The problem under analysis is how to best increase the hospital’s capacity to serve more patients while at the same time maintaining control over quality of service delivered as well as sustaining existing high levels of employee and patient (customer) satisfaction.
Unique and defined Surgical procedure (could not be varied) Facility that encourages movement
Up to date equipment
Less time taken (time for operation as well as for recovery is lower than industry average) Educated and experienced and efficient surgeons (perform 600 or more operations in a yr while industry average is 25-50 ops/yr) Lower nurse-to-patient ratio required which reduces costs Efficient, good quality and mostly uniform service,
Pay scale of staff higher than union scale of comparable jobs in the area Unique training in administration which allows switching work amongst secretaries Reasonable rates***,
High backlogs of scheduled operations
Services are not patented
Diversification at other locations into other specialties with similar opportunities Establish another hospital in/outside Canada
Add to capacity
Competitors (using the Shouldice name )
*** IN SHOULDICE
charge for typical operation with 4days stay = $111
surgical fee for primary inguinal operation = $450 fee for assistant surgeon = $60 general anesthetic (if required) = $75
TOTAL = $ 696
TOTAL cost is between $2000 to $4000.
Therefore, even patients coming from North America found it cheaper to get operated in Shouldice as round trip from major cities in North America to Toronto ranged from roughly $200 to $600.
1) To stay at a present level and continue to do as they are currently doing. 2) Add more capacity in the hospital by starting Saturday operations 3) Add capacity by increasing number of beds.
4) To meet unmet market demand with external capacity in North America. 5) Diversify at other locations into other specialties.
6) Have on site clinic camps at various places
Evaluation of alternatives:
1)But demand is very high and they are unable to meet demands at current levels so expanding becomes important.
2)Adding Saturday as operating day is also reasonable, because they easily
can increase number of patients (but this can slightly decrease the quality of service-so they need to hire additional staff). This would increase hospital capacity by 20%. But this may create a divide amongst the surgeons which is not good for the functioning of the hospital.
3)If they plan to increase the number of beds then they will also have to increase their staff members to avoid any delays in operations.This would require an investment of approx. $2million and permission from provincial government.
4)The option of expanding in North America is good as currently 42% of all Shouldice patients come from USA. But the problem here would be maintaining control over the quality of service. But this can be overcome as per Theodore Levitt’s argument in “Production-line approach to service” that if companies stop thinking of service as servitude and personal ministration, they will be able to effect drastic improvements in its quality and efficiency. Also the service at Shouldice is more standardized than hospitals in general and therefore new staff can be trained accordingly. Also they need to have the capability to make such a big investment.
Patients Re-union is a very good concept also takes care of after sales service aspect.
Advertising may create more demand
but do they need that?
Right now the customer base includes those who trust Shouldice because they’ve heard positive word of mouth but advertising would make it more commercial.