Monday, February 25, 2019

Shouldice Hospital Limited. Case Study Analysis

register 1 Acceltion,s run Guarantee Quaury oF Srnvlcn GueneNTEE TheAccelIionQualitvofServiceGuaranteedefines,AcceI1ion,sassurance*, Ifjrfl. ,f,iljtm3rumlFj *-Hiri, dilaffi,. irn 1. Perfonnance Guarantee ari,,iuo. , orte-. *r,sea ne. i,, is the same as Accellion guarantees that the death penalty of the. Net- fit uproading and downloading content, Accellion value will be no t*t p. *t of that w1n hich. hr*d by a benchmik origin as a resurt of usine the site being accessejfrom r. ribii , ffi,ltjifi ,TiTt u pfilffi, p,ro. *u, *iTly*il? T? Jril,xHi. ililabilitv, 3.Customer Service -,****,L,tr o,%li o, o. r,o. ,. excludingForce Maieureand schedured Maintenance for customers Guarantee should Accellion burst to pick up on the service trains set come forward in sections 1 and 2 with virtuoso (L) months service fee ror Accenion will credit ttre monttirirtua-*nr,,n r,iGl3bove account .diili,it*. mer the customer,s ritten nonice to Accellion of such(prenominal)(prenominal) failure gi ves w withiii6) aays rrom ttre J* ,r1 rrrrre occurred. with this requirement,wil rrrit. rttil/r The Customers rrii* t. *fry right to receive such credit. Accellion will notify the cttom. ,o LIfrffixirabre or anv different iI* iri1 s r,or. , liauyrfy*. J of schedule Maintenance. I reasniii pfi, ffirtn c,,i. -,. 1Jiii,,saryf the service acrion to *fffflflffirffilJ,Ji*,. il$Jt3iJfl*fil*il* 4. Security and privacy policy ,o each(prenominal) interrogative sentence in re,a,ion,o Accellion has comolete respect for the Customers privacy and that of any custome,r data stored in Accellion service does not require Acce,ion servers. The Customers i prtJa iyalrrite servers solely information provided details for the data being stored on the to a. uioiy tLr c. r. i,rrii, he Customer,, ililT Iv r,u,, ut,, ,or br,rit. A,ccerion w,I not hat the revelation of Customers itrttti. 5. iuii. A. ions til,,, &iT,tffi1nir. r,1liffidHi ilJAff1X1T. ,HfiHdr1oaut, to possession shalr i-tut * . ifntI . ,*p . ffity onlybe made where such disclosure is *a to the terms or example or ,,o, Accellion will ensure-that th ctstoms informatiorr and data atomic cast 18J ke1cur9 or imProPer mapping which includes ttrqgii*ruur rtp, io rr. ri,fil,tr1r,. mer,s adenrity d protected from unauthorized access i before granring access. EXHllBlr Dear Team, 2 orAcclrionEmail to solely Accellion cater Announcing the Launch of the oos Guarantee T Xijiffi11JT? ,i? tYl1*8 vua,ry ot ervlce guarantee read it over very cargonfully. vo iulLriJi1/*u16 Quarirvof service suarantee (Qos). prease Please ancr ascribes t ownership o in this company to deliver. Cr,o. . , ompanf c ustomers aon,r wen+ . J9,flT? Ll31d irt nuts *he -o*r,rrnipin ever d o,. ,tt-1q6btcDDrve ,h theirnetworkrip*irrrilrhcfi,*. . ,f1. -t-,LevelAgreement(sLA)ttruyrt**i *ilfflr. H,ffi Slfl a*Xi AJffi ,,*mf ***$ii+,r,fry,j,nTffi 18,. ,l*iFiqd-. iffi H? 1HJHT1f 3tr As a member of the Accellion Lt, vl_. 1. team, you ar key to our client,s s atisfaction. Thanks in maintain for your suPport in making our clients and ourselves successful. .. 4? jir. -. . ii. ,l*-i1il.. 1,ji. iijlj. L. what is the marketing impact of a well-designed guarantee? 2. Eaaluate uncover the_ seraice design of Acceilion,s guarantee shown in r-. How ffictiae wilr it ui rn communicating seraice exceuence to potentiar and current customers? would you suggest any motleys to its design or imple_ mentation? 3 will he guarantee be successfut in creating a curture for seraice exceilence inwardly Aiceilion? whit erse may be needed for achieoing such a glossiness? . Do you 4 think customers mEht take adaantage of this guarantee and stage seraice filures to inaokeTlrrgrorantee? If yes, how could Acceuion minify potentiar iheating on its guarantee? The Accellion Service Guarantee Sg1r Case 16 Shouldic e Ho spit al Limite d (Abri dge d) JeuEs Hpsrprr AND Rocnn HellowELL A Canadian infirmary specializing in herniation trading ope proportionalityns is considering whether and how to turn out the reach of its seraices, including expansion into sepa grade specialty aras.Various proposals haae been adaanced to increase the capacity of the hospital without demotiaating the staff or losing tone down oaer seraice quality, which, in addition to achieoing excellent medical outcomes, has created a aery deaoted launch of long-suffering alumni. Options include adding Satur solar day surgical operations, building an extension, and constructing a neTD hospital in anformer(a) location, perhaps in the United States. TWo shadowy figures, enrobed and in slippers, offered slowly down the semi-darkened hall of the Shouldice infirmary. They didnt notice Alan ODell, the hospitals managing director, and his guest.Once they were out of earshot, ODell remarked good genius dLy, By the way they act, youd think our endurings own this dwelling. And while theyre here, in a way they do. Following a project to the five operating modes, ODell and his visitant once again encountered the same pair of perseverings still engrossed in discussi. g their hernia operations, which had been performed the previous good morning. HrsroRY An attractive brochure that was freshly printed, although in recognise dated nor distri exactlyed to prospective long-sufferings, described Dr. Earle Shouldice, the founder of the hospital Dr. Shouldices inte counterweight in primaeval ambulation stemmed, ffi.? T,15,T? jTJH-,H,,T the girls subsequent refusal to stay quietly in bed. In spite of her activity, no harm was done, and the experience recalled to the rectify the surgical actions of animals upon which he had performed sur gery. They had all moved clearly freely with no ill effects. By 1,940, Shouldice had disposed extensive thought to approximately(prenominal) factors that contributed to early ambulation following surgery. Among them were the intent of a local anesthetic anesthetic, the nature of the surgical surgical process itsel f, the design of a facility to encourage movement without unnecessarily causing discomfort, and the postoperative egimen. With these things in mind, he began to develop a surgical proficiency for repairing herniasl that was superior to other(a)s word of his early success generated demand. Dr. Shouldices medical license permitted him to scat anywhere, heretofore on a kitchen delay. However, as more(prenominal) and more patients bespeak operations, Dr. Shouldice created new facilities by buying a rambling 130acre estate with a 17,0-squ be foot main house in the Toronto suburb of Thornhill. aft(prenominal)ward whatsoever years of planning, a large wing was added to provide a summate capacity of 89 beds. Dr. Shouldice died in 1965. At that time, Shouldice hospital Limited was formed to hold in both the hospital and clinical facilities under the surgical direction of Dr. Nicholas Obney. In 1999, Dr. Casim Degani, an inter areaally-rec o g nrzed authority, b ecame surge on-inch ief. By 2004,7,600 operations were performed per year. THr SHouLDtcE system Only external (vs. internal) ab hernias were repaired at Shouldice infirmary. Thus close to proto natural-time repairs, primaries, were sincere operations requiring approximately(predicate) 45 minutes. The remaini. g procedures involved patients suffering getting evens of hernias antecedently repaired elsewhere. Many of the return keys and very difficult hernia repairs required 90 minutes or more. In the Shouldice method, the muscles of the abdominal wall were affanged in trinity clear layers, and the opening was repaired-each layer in turn-by overlapping its margins as the edges of a come out might be overlapped when buttoned. The end result reinforced the muscular wall of the abdomen with six rows of sutures (stitches) under the skin cover, which was then crockedd with clamps that were posterior removed. (Other methods might not separate muscle layers, practically involved feH,er ilil,13i* ffiT,nvorvedtheinsertionotCoPyright O 2004 President and Fellows of Harvard College. To order copies or request consent to disgorge materials, call 1-800515-7685, write Harvard Business School Publishing, Boston, MA021,63, or go to http//www. hbsp. harvard. edu. No part of this publication may be reproduced, stored in a recuperation system, used in a spreadshee or transmitted in any form or by any meanselectronic, mechanical, photocopying, recording, or otherwise-without the permission of Harvard Business School. Professor crowd together Heskett prepared the original version of this case, Shouldice infirmary Limited, HBS No. 583-068.This version was prepared jointly by Professor James Heskett and Roger Hallowell (MBA 1989, DBAI997). HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illusfrations of useful or ineffective management. 592 A typical first-time repair could be consummate(a ) with the use of preoperative sedation (sleeping pill) and analgesic (pain killer) plus a local anesthetic, an injection of Novocain in the region of the incision. This allowed immediate post-operative patient ambulation and facilitated fast recovery. THe PaTIENTS ExpERIENcE about potential Shouldice patients learned about the hos- pital from previous shouldice patients. Although thousands of mends had referred patients, loads were less likely to recommend shouldice because of the generally regarded simplicity of the surgery, often considered a bread and butter operation. Typically, some(prenominal)(prenominal) patients had their hassle diagnosed by upersonal physician and then contacted Shouldice directly. Many *tru made this diagnosing themselves. The process experienced by shouldice patients depended on whether or not they lived close enough to the hospital to visit the facility to obtain a diagnosis.Approximately 10% of shouldice patients came from outside the province o f ontario, most of these from the United States. Anoth er 60/o of patients lived beyond the Toronto area. These out-of-own patients often were diagnosed by mail using the Medical k presentlyledge Questionnaire shown in Exhibit L. base on information in the questionnaire, a shouldice operating surgeon would make up the type of hernia the respondent had and whether there were signs that some risk might be associated with surgery (for example, an overweight or heart condition, or a patient who had suffered a heart attack or a stroke n the past six months to a year, or whether a general or local anesthetic was required). At this point, a patient was given a operating date and sent a brochure describing the hospital and the shouldice method. If necess ary, a sheet outlining a weight-loss program front to surgery was excessively sent. A small proportion was recalld treatment, either because they were overweight, be an undue medical risk, or because it was determined that they did not have a hernia. Arriving at the clinic between 100 p. M. and 300 p. M. the duy before the operation, a patient joined other atients in the waiting room. He or she was presently examined in one of six interrogative rooms staffed by surgeons who had entire their operating schedules for the day. This examination required no more than 20 minutes, unless the patient needed reassurance. (patients typic ally exhibited a moderate level of disturbance until their operation was completed. ) At this point it occasionally was discovered that a patient had not corrected his or her weight problem others might be found not to have a hernia at all. In either case, the patient was sent home. After checking administrative details, about an hour fter arrivin 8 at the hospital, a patient was directed to the room number shown on his or her wrist band. Throughout the process, patients were asked to keep their luggage (usually light) with them. All patient rooms at the hospital were semiprivate, c ontainig two beds. patients with standardized jobs, backgrounds, or interests were delegate to the same room to the extent possible. upon reaching their rooms, patients busied themselves unpack ing, getting acquainted with roommates, shaving themselves in the area of the opera- tion, and ever-changing into pajamas. At 430 P. M. , a shields orientation provided the roup of incoming patients with information about what to expect, including the need for exercise after the opera- tion and the daily routine. Accordi. g to Alan OiDell, Half are so nervous they dont remember more than. ,, Dinner was then served, followed by foster recreation, and tea and cookies at 900 p. M. Nurses emphasized the importance of attendance at that time because it provided an fortune for preoperative patients to talk with those whose operations had been completed former that same duy. Patients to be moldd on early were awakened at 530 A. M. tcl be given preop sedation. An attempt was ade to schedule op erations for roommates at approximately the same time. patients were taken to the preoperating room where the circulating nurse administered Demerol, an analgesic, 45 minutes before surgery. A a few(prenominal) minutes foregoing to the first operation at 720 A. M. , the surgeon assigned to each patient administered Novocain, a local anesthetic, in the operati. g room. This was in contrast to the typical hospital procedure in which patients were sedated in their rooms prior to being taken to the operating rooms. upon the completion of their operation, during which a few patients were cha tty, and fuily aware of hat was going on, patients were invited to get off the operating table and walk to the post-operating room with the help of their surgeons. According to the director of nursing 99 percent accept the surgeon,s invitation. while we use wheelchairs to return them to their rooms/ the walk from the operating table is for psychological as well as physiologicai blood pressure, res piratory reasons. patients present to themselves that they can do it, and they start their all-important exercise immediately. Throughout the day after their operation, patients were encouraged to exercise by nurses and housekeepers alike. By 900 P. M. n the duy of their operations, all patients were ready and able to walk down to the eat room for tea and cookies, even if it meant climbing steps, to help indoctrinate the new unrefined admitted that duy. on the fourth morning, patients were ready for dis- charge. During their stay, patients were encouraged to take advantage of the opportunity to explore the premises and make new friends. Some members of the staff mat that the patients and their attitudes were the most important shouldice hospital Limited (Abridged) 593 (HIBIT EF 1 Medical lnformation O,uestionnai re 5 n,ti,rBER (or Rural Route or P. O. Box) Province/StateTown/City SHOULDICE infirmary 7750 Bayview Avenue Box 379, Thornhill, Ontario L3T 4A3 Canada Phone (418) 88 9-1 125 Telephone (Thornhill One milliliter join Metro Toronto) tq-Frhrr. 1i il3$-1- rr=CBlvlATlON Please give note of lnsurance Company and Numbers. MEDICAL .nS,-IANCE (Please bring hospital certificates) INFORMATION nLR3r,r- . a r. l IJCE (Please bring insurance certificates) OTHEH SURGICAL INSURANCE Patients who live at a distance often prefer their examination, admission and operation to be set all on a single visit to save making two lengthy journeys. The whole kEl&anrr Name of Business argon you the owner? f Retired Yes purpose of this questionnaire is to make such arrangements possible, although, of course, it cannot replace the examination in any way. Its completion and return will not put you Former Occupation No under any obligation. Do you ingest? Please be sure to fill in both sides. tr- n? -? asr,ssrcn date? (Please give as much advance notice as possible) ry*esi,-s =-(, Sa-a cr Sunday. ffiEr h ,s *crJ FOR OFFICE USE ONLY symbol of hernia This information wi ll be treated as confidential. IEXIEEIEEIRIE ffi iMEfrgles ory cqJd n=trr emailprotected rE cr*en rr d yotrr operatirn a tir lrctrr ru=ight EXHIBIT 1 (ConttnueolPLEASEBEACCURATE Misleadrngfuures.. *firl. cFeoxr3 admissionday,couldmeanposFonementolyqJropeGlhontrlll,yc-,,e,Etri Waist (muscles THIS IS YOUR CHART PLEASE MARK IT APPROXIMATE SIZE. walnut tree (or less) Hens Egg or Lemon GraPefruit (or more) INFORMATION ESSENTIAL senseless and put that apply to your hernias Use only the sections v. lu H a / in each relaxed)ins is your health now E treatment drive Excess bodY fluids Chest Pain (angina) lr perpetual Heartbeat Ulcers Anticoagulants (to check blood-clotting or to thin the blood) F t Name of any(prenominal) Prescnbe pills, tablets or caPsutres 1otake regularlY A nY condition Please tick regular for which You are having Diabetes Asthma & Bronchitis Y ,JI GOOD Blood ,JI Chest (not exPancld il il t t I il I il still be finished in time for a 1230 P. M. dejeuner in the st aff dining room. Upon finishing lunch, surgeons not scheduled to operate in the afterhigh noon examined incoming patients. A surgeons day ended by 400 P. M. In addition, a surgeon could expect to be on call one weekday night in ten and one weekend in ten. Alan ODell commented that the position appealed to remedys who want to watch their children grow up. A doctor on call is rarely called to the element of the Shouldice Program.Accordig to Dr. Byrnes Shouldice, son of the founder, a surgeon on the staff, and a 50% owner of the hospital Patients sometimes ask to stay an extr a day. Why? Well, think about it. They are basically well to begin with. But they arrive with a problem and a certain amount of nervousness, tension, and anxiety about their surgery. Their first morning here theyre oPerated on and experience a Sense of relief from Something thats been botheri. g them for a long time. hospital and has regular hours. Accordi. g to Dr. They are immediately able to get around, and t heyve got a three -duy holiday ahead of them with a Per- ObneyWhen I interview ProsPective surgeons, I look for experience and a good education. I puree to gain some insight into their interior(prenominal) situation and personal interests and habits. I besides try to find out why a surgeon wants to switch positions. And I try to determine if hes willing to perform the repair exactly as ,it i ? ffi il JilI% ILx *,x* have the run of the 3 patients, make friends easily, and hospital. In summer, the most commonality after-effect from the surgery is sunburn. hes told. This is no place for prima donnas. Tue NuRsEs ExPERtENcE Dr. Shouldice added 34 full-time-equivalent nurses staffed Shouldice each 24 hour period.However, during non- run hours, only six full-time-equivalent nurses were on the premises at any given time. While the Canadian acutecare hospital average ratio of nurses to patients was 1,4, at Shouldice the ratio was 115. Shouldice nurses spent an unusually large equilibri um of their time in counseli. g activities. As one suPervisor commented, We dont use bedpans. According to a manager, shouldice has a waiting list of nurses wanting to be hired, while other hospitals in Toronto are short-staffed and perpetually subordinate resident in surgery performs. Hernia repair Tiaditionally recruiting. hernia is often the first operation thatThe hospital employed 10 full-time surgeons and other major operations. This is quite wrong, ES is borne out by the resulting high coming back rate. It is a tricky anatomical area and occasionally very complicated, specially to the novice or those doing very fer*hernia repairs each year. But at Shouldice hospital a surgeon learns the Shouldice proficiency over a periol of several months. He learns when he can go fast anc when he mustiness go slow. He develops a pace and a L?. cardinalJ. T,i*111-x1*1iilIt. TJ geons. We teach each other and try to encourage a 8 each duy. a scrubbing scheduled operation at 730 A. M. hortly before the first If the first operation was routine, it usually was completed by 815 A. M. At its conclusion, the surgical team helped the patient walk from the room and summoned the next patient. After scrubbrng, the surgeon could be ready to operate again at 830 A. M. Surgeons were advised to take a coffee break after their second or third operation. Even So, a surgeon could complete three routine operations and a fourth involving a recurrence and Shouldice Hospital Limited (Abridged) tr achieve absolute perfection. Excellence is the eneml of good. part-time adjunct surgeons. TWo anesthetists were also on site.The anesthetists floated among cases except when general anesthesia was in use. Each operating team required a surgeon, an assistant Surgeofl, d scrub nurse, and a circulating nurse. The operatirg load varied from 30 to 36 operations per duy. As a result, each surgeon typically performed three or four oPerations A typical surgeons duy started with a L regarded as a r elatively simple operation compared to group effort. And he learns not to take risks Tne DocroRs ExPERIENcE 595 a Chief Surgeon Degani assigned surgeons to an oPerating room on a daily basis by noon of the preceding da1 This allowed surgeons to examine the specific patienE hat they were to operate on. Surgeons and assistants H-ere rotated both few days. Cases were assigned to give do. tors a non-routine operation (often involving a recurrenc several times a week. More complex Procedures er assigned to more older and experienced members of th staff. Dr. Obney commented If something goes wrong, we want to make sure tha we have an experienced surgeon in charge. Experience is most important. The typical general surgeon mai perform 25 to 50 hernia operations per yeaL Ours Perform 750 or more. The L0 full-time surgeons were paid a straight salan typically fi,aa,000. In addition, bonuses to doctors ere distributed monthly. These depended on Profit, indir-icual productivity, and performa nce. The total bonus Pc-i paid to the surgeons in a recent year was aPProximate-r $400,000. Total surgeon compensation (including benefir was approximately 15% more than the average income for kitchen staff several times a d,ay, and the hospitar staff to oD efi, weuse arl fresh ingredients and prepare the nutriment from scratch in the kitchen. ,, The director of hold pointed out a surgeon in Ontario. Training in the shouldice technique was important eat together. Accordig to ecause the procedure could not be varied. It was accomplished through direct supervision by one or more of the senior surgeons. The rotation of teams and frequent consultations allowed for an ongoing opportunity to appraise performance and take corrective action. where possibre, I former shouldice patients suffering recurrences were assigned to the doctor who performed the first operation to allow the doctor to rearn from his mistake. ,, Dr. obney commented on being a shouldice surgeon ilH*XXHltiiJf mxx$ ing n otes for confidence, e.. oriaging eachither, and walking around, getting exercis.. briourse, e,re in the rooms straightenirg ,p throughout the day. This gives the housekeepers chancl to josh with the patients and to encourage them to exercise. A doctor must decide after several years whether he to do this for the rest of his liie because, just a Iultt in other speciarties-for exampre, radiology_h. s loses touch with other medical discip contestations. If h stays for five years, he doesnt leave. Even among junior doctors , few elect to leave. ?,. i. . 1.. lrtii. ii. . )ii. i. The shouldice Hospital contained two facilities in one uilding-the hospital and the clinic. On its first-level, the hospital contained the kitchen and dining rooms. The sec_ ond level contained a large, open tounge area,the admis_ sions offices, patient rooms, and a spacious grass-covered Florida room. The third revel had aaaitiond fatient rooms and recreational areas. patients could be seln visiting in each othersrooms, walking up and down hall shipway, loung_ irg in the sunroom, and making use of light recreational facilities ranging from a pool table to an exercycle. Alan oDell pointed out some of the features of the hospital The rooms contain no telephone or tv set ets. If a patient needs to make a call or wants to watch terevi_ sion, he or she has to take a walk. The steps are designed specialry with a smalr rise to alow patients recently operated on to negotiate the stairs without undue discomfort. E-Iy rqluru foot of the hospital is carpeted to reduce the hospital olfaction and the possi_ bility of a fall. Carpetir,g urro gives tf,e phce a smell other than that of disinfJctant. This- facility was designed by an architect with input from Dr. Byrnes shouldice and Mrs. w. H. uiquhart (the daughter of the founder). The facility was discussed for years and many changes in the lans were made before the first concrete was poured. A number of anomalous policies were also instituted. For example, parents accompanying children here for an operation stay free.. you may enjoy why we can do it, but we learned that *. rrre more in nursing costs than we spend for the parents room and board. have- only three on my housekeeping staff for the entire facility. one of the reasons for f* housekeep_ that we dont need to change rinens during a ? ,tr patients four- duy stay. Arso, the medical staff doesln,t The clinic housed five operating rooms, a moil atory, and the patient-recovery room. In totar, the stimated cost to furnish an operating room was $30,000. This was con_ siderably less than for other hospitals requiring a bank of equipment with which to administer anesthetics for each room. At shourdice, two fluid units were used by the anesthetists when needed. In addition, the complex had one crash draw per floor for use rf a patient should suffer a heart attack or stroke. ilin,4i4? ljiij. i. i. ))1 Alan ODell described his job we try to meet peoples needs and make th is as good a place to work as possible. in that respect is a strong concern or employees here. goose egg is fired. This was freshr reinfor. -d by Dr. shouldice, who described a situa_ tion involvirg two employees who confessed to theft in the hospital. They agreed to seek psychiatric help and were allowed to remain on the itu. l As a resurt, turnover is low. our administrative and support staff are non_ union,. b, we try to maintain a pay scale higher(prenominal) than the union scale for comparabl. Jou, in the area. we have a profit-sharing prin that i, ,. prrate from the docto* year the administrative and support -LTt staff divided up $60,000. If work needs to be done, peopre pitch in to herp each other.A unique aspect oi o,,r, administration is that I insist that each secretary is trained to do anothers work and in an emergency is able to switch to another function immediatlly. we don,t have an governing body graph. A chart tends io make people think theyre boxed in jobs . a r try to stay one night a week, having dinner and ristening to the patientJto find out how things are really goinf uro. rnd here. Patients and staff were served food prepared in the same kitchen, and staff members picked up iood from a cafeteria line placed in the very .. r,t. , of the kitchen. This proided an opportunity for everyone to chat with he operating(a) Costs The 2004 budgets for the hospital and clinic were close to $8. 5 millions and $3. 5 million, respectively. 6 Shouldice Hospital Limited (Abridged) Sgz EXH lB lT FIoor Supenisor 2 Organization Chart Lab (4) operational Laundry Room Housekeeping Office Accounting Medical reason (3) (2) Supervisor I Head Head Nurse urse (2) Record (2) dietetic (r7) I5 (2) (3) i aleets three limes a year or as needed. bUeets as needed (usually twice a month). lnformallv reports to Executive Committee. Physical Surgeons Assistant fructify (12) Surgeons (7) Anesthetist (t) pared to an average charge of $5,240 for operations per_ ormed el sewhere. if. l. rlii. ,i. l. ,,. illl. . l.. . . . ) Hernia operations were among the most common per_ formed on mares. In 2000 an estimated r. ,000,000 such operations were performed in the united states alone. Round-trip fares for traver to Toronto from various major cities on the North American continent ranged from roughly $20A to $600. when our backlog of scheduled operations gets excessively large, we The hospitar arso provided annual checkups to alumni, free of charg.. Muny occurred at the time of the According to Dr. Shouldice wonder patient reunion. The most recent eunion, featuring dinner and a floor show, was held at afirst-class hotel in down_ town Toronto and was attende d by 1,000 former patients, many from outside Canada. ho* many peopre decide instead to prfor* the operation. Every have their rocal doctor time weve expandea o11 capacity, th backrog has declined briefly, onry to climb or,. u again. Right now at 2,400,1 ir rarger than it has ever been and is grow_ irg by 100 every six months. The hospitar relied unaccompanied on word-of-mouth adver_ tising, the importance of which was suggested by the results of a poil carried out by i. i,i. ,)i. . ,. ii. . ,. ). ,.. . when asked about major questions confronting the man_ agement of the hospital, Dr. shourdice cited I aesire to seek ways of increasing the hospitals capacity while at the same time maintaining . oriror over the quatity of service delivered, the future role of government in the operations of the hospital, and the use of the shouldice name by potential competitors. As Dr. shouldice put it Im a doctor first and an entrepreneur second. For students of Depaul lrxiriuit 3 shows a portion results). Although little systematic data about university as part of a project of these atients had been collected, Alan oDell remarked that ,,if we had to rery on wearthy patients onry, our practice would be much smaller. ,, Patients were attracted to the hos pitar, in part,by its reasonable place . Charges for a typical operation were four days of hospital sta y at $? 20 p. iau anda $650 surgical fee for a prim ary inguinar (the most common example, we courd refuse permission to other doctors ah. hospitar. The y may copy our technique and Tisappry it or misinform *,. i. patients about the use of it. rni, resurts in failure, and we are f, who want to visit hernia). An additional fee of $300 was assessed f generar anesthesia was required (in about 20% of cases). These charges com_ ExHlBlr Direction you. 5. B interested that the technique will be blamed. But Shourdice Hospitar Annuar Patient Reunion Data For each question, please place a check mark as it applies to 4 /7 22 Nationalitv Directions please place a check mark in nation you represent and please write in your province, state or democracy where it applies. Canada America Europe J6 - province sate a*r, ee 2 /o uarl ,o/ // 63% 5 /6 /960 7 5 %dt 39. 54% 5/. /6% fl. 63% 4/. 56% 30. 23% /6. 26% occupation Ilave you been o vernight in a hospital other than u* houldice befone your operation? * j _ No lZ What brought Shouidice Hospital to your attention? Friend 8 ,1 Doctor Rerative . . , 6r. 1//o _0. %% EzW,/. rticre ,9 , Did you have a si,gle 26 or double /6 other 4 ,iiJZw hernia operation? 56,/4% fi. s6% 9. Is this your first Annual Reunion? yes No fi .10 . , If no, how many reunions have you iiM ,,afz,fl tt 10. Do you feel that Shouldice Hospital to, ,* * per,son? r0 Most by all odds Definitety 6 JZ very(prenominal) iittle not 66,05% /a%% 7 Z_. reaubrc _fl 42. 6J% 6-/0 ruo,rn,re 5 z17J% r , at all Shouldice Hospital Limited (Abridged) 599 EXHIBIT 3 (Continued) fhat move you the most about your stay at Shouldice? check one help for each of the following. for operation and hospital P1ease s non or so 27. 9d1 Imporiant /4 Somewhat Imporbant 32. 56% // Somewhat Important 25. 5/l /5 Somewhat Important 34. 5E% Not 7 /6. 26% Important 32. 56% Not ImPortant 6 /S,6dl 3 6,96% Not 27,9/k Somewhat 5 /0 Important 25 Important n. fi% 23,2fl1 56. /5% sbouldice Hospital hardly seemed like a hospital at all. Somewhat Very 5 /3 Importani 25 Importani Important //. 63% 30. 23% 55. /4% give the MAIN REASON why you reiurned for this annual In a few words, reunion. Very Important 2 4. 65% SomewhaiVery 39. 53% Friendships witb Patients Not Important / 2. 3? l Not Important 3 696% Not ImporLant were doctors, and it is our obligation to help other Alan ODell added his own concerns surgeons learn. On the other go , its quite clear that others arc tfying to emulate us. Look at this ad. The publicizing is shown in Exhibit 4. ) This makes me believe that we should add to our capacity, either here or elsewhere. Here, we could go to Saturday operations and increase our caPacity by 2O%. Throughout the year, no oPerations are sched- How should we be marketing our services? Right now we dont advertise directly to patients.Were uled for Saturdays or Sundays, although patients whose operations are s cheduled late in the week remain in the hospital over the weekend. Or, with an enthronisation of perhaps $4 million in new sPace/ we even afraid to send out this new brochure weve pu together, unless a potential patient specificallrrequests it, for fear it will generate too much demand. Our records show that just under 1% of our EXHIBIT 4 advertising by a Shouldice Competitor could expand our number of beds by 50%, and schedule the operating rooms more heavily. On the other hand, given Sovernment regulation, do we want to invest more in Toronto?Or should we take a shit another hospital with similar design, perhaps in the United States? There is also the chess opening that we could diversify into other specialties offering similar opportunities such as eye surgerf, yancose veins, or diagnostic services (e. 9. , colonoscopies). For now were also beginnirg the process of groomirg someone to succeed Dr. Degani when he retires. Hes in his early 60s, but at some point well have to add ress this issue. And for good reason, hes resisted changing certain successful procedures that I think we could improve on. We had quite a time changing the schedule for the administration ofDemerol to patients to increase their comfort level during the operation. Dr. Degani has oPPosed a Satutday operating program on the premise that he wontbe here and wont be able to maintain proper control. 500 Shouldice Hospital Limited (Abridged) Canadian Hernra Ctinic Hernias (Ruptures) Required Under local anesthesia as by Canadian method. No Overnight Hospital Stay, Co nsult atio n s Witho ut Char ge 23061St. Rd. 7 BOCA RION, FLA. 33433 482-7755 patients are medical doctors, a significantly high percentage. How should we capttahze on that? Im also concerned about this talk of Saturday operations.We are already getting good utrltzation of this facility. And if we expand further, it will be very difficult to maintain the same attractive of working relationships and attitudes. Already there ar e rumors floatirg around among the staff about it. And the staff is not pleased. The matter of Saturday operations had been a topic of communication among the doctors as well. Four of the older doctors were opposed to it. While most of the younger doctors were indifferent or supportive , at least two who had been at the hospital for some time were particularly concerned about the possibility that the issue would drive wedge between the two groups. As one put it, Id hate to see the practice split over the issue. EruDNOTES Most hernias, knows as external abdominal hernias, are protrusions of some part of the abdominal contents through a hole or slit in the muscular layers of the abdominal wall which is supposed to contain them. Well over 90% of these hernias occur in the groin area. Of thes e,by far the most common are inguinal hernias, many of which are caused by u slight weakness in the muscle layers brought about by the passage of the testicles in male babies through the groin a rea shortly before birth.Aging also contributes to the development of inguinal hernias. Because of the cause of the affliction, 85oh of all hernias occur in males. 2. Based on tracking of patients over more than 30 years, the gross recurrence rate for all operations performed at Shouldice was 0. 8%. Recurrence rates reported in 1. the literature f or these types of hernia varied greatly. However, one text stated, In the United States the gross rate of recurrence for groin hernias approaches 70/. monet ary references in the case are to Canadian dollars. $1 US equaled $1. 33 Canadian on February 23, 3. A11 2004. n Exhibit 2 was prepared by the casewriter, based on conversations with hospital personnel. 4. The chart 5. This figure included a provincially mandated return 6. on investment. The last mentioned figure included the bonus pool for doctors. SIUDY OuEsrtoNs L. What is the market for this seraice? Hout successful is 2. Shouldice Hospital? Define the seraice model for Shouldice . How does each of its elements contribute to the hospitals success? 3. As Dr. Shouldice, what actions, if any, would you take to expand the hospitals capacity and how utould you implement such changes? Shouldice Hospital Limited (Abridged) 601

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