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CASE ANALYSIS: SHOULDICE HOSPITAL LIMITED

Group 5: Ramya ID # 9564 Chandra ID # 9595 Li Xiao Yuan ID # 6756 Ophilia ID # 8530 Linh Truong ID # 9296

Introduction summary


The Shouldice Hospital, Ontario, Canada is a pioneer in the field of treating patients suffering from external abdominal hernia. The speedy ambulation coupled with its reasonable price rates leads to satisfied patients publicizing the hospital by word of mouth. The main challenge in front of the hospital is deciding on ways to meet the backlog of operations, by expanding the hospital's capacity, while still maintaining control over the overall quality of service delivere and selection of the new surgeon after Dr Obney.

The effective solution to do so will be as follows.


1)Currently the hospital doesnt operate on saturday.Increasing the capacity by scheduling Saturday operations is a swift and cost effective solution. It does not violate any government regulations and at the same time also leverages the existing strength of the hospital in rendering high quality services to the patients. 2)By implementing the shift system, the existing strengths of the hospital will be leveraged. This is similar to the the above saiThe selection of a successor to Dr. Obney is a step that must be taken soond plan in terms of the expenditure involved and the time frame being talked of.The selection of a successor to Dr. Obney is a step that must be taken soon. 3)The successor to Dr. Obney as Chief Surgeon has to be selected. The selection of such a candidate should preferably be done among the existing doctors in the hospital. In case a specialized doctor from outside is appointed, proper induction to acquaint the existing surgeons must be carried out.

More challenges
1)Marketing the services of the hospital, though would lead to an increased awareness of the authenticity of the Shouldice method, while exposing the piracy in the method, but at the same time it will also lead to an increased number of patients wanting to come to the hospital. 2)The plan of expanding the capacity by moving into another geographical segment such as the United States, involves extensive capital expenditure in setting up a new facility. Also by dividing half of the specialized staff into the two respective facilities, the quality levels may not remain same for the initial span of time

Questions And Answers


Question #1: How well is the hospital currently utilizing its bed?
90 beds x 7 days/ week = 630 beds available in a week 30 patients x 3 days x 5 days per week = 450 beds utilized 450 beds utilized / 630 available beds = 71.43% The hospital is currently utilizing 71.43% of their beds, this is actually an ideal operating point. To increase its rate of utilization might decrease the service quality.

Question #2. Develop a similar table to show the effects of adding operations on Saturday. (Assume that 30 operations would still be performed each day). How would this affect the utilization of the bed capacity? Is this capacity sufficient for the additional patients?

Check-in day Mon Tue Wed Thu Fri Sat Sun Total

Mon 30

Tue 30 30

Wed Thu 30 30 30 30 30 30

Fri

Sat

Sun

30 30

30 30 30 30 60

30 30 90

30 90

90

90

60

60

The total beds used if the hospital adds operations on Saturday: 540 beds The utilization rate = 540/650 = 85.71% So with the addition of one more day operation will increase the utilization of bed capacity. With this rate of capacity utilization, it will be risky for the hospital in coping with the immediate changes in demand. With this adding one day operation, but without increasing facilities and labor, the capacity is less likely sufficient for additional patients.

Question #3: Now look at the effect of increasing the number of beds by 50%. How many operations could the hospital perform per day before running out of bed capacity? (Assume operations are performed 05 days per week, with the same number performed on each day). How well would the new resources be utilized relative to the current operations? Could the hospital really perform this many operations? Why?


* In case of increasing the number of bed by 50%, the total bed available will be: 90*1.5 = 135 beds. This means the hospital could perform maximum 45 operations per day before running out of bed capacity. * With this new resource, the total bed capacity will be: 135*5 = 675 beds Relating to the current operation of 30 patients per day, the bed capacity utilization rate will be: 450/765 = 66.67%.

It will be hard for the hospital to perform 45 operations per day due to the limitation in their surgeon force and operating facilities. Firstly, they have only 12 full-time surgeons. Each surgeon can operate on 4 patients per day. At maximum, 12 surgeons can perform total 48 operations. Secondly, there are only 5 operating rooms. Each operation needs 1 hour, so each hour can maximum perform 5 operations. The operation time is from 7:30am till 4:00pm, there will be about 8hours, then the maximum number of operations per day is 5*8 = 40 operations. Combine these factors, we conclude that the hospital can operate 40 patients per day at maximum. Therefore, the hospital couldn t perform 45 operations per day.

Questino # 4:Although financial data are sketchy, an estimate from a construction company indicates that adding bed capacity would cost about $100,000.00 per bed .In addition, the rate charged for the hernia surgery varies between about $900 and $2,000 (US dollars), with an average rate of $1,300 per operation. The surgeons are paid a flat $600 per operation. Due to the uncertainties in government health care legislation. Shouldice Hospital would like to justify an expansion from 90 beds to 135 beds within a five-year time period.

conclusion


There are a few options Shouldice Hospital can consider to expand their current capacity; the first option would be to build additional facilities to house the additional patients. They could either add-on to their existing facilities in Canada or build a new clinic internationally, most likely in the United States. 1)Currently the hospital doesnt operate on saturday.Increasing the capacity by scheduling Saturday operations is a swift and cost effective solution. It does not violate any government regulations and at the same time also leverages the existing strength of the hospital in rendering high quality services to the patients. 2)By implementing the shift system, the existing strengths of the hospital will be leveraged. This is similar to the the above saiThe selection of a successor to Dr. Obney is a step that must be taken soond plan in terms of the expenditure involved and the time frame being talked of.The selection of a successor to Dr. Obney is a step that must be taken soon. 3)The successor to Dr. Obney as Chief Surgeon has to be selected. The selection of such a candidate should preferably be done among the existing doctors in the hospital. In case a specialized doctor from outside is appointed, proper induction to acquaint the existing surgeons must be carried out.

 

More challenges: 1)Marketing the services of the hospital, though would lead to an increased awareness of the authenticity of the Shouldice method, while exposing the piracy in the method, but at the same time it will also lead to an increased number of patients wanting to come to the hospital. 2)The plan of expanding the capacity by moving into another geographical segment such as the United States, involves extensive capital expenditure in setting up a new facility. Also by dividing half of the specialized staff into the two respective facilities, the quality levels may not remain same for the initial span of time

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