FINANCIAL ANALYSIS

Financial Analysis

Shouldice Hospital Financial Analysis

Success of Shouldice Hospital

The success of a hospital which basically is a part of the service industry can be done in 2 ways -

The financial perspective

The service perspective

Financial analysis :

Total market

Nos of operations in US = 600,000 ( in 1979 assuming it is the same in 1983)

Nos of operations in Shouldice = 6850 (in 1982)

Market share = 1.14%(assuming that the market size remains the same)

Price charged per customer on average (assuming similar price for primaries and recurrence)

Accommodation = $ 111 * 4 (4 days)= $ 444

Surgery cost = $ 450

Assistant surgeon = $ 60(assuming every operation uses an assistant surgeon)

Anesthetic = $ 75(assume we are using an anesthetic in every operation )

Transport costs = $ 400(average of $ 200 to $ 600)

Total expenses for the customer = $ 1429

Total revenue of the hospital = $ 1029* 6850

= $ 70,48,650

Cost incurred by the hospital:

Salaries of the surgeon = $ 50000* 12

= $ 600,000

Bonus = $ 500,000

Assistant surgeon = $ 30.6* 6850

= $ 209610

Anesthetist = $ 300 * 261(working days in an year)

= $ 78300

Food expenses = $ 1.1 * 400 * 261

= $ 114840

Total expenditure = $ 24,27,750

Gross operating margin = $ 46,20,900

The service analysis :

The hospital can be classified as a people based pure service requiring the client's presence . The performance can be measured in terms of the seven P's:

Price : The price of the operation is only around $ 1429 at max when compared to $ 2000 to $ 4000 charged by others

Product : The complete process of the operation including the diagonosis, evaluation treatment process, recovery schedule etc was very innovative and effective when compared to the competitors.

Place : It was basically a localized service . 42% were from the US and about 2% where from others .

Promotion : The hospital does not have any extensive promotion policy . It is popular only by word of mouth . In spite of that it has a huge back log schedule to cater to .

People : There can be three classifications here

Internal:

Selection : On the basis of experience ,education personal habits and interests and recommendations .

Training : Procedure of treating hermia is shown during training period.

Work habits: Nurses spend large amount of time in counseling the patients.

Turnover : there is no firing and employee friendly procedures see to it that there is very low turnover.

External:

Well planned time schedule from the time the patient enters the hospital including his diet schedule, time for exercise etc.

Special care is taken for deciding the room mates based on their backgrounds.

Dinner tables having the seating capacity provide an opportunity for interaction between the pre operation and post operated patients.

The design of the hospital made the patient walk for the recreational activities which helped in faster recovery.

The whole hospital was carpeted to ensure the safety of the patients during the walk and also to give the patients a homely ambience.

Interactive:

Medical information questionnaire was an innovative way in which the initial testing of the patients who ...