Benefits purchased by the consumer: Shouldice Value Proposition as compared to other hospitals •Value is added into every aspect of Shouldice Hospitals sensible service culture. The service offered is the expertise of the doctors, the dedication of the staff, and the overall feel of the atmosphere which, in turn, makes customers feel comfortable and helps in the patients speedy recovery. •Shouldice Hospitals biggest value proposition is quality through experience. For over 60 years Shouldice Hospital has been repairing hernias for hundreds of thousands of patients (with over a 99% success rate) and the number is rising daily.
This value proposition is definitely being utilized. On their surgical team is Dr. Casim Degani, an internationally recognized authority. The surgeons that work there make a lifetime commitment to the company because after they have been away from other disciplines for so long they loose touch with them. There is no alternative to experience, and since the doctors stay and at Shouldice for countless years, their value proposition is far exceeding what is promised. •The procedure itself is one of the many unique aspects the hospital offers.
With the use of a local anesthetic combined with the nature of the procedure itself, allows early recovery following surgery. Recovery time is practically cut in half when compared to other hospitals. Also, the local anesthetic is administered in the operating room, compared to other hospitals completely sedating you before you even enter the operating room. After the operation patients are encouraged to step off of the operating table and walk to the post-operating room, allowing the exercising needed for full recovery to begin immediately. This procedure would never be carried out at other hospitals.
Hospital Value Proposition Example
The simple fact that patient is awake and is fully aware of what is happening around them is also not the norm for most hospitals. •The atmosphere of the Shouldice hospital is one of their value adding features with two different facilities (the hospital and a clinic) in the 17,000 square foot building sitting on 130 acres. The entire hospital is carpeted to give it a comforting feeling, as opposed to a cold hospital floor feel. It is equipped with a large open lounge area, the admissions office, patient rooms, and a spacious glass-covered Florida room.
It also contains recreational facilities ranging from exercising equipment to a pool table. Balancing low cost with high quality •Shouldice is able to balance low cost with high quality in several different ways. The low cost of the operation room furnishings ($30,000) is one reason. The cost of operating rooms in other hospitals is quadruple that because the equipment needed is much more extensive. They are able to reduce costs with only having one “crash cart” per floor of the hospital, compared with hundreds. Turnover is low, so there is another cost-cutting measure.
They pay their employees over average than most hospitals, which raises their budget more. This is how their quality remains at a high level, while being low cost competitors at the same time. Their full utilization of their time also helps in cost cutting measures. Target Group of Customers: Commonalities & Production Process •Shouldice Hospital has created a niche service in the medical field that targets only external abdominal hernias or hernias from patients suffering from recurrences. They also partner patients with similar backgrounds, jobs, or interests into the same room to further add to their value proposition.
•To further add to the delivery of their value proposition, Shouldice Hospital’s service process is unique in its own right. From being kind enough to wake patients in the same room for surgery within minutes (a procedure I have never seen another hospital perform) to almost immediately after surgery administering counseling activities. When patients arrive at the facility, they are immediately able to mingle with other patients who had their operation on that same day. This is a psychological procedure to make the patients feel comfortable about their operation, again, not a practice that is done by other hospitals.
A simple blueprint of their production process is attached to this essay to further demonstrate their unique service delivery. The service delivery far exceeds the expectations of patients and perfectly matches their value proposition. Five Dimensions of Service Quality •Reliability: Delivery on Promises oReliability is defined as the ability to perform the promised service dependably and accurately. Throughout this paper I have stated how Shouldice Hospital is living up to their service value proposition in many different dimensions. Shouldice maintains promises made with regards to pricing, delivery, and problem resolution.
They are always on the same schedule Monday through Friday, and make careful diagnoses from the start. •Responsiveness: Being Willing to Help oResponsiveness is the willingness to help customers and to provide prompt service. Shouldice’s accessibility, willingness to listen to every patient individually, and immediate attention as soon as the patient enters the door shows their proficiency in responsiveness. •Assurance: Inspiring Trust and Confidence oAssurance is defined as employees’ knowledge and courtesy and the ability of the firm and its employees to inspire trust and confidence.
In the medical field it is extremely important to achieve assurance because of the high risk factor. Trust and confidence are apparent when you enter the doors, when you receive your first examination, when you go to your first counseling session with patients that have just had the operation, to when you leave the hospital. The patients have a great amount of assurance when they discover the experience and skill level of the doctors, and when they hear about the good reputation that they hold. With no advertising in place, their customer base is highly reliant upon word-of-mouth and reputation is everything.
•Empathy: Treating Customers as Individuals oEmpathy is defined as the caring, individualized attention that the firm provides its customers. Since Shouldice hospital positioned itself as specialist in hernia surgery they are able to compete with larger hospitals in this area. The specialized attention they give to each patient also shows there successfulness with regards to empathy. With all of the counseling sessions the patients endure throughout their stay, each patient is treated like family members of a huge group.
Each patient is understood by their peers, and the experienced staff is empathetic and knowledgeable about what they are going through also. •Tangibles: Representing the Service Physically oTangibles are defined as the appearance of physical facilities, equipment, personnel, and communication materials. From the moment that you decide that Shouldice is the facility that you want to operate on you, they send you an informative brochure detailing the facility and procedure you will endure. I mentioned above some of the amenities that Shouldice offers for their patients that makes them proficient in delivering tangibles.
Employment at Shouldice Hospital Compared to Other Hospitals •Nurses: The nurse to patient ratio in other hospitals in the Ontario is 1:4, compared to Shouldice’s ratio of 1:15. Their unique service delivery process can be attributed to these differences. Most of their time is spent in counseling activities for the patients, instead of the grueling activities nurses do at other hospitals such as paperwork and changing bed pans. There are no bed pans at Shouldice. The waiting list to be employed as a nurse in this facility is endless, while hospitals in the area are extremely short staffed.
• Doctors: This position appeals to experienced doctors who “want to watch their children grow up. ” Their typical day only lasts from 7 a. m. to 4 p. m. which are very attractive hours for me. They are only on call one weekday night in ten and one weekend in ten. Compared to other hospitals where doctors work long strenuous hours and are on call all of the time. They are paid 15% more than a surgeon in Ontario. The only downside, if you could call it a downside, for doctors is that they loose touch with other medical surgical disciples since they are always performing the same surgery with the same disciplines.
There are a very small percentage of doctors that elect to leave the organization once they have started, which results in low turnover. •Administration and Support Staff: The administration and support staff are non-union individuals because their pay is higher than comparable jobs in the area. There is very low turnover because they have a “no one fired” policy. One characteristic that I found interesting was that there is no organization chart because, “A chart tends to make people think they are boxed in jobs.
” The administration staff is cross-trained to do every other administration and support staff job, so if the situation arises where they are needed else where, there is no problem in doing so. Growth Alternatives •Dr. Shouldice seeks a desire to find ways of increasing the hospitals capacity. There are a few proposals on the table that help make this happen. oStart performing operations on Saturday which would increase capacity by 20%. There are currently no operations performed on Saturdays and Sundays. Patients who have their operation late in the week still stay at the facility during the weekend.
This is frowned upon by all of the current Shouldice employees. oThey could expand their number of beds by 50%, and schedule the operating rooms more heavily. This would require an investment of $4 million dollars. oThey could expand into Toronto, or even in the United States. oOffer more specialties such as eye surgery, varicose veins, or diagnostic services. My Alternatives •Expand the capacity of the current hospital to meet demand •Advertising Campaign •Hire more surgeons & staff •Operate on Saturday •Expand into the United States Solution & Rationale
•With one hundred and thirty acres to build on, I believe that Shouldice should expand the capacity of the hospital to meet the rising demand. If they proceed in this direction then they would be able to begin a marketing campaign that would tremendously attract new patients into the operating room. In order to meet the increased workload of the new expansion new staff would need to be hired to make sure company morale remains high. With the hiring of the new staff, it will be easy to maintain the same working relationships and attitudes they have with their patients.
The current staff can empower incoming new staff to maintain the same business culture and learn the specialized way of Shouldice Hospital. Expansion in the United States would be a great move after my first alternative is assessed, completed, and begins to earn profits. This will not happen overnight. It will be a long process with many trials and tribulations. •The Shouldice Method is very unique and does not need to be copied in anyway. The current threat of other hospitals stealing this unique technique and performing it in the wrong way can prove to be disastrous for Shouldice.
Immediate attention needs to be given to this problem. A thought on what to do includes getting negative media attention towards the hospitals who are trying to reproduce the technique. I believe that the marketing campaign that will be launched could prove to be beneficial instead of hazardous to Shouldice Hospital in this respect. By implementing my alternatives, I believe, that Shouldice Hospital will continue to remain successful in their specialization and offer a superior value proposition, all while remaining to balance low cost with high quality.