Shouldice Hospital

By the way they act, you would think our patients own this place. And while they are here, they do!

Introduction
Started in 1945 by Dr. Earle Shouldice Only external Hernia operations (1st time or repeat) Mission: No substitute for experience Goal: To make the Hernia surgery as just another work simple and effective patients walk just after the surgery. Unique 7600 operations/yr (others: 25-50); better paid doctors (15% more than others in Ontario);

Market Served
Focus on a narrow segment of potential patients who have hernia they are predominantly male, older in age, essentially in good health large market potential: 600,000 operations in US in 1979 Pricing: High quality service at low price Total costs=$1280 for 4 days stay + $650 for operation (inguinal) + $300 for anesthesia + $600 for travel = $2830 While others cost- $5240 Efficient and low cost

Service at Shouldice
What is the service concept of the hospital?
Unique operations strategy that is based on focusing on a single type of surgery with operational efficency, timing and minimal cost of surgery

To the patient:
Peace of mind A holiday experience New friends a fraternity You are special but treatment is standard

To the employee:
A direct professional contribution A team and a place in the team

Evidence of Service
Patients are active participants in the service delivery process Very experienced doctors who are team oriented and flexible No formal organization chart, This philosophy encourages job People rotation which removes monotony Employees enjoy a reasonable workload as well as an above market average basic salary in addition to the profit sharing system

Physical Evidence

Unique environment Nurse ratio is 1:15-helps in counseling The matching of roommates based on similar backgrounds Patients and staff were served food prepared in same kitchen.

Process
Patients involving other health problems duration of stay reduced Admission by appointment: scheduled service 20 min checkup Screening patients: easier to estimate the service time The avoidance of general anesthetics Patients to return to work in an average of 8 days after an operation

Market Focus
Responsiveness Shouldice

high
operations frontier

One general facility World-class General Hospital

low

Low

High

Variety

Service Management
Standardisation: screening of patients Participation: patients do much of the work Work environment: freed from usual disagreeable work Economics: sharing of expensive services Best practice: interaction of surgeons Motivation: all employees interact with the customer

Facilities for patients: Avoidance of hospital atmosphere Use of TVs, phones The Schedule and Programme (keep moving!) Stairways Operating rooms in semi-circle

Service Quality Dimensions

Service quality Reliability: Patients trusted the un-hospital like method Tangibles: Recreation, friendliness among patients Assurance, Responsiveness & Empathy: Pre operation check ups and talks, receptionist to answer, 24 hours nurse to help, made to walk, talk and exercise, experienced surgeons in charge Product quality 750 operations/year 45 mins (1st time) and 90 mins (repeat) Follows the government rules Sufficient number of doctors/nurses to take care of all patients and no much work load

Product Evaluation Continuum - Derived services

Explicit services Brochures, emails and pre operation talk by nurse/doctor Word of mouth/search properties 10% outside the Ontario, 60% outside Toronto know and come; ex patients inform others (alumni) Implicit services/Experience The way patients are treated before/during and after surgery (friendly chats, allowed to explore the premises, talk to other patients etc) Past experience/credence Usually no 2nd time surgery needed for the patients operated in this hospital & annual check ups (warranty)

Zone of Tolerance
Adequate Service 45 to 90 minutes Hernia Operation/Rapid Recovery Zone of Tolerance

Desired Service - Friendly Doctors/Unique Environment/Interactive Patients

Line of external interaction

Line of visibility

Line internal interaction

Gap Model
Customer Gap
Customers expect good care, good quality operation with fast recovery.

Knowledge and Standards Gap

A questionnaire is sent to customers Pre check for 20 minutes Procedure is explained before operation

Delivery Gap
Delivering what is promised (45mins/90 minutes surgery) Can walk and exercise after surgery, no need for bed pan.

Communications Gap
All the support service and primary service coexist - what is promised is provided.

Future expansion options

Add a floor (45 more beds)
29% increase, $930,000/year, i.e. 45% return on investment

Add a Saturday shift

148 to 177 patients/week = $627,000 /year

Develop another facility Replicate Shouldice on new specialty

Issues and Recommendation

To improve the hospital capacity without affecting the service quality Cost to furnish a operation theatre - $30,000 (much lesser than other hospitals) increase hospital rooms Expand in different geographic locations (50% improvement) Work on Saturday and Bring shift system to reduce the work pressure because of Saturday working. (20% improvement)

Operating Concept
Shouldice achieves outstanding results as a low price and at a high profit because:
Everything done by the hospital is designed to maximize the difference between perceived quality and the value of the service provided patients on one hand and the cost of providing the service on the other.

Thank You
Jemeema and Vandhana