Hospital Case Analysis

In: Business and Management

Submitted By ajaja
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Pages 10
Shouldice Hospital:
Operations Assessment

[pic]

Shouldice Hospital has been devoted to repairing hernias for over half a century. Although the Shouldice system has led to great competitive positioning, the hospital is falling victim to its own success. Demand for Shouldice services is so much higher than its current capacity of 89 beds that it is in a constant state of operations backlog, which grows by 100 patients every 6 months. Thus, Shouldice needs to find a solution to its single most critical question – how to expand the hospital’s capacity while simultaneously maintaining quality control of service delivery.

The analysis below is designed to assess the current operations at the hospital, in addition to explaining our recommendation that Shouldice should invest $4MM in a new unit, which will increase bed capacity by 50% and require its surgeons to perform Saturday surgeries. As the financial analysis shows, this change will allow Shouldice to capture unmet demand without compromising its unique system of patient and employee care. Lastly, our recommendation will be also juxtaposed to other options we evaluated as potential solutions, but that neither make financial sense nor solve the current dilemma for the hospital.

Hospital Overview

Shouldice Hospital is a “focused factory:” a hospital with a specific area of expertise that gives it competitive strength resulting in lower cost, higher quality service for its patients, and better pay for and loyalty from its employees. Specializing in external abdominal hernias, Shouldice doctors execute the “Shouldice Technique” developed by founder Dr. Edward Earle Shouldice. This precise technique has resulted in early ambulation and higher success rates (greater than 99%) for Shouldice patients for over 55 years. However, what makes Shouldice so successful is that it is not just a…...

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