Shouldice Hospital
Shouldice Hospital Case Analysis
Question 1. How successful is the Shouldice Hospital? Generate a P&L statement using available information from the case. Treat each of the two operations – hospital and the surgery – separately
Compared to other medical institutions that provide a wide array of medical procedures, Shouldice Hospital specializes in one procedure for patients that suffer from abdominal hernias. This specialization allows each doctor at Shouldice Hospital to perform approximately 600 hernia surgeries per year, while doctors at other institutions only perform 25-50 hernia surgeries per year. As a result, the “Shouldice Method” has been perfected to an unparalleled level for the well-being of the patient. The typical Shouldice patient only experience s 5 days of required recovery time after their surgery, while hernia patients from other institutions typically experience 10 days of recovery time. This expedited recovery time is due to the level of active physical rehabilitation that Shouldice Hospital expects from their patients. Walking and socializing with others is expected, and Shouldice Hospital has proven that these actions significantly aid in the healing process due to the improvement of the positive mental attitude of the patient.
The specialization in one particular procedure as well as the 4 day recovery time allows Shouldice Hospital to offer their surgical procedure at a lower cost than other institutions. This is because Shouldice Hospital has lower overhead costs associated with labor and has fewer investments in capital expenditures since they do not have the wide array of machinery and equipment that you might see at a typical institution. This savings is passed along to the patient, as Shouldice procedures typically cost $954 ($111 * 4 days + $450 + $60) while other institutions typically charge $2,000 to $4,000 for the same procedure. Additionally, the extremely low turnover rate a Shouldice Hospital demonstrates
Question 1. How successful is the Shouldice Hospital? Generate a P&L statement using available information from the case. Treat each of the two operations – hospital and the surgery – separately
Compared to other medical institutions that provide a wide array of medical procedures, Shouldice Hospital specializes in one procedure for patients that suffer from abdominal hernias. This specialization allows each doctor at Shouldice Hospital to perform approximately 600 hernia surgeries per year, while doctors at other institutions only perform 25-50 hernia surgeries per year. As a result, the “Shouldice Method” has been perfected to an unparalleled level for the well-being of the patient. The typical Shouldice patient only experience s 5 days of required recovery time after their surgery, while hernia patients from other institutions typically experience 10 days of recovery time. This expedited recovery time is due to the level of active physical rehabilitation that Shouldice Hospital expects from their patients. Walking and socializing with others is expected, and Shouldice Hospital has proven that these actions significantly aid in the healing process due to the improvement of the positive mental attitude of the patient.
The specialization in one particular procedure as well as the 4 day recovery time allows Shouldice Hospital to offer their surgical procedure at a lower cost than other institutions. This is because Shouldice Hospital has lower overhead costs associated with labor and has fewer investments in capital expenditures since they do not have the wide array of machinery and equipment that you might see at a typical institution. This savings is passed along to the patient, as Shouldice procedures typically cost $954 ($111 * 4 days + $450 + $60) while other institutions typically charge $2,000 to $4,000 for the same procedure. Additionally, the extremely low turnover rate a Shouldice Hospital demonstrates
Bibliography: 1. “Shouldice Hospital Limited.” Harvard Business School, June 2, 2003