Transcript Shouldice Hospital - A Case Study .ppsx

Shouldice Hospital Ltd. Case Study
WCU HR-693 Org Planning & Execution – Group 2
Fall 2007
In this presentation…
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Introduction
Overview of the facts of the case
Relevant business issues
Strategic recommendations
Unanswered questions
Key take-aways
By Group Two
Cindy Carter
Conclusion
David Crouch
Christian Frank
Jean Gilreath
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Introduction
Shouldice Hospital Ltd. Case Study
Introducing Shouldice Hospital
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Introduction
• Shouldice Hospital Limited is an 89 bed healthcare
facility located in the suburbs of Toronto, Canada. The
17,000 square foot facility is housed on a sprawling 130
acre estate and specializes in repairing external
abdominal hernias. Currently, 7,600 surgeries are
performed each year on patients from all across the
United States and Canada. Founded by Dr. Earle
Shouldice circa 1940, the organization enjoys a
reputation for effectively using a unique surgical
technique to repair hernias that is considered superior to
all others. The procedure includes early ambulation
following surgery for rapid and effective recovery. The
organization takes great pride in its “patient as boss”
philosophy of service.
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Dr. Edward Earle Shouldice
• Founder of the
Shouldice
Hospital in
Ontario, Canada
& of the unique
Shouldice method
for repair of
inguinal hernias.
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Overview of the case
Shouldice Hospital Ltd. Case Study
Case Overview
• The Shouldice Method…
– Specializes in external hernias only.
– Is a 45 minute procedure for first time repairs,
– And a 90 minute procedure for recurrences of
hernias previously repaired elsewhere.
– Involves separation of muscle layers and six
rows of sutures in an overlapping fashion
resulting in a reinforced muscular wall.
– Typically, only requires use of a sleeping pill, a
pain killer, and a local anesthetic allowing for
immediate post-op ambulation & rapid recovery.
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Case Overview
• The Patient Experience
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Appointments are driven by patient referrals.
Patients are encouraged to self-diagnose to avoid a visit.
The experience requires only one or two visits.
A typical length of stay is about 3 days.
All rooms are semiprivate, and patients are grouped with
someone of like interest.
– Patients nearing discharge help orient new patients
arriving.
– Surgery occurs on day 2.
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Case Overview
• The Patient Experience
– Patients walk from the operating table to the
post-op room (with some help from surgeons),
• For psychological and physiological reasons
– And are encouraged to exercise regularly,
explore the premises and make new friends.
– Patients were so fond of their experience that
they sometimes asked if they could stay an extra
day.
– The most common after-effect in summer is
sunburn!
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Case Overview
• The Nurse Experience
– Shouldice employs 34 full-time equivalent (FTE)
nurses on staff.
– The ratio of nurses to patients is 1:15,
• Compared to 1:4 in Canadian acute-care hospitals.
– Nurses spend an unusually large amount of time
providing counseling services to patients.
– Due to low nurse turnover, there is a waiting list
of nurses wanting to work at Shouldice.
– Competition is constantly short-staffed.
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Case Overview
• The Doctor Experience
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10 full time surgeons,
8 part-time assistants,
2 anesthetists on site,
30-36 operations per day.
Each surgeon performs 3-4 surgeries per day.
Salary is $144k + bonus (15% over competition).
Surgeon’s typically work 7:30 – 4:00 M-F.
Dr. Chan, Dr. Georgievski, Mr. Dixon and Dr. Alexander
• On call 1 weekday night in 10, 1 weekend in 10
• Better quality of life than most surgeon schedules
– Consequently, turnover is low.
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Case Overview
• The Facility
– A hospital and a
clinic, in one
building
– Located in
Thornhill, Ontario,
Canada
• A suburb of
Toronto
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Case Overview
• The Facility (cont’d)
– The facility is designed so patients have to walk
in order to do things they need or want to do.
• Rooms are not equipped with phone or TV.
• Patients must travel to make a phone call, watch TV,
socialize, eat, etc.
• Small rise stairways make it easier on patients who
have just completed surgery.
– Carpeting makes it feel warm and comfortable.
– Patients and staff eat together in the cafeteria.
• Food all fresh ingredients and prepared from scratch.
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Case Overview
• The Administration
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No one is fired! Turnover is low.
Staff is non-union.
Pay scale is higher than the competition.
Profit sharing plans are in place for doctors and staff.
Cross-training & teamwork are strong.
Managing director stays late one night per week to
interact with patients and staff.
– 2004 budget for hospital ~ $8.5 million, clinic ~ $3.5
million.
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Case Overview
• The Market
– 1 million hernia operations in the US in 2000.
– Most commonly performed on males.
– Shouldice has a backlog of 2400 & growing.
– Relies entirely on word-of-mouth advertising.
– Rates are reasonable.
• ~ $2230 compared to $5240 elsewhere
– Annual checkups are provided for alumni free of
charge.
– Annual reunion of patients draws about 1000.
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Relevant Business Issues
Shouldice Hospital Ltd. Case Study
Relevant Business Issues
• Lack of unity in leadership on
strategic direction
• Expansion
• Competitive encroachment
• Succession planning
• Staffing
• Impact of government regulations
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Leadership Unity
• The managing director and surgeon-in-chief
do not see eye-to-eye on the strategic
direction of the organization.
• Older and younger surgeons differ on the
issue of opening on the weekends for
surgery.
• Leadership unity is critical to any
improvement or growth initiatives.
• This issue is fundamental.
• Without unity, the future is unstable.
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Expansion
• Should Shouldice expand?
– This is a central issue in the case.
– Advertising methods are currently limited.
– Should they add other services & specialties?
– Funds for expansion are needed.
– Maintaining control of operations and service
quality relative to expanding is a concern.
– Expansion to weekend operations is currently
debated.
– Current staff has expressed concerns.
– Is global expansion a viable consideration?
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Competitive Encroachment
• The Shouldice method has proven
distinguishable.
• Concerns have been expressed about
others using the Shouldice name while not
performing the Shouldice procedures
verbatim thus damaging the reputation.
• Consequently, Shouldice is hesitant to
advertise at all.
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Staffing
• The 1:15 nurse/patient ratio appears high.
– Does this pose an unsafe risk to patients?
• There is a waiting list of staff wanting to work
at Shouldice.
• The no-fire policy could encourage low
performance.
• Current staff has expressed concerns about
expanding to weekend operations.
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Other Issues
• Succession Planning
– Current surgeon-in-chief retirement approaching.
– Concerns have been expressed about this but no
plan for succession was mentioned.
– A succession plan is needed to ensure continuity.
• Government Regulations
– Concerns have been expressed about the
regulatory environment in Toronto.
– A negative or conflicting regulatory environment
can dramatically impact the operation & future of
the organization.
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Strategic Recommendations
Shouldice Hospital Ltd. Case Study
Leadership Unity
• Resolve the conflict between the managing director
and surgeon-in-chief on expansion strategies.
– As long as that divergence exists at the top, future
success at Shouldice with any expansion strategy is
compromised.
– Consider one of two other strategies:
• Hire an OD consultant to diagnose and suggest an intervention to
solve the conflict, or
• Find a replacement for one of the leaders who can work together
with the other for a unified strategic approach.
– Conduct an ROI analysis on weekend surgeries to
determine economic feasibility.
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Expansion Issues
• With a backlog of 2400 cases and growing,
Shouldice should seriously consider expanding.
• Their unique technique is gaining in notoriety and
improving in reputation.
• No serious effort has been launched to advertise,
so expansion opportunities are strong.
• No formidable competition exists.
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Expansion Recommendations
• Consider becoming a teaching hospital to provide a
new revenue stream and spread the Shouldice
technique around the world.
• Consider performing surgeries on weekends.
• Provide training for leadership & staff.
– To overcome the concerns about compromised quality &
control of operations with expansion.
– Develop resilience skills of all staff and leadership skills
for administration.
– Hire new staff with the understanding of the new
operating hours.
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Expansion Recommendations
• To combat the resistance to expanded
operations on the weekends and the
possibility of 24/7 operations…
– Conduct employee focus groups and surveys to better
understand employee feelings and opinions.
– Solicit employee opinion on ideas to capture the backlog
of patients on the waiting list.
– Conduct change training to help the staff open their
minds to the wonderful potential of the future.
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Competitive Encroachment
• Patent the Shouldice method.
– Protection is needed to ensure that the reputation of
Shouldice remains intact.
– Once patented, Shouldice could license others to
perform the technique around the world and ensure its
quality and consistency.
– This could also provide a strong additional revenue
stream.
– Once patent & expansion plans are secure, consider
more aggressive marketing strategies.
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Staffing Recommendations
• High nurse ratio of 1:15
– Closely study the impact of that ratio on patient
and guest care.
– If decision is made to stay with the current ratio,
remain cognoscente of the potential for negative
impact on patient care and staff morale.
– If a negative impact is discerned, hire more staff
to reduce the ratio. This should have a positive
impact on quality of care and staff morale.
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Succession Planning
•Get one!
• Without a viable succession plan, the future
stability of Shouldice is compromised.
• Continuity in leadership will ensure their
continued success.
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Government Regulations
• There is a concern expressed about the
future role of government in the operations of
the hospital in Canada.
• Investigate regulatory requirements in the US
and consider opening a sister facility there if
conditions are favorable.
• Network with government officials to seek
opportunity to impact the regulatory
environment locally.
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Unanswered Questions
Shouldice Hospital Ltd. Case Study
Unanswered Questions
• Strategic Plan
– What is the hospital’s strategic plan?
– Is growth a real objective? If so, at what rate?
• Slow/steady, as is, or aggressive?
– If expansion is an objective, what is the cost
feasibility of:
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Local expansion
Expansion within Canadian borders
Expansion into the US
Global expansion
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Unanswered Questions
• Strategic Plan
– What are other alternatives to expansion?
• Teaching facility, additional services, etc.
• What are the cost returns of those alternatives?
– What is the overall financial situation of the
hospital?
• Can the hospital afford a new facility or to make any
radical changes to procedures?
– What is the leadership positioning on future
plans & strategies?
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Unanswered Questions
• Government Regs & Restrictions
– What are the Canadian regulations/restrictions
for expansion?
– What are the US regs/restrictions for expanding
into the US?
– What are the future anticipated regs/restrictions
in Canada and the US?
– What are the Canadian & US similarities?
– Can the Shouldice technique be legally
protected?
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Unanswered Questions
• Human Resources
– Is there a succession plan for other key
contributors besides the chief?
– Does the right leadership exist for growth and
expansion?
– What measures are in place to get the right
leadership prepared for the future?
– Who exactly is on the leadership team?
– Who oversees human resources?
• Do they need an HR Director?
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Unanswered Questions
• Marketing
– What does management do with the patient
survey information?
– Is there a marketing objective for the annual
patient reunion meetings?
– Have they done any other market research?
• Into other US or Canadians markets?
• Into other global markets?
– Have other places actually copied the Shouldice
method or is it just a concern that they might?
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Key Take-Aways
Shouldice Hospital Ltd. Case Study
Key Take-Aways
• Shouldice provides a unique service
experience that distinguishes it from
competitors.
• It’s a great place to work for healthcare
professionals, so turnover is low.
• The production process is efficient and
effective.
• Opportunities for growth are plentiful.
– Key issue is “Should they expand?”
• Problems and concerns are manageable.
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Conclusion
Shouldice Hospital Ltd. Case Study
Conclusion
• Shouldice Hospital is very successful primarily due to its
unique service delivered by motivated and empowered
staff in a friendly, comfortable environment. Patients are
viewed as the boss, so the patient experience is positive.
Staff and physicians are treated well so turnover is low.
The demand for the Shouldice technique continues to
increase, so the future can bring much opportunity if
Shouldice management chooses to expand. Issues of
expanding operations & generational differences are
manageable. The organization is run well but continued
success is hinged on the upcoming change in leadership.
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Questions?
Shouldice Hospital Ltd. Case Study
Thank you!
It’s been our pleasure to
share with you. We hope
you’ve enjoyed the
presentation. We welcome
your questions and
comments. Please address
them to Group 2.
– Group 2 team members include:
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Cindy Carter
David Crouch
Christian Frank
Jean Gilreath
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