Shouldice Case Study

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Shouldice Hospital Limited Group Case Study Feb. 14th, 2012 Brief Synopsis In 1982 Shouldice hospital comprised of 89 beds and performed 6,850 hernia operations while being staffed by 12 full time surgeons, 7 assistant surgeons, an anesthesiologist and 30 nurses in addition to support staff. The Shouldice hospital employed unique surgical techniques and post operation routines which led to a speedier recovery and a lower than average hernia reoccurrence rate. The hospital had gained a reputation for providing a quality service and relied mostly on word of mouth marketing. Many of their patients were from Ontario (56%) and the US (42%) with a smaller percentage (2%) travelling from Europe or other provinces in Canada. Shouldice performed two types of hernia operations which they classified as primary (first time occurrences) and secondary (reoccurrences or repairs). Primary surgeries accounted for 82% of the hospitals overall volume of operations. The number of surgeries being performed at the hospital continued to increase year over year as did the backlog of scheduled surgeries, which at the end of 1982 was also at an all-time high of 1,200. Key Issues and Findings Shouldice Hospital appears to be quite successful. Patients typically paid approximately $1000 for a primary surgery and their 4 day stay at the hospital. With 6,850 surgeries being performed in 1982 we can estimate the hospital’s revenue at approximately $6.85 million. Using their 1983 operating cost budget total of $4.2 million we can assume that the hospital is quite successful with approximately a 38% profit margin. Shouldice is able to operate more efficiently than other hospitals for a number of reasons. Ultimately, due to the fact that they specialize in one type of surgery, they are able to benefit from economies of

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