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Part - III

Case Example

A successful hospital located in Toronto, Canada, Shouldice Hospital that outperforms only inguinal hernia operations will be used to illustrate how each element of the service concept contributes to the strategic mission. Shouldice Hospital is privately owned and uses a special procedure to correct inguinal hernias that has resulted in an excellent reputation. Its success is measured by the recurrence rate, which is 12 times lower than that of its competitors.

The structural elements of Shouldice's service concept that support its strategy to target customers suffering from inguinal hernias are:

• Delivery system: A hallmark of the Shouldice approach is patient participation in all aspects of the process. For example, patients shave themselves before the operation, walk from the operating table to the recovery area, and are encouraged the evening after surgery to discuss the experience with new patients to alleviate their preoperative fears.

• Facility design: The facility is intentionally designed to encourage exercise and rapid recovery within four days, providing a return-to-normal activity time that is approximately one-half the time at traditional hospitals. Hospital rooms are devoid of amenities, such as telephones or TVs, and patients must walk to lounges, showers, and the interior is carpeted and decorated to avoid any typical hospital "associations".

• Locations: Being located in a large metropolitan community with excellent air service gives Shouldice access to a worldwide market. The large local population also provides a source of patients who can be scheduled on short notice to fill any cancelled bookings.

• Capacity planning: Because hernia operations are elective procedures, patients can be scheduled in batches to fill the operating time available; thus, capacity is utilized to its maximum. This ease in scheduling operations are allows Shouldice to operate like a fully occupied hotel; thus, the supporting activities, such as housekeeping and food service, also can be fully employed.

The managerial elements of the Shouldice service concept also support the strategy of delivering a quality medical procedure:

• Service encounter: All employees are trained to help counsel patients and encourage them to achieve a rapid recovery. A service culture fostering a family-type atmosphere is rein forced by communal dining for both workers and patients.

• Quality: The most important quality feature is the adherence of all physicians to the Shouldice method of hernia repair, which results in the low recurrence rate of inguinal hernias among these patients. In addition, patients with difficulties are referred back to the doctor who performed the procedure, Perceived quality is enhanced by the Shouldice experience, which is more like a short holiday than a typical hospital stay.

• Managing capacity and demand: Patients are screened by means of mail-in questionnaire and are admitted by reservation only. Thus, the patient demand in terms of timing and appropriateness can be controlled effectively. As mentioned, walk-in patients or local residents on a waiting list are used to fill vacancies created by canceled reservations; thus, full use of hospital capacity is ensured.

• Information: A unique feature of the Shouldice service is the annual alumni reunion, which represents a continuing relationship of the hospital with its patients. Keeping information on patients allows Shouldice to build a loyal customer base, which is an effective word-of-mouth advertising medium. Providing free annual check-ups also allows Shouldice to build a unique database on its procedure.

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* The author is presently studying at NITIE