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Shouldice Hospital

Decent Essays

OPERATIONS MANAGEMENT

CASE 1 – Shouldice Hospital

Introduction Shouldice Hospital, set up in 1945 by Dr. Earl Shouldice, is located near Toronto. It follows the business model of focus on a single standardised service for a narrow target of consumers, rather than to provide customised solution (as in a general clinic or hospital). It focuses on providing quick, convenient, and reliable cure for external types of abdominal hernias. The Hospital uses its own technique, called the Shouldice Method. It is famous for a relatively short post-operative recovery period.

Description
1. Shouldice Hospital provides low-cost medical service in its area of specialization. Use of the Shouldice Method allows patients to recuperate fast …show more content…

Free Service to clergy and family members
13. Out-of-town patients were diagnosed online using the medical information questionnaire, saving $200-$400
14. Recovery time for patients is 1-4 weeks, as compared to 2-8 weeks in other hospitals

Process Flow Diagram

Process Analysis using Cost and Capacity

A: Cost Analysis
Budget for the Hospital: $ 2.8 million
Budget for the clinic: $2 million

Therefore, Total Budget = Budget for the Hospital+ Budget for the clinic = $2.8 million + $2 million = $ 4.8 million
Number of operations per year = 6850 (considering the same as for the year, 1982)
Therefore average cost per operation = $4.8 million/6850 = $701
Total charge to the patient = Hospital stay + Surgical fee + Assistant surgeon fee + Anesthetic fee = 111*4 + 450 + 60 +75 = $1029
Net profit per patient = $(1029-701) = $328

B: Capacity Analysis
The critical resources in this case are:
• Number of operation theatres
• Number of hospital beds
• Number of staff (including surgeons, assistant surgeons and nurses)

These resources are tabulated as under:
Resource name Availability Max. capacity per week
Operation Theatre 5 185
Number of beds 117 152
Number of surgeons 12 357

For details of calculation of the maximum capacity, please refer to points 1, 2 and 3 below.

1. Average number of operations per day = 27(See Appendix A above)
Number of critical operations performed = 18% of total

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