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Shouldice Hospital: The Success Rate

Introduction and case history

The hospital is extremely successful which can be seen from the fact that, while initially, the total number of available beds was just eighty-nine, during 1982, the hospital was capable of carrying out nearly “6850 operations”. (Hooksett, 1983, p.2). This speaks volumes for the growth of this hospital over the years in terms of professional health care services provided to the community, in and outside Canada.

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Having established itself way back in the 1940’s it is indeed a creditable performance for Shouldice Hospital to have traversed a long way, with a lot of accolades and performance, based solely on meeting the patient’s needs and health concerns and according to the highest priority to patient care and management.

The success rate of Shouldice Hospital could also be measured from the fact that the management is seriously thinking in terms of expanding its present infrastructure. The management is contemplating on the proposed benefits of adding to bed capacity, going in for “Saturday operations” or increasing the “number of beds by 50%, and schedule the operating rooms more heavily.“ (Hooksett, 1983, p.11).

The success rate of operations carried out is also extremely high with just 0.8% incidence of recurrences, as compared to the industry average of 10%.

It is also seen that the hospital has a dedicated number of health care professionals, nursing faculty, and support team who are committed to setting and maintaining the highest standards of patient care at all times, especially for critically ill patients who need extra care and attention. Most people are of the misconception that a hernia operation is a comparatively minor surgical process, but it is quite possible that, through lack of proper care and medical attention, this could easily develop into complexity with attendant risks, that could even be fatal for patients.


The administrative system of the hospital works in an extremely efficient and systematic manner, paying a great deal of personal attention to the needs and medical care of the patients, right from the time they are sent in for admission till the time they have been certified fit for discharge from the hospital premises.

In this hospital there are no hidden costs recovered from patients, and all charges borne by patients/their carers are towards actual services rendered with no loaded inputs, often collected as service charges by other medical institutions. Because of this, the hospital has earned a very good reputation, not due to advertisement and publicity campaigns, but only through opinions passed from one satisfied customer to others urging them to use only Shouldice’s medical services.

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Moreover, it is seen that, besides having unique operating techniques not normally used by other health care institutions, the food served for the patients is from the same catering unit used by medical staff and health care professionals. Food costs are also subsidized and made economical for the patients.

Patient experiences

The excellent rapport that patients instill in each other and the nursing facility is not normally found in other health care settings. Moreover, the pre-operative and post operative care of the patient is carried out in a very systematic and customary manner, leaving very little margin for error. Although it is felt that hernia operations which this health care unit specializes in, is wrongly considered to be a simple interventionist procedure, there are possibilities that serious complications may arise, for which, attending surgeons needs to be fully prepared from the very start of operation and not leave any aspect of the surgery, however small as unplanned, or unscheduled.

Nurses’ experiences

A patient care, palliative medical interventions and procedures are considered to be hallmarks of this unit, and every effort is made to ensure that the patient’s stay is as comfortable and convenient as (s) he would like it to be. Moreover, the days spent in the hospital are least, and on most occasions, a patient need not have to stay for more than 4 days including post-operative care, whereas in the case of other medical units, this could be as much as 14 days, especially in case of critical Illness/ complicated surgery. Moreover, it is seen that the total costs incurred for surgery are also nominal, and not a strain on the financial resources of patients, sometimes being just 1/3 of what is normally charged by medical institutions, for a similar kind of surgery.

It is indeed to the credit of Shouldice hospital, that, being a non-profit making organization, the management does not believe in any kind of publicity or advertisement for marketing its services but relies just on verbal testimonies of its past patients. The hospital takes pride in having a past patients’ reunion meet during 1983 in which nearly “1400 former patients” attended (Hooksett, 1983, p.10).

The success of this hospital could also be measured from the fact that many other clinics try to imitate the operation techniques followed by this hospital, sometimes without success. This is one of the primary reasons that, as a policy, no outside medical practitioner is allowed to be trained in operation techniques followed by this hospital, since there is every likelihood that it may be misused and thus bring this institution into disrepute.

Another salient aspect about the hospital is that it is non-profit making and hence, patient care is accorded the highest priority, without other considerations. The rate of an operation here is only around 1/3 of what it would cost in other hospitals or private practices.

Doctor’s experiences

The main reason for its performance has been in terms of the reasonable rates charged by this doctor of this hospital. For example, operation costs for a standard operation with four days of hospital stay works out to less than $1000 as against the astronomical sum of “$2,000 to $4,000 for operations performed elsewhere.” (Hooksett, 1983, p.10). Again the fact that the congenial atmosphere and warmth generated in the hospital precincts, the highest degree of personal care and devotion shown by the attending faculty, is unsurpassable by any of its rivals or competitors, Typically a standard procedure would last 45 minutes. Even in the case of the unique operating method followed exclusively by Shouldice in which each layer of flesh is separated and excellent suturing done to repair the ruptures, as such the dressing could be removed within 48 hours. This alleviates the post–operative soreness and discomfort felt by patients and allows them to return to normal work within a minimum time frame.

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“Other methods might not separate muscle layers, often involved fewer rows of sutures, and sometimes involved the insertion of screens or meshes under the skin.” (Hooksett, 1983, p.03).

Comparative cost study of Shouldice with other hospitals

Total cost to patients Shouldice Hospital Other hospital
1. Cost of a typical operation
(average for others taken $ 3000)
$ 1054 $3000
2. Transportation to and from hospital (Average taken) $400 only local


3. Time lost from work while at


4 days 5-8 days
4. Time lost for work while


7 days 14 days
5. Value of time lost to employer
($50-500 per day) average taken – $275 day
$1925 $3850
6. Total before allowing for recurrence $ 3379 $ 6850
7. Probability of recurrence 0.8% 18%
8. Weighted cost of recurrence $27 $1233
9. Total cost to patient, employer and insurer $3406 $ 8083

Costs statements of Shouldice Hospital

Of the total 6,850 operations conducted during 1982, 82% were primaries and rest 18% were recurrences from other hospitals. Shouldice Hospital rate of recurrences was just 0.8 %

Therefore, the weighted average of recurrence for both Shouldice and others would be as follows:

Total cost to patients Shouldice Hospital Other hospital
1. Total costs of each Operation $3379 $6850
2. Proportionate weighted costs
55/6850 X 3379 = $ 27
1223/6795 X 6850 = $1233
$27 $1233
Particulars Shouldice Hospital



Revenues : 4 X$111X 6850

Costs (actual ) $1454 X 6850


Revenues : ( $510X 6850) +
($75X 6850 X 20%) =
3,493,500 + 513,750 + 102,750 =
Costs (including surgeon fees, bonuses and anesthetists fees )








( 4,038,650)

Clinic costs

Yearly Charges for a typical operation = 1029 X 6850 = $7,048,650

(Including anesthetists fees)

Surgeon’s fees $ 50,000 X 12 = 600,000

Bonus – 500,000

Total – 8,148,650

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Even Swap Methodology

Particulars Addition of another floor to the hospital Initiation of Sat. operating Schedule Opening of another
Doing nothing
Let things remain the same
Marketing Will improve No change Expected to improve Will not come down
Services delivery systems More beds can be availed Expected to improve Will depend upon location, demand, etc Constant
Patient care Will improve provide patient: provider ratio is increased May improve if doctors available Will offer better specialized services Should not reduce
Fooding and conveniences Will improve No change Circumstantial Food quality and care not to lower
Investment outlay Light investments No investments Heavy investments No change
Control functions Manageable May not be manageable Need more management personnel No change
Profitability May increase No change since costs would also increase May increase depending upon patient preferences May increase due to marketing efforts

Judicious changes in the existing processes

The best changes at the present juncture would be in terms of adding one more floor to the existing hospital complex, resulting in shorter hospital stay in terms of post operative care and recuperation, etc. both optimum usage of resources and augmenting patient care and better health promotion services. This would involve additional investments of around $2million along with requisite permission from the local government. (Hooksett, 1983, p.11).

This could also lead to a quantitative increase in number of beds by another 50% which could help the hospital take up more operations in future. This will also accelerate the process of patient care and operations since more facilities, resources and personnel would be available to provide excellent health care services to patients.

Additional investments necessary for constructing one more level, would required to become self generative, instead of depending upon outside loans or credit arrangements. Again, the option to set up a new venture outside Canada (preferably US destination) may be stalled until government clearances are approved and necessary climate for US investments become more conducive.

Saturday operations would be a heavy toll on surgeons, and with the availability of more surgeons, this could be made possible.

Although Shouldice is a non-profit making establishment, the management is aware of the extreme competitive health care market in which it operates. The reasonable fees along with unique and excellent patient care facilities have ensured a remarkable degree of success during the past. However, for the future, it is necessary to embark on more ambitious expansion plans to stay ahead of competition and services offered by potential rivals, even in terms of undercutting health services delivery costs in order to woo potential patients to their units.


It is seen that Shouldice needs to expand its facility with better and more productive use of existing technology and personnel. The health care markets are extremely competive and most of them justify the exorbitant fees that are charged in terms of professional health services and post operative facilities, sometimes spanning two weeks or more. Routine cases are disposed off overnight using the Canadian methods.

Shortage of trained and experiences nursing and medical staff is also a major constraint and it thus becomes necessary to maintain the patient: provider ratio consistently.

The medico-legal aspects are also areas of concern since such instances could lead to lowered goodwill and higher litigation costs. Ethical and moral considerations towards patients/carers, their consent and keeping their best interests in mind, even in conflicting situations, are challenging areas for Shouldice, and this medical care institution needs to invest time and efforts in this direction in right earnest.

Medical research is a major area in which Shouldice needs to invest, considering the various types of diseases which may not be controlled or cured with conventional treatment and interventions. Thus, there is need to diversify at other locations into other specialties offering similar opportunities such as eye surgery, varicose veins, or hemorrhoids.


From the deliberations made above it is clear that the highest standards of patient care and commitment has underpinned the success of this Hospital. Moreover, aspects like reasonable operation costs, low post operative stay and high success rate of surgery have all contributed, in no small measure, to the continued success story of this hospital. It is believed that in the coming years, with more infra structure at its command and disposal, the hospital would take greater strides in patient care and alleviation of their pain and sufferings.

It needs to make better operational facilities, including making examination, admission and operation of outstation and long distance patients available in a single day. It could also reducing incidence of recurrences and relapses of conditions, through the use of careful and appropriate need based operations and interventions available.

Finally, as is the pre-requisite of all good health professionals- the criteria of good health and well being of the patient are paramount considerations and should not be compromised, or lowered, at any cost. The hospital needs to understand that its future success and growth would, to a very large extent, depend upon the degree of excellent care and benefits it provides its client base, and seek new and modern methods of reducing costs and increasing efficiencies in its various departments, all intended with the best intentions of safeguarding and protecting the health and well being of patients at all times.


  1. Hooksett, James. (1983). Harvard Business School 1983 Shouldice hospital Limited: History. p.02. (Provided by the customer).
  2. Hooksett, James. (1983). Harvard Business School 1983 Shouldice hospital Limited: History. p.03. (Provided by the customer).
  3. Hooksett, James. (1983). Harvard Business School 1983 Shouldice hospital Limited: History. p.10. (Provided by the customer).
  4. Hooksett, James. (1983). Harvard Business School 1983 Shouldice hospital Limited: History. p.11. (Provided by the customer).

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