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SHOULDICE HOSPITAL

LIMITED

FROM A HR PERSPECTIVE

BY ABHISHEK MALL 30 APRIL 2018

SHOULDICE USPs

(OD & Process Optimization & Best HR Practices)

Parents Accompanying Children For An Operation Stay Free. We Learned That We Save More In Nursing Costs Than We Spend For Th e Parent’s Room And Board .” ( Lean Human Resources. Kaizen On Learning From Experiences )

Nurses To Patients Was At Shouldice The Ratio Was 1:15 As Compared To 1:4 At Other Hospitals (Process Optimization)

Providing A Guilt Free Vacation (Intangibles Value Proposition)

Nurses Were Spending Large Proportion Of Their Time In Counseling Activities.To encourage the patients to be up socializing, comparing notes, encouraging each other, and walking around, getting exercise (Job Enrichment)

1% of patients are medical doctors, a significantly high percentage (Trust factor)

Nobody is fired;Administrative and support staff are non-union; Pay scale higher than the union scale (Compa Ratio)

Each secretary is trained to do another’s work and in an emergency is able to switch to another function immediately (Job Rotation)

If surgeon stays for five years, he doesn’t leave. Even among younger doctors, few elect to leave. (High retention and experience in system)

JOB ANALYSIS FOR A SURGEON

 Operations done daily by Surgeon Normal Operations done in a year Recurrence operations done in a year Salary of a Surgeon Working hours 3 (normal) + 1 (recurrence) 3 * 5 * 52 = 780 1 * 5 * 52 = 260 144,000 + 40,000 = 184,000 Can \$ = 7:30 AM – 4:00 PM (5 days a week) (8.5 hours)
 Charges for Operation Charges for Stay Travel Charges (Average) Total Revenue Total Cost for Patient including travel Can \$650 \$320 * 4 = Can \$1,280 Can \$400 = 650 + 1280 = 1930 Can \$ \$ 2330 (\$5240 for operations performed elsewhere)

Since recurrence operations takes twice as normal we can take 260 operations as 520 operations Total operations done by a surgeon in a year = 780 + 520 = 1,300 Compensation = \$ 184,000 Per operation compensation = \$ 142 per operation Per operation revenue = \$ 1930

OPERATIONS AND OPERATION COST AND PROFIT

 Per Ops Rev (All fig in Can \$) Number of Operations in a day Total Revenue Total revenue for a week (All fig in Can \$) Total revenue for a year (All fig in Can \$) Operating Cost (All fig in Can \$) Total profit (All fig in Can \$) (Day) 1930 30 57,900 289,500 15,054,000 12,000,000 3,054,000

Overall Shouldice Hospital is profitable by 3 million Canadian dollars The hospitals have 5 operating rooms and 10 FT surgeons There can be 6 operations 7:30 8:15

8:30 9:15

Coffee break 9:45 10:30 10:45 - 12:15 Lunch break 1:30 2:15 2:30 3:15 Total operations in a day = 5*6 = 30 Therefore operations are being done in full capacity

CHALLENGES

They may copy our technique and misapply it or misinform their patients about the use of it

Saturday operations and increase our capacity by 20%?

With an investment of perhaps \$4 million in new space, we could expand our number of beds by 50%,

and schedule the operating rooms more heavily

On the other hand, given government regulation, do we want to invest more in Toronto? Or should we establish another hospital with similar design, perhaps in the United States?

Diversify into other specialties offering similar opportunities such as eye surgery, varicose veins, or diagnostic services

Dr. Degani - He’s resisted changing certain successful procedures

How should we be marketing our service

Copy Our Technique And Misapply It

Shouldice should patent their method of operating hernias (if not done already)

Surgeons should be invited for visitors and learning but should be kept in board rooms and not in operation theatres.The special procedure of Shouldice is not just the operation procedure but it should be well

protected.

SATURDAY OPERATIONS AND INCREASE OUR CAPACITY BY 20%?

 Week Day Mon Tue Wed Thus Fri Sat Sun Beds required 30 30 30 Check Out Beds required 30 30 30 Check Out Beds required 30 30 30 Check Out Beds required 30 30 30 Check Out Beds required Check Out 30 30 30 Beds required No admissions No admissions No admissions Total Beds required 30 60 90 90 90 60 30

Monday mornings Surgeons are not being utilized

Current operations are around 150 per week . Adding Saturday would increase it to 180 = 20% increase

Alternatively they can start operating on Mondays since the surgeons are not fully occupied on Mondays and are utilized only post 1:30 PM

Also as seen earlier there can be 6 operations in a day. This can be increased by 33% = By having 2 more operations in a day

We have seen that by having 8 operations in a day and working on Monday morning total increase in the number of operations = 8 * 6 = 48

Earlier operations = 30

Increase = 60% in capacity without no capital investment

With an investment of \$4 million in new space, expand number of beds by 50%, and schedule the operating rooms more heavily

 Per Ops Rev (All fig in Can \$) Number of Operations in a day Total Revenue Total revenue for a week (All fig in Can \$) Total revenue for a year (All fig in Can \$) Operating Cost (All fig in Can \$) Total profit (All fig in Can \$) (Day) 1930 30 57,900 289,500 15,054,000 12,000,000 3,054,000

As seen already we have profit of around 3 million therefore 4 million is not a heavy investment for Shouldice

Secondly if profit is in proportion to capacity increase, we have seen that we can get 60% increase in capacity

Therefore the next year the profit would be of 4.8 million

REMAINING CHALLENGES

On the other hand, given government regulation, do we want to invest more in Toronto? Or should we establish another hospital with similar design, perhaps in the United States?

Do A/B testing with setting up small operations in US and see if it is profitable and more convenient.

Diversify into other specialties offering similar opportunities such as eye surgery, varicose veins, or diagnostic services

As we have seen that beds are not fully utilized on Mon, Tue- We can take up opportunities that require a days time for diagnosis

Dr. Degani - He’s resisted changing certain successful procedures

As per succession planning. Assessment center should be run and best candidate should be picked up by the executive committee. Prior to that it should be properly though through if new changes are required in the already successfully running system

How should we be marketing our service

Currently there is a backlog of 2400 patients, as already informed marketing would lead to more backlogs. Marketing should be targeted and should be done through more precise methods as it related to hernia only. For example No need to TV or newspaper advertisement. Company can market it to other doctors who can

recommend Shouldice to them. Ask patients for referrals.

OTHER POINTERS

Operating day is only 1. We can have recreational activities in other complex nearby.

Beds can be increased to all 3 floors = 90 beds and operations can be done on all floors

Number of operations would also increase to 90 operations in a day up from 30

The back log of 2400 can be completed in 40 working days (60 operations extra). Which is around 8 weeks.

This should not lead to recruit more surgeons since we have 10 Full time surgeons who can do around 6 operations in a day.

Thank You