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Shouldice Hospital Essay

2174 words - 9 pages

© 2007-2008 Richard E Murphy

Even Swaps - Shouldice Hospital

18 November 2007

1. How Successful is Shouldice Hospital?
Shouldice Hospital is a highly successful business that maintains a
focused service delivery system due to the success rate of its surgeries, its low
employee turnover, its ability to maintain high quality standards, its ability to keep
costs low and to remain profitable, and most especially the positive evaluations
of its patients.

Its strengths can be attributed to stringent policies of staff

training in the Shouldice surgical method; the preservation of a communal
atmosphere amongst both the staff and with the patients; the implementation of
...view middle of the document...

perceived that a less-stark and more friendly environment reduces anxiety and
speeds recovery.

The personal care displayed by the entire staff and the

hospital’s policy of not charging clergy members or the parents of the minor
patients are indicative of the hospital’s exceptional service.
The design of the entire hospital is based around customer needs and Dr.
Shouldice’s ideals of early ambulation following surgery. Patients are assigned
rooms with someone who may have a similar professional background or who
shares similar hobbies.

Phones and television sets are located only in

communal areas, which helps keep patients out of their beds, walking around
and meeting others. Further, the patients are encouraged to enjoy their meals in
the common cafeteria in order to interact with other patients and with doctors. To
speed the healing process, Dr Shouldice’s post-operative technique encourages
patients to begin walking immediately following their operations. What's more,
the participation of patients in their own recovery cuts Shouldice's costs for things
like service to rooms and one-on-one physiotherapy.
With regard to costs, the average cost of obtaining an operation at
Shouldice relative to receiving the same procedure at other hospitals can be seen
in the table below:


© 2007-2008 Richard E Murphy

Even Swaps - Shouldice Hospital

18 November 2007

Total Cost to Patients
1 - Cost of typical operation (a) (b)
2 - Transportation to and from hospital (c) (d)
3 - Time lost from work while at hospital (e)
4 - Time lost for work while recovering (f) (f)
5 - Value of time lost to employer - ranging from
$50-$500 per day (avg = $275)
6 - Total before allowance for recurrence
7 - Probability of recurrence
8 - Weighted cost of recurrence
9 - Total cost to patient, employer and

Shouldice Other Hospitals
954 $
4 days
5 days
5 days
10 days










(a) Based on assumptions of a $450 surgical fee, a four-day stay at $111 per
day, a $60 fee for the assistant surgeon and no need for general anesthesia.
(b) See “The Market” section of the case.
(c) See “The Market” section of the case.
(d) Assuming the operations were performed near the patient’s home.
(e) The shortest stay mentioned in “The Patient’s Experience” section.
(f) Assuming the patient is engaged in a job involving “light” work, as described in
“The Patient’s Experience” section of the case.
(1) All monetary calculations based on Canadian dollars @ 1983 exchange rate
$.8CA = $1.US
c. Target Market
The target market for Shouldice Hospital is primarily healthy persons who
require low risk inguinal hernia operations.

The advantage of admitting only

healthy persons is that the percentage of successful procedures is high, while the
duration in the hospital is low, which...

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