$he report presents a %ase ana&sis on the su%%ess o' Shou&di%e ospita& as a seri%e organi*ation+ ,t detai&s the reasons -ehind high patient and emp&oee engagement+ $he ana& ana &si sis s a& a&so so e ea& a&uat uates es the op opti tion ons s 'o 'orr Sh Shou ou&d &di% i%e e gr gro.t o.th h
Group 3 Deepesh Gupta (1511319) Jitendra Kumar Singh Singh (1511325) Smruti Ranjan Panda (1511362) Souma Ranjan Sahoo (151136!) Ra"shith K # 15113!6
1.
INTRODUCTION
Shou&di%e ospita& /imited is a hea&th%are 'a%i&it &o%ated in the su-ur-s o' $oronto0 $oronto0 anada+ $he 10 s4uare 'oot 'a%i&it is housed on a spra.&ing 13 a%re estate and spe%ia&i*es in repairing eterna& a-domina& hernias+ ,t has 9 -eds and 605 operations are per'ormed on patients (in ear 192) 'rom a&& a%ross the 7nited States and anada+ 8ounded - Dr+ Dr+ ar&e Shou&di%e in 19!0 the organi*ation enjos a reputation 'or e:e%tie& using a uni4ue surgi%a& te%hni4ue to repair eterna& hernias hernias that is %onsidered superior to a&& others+ $he pro%edure in%&udes ear& am-u&ation 'o&&o.ing surger 'or rapid and e:e%tie re%oer+ $he organi*ation ta"es great pride in its ;patient as -oss< phi&osoph o' seri%e+
2.
BUSINESS PERFORMANCE
Shou&d Shou&di% i%e e hospit hospita& a& has -een -een su%%es su%%ess'u& s'u& in di:er di:erent ent aspe%t aspe%ts s rangin ranging g 'rom 'rom emp&oee satis'a%tion to %ustomer satis'a%tion to e=%ien% and 4ua&it o' seri%e o:erings+ >ne %an gauge the su%%ess o' the -usiness - &oo"ing at the oersu-s%ription rate in spite o' &a%" o' adertisement+ $he per'orman%e %an %an -e measu measurred 4uan 4uanti tita tati tie e& & (in (in ter terms o' pro? pro?tt marg margin ins0 s0 %apa %apa%i %it t uti&i*ation et%+) as .e&& as 4ua&itatie& (in terms o' patients and phsi%ian satis'a%tion)+
2.1 Qualitativ pr!or"a#$ "a%ur"#t 8or an seri%e -usiness0 su%h as Shou&di%e hospita& is0 it must get -e&o. 'our e&ements right to de&ier seri%e e%e&&en%e %onsistent&@ • • •
Seri%e o:erings mp&oee management ustomer management
a%h o' the a-oe e&ements hae -een ea&uated in detai& in the -e&o. se%tions+
2.1.1 Srvi$ o&ri#'% 8or 8or produ produ%t %t -ased -ased %ompan %ompanies ies00 the 'o%us is on the %hara%ter %hara%terist isti%s i%s o' the produ%t that %ustomer .i&& a&ue+ o.eer0 'or seri%e -ased %ompanies0 the 'o%us is on %ustomer eperien%e+ $he %ompanies %annot 'air .e&& in eer aspe%t o' -usiness0 there is a&.as a tradeAo: ino&ed and the tri%" &ies in the %hoi%e to per'orm -ad& in some minor aspe%ts o' -usiness in order to e%e& e%e& at other things+
Shou&di%e .as a-&e to esta-&ish short treatment regime at a high 4ua&it &ee&+ Patients .ere a-&e to returns to their jo- .ithin 1A2 .ee"s as %ompared to 2A .ee"s in other hospita&s+ 2.1.1.1 Qualit( $o#trol
Shou&di%e ospita& has managed to maintain high 4ua&it in its operation and postAoperations a%tiities+ Some o' the 4ua&it %ontro& is reBe%ted in the -e&o. s%enarios+ 1) $he re%ruitment pro%ess is rigorous in order to ma"e sure Shou&di%e hire eperien%e phsi%ians .ho are Bei-&e i+e+ read to adopt Shou&di%e method o' operation+ >ne o' the important parameters is to understand the motiation o' the phsi%ian to .or" at Shou&di%e+ Genera&&0 phsi%ians a&ue .or"A&i'e -a&an%e (as the are married ) and are re&atie& &ess am-itious 2) $here is a &o. re%urrent rate o' eterna& ernia -ased on the Shou&di%e operations method+ $his is an indi%ation o' the high 4ua&it o' operation - high& s"i&&ed surgeons 3) $he 'ood is prepared in house to ensure the 4ua&it %ontro&+ $he %ontro& on the 4ua&it is interna& and there is no dependen% on the eterna& %ontra%tor en%e .ith high 4ua&it %ontro&0 Shou&di%e has -een a-&e to improe patientCs eperien%e as .e&& as %ontro& the %osts+ 2.1.1.2 E)$i#t a#* $o%t &$tiv pro$%% +o,
part 'rom 4ua&it %ontro&0 there has -een other initiaties that Shou&di%e has underta"en to redu%e the oera&& %ost 'or the patients and maintain an e=%ient Bo. 'or operations+ 1+ a%h se%retar is trained to do otherCs .or" in %ase o' an emergen% situation 2+ $he produ%tiit is high due to high& trained phsi%ians+ $heir re%ruitment po&i%ies are re&ated to the 'o%used strateg o' Shou&di%e 3+ $here is a &o. nurse to patient ratio as %ompared to tpi%a& hospita&+ $his is -e%ause a+ $he estimated %ost to 'urnish an operating room is &ess than E30 -+ Shou&di%e a&&o.ed parents to a%%ompan the %hi&dren as the nursing %osts .ere higher than the patientCs room and -oard+ %+ S"i&&ed surgeons at Shou&di%e &ed to a redu%ed operationa& %ost as there .ere no mista"esF4ua&it issue .hi&e operations d+ Sin%e Shou&di%e 'o%used on eer%ise and patient %are0 hen%e the resour%es re4uired to ta"e %are o' the patients are re&atie& &ess
e+ $he 4uestionnaires sent to the patients 'or initia& diagnosis a&so redu%ed the initia& %he%"Aup %osts+ $he patients .ere instru%ted to redu%e the .eight in %ase the .ere oer.eight
2.1.2 E"plo( "a#a'"#t s Shou&di%e hospita& is 'o%ussed on a ni%he seri%es (i+e+ proiding operations 'or eterna& hernia)0 it has -een imperatie 'or the hospita& to maintain high &ee& o' epertise+ en%e0 Shou&di%e hospita& has 'o%ussed on its emp&oee re&ated strategies in order to retain the ta&ent and maintain its point o' di:erentiation+ $he e%e&&en%e in emp&oee management is reBe%ted in the etreme& &o. emp&oee turnoer as %ompared to the other hospita&s+ $his is due to mu&tip&e emp&oee 'riend& po&i%ies+ 1+ #o-od is ?red+ $his a&&o.s emp&oee the 'reedom at the .or" p&a%e and gies more sense o' responsi-i&it 2+ Shou&di%e maintain higher pa s%a&e 'or its sta: than the union pa s%a&e 'or %ompara-&e jo-s in the area 3+ Pro?ts are shared among phsi%ians and sta:+ 8or eamp&e0 surgeons re%eied a -onus o' E50 in the re%ent ears and sta: re%eied E650 as the emp&oee diidends !+ Shou&di%e a&&o. a good .or"A&i'e -a&an%e 'or the surgeons+ Surgeons da gets oer at ! pm a'ter .hi%h the %an spend time .ith their 'ami& 5+ Surgeons are proided opportunit to &earn - a&&o%ating the patients .ith ernia re%urren%es to the same do%tor .ho treated the patient ear&ier 6+ Shou&di%e en%ourage group &earning+ o&&a-oration is en%ouraged + $he .or"&oad o' surgeons is moderate .ith 3A! operations per da as %ompared to the s%hedu&e o' surgeons in other hospita&s &though surgeons tend to do simi&ar "ind o' operation throughout their &i'e0 the re%ruitment po&i% is made su%h that the do%tors re%ruited are ?ne .ith this "ind o' enironment+ Do%tors .ith 'ami&ies are re%ruited .hi%h .ou&d &i"e to hae .or"A&i'e -a&an%e rather than more am-itious do%tors+
2.1.3 Cu%to"r "a#a'"#t Shou&di%e ospita& has e%e&&ed in proiding patients .ith homeA&i"eC enironment .ith a %o&&a-oratie %u&ture and intentiona&& aoided to proide hospita&A&i"eC 'ee& to the patients+ $his is due to the %u&ture Shou&di%e has de%ided to -ui&d in the hospita&+ Patients are en%ouraged to intera%t and so%ia&i*e among ea%h other+ $his .a o' treatment has -een so su%%ess'u& that patients demand 'or one etra da
o' sta at the hospita&+ $he 'a%i&ities in the hospita& are not traditiona& hospita& &i"eC -ut gien a er 'riend& 'ee& .ith addition o' &ounges and re%reationa& areas+ er s4uare 'oot area in the hospita& is %arpeted to redu%e hospita& &i"e 'ee&ing+ He&o. are spe%i?% -ehaiors en%ouraged - Shou&di%e that has &ed to the prea&ent %u&ture+ 1+ Patients are en%ouraged to ta&" to the a&read operated patients in order to &isten to their eperien%e that %ou&d potentia&& &ead to redu%tion o' aniet 2+ Parents a%%ompaning the %hi&dren are a&&o.ed to sta 'or 'ree+ part 'rom redu%ing the nursing %ost0 this ma"es -oth %hi&d and parent happier as the are a&.as near ea%h other 3+ 'ter operations0 patients .ere en%ouraged to .a&" to the .hee& %hair0 the %an start eer%ising the same da0 een %&im- stairs+ && these .ere done to redu%e the 'ee&ing o' patientC and insti&& the 'ee&ing that patients hae %ontro& oer his &i'e and is not %ontro& o' the disease+ $his shaped patientsC attitude Shou&di%e a&so hosts a&umni dinners 'or patients operated at Shou&di%e+ Iost o' the patients in the a&umni reunion seems to -e mention that Shou&di%e eperien%e did not 'ee& &i"e a hospita&+ $his is an eiden%e 'or a great patient 'riend& hospita& that has &ed to its su%%ess+ Patients hae -een er .i&&ing to re'er other patients to Shou&di%e and this has in turn made the mar"eting redundant+
2.2 Qua#titativ pr!or"a#$ "a%ur"#t $he 4uantitatie per'orman%e o' Shou&di%e %an -e measure in terms o' pro?&e margin0 %apa%it uti&i*ation and %omparison .ith other hospita&s+
2.2.1 Pro-t Mar'i# $he annua& pro?t margin is e&a-orate& %a&%u&ated in the -e&o. ta-&e+
Total i#$o" !ro" %ur'ri% pr (ar USD/ A$tivit(
Detai&s
ospita& sta
a&%u&ations
$ota& (E)
! das E111FDa
111!
!!!
Surgi%a& 'ee
E!5 per surger
!51
!5
ssistant Surgeon 'ee
E6 'ee
6
6
Total #or"al opratio# $0ar'%
95!
naestheti% %harges (spe%ia& %ase)
E5 per surger
Total $0ar'% !or $riti$al opratio#
#orma& %harges L anaestheti%
erage no+ o' operationsFda
erage o' 3 to 36
#o+ o' %riti%a& operations per da
51
5 129
+5(3L36)
33
ssume5 M o' tota& operations
+533
1+65
#o+ o' regu&ar operations per da
95M o' tota& operations
+9533
31+35
AERAGE TOTA INCOME PER DA
.eighted ag+ regu&ar and %riti%a&
95!1+65 L 12931+35
33033+25
#o o' Nor"ing Das Per Ionth
5 dasF.ee" %urrent&
5!
2
TOTA EAR REENUE
Dai& in%ome$ota& das
3333+252 12
+12 Ii&&ion
Total %alari% pai* pr (ar USD/ E"plo(
Dtail%
Cal$ulatio#%
Total 4/
8u&& $ime Surgeons
12 E5" sa&ar L 5" -onus poo&
125"L5"
1010
Part $ime Surgeons
51M o' E6FsurgerO 33 operationsFdaO 2 dasFmonth0 12 monthsFear
+516332 12
2!20352
#urses
! nurses 2" sa&ar (aerage)
!2"
0
nestheti%
E3Fda 2dasFmonth 12
3212
20
harge
month
Honuses Distri-uted
65"
TOTA
650
2.25M#
ANNUA OPERATING E6PENSES USD/ ospita&
2+In
&ini%
2In
Total
7.5M#
Curr#t a##ual oprati#' pro-t 8 5.12 9 7.5 8 3.32M#:::::::::::::::::::.A/ 8rom the a-oe ana&sis0 it %an -e said that the hospita& is haing good pro?t+
2.2.2 Capa$it( Utili;atio# Ne .i&& %a&%u&ate %apa%it uti&i*ation o' 'u&& time surgeons and operation theatre 2.2.2.1 Full ti" %ur'o#%
#o o' hours the 'u&& time surgeons are aai&a-&e 'or seri%eFda 12 96 #o o' usa-&e hours o' 'u&& time surgeonsFda >perating hours per da L onsu&ting hoursFdano o' surgeons (331) L (62) !5 hours (assumed 3 operations per da0 duration o' 1 operation %onsidered 1 hr as gien in %aseO assumed 6 do%tors %onsu&ting 'rom 1 pm to 3 pm eer da0 tota& usa-&e hours 'or %onsu&tan% is 12 hours) apa%it uti&i*ation o' do%tors !6+M+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ B/
!5F96
2.2.2.2 Opratio# t0atr<
#o o' operations that %an -e per'ormed at 'u&& %apa%it #o o' operation theatres (#o o' .or"ing hoursFDuration o' ea%h operation) 5(F1) !
apa%it uti&i*ation o' operation 2+5M+++++++++++++++++++++++++++++++++++++++++++++++C/
theatres
33F!
2.2.3 Co"pari%o# o! S0oul*i$ v%. ot0r 0o%pital% 8o%ussed approa%h o' Shou&di%e hospita& has -een one o' reasons -ehind its su%%ess+ ,t has not epanded its 'o%us to other operationsFsurgeries een i' eterna& hernia is the one o' the eas surgeries to per'orm+ ,ts strateg has -een to 'o%us on the ni%he .ith &imited %apa%it (and not epand0 ti&& no.)+ He&o. e&ements su-stantiates ho. narro. 'o%us has a&&o.ed Shou&di%e to a%hiee -etter e=%ien% and 4ua&it+ 1+ $he narro. 'o%us on operating eterna& ernia has a&&o.ed Shou&di%e to gain epertise in that area and 'o%us on ho&isti% %are o' the patients+ 2+ $he train the in%oming phsi%ians to 'o&&o. a spe%i?% approa%h to operate eterna& ernias 3+ $heor o' s.i't een Bo. suggests that the produ%tiit 'or an pro%ess Q-e it &a-or produ%tiit0 ma%hine produ%tiit0 materia&s produ%tiit0 or tota& 'a%tor produ%tiitQrises .ith the speed - .hi%h materia&s (or in'ormation) Bo. through the pro%ess0 and it 'a&&s .ith in%reases in the aria-i&it asso%iated .ith the Bo.0 -e that aria-i&it asso%iated .ith 4ua&it0 4uantities0 or timing+ $his is app&i%a-&e 'or Shou&di%e hospita& as it 'o%us on ni%he strateg (.ith &ess aria-i&it) and 4ua&it0 hen%e its pro%ess Bo. is e=%ient+
2.3 C0all#'% ,n the %urrent s%enario0 the main pro-&em o' Shou&di%e hospita& is .hether to in%rease its %apa%it or not+ nd i' es0 .hi%h .a shou&d it do+ ,t has 'o&&o.ing ?e options to epand the %apa%it@ 1+ 2+ 3+ !+ 5+
S%enario S%enario S%enario S%enario S%enario
1@ pand .ith additiona& Boor and one operating theatre 2@ Possi-i&it o' introdu%ing 3 das treatment 'or patients 3@ Ia"e Saturda a .or"ing da !@ >pening a ne. 'a%i&it in di:erent &o%ation0 in 7S 5@ Diersi'ing seri%es
$he ana&sis 'or a&& the 'our s%enarios has -een done -e&o. and a ?na& re%ommendation is proided 'or the gro.th strateg o' the Shou&di%e+
2.7 A#al(%i% 2.7.1 S$#ario 1< E=pa#* ,it0 a# a**itio#al +oor A%%u"ptio# • •
>ne ne. operation theatre >perating theatre to -e in%&uded in the ne. Boor -ui&t .ithout redu%ing the in%rease in num-er o' -eds
,n this so&ution0 the %apa%it uti&i*ation o' Shou&di%e hospita& has -een %onsidered+ $here are man resour%es used in Shou&di%e hospita& .hi%h %omprises o' a ?ed %ost and aria-&e %ost+ $he resour%es responsi-&e 'or aria-&e %ost are do%tors0 assistant do%tors0 anaesthetist0 nurses0 house "eepers0 other emp&oees et%+ $he tota& operating %ost o' the hospita& in ear 193 .as !+ mi&&ion %o&&e%tie& 'or -oth hospita& and %&ini%+ s 'rom our ear&ier ana&sis0 'rom (H) and ()0 .e "no. that the %apa%it uti&i*ation o' .or"ing hours o' 'u&& time surgeons and operating theatre is 7>.5?@ and 52.@ respe%tie&+ $he pro?t margin as %a&%u&ated in () is 43.32 "illio#.
Propo%* %olutio#< $he num-er o' -eds in the hospita& %urrent& is 9+ pproimating the num-er to 9 ( 'or %a&%u&ation ease)0 and %onsidering the 'a%t that eer patient is dis%harged on ! th da morning0 at an gien time the maimum -ed o%%upied .i&& -e 9 i'0 eer da at an aerage 3 patients are operated+ Nith in%reasing in the num-er o' -eds - 5M0 tota& num-er o' -eds .i&& -e 91+5 1!5 dditiona& ?ed %ost in%urred E2 (1) #o o' patients to -e operated on dai& -asis 1!5F3 !+33 approimate& ! en%e there has to -e in%rease in no o' operating theatre - 1 num-er0 ma"ing it tota& o' 6 theatres operating hours a da0 hen%e tota& no o' operations ! ,n %ase o' an emergen% or issue in an operation theatre0 and additiona& operation theatre %an -e -ui&t to share the operating &oad+ $here'ore0 in%rease in ?ed %ost due to 2 additiona& operation theatre 2E3
E6 (2)
I#$ra% i# %alar( o! "plo(% !or t0 #, %t up< #o o' surgeries per da ! $ota& no o' surgeries per ear in 5 .ee"s (!55) 12 $a"ing aerage num-er o' surgeries as per preious %apa%it per da 33 $ota& no o' surgeries per ear as per preious set up in 'u&& %apa%it 3355 25
Pati#t r'i%tratio# o# 1%t *a(< Nith the ne. set up0 the maimum num-er o' patient registration has to -e in%reased 'rom 36 to !0 i+e 'urther in%rease in (12(2F6)) hours o' usa-&e time o' 'u&& time surgeons+ i+e 3+6 hours (ssumption@ $he in%rease in no o' registration is a%%ommodated - shi'ting some o' the patient registration to morning shi't .ithout in%urring an additiona& %ost)
Full ti" %ur'o#%< $here is no re4uirement o' in%reasing no o' 'u&& time surgeons+ $ota& usa-&e time o' 'u&& time surgeons no o' operating hours no o' %onsu&ting hours ! L (no o' patients%onsu&ting time in hours) ! L (!(2F6) hours) 6! hours apa%it uti&i*ation o' 'u&& time surgeons 6!F96 66+6 M Nith a tota& o' assistant surgeons and 6 operating theatres0 at an gien time0 there is an assistant surgeon aai&a-&e 'or surger+ apa%it uti&i*ation o' assistant surgeons #o+ o' operating hoursF no o' hours o' aai&a-i&it !F56 5+1M s assistant surgeons are paid a%%ording to num-er o' surgeries done0 in%rease in %ost in%urred - the hospita& to a%%ommodate their sa&ar (12A25)E6+51 11!5 (3) #o o' nurses at present 10 no additiona& nurses re4uired .ith in%rease in 1 operating theatre+
(ssumption@ $he same anesthetist is a-&e to supp& at the same pri%e per da)
Pro-tailit( $al$ulatio#%< A**itio#al Co%t i#$urr* pr (ar< dditiona& 8ied ost E2 L E 6 E 26 (ssumption@ depre%iated .ith *ero residua& a&ue oer 2 ears) Depre%iating the ?ed %ost oer 5 ears0 %ost in%urred in 1 ear E26F5 E !12 dditiona& aria-&e %ost per ear 'or assistant surgeons E 11!5 $ota& %ost E 5265
A**itio#al rv#u i#$urr* pr (ar< ,n%rease in num-er o' surgeries per ear (!A33)55 35 Reenue 'rom additiona& 35 surgeries (35F25)12 E 369 #et additiona& pro?t E369A5265 E316325 Pro?t in%reases - a&most 1M+ en%e this so&ution is pro?ta-&e0 and the ?ed %ost %an -e re%oered .ithin 1 ear o' operation+
Pro% a#* Co#% o! t0 %olutio#< PR>S
>#S
1) Hed %apa%it in%reased - 5M
1) ssistant surgeon oer -urdened
2) #o re4uirement o' Saturda .or"ing
2) Surgeons ma -e oer-urdened %ompared to %urrent .or" &oad
3) #o additiona& surgeon re4uired+ er &ess in%rease in annua& aria-&e %oat
3) During morning registration o' patients0 things might get mess due to dis%harging o' patients in the morning
!) igh pro?t margin
!) ,' the demand doesnCt in%rease0 the hospita& might in%ur a &oss due to &o. reenue
2.7.2 S$#ario 2< Po%%iilit( o! i#tro*u$i#' 3 *a(% trat"#t !or pati#t% s mentioned in the preious %ases that Shou&di%e hospita& is not uti&ising its 'u&& %apa%it+ $he main reason o' this is that the -eds aai&a-&e are &imited i+e+ 9 in num-ers+ en%e in the present s%enario0 .e %anCt a%%ommodate more than 9 patient+ $o in%rease the num-er o' the patient -eing treated .e %an in%rease the num-er o' -eds aai&a-&e 'or the treatment0 or .e %an redu%e the pro%ess %%&e - one da+ ,t is mentioned in the %ase that man patients %ome to the hospita& 'or treatment 'rom the di:erent regions o' the .or&d0 espe%ia&& 'rom 7+S++ o.eer0 there are a &arge num-er o' patients .ho %ome 'rom the near- regions+ ,' .e %an target those patients0 then .e %an redu%e the %%&e time - one da+ Some patients are .e&& a.are o' the pro%ess+ $he "no. .hat to do and ho. to do+ en i' the donCt "no. anthing a-out the pro%edure0 .e %an proide them ne%essar in'ormation on our .e-site .ith the he&p o' 'e. tutoria& ideos+ So .e donCt hae to proide them that amount o' the training .hi%h .e are giing to the patient right no.+ s it is mentioned ear&ier that usua&& a patient %omes in -et.een 1 pm to 3 pm+ $hen a'ter &ong 'orma&ities &i"e %he%"ing the %urrent medi%a& %ondition o' the patient0 his -&ood samp&e0 insuran%e papers0 et%+0 .e proide them a%%ommodation+ $hen in the eening nurse gies them instru%tion regarding the operation pro%edure+ She a&so te&&s them a-out the important does and donCt things+ $hen at night the ta"e their dinner and ?na&& the hae teaA sna%"s .ith the patients .ho hae a&read undergone the operation pro%edure+ 'ter that0 the go to the -ed+ #o.0 in this s%enario patients are o%%uping the -ed0 een .hen on the ?rst da the are not undergoing an major medi%a& treatment+ Ne are a&so a.are o' the 'a%t that %urrent& the do%tors are underuti&i*ed+ So .e %an use them to eamine the patients .ho hae the .i&&ingness to arrie in the morning+ s the are .e&& a.are o' the pro%edure0 hen%e the .i&& ta"e essentia& pre%aution in their home itse&'+ Ioreoer0 it is mentioned in the due to the aniet man o' the patients .ho arried at 1 pm at 3 pm0 donCt remem-er the pro%edure to&d - the nurse+ $he same standard pro%edure %an -e per'ormed in the morning session in -et.een am to 1 pm+ So a&& the medi%a& and administratie .or" %an -e %omp&eted -e'ore the &un%h+ ,n the a'ternoon0 these patients %an go to operation theatre0 .here a&& the operations .i&& -e per'ormed+ ,n this .a0 .e %an sae one produ%tie da0 .hi%h %an %ause tremendous e%onomi% -ene?t to the organisation and as .e&& as to the patient+ ere .e are ma"ing an assumption that it is medi%a&& 'easi-&e and ia-&e+ s there .i&& -e no need to sta in the hospita& 'or 'our das0 it .i&& -e e%onomi%a& to the patients and
the %an go to their .or" one da ear&+ So it .i&& %reate an enormous demand o' the seri%e among the patient+ en%e .e hae to run t.o shi't o' 6 do%tors ea%h+
?<3 a"912<3 p"
1<97< p"
S0i!t A
>peration
onsu&ting
S0i!t B
onsu&ting
>peration
/etCs %he%" the 'easi-i&it o' the option+ Suppose there are around 15 patients per da .ho are .i&&ing to %hoose the option+ $hen .e %an arrange the patient in su%h a .a that .e %an maimise the uti&isation o' the -eds+ 8or eamp&e0 i' on 8rida the tota& patients .ho hae undergone treatment is 55 and 'or .e are ta"ing admission o' 2 ne. patients 'or regu&ar treatment+ $hen the num-er o' patients .hi%h %an -e a%%ommodated 'or t.o das treatment .i&& -e 15+ Simi&ar&0 -ased on the maimisation o' the admission0 .e hae prepared a timeta-&e as sho.n -e&o.+
B* U%* !or 3 *a(% ( pati#t he%" in
Mo#* a(
Ionda
Tu%* a(
2
$uesda Nednesd a
*#% *a(
T0ur% *a(
Fri* a(
Satur *a(
2
2
2
2
2
2
2
2
2
2
2
>
2
$hursda
Su#* a(
8rida Saturda Sunda
2
2 2
7
$ota&
>
>
>
Hed 7sed 'or 2 das - patient he%"
Mo#
Tu%
*#
T0ur%
Fri* Satur
Su#
in
*a(
Ionda
15
$uesda
*a(
$hursda
*a(
a(
*a(
*a(
15 15
Nednes da
%*a(
15 15
15 15
8rida
15 15
15
Saturda Sunda $ota&
Grant
1
3
3
3
3
1
3
,n this .a0 .e %an a%%ommodate 195 patients per .ee"0 .hi%h is 3M more than the %urrent patients+ $he %a&%u&ation o' the in%reased reenue is as 'o&&o.s
o%pital Reenue 8or ! das a%%ommodation (!11152 per ear)
23
8or 3 das a%%ommodation (311139 per ear)
129
ost
Pro-t
2
8 5?
Cli#i$ Reenue (!5L6L5+2) 91
!5
ost
2
Pro?t
25
Nt Pro-t
8 35
So it has enormous potentia& to epand our seri%es+ Hut one ma argue that the ?rst da %an he&p the patient to -e%ome %om'orta-&e .ith the pro%edure+ s the intera%t .ith other patients .ho hae -een a&read undergone the operation+ So redu%ing the ?rst da ma de%rease their %om'ort+ o.eer0 .e %an a&so arrange the intera%tion -et.een the patients during the da itse&'+ Nhen the ne. patients are .aiting 'or their se4uen%e0 then the %an intera%t .ith the other patients+ So .e %an ta"e %are o' this 'a%tor a&so+ $here is possi-i&it that it .i&& -e di=%u&t to s%hedu&e the do%tors as per their patients+ 8or eamp&e0 i' .e %hange the shi't o' the do%tors then it .i&& -e di=%u&t 'or them to 'o&&o. up .ith their patients+ o.eer0 it %an -e minimi*ed - in%reasing intera%tion -et.een the do%tors+ So that the %an "no. a-out their patient in %ase o' shi't %hange+ &so0 .e %an %hange their shi't in a phased manner+ /i"e i' there are 6 do%tors in the shi't 0 then in net .ee" .e %an shi't 2 do%tors 'rom shi't H to and i%eAersa+
Pro% a#* Co#%<
Pro%
Co#%
1+ ,t %an in%rease the s%a&e o'
operations - 16+6M+ So the reenue .i&& a&so in%rease+
1) ,t %an in%rease the .or" &oad to
the do%tors 2) ,t un%onentiona& to the eisting
1+ Patient %an go home in 3
das+ en%e there .i&& -e huge demand o' the seri%e+ 2+ Iaimum uti&i*ation o' the
-eds 3+ s the %apa%it o' the
hospita& in%reases0 hen%e &ess patients .i&& go to other ine=%ient hospita&s0 and image o' the hospita& .i&& improe+
.or" %u&ture o' the hospita&+ en%e it ma a:e%t the per%eption o' the patients a-out the hospita&+ 3) Iaintaining the s%hedu&e o' the
do%tors .i&& -e di=%u&t+
2.7.3 S$#ario 3< Ma Satur*a( a ,ori#' *a( s 'rom our ear&ier ana&sis0 'rom (H) and ()0 .e "no. that the %apa%it uti&i*ation o' .or"ing hours o' 'u&& time surgeons and operating theatre is 7>.5?@ and 52.@ respe%tie&+
T0 pro-t "ar'i# a% $al$ulat* i# A/ i% 43.32 "illio#. dding one more .or"ing da .i&& in%rease %apa%it - 2M+ $hus surger in%ome in%reases - 2M
Total i#$o" !ro" %ur'r( ,it0 Satur*a( a% ,ori#' *a( 8 1.2H5.12 8 .?77M# $his .i&& a&so &ead to in%rease in sa&aries and operating epense+ Ne assume that 5M o' the nonAsa&ar %ost is aria-&e and aries &inear& .ith epansion+ urrent nonAsa&ar epense $ota& >perating epense Sa&aries !+ 2+2 2+52In urrent aria-&e %ost 2+52+5 1+26In Nith 2M epansion this 1+26In in%reases to 1+512In (1+261+2)+ nd nonA sa&ar epense in%reases to 1+26L1+512 2.??2M# Sa&ar epense a&so in%reases - 2M #e. sa&ar epense 2+21+2 2.?3>M# $ota& operating epense (.ith Saturda as .or"ing da) Sa&ar L #onA sa&ar epense
Total oprati#' =p#% ,it0 Satur*a( a% ,ori#' *a(/ 8 2.?3> 2.??2 8 .5M# A##ual oprati#' pro-t ,it0 Satur*a( a% ,ori#' *a(/ 8 .?77 J .5 8 7.23>M#TTTTTTTT(D) 8rom () and (D) .e %on%&ude that .ith Saturda as a .or"ing da our net operating pro?t in%rease 'rom 3+32In to !+236In i+e+ pro?t in%reased - 2?.@ $hus .e %an o-sere that adding one more .or"ing da in the .ee"0 .e a%hiee %apa%it epansion - 2M and pro?t in%reases - 2+59M+ $he adantages o' this so&ution is that no immediate inestment or goernment approa& is re4uired+ Ne a%hiee %apa%it epansion (thus redu%ed .ait&ist) .ithout -ui&ding ne. Boors or hiring ne. peop&e+ $his trans&ates to -etter %ontro& and management+ o.eer the major disadantage o' this method is that surgeons and a&& other emp&oees .i&& -e re4uired to .or" one more da+ &though the .i&& a&& re%eie an immediate
in%rement o' 2M0 this .onCt -e enough to %ompensate %urrent surgeons .ho pre'er spending more time .ith their 'ami& and "ids+
2.7.7 S$#ario 7< Op#i#' a #, !a$ilit( i# *i&r#t lo$atio#K i# US ,mpa%ts@ 1+ !2M o' %urrent Shou&di%e patients are 'rom 7S+ $ota& patients #o o' .or"ing das erage operations per da #o operations on Saturda and Sunda+ ospita& is %&osed 'or 2 .ee"s in &ate De%em-er+ #o o' .or"ing das 365 (52 2) (5 2) 251das erage operations per da 32 (3A35 operations) $ota& patients 25 32 en%e0 7S patients +!2 336 $hus0 Shou&di%e hospita& %an epand its aai&a-i&it o' seri%e to 336 additiona& anadian patients at its $oronto 'a%i&it per ear+ 2+ Redu%tion in trae& epense+ #et trae& epense Round trip 'are #o o' patients 'rom 7S Round trip 'are E2 to E6 U erage 'are E! #et $rae& pense ! 336 103!!0 V E1+35 mi&&ion+
PROS •
•
•
#earer to patientsC &o%ation in 7S0 trae& to anada just 'or ernia operation %an -e aoided+ Nith redu%tion in !2M o' patients 'rom 7S0 it %an sere more patients (V336 patients) in anada0 and %an start adertising+ $hus %an aoid misuse o' Shou&di%e name (Shou&di%e operation te%hni4ue) - its %ompetitors+ panding their uni4ue seri%e
CONS •
•
•
$he ne. esta-&ishment re4uires signi?%ant %apita&+ $his re4uires site o' a-out 1As4uare 'oot0 to -ring up ne. 'a%i&it+ Remunerations 'or do%tors and nurses .ou&d amount to E1+23 mi&&ion+ Wua&it o' $he Shou&di%e methodC o' operating ernia ma -e hampered+ Ionitoring and %ontro&&ing its 4ua&it .ou&d -e high& %ha&&enging+ ,t .ou&d -e rea&& di=%u&t to
•
•
•
to &arger se%tion o' peop&e0 at &o.er %ost than their %ompetitors in 7S0 as Shou&di%e ospita& .or" on nonApro?t -asis+ Redu%es trae& epense around E1+35mi&&ion0 thus seri%e is aai&a-&e at a mu%h &o.er %ost 'or 7S patients+ s0 trae& to $oronto in midA .inter season is o'ten dis%ouraged0 patients see"ing immediate medi%a& attention %an -e treated in 7S on&+ $his .i&& -e a ne. opportunit 'or eisting personne& to .or" .ith ne. eperts at 7S and %an -ene?t 'rom the trans'er o' "no.&edge and %u&ture+ &so %an improe on the eisting su%%ess'u& pro%edure+
Sl #o
No o! "plo(%
D%i'#atio#
esta-&ish a simi&ar atmosphere and %u&ture in 7S+ $hus the patientCs eperien%e .ou&d not -e as good as at $oronto 'a%i&it+
Total Salar( o! all "plo(% pr a##u"
1
8u&& time surgeons
12
E6
2
ssistant surgeons
E2961 (51M o' E6 'ee 'or 65 operations
3
>perating #urse
1 (hi-it 2)
E3!
7
naesthetist
1
E5( E3 per da 'or 5 .ee"s)
Total %alar(
E10221061
Solutio# < Divr%i!(i#' %rvi$%. Proposa&@ $o diersi' and etend the seri%es to e surger0 ari%ose eins0 aemorrhoids et%+
Pro% •
•
Srv "or poplK a#* provi* a**itio#al !a$iliti% at o# pla$ o# #o#9pro-t a%i%K ,0i$0 i% a 'rat %o$ial $o#triutio#. I#$ra%% pro-t%.
Co#% •
•
•
•
Di=%u&t to maintain proper %ontro& oer 4ua&it o' indiidua& seri%es and administration -e%omes more %omp&e0 as Shou&di%eCs epertise is &imited to ernia operations+ Re4uires ne. spe%ia&ist surgeons0 to drie ne. seri%es+ $hus0 it is di=%u&t to hire ne. eperts .ho .ou&d render their seri%e 'or nonApro?ta-&e %ause+ Re4uires ne. inestment 'or setting up 'a%i&ities and promotiona& a%tiities+ dertisements are needed to -ring a.areness a-out the additiona& seri%es aai&a-&e at Shou&di%e+ $he eisting sta: has &imited Bei-i&it0 hen%e surgeons ma not sho. interest to -e %ross trained in ne. spe%ia&i*ations+
R$o""#*atio#< Hased on the a-oe ana&sis0 it is re%ommended that Shou&di%e hospita& %an either go .ith S%enario 1 or S%enario 2 'or epansion+ ,n s%enario 10 though there is a huge %apita& inestment0 the mone %an -e re%oered .ithin 1 ear .ith an approimate additiona& 1M pro?t .ithout redu%ing 4ua&it o' seri%es+ ,n s%enario 20 the seri%e %an -e epanded .ithout an additiona& resour%e re4uirement+ $hough in this %ase there ma -e an issue .ith the 4ua&it o' seri%e as the num-er o' das 'or treatment is proposed to redu%e - 1 da+ ,n this %ase .e hae assumed that redu%tion in num-er o' das .onCt redu%e the seri%e 4ua&it &ee&+ Ne donCt re%ommend to adopt s%enario 3 i+e %onerting Saturda into a .or"ing da0 as surgeons donCt seem to -e interested in this proposa&+ ,mp&ementing it might a:e%t the per'orman%e o' the surgeons and thus the 4ua&it o' seri%es proided .i&& get degraded+ S%enario ! is dis%arded as huge amount o' %apita& %ost is re4uired+ Se%ond&0 maintaining the same .or" %u&ture and seri%e &ee& at a 'ar o: p&a%e .i&& -e a -ig %ha&&enge+ S%enario 5 is not re%ommended as .ith in%rease in the num-er o' hea&th seri%es0 there is a greater %han%e that the 4ua&it o' seri%e .i&& redu%e as Shou&di%e hospita& sta:s and surgeons donCt hae enough epertise in these ?e&ds+
