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Hospital Governance in Crisis A case study of Advanced Medicare & Research Institute (AMRI) Hospital Governance Practices in Dhakuri (Kolkata) Prof.Mahesh Bendigeri Assistant Professor Global Business School, Hubli 9342585290, 0836-2243330 Email Id: maheshbendigeri@gmail.com Postal Address: Bendigeri Oni, Beside Women Hostel, Hubli. Dr. Ramesh Olekar Assistant Professor Karnatak University PG Centre for Studies in Commerce & Research, Karwar Mobile: 9448641182, ramesh.olekar@rediffmail.com Published Research Paper in International Journal of Development Studies, ISSN no. 0975-5799 titled “ Hospital Governance in Crises-A case study of AMRI Hospital Calcutta�

Abstract The AMRI hospital system and, in particular, its management have been lauded for the manner in which they responded to the devastating fire incident that took place on 9 th Dec 2011 at Dhakuria(Kolkata) unit of the Advanced Medicare & Research Institute(AMRI) Hospital. The incident killed 93 people and led to the arrest of the members of the boards, who represent the two companies Emami and Shrachi having significant share holding in AMRI. Moreover the internal fire safety norms were against the standard norms set for preventing the fire attack. Lack of internal check system and preventive measure. Violation of code of best practices in safeguarding the health of patient in the event of disaster, Information lapse by the executive management, non compliance of internal audit system, minimal use of power by the board members and absence of understanding the administrative issues raises question on the governance issues. The purpose of this article is to consider whether the generally stellar conduct of AMRI senior hospital administrators and boards during the crisis was in keeping with the best principles of good corporate governance. Keywords: Hospital Crises, Governance Issue, Board Dynamics Introduction Medical Care in our country is like a patchwork quilt; a few segment sewn with lovely silk while the rest are frayed and falling apart. Millions of Indians are deprived of basic medical facilities because they are too expensive. Well to do Indian have right to be healthy. The rest simply suffer or die. The imbalance in the health care, the dreadful state of our government hospital and the exorbitant fees charged by private doctors are common. Today hospitals are key actors in national health systems, and invariably account for a large share of spending. Consequently, governments, health professionals, communities, and other stakeholders are deeply concerned about how hospitals are governed and how they perform. However, stakeholders may emphasize varied priorities such as access to care, fiscal efficiency, service quality, transparent accountability, or public service. Hence, policy makers attempting to shape the future of national health systems are faced with competing agendas, and various ideas about who should be making decisions governing the behavior and shaping the performance of hospitals. Governance


arrangements, which generally are embedded in an organizational form, will predispose hospitals to better performance on different goals. Hospital Governance System: Governance may be defined as the structures and functions of an organization that set and enforce policies and exercise the ultimate authority for decisions made in or on behalf of the organization1 (Umbdenstock & Hageman, 1991; Holland, Ritvo, & Kovner, 1997; Pointer & Orlikoff, 1999). As such, governance practices underlie and are presumed to enable all the subsidiary structures and functions that take place within an organization. Theoretically, governance authority includes oversight of administrative practices and fiscal performance, planning and policy making, and accountability to individuals, communities, payers and governments. This oversight may be conducted by individuals, groups, or organizations, such as the agents of government agencies (e.g., a health ministry or secretariat), hospital boards, hospital administrators, or combinations of these. In short, understanding governance and how it affects hospital performance requires an examination of who decides what, by what means, and to what effect. With this backdrop an attempt has been made in the present study to understand what constitute hospital governance in terms of role played by the Board to resolve the crises and role of regulatory authority in managing the crises and future plan to overcome such crises. Objectives of the Study: 1. To understand the Hospital Governance system followed in India. 2. To analyze the reason for fire incident in AMRI hospital 3. To finds the Gaps in the Governance Practice of AMRI Hospital 4. To know the role played by AMRI Board Members post crises. 5. To understand the steps taken by the Government in managing the crises. 6. To suggest some corrective and policy measures for smooth functioning of Hospital and Hospital Board Scope of the Study: The scope of study is restricted to AMRI hospital Dhakuri (Kolkata). Even though AMRI Management runs many hospital in Kolkata. But the fire incident took place in the Dhakuri venue. So entire efforts has been made in the present study to understand the possible reason for fire, the gaps in the board functioning and violation of fire safety norms and the role of government in curbing the crises in future. Review of Literature: Hospital Board Governance-Report by Ministry of Health and Long Term Care- Ontario In this report it is found that out of 20 Ontario hospitals surveyed majority of them have adopted a variety of good-governance practices. These practices include an orientation program for new board members and a written code of conduct and confidentiality guidelines. Collection of Data and Research Methodology: Since the present study is diagnostic in nature, wherein lot of questions raises in the mind of researcher in terms of what went wrong? Who were the parties involved in the case? Why there were no internal checks to address the issue? To answer these questions researcher has relied upon secondary data available from website, newspaper, survey result etc. The data so collected in presented in easiest way using tables and pictures and no statistical tools are used. Limitation of Study: 1. The study is confined to AMRI Dhakuri hospital in Kolkata and the possible reason for fire broke out in this hospital cannot be generalized for other private hospitals in the event of fire.


Brief History of AMRI Hospital AMRI Hospitals is a private hospital chain owned by the Emami & Shrachi group. As per records with the Registrar of Companies, the state government has 1.99 percent stake in Advanced Medicare Research Institute - Hospital, with private companies Emami and Shrachi Groups owning the remaining 98.01 percent. The hospital was co-founded by the two private companies with the state government in 1996. Earlier, the state-owned Niramoy Polyclinic was transferred to a consortium floated by S.K. Todi of the Shrachi Group and Swapansadhan Bose. Later, the Emami group replaced Bose. AMRI Board consist of 13 members, with Prof. (Dr.) Soumendra Nath Banerjee being the Chairman of the board. Prof M K Chhetri as Managing Director. Out of 13 members on board Six members belong to the two founding families of Emami Group. They are R S Agarwal, R S Goenka, Manish Goenka, Prashant Goenka, Aditya Agarwal, Priti Sureka. Others are non family board members. Mr. S K Todi – Compliance Officer and Director was running the show at Dhakuria facility including making most of the important management decisions. Black Friday – 9th Dec 2011. It was early in the morning around 3.30am on 9 th Dec 2011, a fire broke out at the basement of AMRI Hospital Dhakuria and then the massive smoke spread all other floors of the hospital. The basement had the stock of inflammable articles, chemicals & medical wastages products that were fire-friendly. Within few hours, entire Hospital was filled with the thick smoke (coming out from the basement fire) that contains Carbon Monoxide gas. As per the report, most of the patients who were admitted in the ICU, ICCU, Intensive Therapy Unit, Critical Care Unit etc died due to suffocation as poisonous smoke covered the sealed glass windowed cabins of AMRI Hospital and thus the death numbers risen to 88 is because of the suffocation and not by the burning reason. Some attempts were made by the local people and hospital staffs to rescue the patients and they could successfully rescue around fifty percent of the admitted patients from the building. It is obvious that the hospital did not have adequate preventive measures to tackle an accidental fire. Reason for Crisis According to the National Building Code, 2005, hospitals are classified as institutional buildings, and therefore require equipment like extinguishers, hose reels and automatic sprinkler system. At all times, the area around a hospital building must be kept clear for easy access of fire tenders. Reasons for Fire: Reason 1: One of the main causes of the inferno was the construction of an illegal storeroom in the basement which was packed with inflammable articles like chemicals and medical waste. Reason 2: The 500-bed hospital lacked adequate fire-fighting equipment and even trained staff to handle a situation. The hospital night staff had wasted two precious hours trying to douse the fire on their own and even refused to let the fire brigade enter when the entire annexe building had already turned into a gas chamber and patients were dying. The reason for such act was the protocol of AMRI hospital that in case of fire, the internal staff should make all efforts to douse the fire. Fire brigade should not be informed of a fire immediately; this was against the standard protocol of informing the police and the fire brigade immediately when a fire is spotted. Reason 3: The hospital's firefighting equipment did not work on time which allowed the fire to engulf the entire building. Fire fighters had to resort to gas cutters to enter the wards through windows as there were no emergency exits in the hospital.


Reason 4: Even the construction of the building was faulty. There was lack of proper ventilation system installed which caused many patients to suffocate to death as thick smoke covered the entire building. Reason 5: What proved truly fatal were the narrow lanes leading to the hospital that delayed the rescue operations mounted by the fire brigade. Reason 6: Fire officials have found evidence that gas stove was used next to flammable stuff for making tea for the night shift. Reason 7: Electric cables did not have the mandatory fireproof casing; this was evidence from the burn-out cables, indicating a short circuit.


Gaps in Governance Practices: Gap 1: The AMRI Hospital Management had violated the Fire Safety norms and lacked in the preparedness to fight fire, in spite of the notice issued by fire department 3months back. Gap 2: Setting up of fire protocol against the standard protocol. Accordingly when the fire broke out first the internal staff made all the efforts to douse the fire without informing the police or fire brigade, which is against the standard protocol. This is basically to avoid the submission of report on the compliance of fire safety norms. Gap 3: Absence of Internal Audit System to check the effectiveness of board process. Gap 4: Prof. Mani Chhetri – Managing Director was not involved in day-to-day management of the company and most of the administrative decision was not taken by him. Gap 5: More over Prof. Chhetri is the licensee on behalf of AMRI hospital since mid-90s and has lent his name for the benefit of promoter of the company. This practice of Prof. Mani Chhetri raises question on the lapse of the basic fiduciary duty as a Managing Director. Gap 6: Board is collectively responsible for the governance of the company and each independent director has to understand the business well and should have adequate knowledge to appreciate management issue, but looking to the present crises and the investigation report from the police authority on questioning to Prof. Mani Chhetri and Dr. Pronab Dasgupta it is found that Mr. S K Todi controlled the entire affair of the company and he never used to bring the matter to the notice of the board. Gap 7: Dr Chetri being the Managing Director of AMRI looked into the purchase of the medical equipment and the treatment provided to the patient. But the he was never involved with security and safety affair of the hospital. This is yet again a serious flaw as a Managing Director. Gap 8: Charges are levied on hospital of running a radiology department without mandatory radiation safety clearances from the Atomic Energy Regulatory Board (AERB). Gap 9: On paper, Advanced Medicare and Research Institute’s (AMRI) vision is/was “to be cherished as the best place to come for care and the best place to work.” The ‘corporate governance’ section, among other things, on the hospital's website says this: AMRI is committed to meeting the highest standards of ethical behaviour and appropriate business conduct in everything we do, every day. Sound corporate governance principles are critical to helping ensure that we perform with integrity and excellence in all aspects of our operations. What's more, they are vital to retaining the trust and respect of investors and other stakeholders and interested parties, including the individuals we serve, employers, doctors and other healthcare professionals, suppliers, government officials, employees and the general public. All these are mere words rather than actionable one. This is evidence from the report published by hospital authorities claiming the death number to be 42 and giving the detail list of patients. This is against the media report which claim death number to be over 91. Another reason for the gap in showcasing the death number could be the announcement of Rs. 2 lakh compensation for each deceased patient by the hospital authorities and possible act by the public relation team to declare lesser number of death casualities would do damage control to hospital reputation. Role of Board Post Crisis • The board decided to announce Rs. 2lakh as compensation to each deceased patient and provide free medical treatment facility for the injured patient in its another branch hospital. • It also decided to cooperate with the legal authorities for all the matter relating to the incident. • The board also decided to hold its expansion plan of about Rs. 2000 crore till the legal case is resolved. • To provide all the documentary evidence in support of board meeting conducted and decision taken, members involved in the meeting, role and responsibility of each board members etc.


Role of Government during Crisis • The first step Government of West Bengal has done was cancelling the license of the Dhakuria hospital with immediate effect. • Fire Department lodged FIR against the hospital authorities — under non-bailable charges. • A high level committee was formed with representatives from police, fire brigade, Kolkata Municipal Corporation and health department to inquiry into the cause of the fire. • The union government announced an ex-gratia of Rs 200,000 for the families of the deceased and Rs 50,000 for the injured. • The State Government also announced a compensation of Rs 300,000 each to the next of kin of the victims and offered employment. Suggestions Following are some of the suggestions given by the researcher after having taken into account the severity of damage caused by fire incident and the lack of preparedness on the part of Board to address the issue. • Hospital Safety Measures: o Hospital Buildings must be periodically inspected for fire safety. o Hospital Buildings must provide a map of the floor outlay o Safety drills must be conducted regularly o Emergency exists must be clearly identified o Safety Audit should be conducted on periodical basis to check the functioning of fire extinguishing equipment, status of exist routes and passageways, training program to staff members on use age of fire extinguish equipments. o Fire Safety is a State responsibility and each states deals with it in different ways and with varying degrees of efficiency. This leads to lack of a unified command at the Centre that can help oversee fire rescue management. Hence Government should pass a strict legislation in the lines of 2005 Disaster Management Act, to give the Centre more leeway in framing fire safety rules for states to follow. o In order to bring seriousness in fire safety measures, our judicial system should gear up the process faster so that all those responsible for causing the tragedies are held guilty and convicted. o The No Objection Certificate (NOC) from the fire department is required in some states and not required in some states as per the height of the building. This NOC should be made mandatory for all the hospitals.


Board Effectiveness and Governance: • Board should hold 30-minute board education sessions before scheduled board meetings to keep members up to date on various subjects, including hospital activities • Board members should visit various hospital program areas to ensure that they understand their hospital’s various operational areas involvement in strategic decisions and risk management. • Board should use clear, concise performance “scorecard” that visually compares the hospital’s performance to its strategic plan • There should be appropriate mix of skills sets within the Board to fulfil the full scope of governance responsibilities • There should be proper alignment between Board roles and responsibilities and the processes for conducting the work of the Board • Use a reporting system with pre-established indicators to regularly measure key aspects of the hospital’s activities • Use trend information to identify areas of potential problems related to hospital activities • Encourage open and candid discussions, where all board members have an opportunity to speak • Use a precise work plan to ensure that the board focuses on key issues • Receive key reports a week in advance of board meetings so that members have time to prepare • Designate one day a month for major committees to meet, thereby ensuring that specific issues are addressed on a timely basis • Invite the Ministry, Fire Department Officer address the board and Staff annually, including an update on latest guidelines and safety norms. • Co-operate with other health-care boards and share useful practices. Conclusion Healthcare facilities have to be more responsible enough to follow the guidelines on fire safety and have protocols in place to manage such unfortunate situations. Training all categories of staff and regular drills are an important component of fire safety. Safety should be the prime driver that guides the norms, regulations and policies in a hospital. A robust and well executed emergency plan in a healthcare setting is important for protecting a fragile population against unsettling disasters like flooding, fires, epidemics and the likes. AMRI hospital tragedy in Kolkata, have brought to light many gaping holes and there is undoubtedly much work needed in this regard by both Government Authorities and hospital board. Government should set up committee to draft new guidelines considering the Gaps existing in the present system and incorporating international best practices in it. Hospital board no doubt had eminent people on the board but negligence in performing board duties and not adhering to compliance norms resulted into such cruel act showcasing poor governance practices.


References: Website: 1. http://expressbuzz.com/topic/fire-crisis-only-few-hospitals-in-city-prepared/343162.html 2. http://expressbuzz.com/nation/New-guidelines-soon-for-emergencies-inhospitals/344549.html 3. http://oakblue.wordpress.com/?s=The+awful+state+of+health+care+in+Bengal 4. http://news.in.msn.com/exclusives/it/article.aspx?cp-documentid=5667171 5. http://www.kolkatabengalinfo.com/2011/12/amri-hospital-dhakuria-fire-case.html?m=0 6. http://www.aalatimes.com/2012/01/27/dr-mani-chhetri-dr-pronab-dasgupta-arrested-in-amri-firecase/ 7. http://expressbuzz.com/thesundaystandard/Villains-of-the-inferno/342164.html 8. http://www.causebecause.com/news-detail.php?NewsID=491

Newspaper: 1. The Times of India dated 12th Dec 2011 titled Kolkata fire: Knee-jerk reactions stifling due process of law 2. Business Standard,dated13th Jan 2012 titled AMRI hospital fire: Corporate governance under scanner 3. Business Standard, dated 18th Jan 2012 titled Kolkata hospital fire kills 90, AMRI loses licence 4. Business Standard, dated 14th Feb 2012 titled Hospitals pay scant heed to safety, fire drills Reports: 1. 2008 Annual Report of the Office of the Auditor General of Ontario on Hospital Board Governance 2. Hospital Governance and Accountability in Ontario by Maureen A Quigley, Graham W S Scott 3. Hospital Governance in Latin America by Richard J. Bogue, Claude H. Hall, Jr., and Gerard M. La Forgia, April 2007.


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