Executive Summery

This report is intending to show the Shouldice Hospital, Ontario, Canada is a pioneer in the field of
treating patients suffering from external abdominal hernia. The speedy ambulation coupled with its
reasonable price rates leads to satisfied patients publicizing the hospital by word of mouth. The main
challenge in front of the hospital is deciding on ways to meet the backlog of operations, by
expanding the hospital's capacity, while still maintaining control over the overall quality of service
delivered and selection of the new surgeon after Dr Obney. The available options are evaluated and
given thereby.

Problem Statement:
What should Dr. Obney should do to increase bed capacity and
thereby operation capacity as a doctor.

Options under consideration

Option 1: Make Saturday as operational day/ regular working day.

The reason being no investment required and therefore no additional
cost is involved and more over they can still maintain the quality of
service.
This requires Shouldice to schedule 23-25 operations on Saturday. Six
surgeons and a supervising surgeon have to work on Saturdays and
this violates the implied contract that Shouldice has with its surgeons.
This would be strongly opposed by the senior doctors.

Option 2:Add a new floor to the hospital.

Presently there are 45 Rooms available and adding a new floor

will increase the bed capacity by 50 % and therefore total Number of
Rooms will be: 89 +45= 134, and thereby increase the revenue of the
hospital. Moreover no additional cost of controlling and can also
maintain culture and environment.
This would Require to schedule doctors to the full capacity of five
days per week Increase work load on admissions, kitchen, laundry,
housekeeping and accounting Further staggering of meal hours for
patients (100 seat dining room) Disruption during construction
Option 3 : Expanding to the USA and other market.
Current clinic already attracts a large number of US citizen and by
establishing a new hospital in US will help the hospital to expand its
market share and thereby increase the revenue. However this requires
a huge investment. Hospital can have loans easily from banks as it has
a turnover of (6850 * 1029) 7.04 million and a profit of 2.02 million
as the cost being 4.08 million. They can pay back the loan easily,
although it is uncertain that the hospital will always earn profit and
ultimately can assure redemption of loan. So this is moderately
favoured.

Option 4: Diversification of operations like eye and ear surgery

This will give the hospital a chance to access a range of patients with
different disease and also the strength of the hospital will go up. This
action would need the hospital to have additional doctors specialised
in eye and ear surgery and also additional staff to maintain the new
department, and therefore add on to the cost of the operation of the
hospital. However diversification to other surgery does not ensure the
same result as existing surgery operation. Therefore it shows low
favourable.
Criteria of evolution:

1. Cost
This criteria assumes that the more bed added to the hospital the more
cost would be incurred to maintain quality of the hospital.
2. accessible by Patients
The assumption is that as the hospital increases its capacity of
operation it would be easier for patients to have more assurance about
having complete treatment without any waiting list.
3. Return On investment (ROI)
As the hospital invests more on its operation it is assumed to give
increasing returns with an every additional investment.
4. Availability of surgeons
It is assumed that surgeons are easily available when they are
demanded by the hospital.
Analysis of options:
Option 1:
Criteria 1:
The cost of operating Saturday as working day very economical as no
other investment is required. Highly favoured
Criteria 2:
By making Saturday as working day they can make fullest utilization
of their available beds. Moreover it will give the hospital a chance to
have more number of patients for some number of cases. Moderately
favoured
Criteria 3:
ROI is high as no additional cost is there except the cost of doctors
and some other minor expenses. Highly favoured

Criteria 4: Surgeons can be easily accessible as there are many

surgeons who are ready to work on holidays for money. Highly
favoured
Option 2:
Criteria 1:
There is opportunity cost involved in borrowing from banks and
investing so the cost is pretty high. LOW in favour
Criteria 2:
The accessibility by the patients with new investment and increasing
bed capacity cannot be assured. However it shows a positive response
with increasing number of beds. Moderately favoured
Criteria 3:
ROI is can be increased but not all time it can assured that ROI will
be positive as additional cost of maintaining quality. Moderately
favoured
Criteria 4:
Surgeons can be easily available as there are many surgeons want to
work with shouldice hospital. HIGHLY FAVOURED
Option 3:
Criteria 1:
Expanding the market has additional cost that has to be bear by the
hospital. Moderately Favoured
Criteria 2:
Accessibility by the patients within and outside Canada is easy
compared to any other options. HIGHLY FAVOURED
Criteria 3:
High ROI is not assured as lots of other expenses of maintain
standard of the hospital outside Canada may be incurred.
MODARETELY FAVOURED
Criteria 4:
All time it is not sure that all the surgeons work as same productivity
in every situation and in every part of the world.
LOW IN FAVOUR
Option 4:
Criteria 1:
High cost of diversification is generally expected. Moreover acquiring
new surgeons is more costly. LOW IN FAVOUR
Criteria 2:
Number customer with different Disease can be treated and thereby
increasing the brand value of the hospital can be increased. HIGHLY
favoured
Criteria 3:
Different treatment has different cost involved so high return ROI
cannot be expected. MODERATLY FAVOURED.
Criteria 4:
Specialised surgeons for different disease are not easily available. As
to maintain standard of the hospital highly specialised doctors are
needed. MODERATLY FAVOURED.

Conclusion
The best options that can be selected out of these alternatives is
“Making Saturday as working day”, because increasing the capacity
by scheduling Saturday operations is a swift and cost effective
solution. It does not violate any government regulations and at the
same time also leverage the existing strength of the hospital by
rendering high quality service to the patients.