HOSMAC Pulse Vol. 1 No. 3 September, 2010
Economizing Healthcare
Diagnosing Indian healthcare with Dr. Narottam Puri Pg. 5
Making healthcare worth it Pg. 17
Editorial Board
Table Of Content
Pathway to affordable healthcare
4
Diagnosing Indian healthcare
5
The gift of sight
9
A sociable catalyst
11
‘Unchaahi’
15
Making healthcare worth it
17
Enterprising insights
20
Insinuating health insurance
21
Validating lessons
23
A rust-proof supply chain
25
Chronicles: Building tomorrow
27
Playing with the yardstick
29
Beyond healthcare building
31
Advisory Panel Narendra Karkera narendra.karkera@hosmac.com Isha Khanolkar Isha.khanolkar@hosmac.com Paresh Gujrathi paresh.gujrathi@hosmac.com Dr. Deepa Mohanty ipshita.dey@hosmac.com Dr. Rahul Shastri rahul.shastri@hosmac.com Dr. Ram Behin ram.behin@hosmac.com Creative Consultant Amit Pandya mumbai@shapecommu.com Chief Editor Vinay Pagarani vinay.pagarani@hosmacfoundation.org Printed by Kothari Printers, Bangalore kothariprinters@gmail.com
HOSMAC Pulse is an initiative of HOSMAC Foundation. High-quality standards have been maintained while preparing and presenting the information in this periodical. However, no legal responsibility will be accepted by HOSMAC Foundation or HOSMAC India Pvt Ltd for any loss or damage resultant from its contents. The views expressed are solely that of the authors or writers, and do not necessarily represent the views of HOSMAC Foundation or its consultants in relation to any particular projects. No part of this periodical may be reproduced in any form without the written permission of HOSMAC Fooundation – the publisher.
Executive's note
Illness is expensive. In India, hospitalization expenses push one out of every four patients below the poverty line. Healthcare costs escalate up the levels of care from preventive to tertiary. Prevention is cheaper than cure. Nevertheless, preventive care is almost non-existent in India. Besides, curative care in both public and private hospitals is either poor in quality or exorbitantly priced. Quality improvements need finance regulation and process streamling. Capital procurement increases costs, process innovation reduces costs; both require committed human resources which are not abundant. The Central Government's investment in NRHM, with its perceptive focus on preventive and primary healthcare, is apt. However, even today, only preliminary treatment is offered rather than primary treatment in village sub-centers. Asking a villager to travel 10km to a PHC for an OPD treatment deters and defers care. In the last five years, social insurance for the poor – secondary and tertiary in-patient treatment – has taken off via the Rashtriya Swasthya Bima Yojana (RSBY) in 393 districts and the Arogyashri scheme all over Andhra Pradesh. In a nutshell, the schemes cover almost 4 crore families. However, reviving them – being the need of the hour – will need enormous investments pushing up the cost slightly. In tertiary care, corporate hospitals have brought in state-of-art technology. With the real estate boom, this has made healthcare expensive. If coupled with a pliant private insurance industry, the trend may drive healthcare in the 30 big cities toward relentless cost inflation with increased utilization of technology and consultants per patient. More care does not always translate to better care. Upcoming hospital projects need to choose markets with care, build to utility, cooperate and pool resources for expensive equipment. The government, too, can add capacity by opening up beds in ESIC, railway and army hospitals for the general public.
Upcoming hospital projects need to choose markets with care, build to utility, cooperate and pool resources for expensive equipment. The government too can add capacity by opening up beds in ESIC, railway and army hospitals for the general public.
Dr. Vivek Desai Managing Director, Hosmac India Pvt. Ltd.
3
Pathway to affordable healthcare
Dr. Deepa Mohanty, Consultant — Hosmac, postulates how the private sector can be an active agent to affordable healthcare in India. India occupies an enviable position of possessing a huge health service system; it has an extensive infrastructure, an army of trained medical personnel, and well-equipped institutions for research and education. Though the spending on healthcare is 6% of gross domestic product (GDP), the state expenditure is only 0.9% of GDP. Thus, unlike in developed countries, only 25% of all health expenditure in the country is borne by the state, and 75% comes as ‘out of pocket payments’ by the people. Health insurance penetration is also around 12%. This makes the Indian health system grossly inadequate and under-funded. For people to get better accessibility, availability and affordability, health care providers need to provide uniform healthcare coverage across the country. Affordable healthcare can be given, if it is cost-effective to the healthcare providers, who will then pass it on to the healthcare seekers with support from the health policy makers. Key pointers for healthcare affordability Vision, mission and goals of healthcare organizations should be towards rendering affordable healthcare.
patient volumes, bulk purchasing and common support services. By these means, Fortis, Apollo, Narayana Hrudalaya and SRL Ranbaxy have provided quality healthcare at affordable prices and still manage to raise their bottom line. Also high volume centers have high bargaining power with vendors. The hospital can strike a deal with equipment vendors to install the equipment on lease without any capital investment and an assured supply of reagents. This reduces the investment burden for the promoter, and has a direct impact on pricing. Appropriate technology rather than the latest technology Clinicians desire a state-of-art technology like a 256 Slice CT scan and 3 Tesla MRI scan instead of appropriate technology needed in the target segment. Unless volumes are assured, such investments can backfire.
Innovative ways in telecommunications like mobile utilizing for patient–physician communication, health education, emergency helpline services and medical record transfer would increase quality of healthcare by information, knowledge sharing and bridging the gaps.
Dedicated telemedicine can make healthcare available to remote areas.
Focus on preventive and promotional health rather than
Cost-effective infrastructure and processes in the hospitals
curative care by changing the health seeking behavior through health education and awareness.
Having a green hospital using energy-saving
Clear referral system from primary to tertiary healthcare with a hub and spoke model, intercepting the health problems early with a low cost and also decreasing the burden on the tertiary and quaternary healthcare institutions.
Need based healthcare through market research of the local community with respect to the demographic parameters, disease profile, existing competitors, buying
capacity of the target customers, health seeking behavior, availability of supportive infrastructure and manpower helps in optimal utilization of resources. This directly impacts pricing of clinical services.
and not extravagant hospihotels for medical tourism. mechanisms like rainwater harvesting, solar panels, LED bulbs, touch sensor taps etc. It optimally utilizes resources while bringing down the operational expenses.
Hospitals can apply Toyota's Lean initiative of reducing waste and gaining efficiency. Top down review of administrative processes like Admission, Discharge, Billing, OT booking, OT utilization, pharmacy and diagnostic turn around time, and identifying the bottlenecks by consulting the stakeholders and counseling them can bring about tremendous efficiency in most of the processes. A carefully written care plan executed by the healthcare team can go a long way in decreasing the Average Length Of Stay (ALOS), thereby increasing the available beds for hospitals to treat patients without additional capital investment and give a tremendous boost to the operational revenue. Stringent supply chain management Inventory carrying costs can be decreased by keeping the required optimum stock. The supply chain can be attacked from both ends i.e. indigenous production of the consumables as well as supplying efficiently to the multiple smaller health facilities with IT support. To conclude, we visualize a perfect competition scenario in which high quality hospitals with efficient processes and inbuilt protocols shall compete with each other on cost, and hence provide excellent support to the government's endeavour of providing affordable healthcare for all.
The author has served the healthcare industry as a clinician, and has completed MHA from TISS. She can be reached at deepa.mohanty@hosmac.com.
To address the high operational expenditure, economies of scale can be achieved by consolidation via mergers and acquisitions and through health city models, providing high 4
Diagnosing Indian healthcare
In a dialogue with Dr. Narottam Puri, Chairman — NABH, Dr. Rahul Garde taps out some thrilling revelations.
Dr. Narottam Puri (centre) with Dr. Abdul Kalam Azad (left)
RG: Sir, what according to you is affordable healthcare? NP: Affordability in terms of healthcare is not much different from any other service. However, in case of healthcare, there is an added emotional and physical component to the service that patient has to bear over and above the price of the service. IFor instance, if a patient has to get some procedure done that will save/improve the quality of his life, but has to sell off his land or use up all his savings, thus although he can afford the price of the procedure, but for him and his family, it is an unaffordable procedure.
Moreover, there is scarcity of trained manpower required for tertiary care, this also adds to the cost of such services with the result that such services are rendered 'un'affordable to the common masses.
In the Indian context, affordability of healthcare cannot be looked at in isolation, it is intertwined with issues of accessibility and the quality of care dispensed.
This, however, can be dealt with by improving the penetration of health insurance in India, but is missing in India primarily because of the lack of widely acceptable quality standards in healthcare sector. NABH is thus an immense improvement from before, yet a lot needs to be done for its wider acceptance and awareness in the masses, because I firmly believe that ‘good quality costs less’.
RG: Since affordability is one of the more important criteria while electing a particular course of clinical treatment, why is speciality care (Cardiac, Neuro, etc) still inaccessible in terms of affordability to a huge part of the population?
RG: More and more beds continue to be added to the urban setting, whereas the most vulnerable population dwells in rural India. How can the Indian healthcare industry check this ‘urbanization’ of healthcare delivery?
NP: There is no one India that healthcare sector caters to, along with this, there are myriad variations in paying capacity and the technology available to the people. Thus, there are lot of variables that affect ‘affordability’ of healthcare services for the population.
NP: In India, healthcare is not dispensed as a single entity. It accords to state directives since ‘health’ is a state subject. What this does is that it creates a lot of variations in the way which states administer healthcare services to their population, the result of which is skewing of healthcare indicators because of extremes variation (of indicators). This, in turn, leads to lopsided availability of trained human resources for delivering healthcare, as Indian healthcare is still predominantly ‘curative’ rather than ‘preventive’. This skew in availability of trained professionals is heavily towards areas, where either
Amongst the many variable, cost of medical technology, especially with respect to tertiary care, is one of the most important factor affecting affordability, This, in turn, is as we don't manufacture good quality, high-end medical technology, 5
forces us to buy them from developed nations pushing up the overall cost of tertiary care.
there is good infrastructure and better opportunities for themselves, as well as for their children and family.
NABH, and making all positions as paid ones, which are currently only an ‘honorary’ consultant position.
In this setting, it is not that difficult to imagine why there is a trend of “urbanization” in healthcare facilities. Having said that though, recent developments have tried to reverse this trend with viable organizations coming up in tier 2/3/4 cities across India. The primary benefit being the advantage of huge numbers (Bottom of the Pyramid approach) that these cities enjoy with relatively sparse availability of public/private healthcare facilities.
Also the kind of application that we are getting now is definitely more than what can be dealt by the existing staff, so there is a need for expansion of the NABH staff so as to ensure we can cater to the increasing awareness amongst doctors, hospitals, insurance companies and patients about NABH and its benefits.
Thus, as far as I can see, this trend will continue until the Government improves the overall infrastructure of the ‘underserved’ areas so as to provide atleast comparable facilities/amenities to the healthcare professional, if not better. RG: How should treatment outcomes be measured and compared across the country? NP: This is a very pertinent question to Indian healthcare; currently, because though we do not have any direct indicator for measuring clinical outcomes, we do have an indirect measure in terms of NABH accreditation and the necessary activities that are required of the healthcare facility. In this regard, NABH has recently issued directives to all the accredited hospitals to compulsorily report data on quality of hospital services, such as mortality rate amongst various sub groups of patients, hospital acquired infection rates, etc. (a total of 12 parameters). Besides, in order to effectively use the NABH standards, healthcare organizations have to understand that these standards can be used alongside the clinical guidelines/protocol — their combined usage can be used as a measure of success and quality of services delivered.
We have put forth a list of 12 parameters that each accredited hospital has to submit to NABH, regularly. This step has been taken to ensure we can do a better monitoring and evaluation of the hospitals, since quality is not the destination, it is a journey wherein we always strive to improve ourselves and have not only a satisfied patient, but also a satisfied doctor. RG: Does accreditation of hospitals facilitate the factor of affordability, given the current perception that there is a ‘higher’ cost of quality? NP: My opinion, as I mentioned in the recent FICCI-Heal conference, is that “Quality costs less.” However, the concept of ‘quality’ in healthcare in the Indian scenario is a relatively new one and it is generally perceived that in order to attain certain standards, one (individual/organization) has to bring about a lot of change in the protocols and bring in costly equipments to ensure good quality of service to patients. However, the basis for quality in healthcare is the other way round — it is the approach that a hospital should take to ensure patients' safety and well-being; how healthcare services are delivered with this core principle.
This combined usage leads to better control on outcome for both the patient as well as the hospital. RG: The mushrooming of tertiary care hospitals has increased attrition in public sector hospitals. How should public sector hospitals deal with this? NP: I agree that the problem of attrition from public hospital is quite evident, especially in tier 1 cities. However, the situation is not like this in tier 3 and 4 cities, as private practice is generally allowed in these states. Though I will not comment on this policy of state governments, it has stemmed the exodus of doctors at least, if not other healthcare professionals, from the public/teaching hospitals. Moreover, there is significant difference in the kind of technology available, generally, in tertiary care hospitals in public and private sector. This also affects movement of senior doctors as research is to a large extent now dependent on expensive medical technology. Thus, there are various reasons for movement of doctors and healthcare professionals from public to private sector. In order to check this outflow, the government needs to develop the basic infrastructure first, viz. roads, clean water, educational facilities, etc. Sadly this doesn't fall under the purview of the Health Ministry. Moreover, as our ministries function in silos with little co-ordination, the result is poor infrastructure that doesn't allow a doctor and his family to have meaningful future for his family espially children, end result of that is movement to cities for better pastures and later in from public hospitals to private ones. Unfortunately, we all know these reasons tacitly, but in order for government to act on it, there is a strong need for research studies to be done on this subject which will provide us with 'scientifically' proven list of causes for such a movement of healthcare professionals. RG: What measures does NABH take to ensure quality 24 x 7 x 365 days a year? NP: We are in the process of improving the staff strength of
Thus, it is evident that first there is a dire need for awareness of the concept of quality in the Indian healthcare industry down to the grassroots’ level and from this awareness will emanate the understanding and acceptance of accreditation and the overall decrease in costs for hospitals since quality would be implemented from inception stage only. Having said that, however, even in current scenario accreditation does help in significantly reducing the costs for hospitals in terms of decreasing the ALOS of patients, lesser HAI rates, better clinical outcomes for patients, improved patient satisfaction rates, etc. Now, some of these offer direct quantitative benefits to hospitals and some offer qualitative advantages with the result that ‘quality’ accreditation pays for itself over a long run. Hence to improve affordability of healthcare for all, accreditation can play an important part. RG: What are the possible public private partnership models in specialty care like cardiac care? NP: I believe PPP is the only way to deliver “quality” healthcare to the teeming masses of India, while keeping the organization sustainable. It is a significant step that the Government has taken in recent years to improve availability, accessibility and affordability of healthcare services to masses. PPP is like a win-win situation for both the private partner and the Government, as it serves the needs of both. Where private 6
benefit from formation of bodies like Ayush. RG: The Central Government is investing to create eight AIIMS-like institutions in the country. How do they solve the problem of getting quality faculty for medical education? NP: Faculty for medical education would be available when the government can give provide faculty incentives that are at par with what private sectors offer. These may not necessarily be monetary incentives, they can be like doing research which has become technologically dependent. Thus it is imperative that in order to retain faculty in public teaching hospitals, infrastructure has to be developed first. RG: The government has just announced a 3-year Bachelor’s Course in Rural Medicine. What is your vision about this course? How should it be structured?
partner gets the advantage of large volumes for its services, which decreases the costs for it and improves the profit margins; at the same time, the Government has in effect been able to provide for a large section of society — quality healthcare at reasonable prices. Like any PPP, the general idea is to utilize the expertise of private sector in operations and management of hospitals, by providing them with land and/or construction (both of which contribute significantly to cost of project). Currently, the Government is able to provide primary and secondary care to a large extent; however, when it comes to tertiary care, an overwhelming majority is provided by the private sector or by very few government hospitals/teaching hospitals, with the cost of technology and its maintenance as one of most important criteria for this gap. This gap can be filled by going in for PPP projects in superspecialty areas like cardiac care, neuro care, joint replacement clinics, etc. RG: What role do you envisage for both central and state governments to improve healthcare quality? NP: As I have mentioned before, our ministries work in silos with very little coordination amongst them, and this gets even more complicated because ‘health’ is a state subject. Thus, in order to improve our nation’s health, it is required that there be more coordination between ministries to begin with, and development of basic infrastructure like roads, safe drinking water, electricity, educational institutes, etc. Unless these are in place, we would keep hitting the same roadblocks time-andagain and keep reinventing the wheel whenever we deliver healthcare services to masses. RG: Shouldn't accreditation also address infrastructure and cost-effective healthcare besides only safety norms? NP: Accreditation is still in its nascent stages in India and with time, it will encompass a wide variety of hospital areas. Currently, there are building norms in India though these are not specific for hospitals, thus there is a need for such norms to be present. As for cost effectiveness, it's a very vague term and is dependent on parameters that we use, to measure it is again a tricky task. RG: Indian System of Medicine (ISM) like Ayurveda, Homeopathy, Unani etc. is gaining perspective with relevant healthcare bodies across the nation. What do you foresee regarding the future for ISM? NP: The Government has finally started taking interest in ISM, and by mainstreaming ISM professionals, we can have a respectable doctor-to-population ratio, since as mentioned in FICCI-Heal conference, India is woefully short of allopathic doctors. Moreover, since a lot of ISM promote holistic medicine, this will also give a boost to promote preventive medicine as the mainstay of healthcare services and curative component as the supportive part, because India's need for healthcare is more of preventive variety rather than curative type. This aspect of Indian healthcare scenario will definitely 7
NP: The govt has its heart in the right place, it’s just that implementation of such course is still being debated, and we have to wait to see the actual and relevant benefits, this course can afford. No doubt this course will help in bridging the gap of skilled human resource at primary healthcare levels, and to an extent — at the secondary level. However, how effective these 'rural' doctors would be in place of general doctor is open to debate. The implementation of this will take time before it can have any bearing on healthcare parameters that we intend to effect for the better. RG: Sir, how have you balanced a career as an active doctor and hospital administrator with that of an active sports commentator, author and a singer? NP: It's about doing what you really like doing and having conviction about it, as with your interests and hobbies; so with healthcare, you have to have compassion and ability to look beyond just the disease and understand how it affects the patient. Unfortunately, this is not how medicine is taught in medical colleges in India, so one has to learn this on their own, which is a daunting task for a fresh doctor. In order to help us keep our focus, all of us should pursue our interests as they help in giving us fresh perspective on things. In my opinion, extra curricular activities in general and sports in particular is very important for everyone and especially for young healthcare professionals.
The interviewee is also the Advisor — FICCI Health Services and Advisor — Medical — Fortis Healthcare Ltd. He is the winner of several prestigious awards and recognitions, and a member of a number of medical associations and industry bodies.
The gift of sight
With as low as 20 lakh rupees, you can set up a self-sustaining eye care centre. Keerti Pradhan, Head of Programs — Right to Sight, reveals how this can be done with a live model.
During my journey toward establishing cost-effective care services in developing countries, someone wanted to know how much investment is exactly needed to set up a self-sustaining eye care hospital. My instant response was — there is no definite amount, but it can range between 20 lakh and 20 crore rupees. Dumbfounded by the disparity in the range, he urged me for a better explanation. I went ahead explicating my point. About 90% of an estimated 37-million blind people live in the poorest parts of the developing world. Each year, one to two million more people lose their sight. Although, 75% of these incidences are treatable or preventable. Eyecare, on the other hand, is unique since: 1. It primarily comprises of non-emergency healthcare 2. It commands an equivalent magnitude of burden across all socio-economic strata 3. The age of the patient is relevant 4. High-end technology and effective treatment are essential 5. It ranges from primary to tertiary care in eye conditions 6. It largely involves curative treatments as compared to preventive measures 7. It predominantly falls under daycare procedures The other uncommon side to eye care is that equipments, instruments and consumables essential for treatment are available in diverse categories: expensive, reasonably priced and low cost. Keeping these elements in view, an eye hospital can be initiated with, as little as, 20 lakh rupees. Though, more funds are always welcome. An NGO, I worked with, held 17 lakh rupees as grant money to
set up an eye hospital in a district headquarters of India. But they had no clue how to go about it. To establish an eye hospital and run it to serve the needy in a self-sustainable manner, seemed like a distant dream. When they contacted me, I suggested to begin with utilizing the available, precious funds merely to buy equipments, instruments and as start-up working capital for consumables and staff salaries, considering a period of two months. To serve as the hospital building, I suggested a rented house would be apt. Fortunately, they soon chanced upon a house of 5000 sqft for a realistic rent amount of only Rs. 10,000 per month. In a month's time, the basic equipments and instruments for a secondary eye hospital were commissioned and procured. With one ophthalmologist and five support staff, the hospital kickstartedits work. Within two months, the hospital was up and running with a good number of patients in the OPD, and the load picking up. By the end of first year, the hospital had seen 10,000
When the Income and Expenses were worked out, the following were the results:
Income in Rupees OPD fee @ Rs. 50 from 5000 patients who turned up at hospital
250,000
OPD Expenses @ Rs. 10 for 10,000 patients seen both in hospital OPD and camps
100,000
500 paying surgeries @ Rs. 3000 per surgery
1500,000
500 paying surgeries cost @ Rs. 500 per surgery
250,000
500 free surgeries @ Rs. 750 per surgery reimbursed by the Government
375,000
500 free surgeries cost @ Rs. 200 per surgery
100,000
Profit from sale of 2000 spectacles
200,000
Staff Salaries
780,000
Hospital rent and maintenance
205,000
Total 9
Expenditure in Rupees
1325,000
The humble beginning in a rented house
outpatients and performed 1,000 surgeries. With the third month setting in, the Direct OPD rolled in 25-30 patients per day
Regular outreach eye screening reached four times in a month Free/subsidized and fee services were made available Speciality eye conditions which cannot be treated were exported to bigger centres The hospital bagged about 10 lakh rupees as net profits with the culmination of the first year. As capital investment were grants, a part of the surplus money was used to purchase additional equipments and instruments, so as to facilitate more doctors working for the hospital. Three years since its inception, hospital moved up to perform 5000 surgeries per year, with a surplus to the tune of 40 lakh rupees per year. By the fifth year onwards, the hospital had built its own building with the surplus generated and saved over the years. Besides, to perform 5000 surgeries per year, an eye hospital needs two to three ophthalmologists and 20 support staff. Similar to the above example, affordable secondary eye centres were developed in other parts of the world. Although onerously in the underdeveloped countries of Africa, due to lack of trained human resource and irregular inflow of consumables. But Indian companies are coming forward in other developing countries to address the above challenges. The learning here is that care services to eliminate needless blindness can be established with minimal investment. And if done carefully with proper planning and judgement, it can be self-sustainable with a service component for the poor and needy. Organizations that can raise more funds have the option of going big right from the inception. They can add other speciality services in eye care besides cataract, which is of paramount importance in the developing world. The blinding conditions like Glaucoma, Diabetic Retinopathy, ARMD etc are increasing dayby-day.
Five years hence, with its own building
planning and judgement is adopted, the return on investment (ROI) has been 1-2 years maximum. Although I have used a modest example to discuss the model, the innovation and improvements in the scope of eyecare technology is much faster. Just like in the market of cars, televisions and other consumer items, the eye care equipments, instruments and consumables are also available in a proportion of 1:3:10:100. For example, an IOL-Intra Ocular Lens used in cataract surgery are available for Rs. 40, Rs. 120, Rs. 400,Rs. 4000 and so on. All are useful and are helping different socio-economic strata to get a IOL implanted cataract surgery. Similarly, a cataract surgery fees vary from Rs. 750 to Rs. 3000,Rs. 7500,Rs. 75000 per cataract surgery done. But the core principles for any category of hospital remains same, whether for a 20 lakh hospital or a 20 crore: Economies of Scale: It has to maintain high volume, high quality and affordable service facility
Creating demand for service utilization: Reach out to the population and do proactive screening for eye conditions Resource Optimization: Ensure regular flow of patients and optimum utilization of the hospital capacity Realizing this potential and global demand for quality and affordable eye care, an organization named ‘Eye Fund’ has started a financing model with a view that globally, there are approximately 37 million blind, and 150 million with serious visual impairment. The grant financing is not commensurate with need — collective annual spending is $250 million. Growth is slow.
The author was a Senior Faculty in Management and a Consultant at the world famous model eye hospital in India — the Aravind Eye Care System. He can be reached at keerti@righttosightindia.org.
To assure success of eye hospitals in developing world, we must ensure:
Trained and skilled human resources in eye care Regular supply of affordable eye care consumables Holistic services in the eye unit like Optical, Pharmacy, Canteen etc Maintenance of equipment and instruments to avoid the downtime Last but not the least, the quality of services both clinical and non-clinical must be optimum Investment of 20 lakh rupees or 20 crore — in either situations, when a systematical approach with proper 10
A sociable catalyst
Sandip Chaudhuri, Asst. Manager — Business Development — Hosmac, outlines a clear role for social marketing in the context of an affordable healthcare system in India advocating an in-depth understanding of the concept for enhanced effectiveness.
Introduction Administrators across the globe are facing the daunting challenge of making healthcare affordable for the masses. India too with its vast majority of uninsured people remains, and is likely to remain, in the priority agenda of policy makers. While there would be well-meaning mechanisms developed at different stages for administering and financing the healthcare system, social marketing can play a critical role in sustaining it. In India, most of the discussions on affordability relate to the needs of the deprived and disadvantaged. For a good measure, these discussions harp on the success stories of low-cost business models such as Aravind Eye Care Center and Narayana Hrudayalaya Hospital. However, if we are to broaden our perspective to make 'affordable' an inseparable qualifying adjective to healthcare, the imperative would transform to fundamental reforms in the way healthcare is conceived and delivered. Imagine developing a product solution, which allows a qualified nurse to administer anesthesia for a procedure with precise mechanized safeguards against over-sedation. Now that's leveraging technology to reduce healthcare costs without any significant trade-off with quality. The two key drivers of 'healthcare reforms towards affordability' would be innovation and marketing. The marketer, more pertinently the social marketer, would realize the implications of the relationship. After all, 'when you have a hammer, everything looks like a nail,' the potential of social marketing to make a difference would not be lost on him. This article seeks to unravel that catalytic potential. Social marketing: Concept and theories Social marketing is defined as “the application of proven concepts and techniques drawn from the commercial sector to promote changes in diverse, socially important behaviors.” The concept of social marketing is inherently promising to the 11
Exhibit 1: Five components of the social marketing mix
cost-optimizing reforms as it places the consumer's primary interests at the core spiraling off with focused cost-effective efforts in order to satisfy them. Social marketing has strands of behavioral theory, persuasion psychology and marketing science in its genetic DNA. Social marketers base their strategies on the proven techniques of segmentation of target audience, tailored communication and marketing mix. (Ref: Exhibit 1) The effectiveness of social marketing, in changing healthcare behavior, has been proved through numerous studies; most notably, in the case of mass communication campaigns. One of the oft quoted examples is the significant success of the American Legacy Foundation's Truth Campaign (1999-2002) with an anti-smoking message. The prevalence of smoking
among young people in USA decreased from 25.3% to 18%. Apart from propagating the message of protective health behavior related to diet, immunization and exercise in exchange of risky behaviors like smoking, social marketing has also been successfully used in the promotion of products like contraceptives. The last stage tapers into a continual improvement loop to attain perfection.
• Production • Motivation
Other core components of SCT include: • Self-efficacy • Outcome expectation • Emotion coping responses • Inactive learning • Rule learning • Self-regulatory capability SCT stresses on the need to assess the audience's perception: • On their ability to perform the desired behavior • The anticipated consequences of that action • The value they place on that consequence The theory also reiterates that attention, retention, production and motivation processes must all be considered for effective learning and performing of new behaviors.
Exhibit 2: Basic stages of social marketing
The Trans-theoretical Model of Health Behavior Change This model, popularly known as 'stages of change', identifies distinct processes of change, some of which are enumerated below: • Raising consciousness • Self-reevaluation • Social liberation • Helping relationships
Exhibit 2: Basic stages of social marketing
Social marketing as a concept has been in vogue since the '70s. Over a period of time, it has given rise to many theories (Ref: Exhibit 3). These theories from the bedrock of social marketing programs developed by professionals in the field. These empirical theoretical models have predictive elements which can encompass a fairly large range of healthcare issues. While drafting the healthcare reforms roadmap, a clearer understanding of these time-tested theories might offer tremendous insight and trigger path-breaking ideas. Health Belief Model (HBM) BM was originally designed to explain why people did not participate in programs to prevent or detect diseases. Since then, this model has been subject to interpretation and extrapolations. Theory of Reasoned Action (TRA) TRA considers one's intention to act as the most important indicator of subsequent behavior. This is presumably guided by one's attitude and subjective norm toward that behavior. Attitude is influenced by one's beliefs about both the outcomes and attributes associated with the behavior. Subjective norms are a function of the opinions (positive or negative) held by significant referent people.
These processes need to be supplemented with interventions that would drive the target audience, through six specific stages of change. 1. Pre-contemplation 2. Contemplation 3. Preparation 4. Action 5. Maintenance 6. Termination Other concepts in the model include: • Decisional balance (weighing the pros and cons of change) • Self-efficacy (gauging the productivity of healthcare delivery) • Temptation (the role of negative affect or emotional distress on positive, social situations and craving) Diffusion of Innovations This is one of the important models for social marketers, who are targeting a large group of people. Kotler & Roberto (1989) contributed to the diffusion of innovations research through
Social Cognitive Theory (SCT) SCT interprets behavior in terms of triadic reciprocality or reciprocal determinism, in which behavior, cognitive, other interpersonal factors and environmental events are the interacting determinants. One of the key concepts in SCT is an environmental variable learning which is governed by the following processes: • Attention • Retention Exhibit 3: Popular social marketing theories
12
the concept of adopter segments, each of whom would require different motivators for change. (Ref: Exhibit 6) Oldenburg, Hardcastle & Kok (1997) hada different approach thatrevolves around the determinants of thediffusion's speed and extent covering attributes like relative advantage, compatibility, trialability, communicability, risk etc. Rothman, Teresa, Kay &Morningstar (1983) studied the notion of 'reference group appeals' and also looked at the varying effects of high-intensity, personal selling approaches to diffusion/marketing vis-Ă -vis a low intensity, 'mass communication' one. Social marketing: Catalytic reaction kinetics Social marketers need to meet the challenge of synergizing their activities in a multi-modal health environment with increasingly cluttered communication bandwidth. Social marketing has been routinely used to influence health behaviour especially in preaching the virtues of better and hygienic alternatives. Time has come to stretch its power to galvanize the consumer into a proactive mode wherein the
down in a hurry, but there is much that we can do to reduce the amount of money wasted. Money, which can be put to good use in prevention, rehabilitation and higher quality care. It is important to put competition back in the market and shake up the coalition of stakeholders within the system, so that nobody feels complacent and stagnant. With increased competition, the health system would be forced to reinvent itself decade-by-decade, if not year-after-year. Conclusion
Behavioural & normative beliefs
Behaviour
Theory of Reasoned Action (TRA)
Social marketing marks the beginning of consumer-driven healthcare an arrangement where the consumer takes thenavigation wheel in his own hands and makes qualitative decisions for himself.
Attitudes
Intentions
Exhibit 5: Elements of the Theory of Reasoned Action (TRA)
aspirations of affordable healthcare can be whetted through active demands for differential thinking, value chain analysis and, if required, a 'start from scratch' approach with a fresh paradigm and a mandate to build to the new cost parameters. There is no single lever which can be used for cost containment. Instead, a number of minor measures can take us nearer to the goal. It is unlikely that the cost of healthcare is going to come
Exhibit 4: Core components of the Health Belief Model
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The author has a penchant for differential thinking, especially while donning the marketing hat, and can be reached at sandip.chaudhuri@hosmac.com.
Unchaahi The mind's eye of an unbidden girl child. Her desire to break-free and the dreams envisioned.
By N.N. Sudhanshu Consultant — Public Health — Hosmac
Making healthcare worth it
Bishwajit Nayak, Head — Claims & Networking — Future Generali India Insurance Co Ltd, justifies how health insurance is the key to make healthcare affordable in India. Healthcare in India is the most sensitive issue discussed in the social sector, with all stakeholders expressing strong sentiments about it. Yet no one makes any earnest effort to bring about any significant improvements in the state of affairs. The deliberations on where we stand in the Human Development Index, what is the improvement in the health statistics of our nation and the percentage of GDP spent on healthcare is a favourite issue passionately debated upon at seminars and conferences across the country. The outcome of all health policies, white papers, discussions and strategies is evident in what we have today, in terms of a defunct Medical Council (although replaced by an expert panel), a completely unregulated healthcare sector, a highly regulated insurance market and a struggle between the central and state governments on who should initiate health reforms. It is an irony that despite having all the diverse health policies, high investments in the health sector and the numerous committees formed to address the health issues of the country, we have been contending to discover the exact solution to have a healthy population which can have access to affordable and quality healthcare. India still faces several worrisome health parameters, especially when compared to developed countries. Some of the following statistics from 2007 are indicative. Life expectancy languishes at 65, as compared to 78.9 in Organization for Economic Cooperation and Development (OECD) nations. Infant Mortality Rate (IMR) is a massive 55 per 1000, while OECD nations have collectively achieved an average of five. These national averages, however, mean little, as there is a huge variation between different regions in India. For example, Kerala has achieved an IMR of 13, while Orissa remains far behind at 71. The cost for hospitalization, on average for a rural household, is Rs. 8366, of which Rs. 3040 are indirect costs. Primary care, though not cheap, still counts for a much smaller average of Rs. 448 per case, of which Rs. 196 are indirect costs such as transportation, loss of wages, and interest costs. The
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country is now in the midst of a dual disease burden of communicable and non-communicable diseases. This is coupled with spiraling health costs, high financial burden on the poor and erosion in their incomes. Health financing in India is currently structured in a way which leads to serious issues of inordinate risk apportioned to those very people who can hardly bear it. Out of pocket payments constitute 72% of all health expenditure made by a person in a year. This compares very unfavourably with the corresponding figures not only of the developed nations, but even with that of other developing nations as we see in Chart 1 below (data is shown for 1995, 2006 and what is expected for 2015). Health episodes are typically financed by a combination of credit, savings, asset sales, private insurance and social insurance, which is funded through collected taxes. The different nature of out-patient and in-patient expenses leads to a significantly different break-up of the sources of financing, as demonstrated in Chart 2 below. The current sources of financing rely inordinately on savings and credit. Insurance funds only 1.5% of household health expenditure in India. Only 11% of the population is covered by any kind of insurance and that too, primarily, by social insurance. The negligible presence of insurance leads to an estimated 20 million people in India falling below the poverty line each year due to indebtedness arising due to healthcare needs. This is further complicated by the fact that credit is very expensive in rural India, and capacity to pay is further reduced by unexpected episodes of diseases. As shown in Chart 3 above, interest on loans taken for treatment is a huge component of a distress caused by unexpected health outcomes. The challenge in India is to avoid both over- and underinclusiveness in any healthcare financing model. The bifurcation of responsibilities between the public and private
Chart 1: Comparison of Public Vs. Private Healthcare Expenditure of Different Countries Source: ICTPH Concept Paper: Healthcare Solutions – The Path Ahead
sector is still not clear and thus leads to extra availability of funds for health to a certain class and less or no availability for those who actually need it. A section of the population does not have any means to access basic healthcare, while another section spends more than required on healthcare services which are not essential but only undertaken for cosmetic reasons or personal satisfaction. Given the above scenario, exploring alternative health - financing options becomes essential. The goal of a sound health financing mechanism is to
penetration of insurance in these areas which enables people now to spend on healthcare more liberally by paying a nominal amount annually. This encourages delivery of healthcare in more quantity and at a higher cost as the user and producer of the service are not concerned about the principles which make insurance viable in the long run. Thus, we have a spiral of more sales for the insurance companies, more hospitals setting up business without any semblance of quality and healthcare costs rising. To add to the woes, third party administrators (TPAs) acting as intermediaries between insurers and hospitals have increased administrative costs for insurers and created more hassles for the consumers. The natural reaction of the insurance sector in such a scenario is to either increase premiums or restrict benefits, both of which force out a certain section of population from the insurance net. The insurers do not have the liberty to increase premiums without a proper justification to the regulator whereas hospitals religiously follow a price increase at any frequency without any authority to question their actions. Thus the gap between premiums and claims increased leading to the bitter clash between insurance companies and hospitals on frauds, exorbitant prices and over provision of services with neither party introspecting on why and where things went wrong!
Chart 2: Sources of household health expenditure. (Sources: NSSO morbidity survey, ICTPH Analysis)
Ensure that there is an equitable and timely access to genuinely required healthcare services. Health Insurance is considered as one of the financing mechanisms to overcome some of the problems of our system. Health insurance has been formally present in the form of the “Mediclaim” for more than two decades now but has not made any significant contribution in making healthcare more affordable or accessible. In fact, if assessed in real terms, it has led to an irrational growth of healthcare infrastructure which has no relation to the needs of population but rather related to the spending capacity. The viability of the health insurance portfolio has been endangered due to the misuse of insurance to fund healthcare needs of a section of the population which either does not need any insurance or the healthcare service which was utilized. For a long time, the organized corporate sector has exploited the insurance tariff regime to discount health premiums to abysmally low levels not realizing that a disaster was imminent. With privatization of the insurance sector and removal of tariffs on motor and fire insurance, health insurance costs went up to unexpected levels, or more rightly, to the actual levels where they should have been. This led to insurers refusing to provide services at a loss and buyers either opting out or reducing their insurance covers. Despite adverse economic environment across the world, the Indian health insurance market continued to post record growth in the last two fiscal years (2008-09 and 2009-10). Moreover, as per estimations, the health insurance premium is expected to grow at a Compounded Annual Growth Rate (CAGR) of over 25% for the period spanning from 2009-10 to 2013-14. Currently, the market is dominated by public sector insurers, and all the private health insurers put together account for less than half the total health insurance premium written in the country. However, with the fast expanding private health insurers, the trend is to get reversed soon; and in next few years, the market will be dominated by private insurers. The continuous growth in the insurance industry, more so in the health insurance sector, has indirectly contributed to an intriguing interest in the healthcare delivery sector. The growth in the premiums has been accompanied with hospitals and nursing homes mushrooming in locations which already have adequate number of them. It is not surprising to understand the reasons for this phenomenon. The population in the metros, semi metros and urban areas have an increased awareness of insurance and thus view it as an essential component of their risk management strategy. This translates into more
Now, let us see how the rural or semi urban sector has been influenced by health insurance. As traditionally viewed in India, health is expected to be public good and the state is required to cater to the health needs of the population. This social objective combined with political motives has contributed to the creation of many populist health schemes and “Swasthya Yojanas” which continue to remain viable on paper and drain the coffers without achieving the objectives they are meant for. These schemes tend to slack the health finance mechanism and create avenues where funds are spent without any accountability or audit of the usage. In the eagerness to simplify or automate validation processes, the funds are made accessible to the producers of the healthcare service which lures them to provide healthcare either more than required or
Chart 7: Major heads of household health expenditure. (Sources: NSSO, ICTPH Analysis)
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only on documents to act as proof of provision of service. Interestingly, rural areas have all of a sudden created investment opportunities for hospitals although the need has existed since a long time. Thus, what is being witnessed is an increase in health infrastructure, improvement in health insurance awareness, over enthusiasm in launch of populist schemes but with all with a significant increase in cost. Who is at fault for the direction which the insurance industry has taken? Is it too late for a course correction? Will we be able to bring stakeholders to a consensus on making insurance a vehicle for affordable healthcare? The answer to all of the above is a “YES�. It is possible to have a more systematic approach to make health insurance more viable for insurers, hospitals to have a reasonable margin in their business and consumers to obtain the best quality of health services. All stakeholders must understand that there has to be stratification of the population based on their economic status, health status and needs. For the insurers, development of products must be related to the customer base being targeted and the level of service expected. It must be accepted that although health has a social tag with it, it must not be expected that insurance must be cheap or subsidized and all hospitals must be charitable. A clear demarcation in essential, desirable and luxury healthcare must form the base of insurance products which in turn shall determine the cost of the product. The insurers and hospitals must offer a choice of products which cater to these segments based on their service expectation and affordability. There has to an unambiguous distribution of responsibilities between the public and private sector on who bears the cost for essential health services which are available to all at a nominal price, desirable services made available as per the paying capacity and luxury services accessible at a premium. Another important factor which must be considered immediately is a regulator for the healthcare sector. The presence of multiple accreditation authorities, absence of any check on how pricing of health services is done and growth of health infrastructure (both public and private) without a development plan is allowing healthcare delivery to become less effective and efficient. A joint and coordinated effort between a Health Regulator and the Insurance 19
Regulatory and Development Authority (IRDA) would be of immense benefit to the industry in the long run. Insurance Industry is unique, in the sense that this is an industry where a buyer spends significant money to buy a service which he hopes he will never have to use! However, when that person is forced to use the service, it is an experience that usually leaves a lasting impression. Market downturn and increased competition is forcing major changes in the insurance industry and in the way insurance companies operate. Competition is permanently altering the expectations in the minds of insurance customers on what they should expect. To cope with this change in expectations, the industry, as a whole, is evolving with respect to what it offers to customers. Insurers are now striving hard to bring more efficiency in their operations which will make services better and products affordable. With a more transparent healthcare sector and viable insurance industry, the end consumer would surely find health insurance as the right solution for better and affordable healthcare.
The views expressed above are solely of the author and do not represent the views of the employer in way. The author can be reached at bishwajit.nayak@futuregenerali.in.
Enterprising insights
Nishant Sarawgi, Strategic Partnerships & Marketing — NSEF, brings to light the need for social entrepreneurship in India and how organizations such as the NSEF can catalyze the metamorphosis. purposes one, they would act as building blocks in creating a social entrepreneurial culture; two, they would be the mediator of skills for equipping social entrepreneurs; and three, they would work as locomotives of social business development. It was founded by three alumni of BITS - Pilani Srikumar Murthy, Yashveer Singh and Rakesh Anugula. All of whom who have had ample experience with various non-profits and in solving grassroots' level socio-economic problems in India. But with time, they realized that there was a bigger need that was not being addressed by any of the non-profits in India. An enthusiastic GDP growth rate does not indicate inclusive growth. A developing economy does not encompass all its citizens. Not unless entrepreneurship plays a major role. Countless issues ranging from education, pollution, sanitation, energy, handicrafts, e-commerce, etc. need to be addressed in an economy like India. Against all odds, social entrepreneurs stepped in and started changing lives through business ideas. A powerful example is Husk Power Systems, which produces electricity from rice husk in inaccessible regions of Bihar, where even the state electricity boards have not reached. Such models can be replicated, universally. What's even more emphatic is the fact that these are not dependent on goodwill funding, but are self-sustained business models, making profits in addition to uplifting the society. Some of the prominent examples of social ventures in healthcare include Narayana Hrudayalaya, Bangalore which carries out more than 60% of its heart surgeries free of cost; Aravind Eye Hospital, Chennai and LifeSpring Hospitals, Hyderabad which are making high-quality healthcare affordable to the underprivileged sections of society. These organizations have changed the thinking of many people, who earlier believed that NGOs or social enterprises with a social mission cannot be entrepreneurial. But the fact still remains that organizations solving social problems are often assumed to be idealistic, philanthropic and lacking business acumen. Unless the youth and fresh graduates have an exposure to the prospects in social entrepreneurship, this avenue can never be fully tapped into. It's essential to reach out and sensitize them on how breakthrough changes can be executed in making social ventures sustainable. India is the perfect breeding ground for such enterprises. Three issues needed attention, which had the potential of creating many leaders who could take on social issues. First and foremost, was the lack of awareness amongst young people in India about social entrepreneurship. Second, the huge lacunae in the university education system to create social entrepreneurs. Third, young people who want to start (or have started) their own social enterprises lack the right resources to succeed. With a clear focus, the National Social Entrepreneur Forum (NSEF) was founded in February, 2009 to inspire and equip young people to build organizations which will respond to social challenges. NSEF's strategy to reach out to the youth was by establishing chapters at local communities (universities/metros) which conduct various activities to create an ecosystem that will produce the next generation of social entrepreneurs. These ecosystems would serve multiple
While a business entrepreneur might create entirely new industries, a social entrepreneur comes up with new solutions to social problems. In turn, he impacts the lives of thousands with the objective of solving social, economic and/or environmental problems. NSEF has a unique set of programs that are executed both at the university level and at national level that are turning out to be very successful in inspiring young people to consider social entrepreneurship as an important career option. Confluence An annual event organized by NSEF - the Youth Confluence - acts as a platform to catalyze social entrepreneurship amongst the youth of the entire country, be a place to drive home various social innovations and different facets of social entrepreneurship and a place to mutually learn about effective
solutions to the most pressing social problems. The event witnesses a conflux of social entrepreneurs, social venture investors, student leaders who have led campus social initiatives and thought leaders in area of social entrepreneurship sharing their ideas under one roof. Moving forward, NSEF's strategy is to identify students and alumni who are passionate about social innovation or entrepreneurship through its programs, and equip them to open a centre in their institution and carry out the activities and events. NSEF acts as a resource to facilitate the right pool of assistance needed to foster social entrepreneurship amongst this group and help them be change-makers in future. NSEF comes in by enabling access for students to social enterprises and vice-versa. The role extends to mentoring, guidance and immersion experiences to provide students an exhaustive knowledge about social entrepreneurship. Consequently, this will fuel the growth of more such enterprises and have as a multiplier effect.
The author is a Business Consultant at Innoversant Solutions Pvt Ltd, Bangalore. He recently got selected to represent India at the United Nations Youth Assembly. He can be reached at nishant.sarawgi@nsef-india.org.
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Insinuating health insurance
When a person buys a car, it is mandatory for him to buy vehicle insurance. Why is it not the case when a person applies for a birth or marriage certificate? Vinay Pagarani, Development Manager — Hosmac Foundation, learns more from Sudhir Sarnobat, Director — Medimanage. VP: Happiness lies, first of all, in health. Then, why hasn't the IRDA made health insurance a compulsion? SS: Insurance is a subject matter of solicitation. The customer has to urge for a cover, and the insurance company provides it upon that request. The individual is not forced or pushed. Whereas, motor insurance cover is mandatory for only Third Party Liability; the comprehensive cover is left for the individual to select. Going by these fundamentals of insurance, the IRDA believes that the Government need not make it mandatory but expects people to understand the importance and buy it at will. VP: What strategies do insurance companies such as yours adopt to successfully penetrate into the market? SS: Bancassurance, Credit Cards, Online Sales and Community Insurance Plans are some of the initiatives that you would see being very active. In addition to these, we have universal health insurance that's being propagated under the Rashtriya Swastha Bima Yojana (RSBY), which provides health insurance cover right at bottom of the pyramid. Although the impetus remains on education of insurance, and making one realize the essence and significance of it. VP: Would you please throw some light on the IRDA's newly sketched health insurance norms? SS: In India, to buy Mediclaim, customer fills up the proposal form and pays the premium upfront. The detailed terms & conditions of the policy are handed over to him only after the cover has commenced. In the event of customer desiring an alteration in the term & conditions, he has no say in the same. His only choice is to either accept it as a whole or opt out. Additionally, the interpretation of policy terms and disparity in various insurer's standard exclusions confuses the policyholder. In turn, s/he feels cheated when claims are rejected citing these conditions. To set things straight, the IRDA is working out norms that will standardize definitions of critical illnesses, hospitalization cost etc. They are soon to publicize an advisory standard list of policy exclusions. The draft norms will also streamline administrative issues like uniform claim form, single preauthorisation request form etc. VP: Germany's health insurance model is perhaps the most promising. Which elements, do you think, are suitable for the Indian setup? SS: German Health Insurance is not optional. It's mandatory for most of its citizens. The penetration rate is currently at 85%. For any insurance to be successful, it must be able to spread its risks properly. Higher the penetration, better the spread. One of the many reasons for Indian health insurance not being very successful is its minuscule penetration; an overall penetration rate of only 3-3.5% of population. In Germany, if a person's annual gross salary is less than 49,950 Euros, you automatically get enrolled in Govt. Insurance (GKV). Approximately, 15% of your salary is contributed towards premium. Out of which, 50% is borne by the employer and the remaining by employee (person). With reforms in 2007 and 2010, even the self-employed persons have to buy health insurance. In a nutshell, it is illegal in Germany to remain uninsured. 21
This is the feature that we may adopt in India to improve penetration. We should look at all members below a certain threshold, but not below minimum wages, to be insured mandatorily under mediclaim. All members whose income is less than the minimum wages per month should be insured under RSBY. This would provide a much needed spread that Indian Health Insurance need to become successful. VP: How will insurance companies fend off the reported inflating of bills by hospitals/practitioners? SS: Frauds are a part of any benefit process, where the Third Party pays for the benefits. The trouble starts when this becomes large-scale, and the providers do not find anything wrong in it. Insurers (and their TPAs) should invest in technologies and systems to identify these deviations from agreed billing rates. When such malpractices are identified, strict disciplinary action should be taken against such errant hospitals. A ban on cashless insurance and even on reimbursement at such hospitals by all insurance companies for 2-3 years, with the hospital's name made public, could be an effective deterrent. VP: Cashless medical insurance, where is it going and where will it halt? SS: Cashless Mediclaim is here to stay. It renders a convenient mechanism, and policy-holders are finding it convenient and favorable. It is being misinterpreted and abused by the stakeholders without realizing the true intent of the services offered.
VP: Why don't health insurance giants focus on preventive care instead of only curative care? SS: If you observe the mature markets, preventive focus comes in when the market stabilizes and has a good penetration rate (more than 50-60%). Indian health insurance is still in its nascent stage, and a lot has to be done in terms of product innovations, operating efficiencies, fraud detections and supply chain management. Once all these areas become fully efficient and the penetration increases, the exploits will dwindle from improvement in existing systems. It is then that preventive care focus will become important and the market will start looking at it as a long-term bottom line improver. VP: Outpatient-care and daycare are not covered in most medical insurance policies. Wouldn't this be a major puller for you to attract customers?
Many hospitals use higher billing rates, forge history to accommodate pre-existing diseases or make bills without patient even being hospitalized. Instead of cutting down on TPAs' fees, insurers should pay them as per tariffs and demand excellence from them. With proper systems and processes, these loopholes can be plugged. But this will need the insurers' — especially, PSU insurers who enjoy 70% market share — to take steps with along term perspective rather than short term gains. VP: In the west, hospital grading has facilitated cashless medical insurance. How can India adopt the same? SS: The PSU insurers who enjoy the largest market share in India have been looking at health insurance as asocial benefit, and were not bothered about losses as long as profits from other portfolios were pouring in. However, with profits from other portfolios (fire, marine, property) being almost vanished, they have woken up to the realities of business. But they are expecting the government (or health ministry) to regulate the healthcare industry. We are of the opinion that they must regulate hospitals for the part that they pay (claims paid), and not wait for any other agency to intervene. Their monies are at stake, so they have every right to demand efficiency, quality and better rates from their suppliers. Any large corporation, while signing up with vendors ensures proper due diligence, expects the vendor to follow best practices for consistent service delivery. It then categorizes them according to the ratings earned during due diligence. This is the practice insurers should also follow.
SS: It's incorrect to say that Indian health insurance policies do not cover day-care procedures. Most of the day-care procedures (where the hospitalization time has shrunk due to advances in medical sciences) are payable. It's a myth that you must stay in hospital for 24 hours to get your Mediclaim admissible. In case of cardiac alarms, even hospitalization of less than 24 hours for observation are paid for. The OPD treatments are not covered currently as it's not treated as catastrophic financial loss. Also, we must bear in mind that the product which is so well-known in Indian markets (Mediclaim) is necessarily a “hospitalization insurance plan” and not a “health insurance plan”. VP: Where do you think the Indian health insurance industry will stand, five years from now? SS: We will see this industry growing at a CAGR of at least 20% for the next five years. Once the fiscal discipline is in place by all insurers, we will see innovation in products based on sound underwriting principles. There will be consolidation in the TPA industry, and each insurer may go for TPA of their own to control efficiency, quality and frauds. More dedicated health insurance companies would enter in India with Indian partners. We believe that at some point, the government will make insurance mandatory for people below certain threshold to improve penetration and ensure that everybody has a right to good healthcare. We also feel that with more products and increased complexity in market, the role of intermediaries would become important.
The interviewee is the Founder & Director of India's only Health Insurance Broking Company and has been in Healthcare business since 1999. He can be reached at s u d h i r @ m e d i m a n a g e . c o m . To k n o w m o r e , v i s i t www.medimanage.com.
Though the current grading methodology is too coarse, we expect it to evolve over a period of time. 22
Validating lessons
Accreditation of district hospitals has gained relevance within the excelling healthcare order of India. Sonali Sinha, Principal Consultant - Hosmac, shows the way ahead.
“Quality marks the search for an ideal after necessity has been satisfied and mere usefulness achieved.� -William A. Foster The prime focus, as far as development in the health sector is concerned, has till recently been utterly on the issue of access. In a country where we are still striving to provide healthcare services to one and all, and where universal availability of services still remain a yet to be achieved goal, the concept of quality has largely existed in the neglected area. A few modern facilities, predominantly in the private domain, have come up in the last two decades but their number and coverage are quite limited. Moreover, the costs of these quality services restrict them to cater only to a class apart society. On the other hand, public healthcare facilities on district and subdistrict level to which the larger population throng to, or most of the private healthcare facilities to which the people depend, are yet to address the issue of quality in the services they deliver. There is a sporadic presence of the voluntary sector too. Yet, quality remains a concern in all three segments. While inadequate resources, lethargic and sloppy attitude, poor motivation level, callousness and chaos often afflict the public sector, unethical and exploitative practices in pursuit of profit maximization largely plague the private sector. The voluntary sector, though shows commitment, is limited in terms of its presence and resources. To achieve better health outcomes, the public sector must become more responsive, the private sector — more responsible, and the voluntary sector needs to be more resourceful. The blueprints for a healthier planet must optimize the use of each, combining the social commitment of the public sector, the selfless spirit of the truly voluntary sector, and the operational efficiency of the private sector.
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But what is quality all about? 'Quality of Care' is not merely about the availability of medical software or hardware in the facilities. It is more about ready availability of desirable healthcare services and their delivery at the time of need and at an affordable price. More than that when we talk about quality healthcare services, it does not only mean the availability of services, but also the ease with which they are available and the level of satisfaction they provide to the ones in need. The issues are complex and the problems multiplex. However, the solution lies in putting up a system that aims in thoroughly investigating and understanding the facilities; making a situational analysis; devising the gap filling strategies; and accordingly upgrading them. However, the challenges in the public health sector have been much more complicated and deep-rooted than its private counterpart. This can be attributed to the shortage of facilities, lack of optimal manpower, increasing work load and ineffective systems. The main concern among end-users is the quality of services provided in the public health sector. Poor quality of services causes loss of customers, end of lives, depletion of revenue, reduction of material resources, wastage of time, erosion of recognition and finally diminuation of trust. In fact, to correct the malady, the public health sector urgently needs extensive capacity building and a thorough upgradation in order to be able to deliver quality care services. It requires a suitable model to be developed, to analyze and overcome the gaps as per appropriate benchmarks. A facility specific action plan as per the provisions of this model is ought to be prepared and implemented under expert supervision. It would initiate a process of change which needs to be facilitated over a period of time to get inculcated, institutionalized and stabilized in the system. The health infrastructure is though growing at a decent pace yet the task is enormous, if underserved areas are to be covered in totality and the goal of universalization of availability and accessibility to quality healthcare services is to be realized and actualized.
Availability, affordability and accountability along with emphasis on efficiency and effectiveness must characterize the quality health services, while equity and universal outreach must be the edifice on which public health policy must erect its programmes. National Rural Health Mission (NRHM) is one such program that envisages bringing about a 'paradigm shift' in the healthcare delivery system across the country. In order to achieve the articulated objectives of the NRHM within the available timeframe, a multi-pronged strategy has been adopted. Institutional strengthening, in terms of infrastructure and human resource development, has been in the core of it, as these are crucial to appropriate, adequate and active functioning of Public Health Delivery System. Here's a success story which probably proves that a small push in the right direction can yield great results and open the floodgates for bigger initiatives. National Health Systems Resource Centre (NHSRC), a technical support wing of Ministry of Health & Family Welfare, Govt. of India, has undertaken an initiative for quality improvement in the public health systems of the country. It has been realized that it needs concerted efforts to bring about improvement in the quality and comprehensiveness of services through improvement initiatives for service delivery processes. To realize this endeavour, NHSRC with the active support of the Technical Support Partners (TSPs), HOSMAC being one of them, piloted the quality improvement and accreditation of one of the District Hospitals in each of the eight Empowered Action Group
developed to traverse the gaps and lay down a comprehensive Quality Management System (QMS) for the clinical as well as the non-clinical processes to address and ensure quality service delivery and thereby enhance both employee and patient satisfaction. The process of implementation has been challenging yet an encouraging experience throwing open a long way ahead. The reality of the success has been impregnated with apt conceptualization and planning, development of hospital specific QMS, step-by-step systemic implementation and inculcation of the systems and processes through adequate capacity building of all concerned and by following a synergistic approach and convergence at various levels. The support from both the district administration and the state government has been overwhelming in this quest for quality and, thereby, improving the functioning of the public health systems. The journey to certification of the district hospitals has been quite an experience, and has brought to the fore a few core issues related to the functionality of these facilities. The key outcomes of the efforts, summed up as follows, are for everyone to see: •
Developed an understanding of the objectives of accreditation and the benefits it accrues
•
Created a positive and informed attitude towards the accreditation system
•
Accreditation program has started getting space in State Project Implementation Plans (PIPs)
•
Advocacy on the QMS got initiated and has helped creating awareness amongst stakeholders
•
Support to sustenance of systems and processes beyond accreditation are being appreciated
• Synergy and convergence is showing at all levels •
Continuous supportive supervision Timely gap analysis and gap filling
(EAG) states of India, namely, Chhattisgarh, Jharkhand, Bihar, Madhya Pradesh, Uttarakhand, Uttar Pradesh, Orissa and Rajasthan. It successfully implemented the Quality Management System (QMS) in the hospitals which, after passing through the stringent audit processes, have subsequently been awarded with the ISO 9001:2008 certification. The process is being replicated in the other states of the country as well after the overwhelming success of the pilot phase. The basic objective of the project is to develop and establish a suitable model of Quality Management Systems (QMS) for the District Hospitals that would facilitate quality and process improvement so as to improve the level of organizational performance and patient satisfaction. As evident, the current functioning of most of the healthcare facilities in the public sector leaves ample scope for improvement in almost every area. The Indian Public Health Standards (IPHS) provides a framework on desirable manpower, equipment and infrastructure related issues. Review of existing facilities against required parameters lead to identification of gaps which are needed to be addressed for efficient functioning of these facilities at an optimum operational level. In an endeavour to upgrade the existing facilities and establish systems to substantiate the inadequacy, a rapid assessment of the functionality of district hospitals was conducted for mapping a detailed 'as — is process' and 'gap analysis' viz-a-viz the availability of the services and their functional status, human resource, infrastructure, equipments and performance statistics etc. Based on the baseline findings, the 'to-be' processes (documented Standard Operating Procedures) were
•
Capacity building of all concerned
•
Facilitating change through end-users
•
Change in attitudinal levels and increased motivation amongst the staff
•
Enhanced satisfaction level in the people
•
Better organized health facilities
The way ahead The certification/accreditation process of the public health facilities is actually a small step ahead to a healthier and happier nation. Taking it beyond the accreditation process will be the real essence of the entire efforts. The message is simple: Quality Public Healthcare must move centre stage from the periphery of development planning, so that health and economy can nurture each other.
The author has varied experience of over a decade in community health & development. She has held positions of responsibility in government as well as in non-government organizations. She can be reached at sonali.sinha@hosmac.com.
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A rust-proof supply chain
Siddiq Khan, Principal Consultant — Hosmac, advises on how materials management can be used in the hospital as a profit center to improve the financial bottom line.
The quality of a hospital's services also is affected by materials management. Part of a nurse's day, for instance, is spent ordering or retrieving supplies. Reducing that time by providing more effective and efficient supply systems allows nursing personnel to spend more time with patients and enhances quality of care. Organizational Audit While no simple formula exists, a basic program to achieve and maintain excellence in materials management and to improve the financial bottom line can be developed. The first step in this process is to carry out organizational audit of the materials management, i.e. determining the current status of a hospital's materials management for measuring progress and for determining strengths, weaknesses, action plans, and priorities. A checklist needs to be prepared to determine whether materials management is structured to meet its mission and provide services on which user departments depend. Assessing physical facilities also is integral to an organizational audit because space and equipment also affect materials management. Operational Audit
Ask a Hospital Administrator regarding the ways & means of improving the hospital's financial bottom line and increase productivity at the Profit Centers like OT, ICU, OPD, Lab, Radiology, Pharmacy etc. will top the answer. The other areas like departments of marketing, cafeteria service, valet parking, gift shop would also figure. But, stores & materials management would usually features at that bottom of the list, if not at all. Materials Management is traditionally treated as a Cost Center, akin to the human-resources department .Human Resources & Materials Management together account for 80% of the hospital's operating budget with a share of approximately 45% and 35% respectively. While little can be done about reducing the salary expenses of employees, a lot can be done in reducing costs associated with purchasing and storage of goods. It is estimated that every 5% reduction in supply and storage costs equates to a 1% improvement in bottom line margin of the hospital. Most departments in hospitals rely heavily on supplies, and inefficient materials management can be detrimental to a hospital's operations. For smooth operations, departments such as OT, ICU, wards, pharmacy, laboratory, blood-bank and CSSD require supplies to be in the right place at the right time and in the right quantity. The threat of lax material management systems in hospitals cause the user departments to create their own systems and, in the process, devote extra staff, inventory, space, and other resources to ensure that needed supplies are available. 25
The next step is an operations audit, which identifies how and how well each functional component of materials management is executed. The main element here is the material handling and distribution. In an operations audit, basic performance levels are evaluated, allowing a reviewer to suggest standards for performance. Other sources of appropriate hospital standards include materials management professional societies, consultants, articles, and books. Whatever source is chosen, a hospital should not simply make comparisons to peer facilities. Doing so could commit a hospital to mediocrity rather than excellence. Program Components Materials management, like other disciplines, requires planning and leadership. Starting with a strategic plan that defines materials management's mission and role within the organization, a hospital can achieve excellence if it recognizes that materials management, as a support service function. A materials manager first must determine the right things to do and the right way to do them. This involves providing supplies and other materials in a consistent, cost-effective manner so that user departments can meet their own goals and objectives. Accountability Organizational structure is central to improve the materials management systems. The level at which it is reported to executive management shows the importance placed on materials management throughout a hospital. While a close working relationship with a hospital's Accounts & Finance Manager is essential, direct reporting is not required to enhance overall functionality. In lieu of the hospital-wide effects on staffing and customer service, a hospital may choose to have its materials management report to its Chief Operating Officer/Hospital Administrator. Departments such as pharmacy, food service, and laundry should be considered part of materials management because they are involved in buying, storing, processing, and delivering
materials. An internal structure for materials management must be lean and allow a materials manager unrestricted, frequent access to user departments and staff to maintain an appropriate level of leadership and control.
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Other components of a successful materials management program include: 1. Customer service Identifying, meeting, and exceeding the needs of user departments and patients. 2. Product quality Conduct value analysis and identify a level of quality that achieves desired patient outcomes in a cost-effective manner. 3. Human relations Continuous training and education of managers/staff members and sharing of responsibility and authority. 4. Resource management and Productivity Balancing the need for high service levels with the cost of providing those services. This includes all resources involved in materials management-staff, space, inventory, and working capital. 5. Technology Not just automating, but obtaining maximum performance or benefit from new technology. Performance Indicators Excellence in hospital operations requires the development and continuous use of meaningful performance indicators of quantitative and qualitative aspects of materials management. While national performance indicators and hospital statistics are good starting points, each hospital must develop its own detailed standards that are compatible with the organization's overall strategic direction. Some KPI are: On-hand inventory balance Inventory Turnover Average value of order Hospital - Prime Vendor relationship On-time delivery Item utilization rate Non-Contract Compliance Analysis — identify off-contract,
high-value, recurring purchases and determine where contracts should be established Non-PO Purchases Analysis — identify items ordered through
non-PO transactions, so corrective actions can be taken and non-PO purchases eliminated Most indicators must be tailored to each hospital's specific circumstances. Items such as on-hand inventory balance must be measured continuously, while others, such as item utilization rate, are measured periodically.
include cost of preparing the order, the stationery used, salary of the clerks, telephone costs etc. It is estimated that ordering cost varies from Rs. 2000 to Rs. 3000 per order in leading hospitals. So hospitals must try to avoid ordering for items individually. They must place the combined order for many items in one order to reduce the costs. Each order has a fixed costs associated with it, and it is independent of the number of items in the order. Inventory Holding Costs: It is a cost associated with storage space, refrigeration, insurance, etc. usually not related to the unit cost. The Total Cost: It is sum of all the above 3 costs that can be minimized by following Economic Order Quantity (EOQ). Optimizing performance: To optimize supply chain performance and achieve savings that enhance the bottom line, hospitals should: Generate purchase orders for every item purchased Ensure the organization is protected from undue vendor
influence Review contracts regularly to ensure competitiveness Have a contract for each product category Buy only what the organization is sure to use Get rid of excess inventory Computerize all operations Develop a strategic plan for continued supply chain savings
Last words Top management should understand the contribution of effective materials management to a profitable organization. Only then can they provide the support, time, and other resources to qualified materials managers to increase chances of success. Without administrative support, to expect stellar performances from the best material managers is going to bear little or no fruit. Materials management has been a vastly neglected area in hospital pperations. If older hospitals seek to retain their impressive their track record and newer hospitals wish to create flawless operation systems, an optimized material management system is the need of the day.
The Costs The costs incurred by materials management department can be grouped into three categories: Purchase Costs
The author is a former Head of Materials at Tata Memorial Hospital, Mumbai and American Hospital, Dubai. He can be reached at siddiq.khan@hosmac.com.
Ordering Costs Inventory Holding Costs
Purchase Costs: This refers to the variable cost of goods. The purchase cost is a product of the price of the goods and the demand for it. A good negotiated price or a discount brings down the purchase cost substantially. Ordering Costs: Ordering costs include all the costs incurred while placing an order and receiving the order. These costs 26
Chronicles: Building Tomorrow
Hussain Varawalla, Mentor — Design Services — Hosmac, provides the artwork for the future role of architects in the Healthcare Delivery Systems Design.
Architecture, as a service to human societies, could be defined as the provision of fit environments for human activities. The word “fit” may be defined in the most generous terms imaginable, but it still does not necessarily imply the erection of buildings. Environments may be made fit for human beings by any number of means. A disease ridden swamp may be rendered fit by inoculating all those who visit in against infection; a natural amphitheater may be rendered fit for drama by installing lights and a public address system; a snowy landscape may be fit by means of a ski-suit, gloves, boots and a balaclava. Architecture, indeed, began with the first furs worn by our earliest ancestors or with the discovery of fire — it shows a narrowly professional frame of mind to refer its beginnings solely to the cave or primitive hut. The service that architects (healthcare designers included) propose to perform for society can often be accomplished without calling in an architect, and the increasing range of technological alternatives to bricks and mortar may as yet set a term to the custom-sanctioned monopoly of architects as environment purveyors to the human race (more so centralized healthcare delivery environments). These alternatives, whose justification is measurable performance rather than some cultural sanction extend, however beyond the provision of technological services, and include analytical techniques as well, so that it is possible to define “hospital” without
reference to a patient room or an X-ray machine, but simply as a complex integration of intrapersonal relationships and technical services. To do so would, in fact, be to depart so far from the operational lore of the society we inhabit as to provoke, alarm and discomfort among the engineers, scientists and doctors who, within their specialities, regularly employ these techniques. Nevertheless, a moment’s reflection on such phrases as ‘TV Theater’, ‘Radio Concert Hall’ or ‘Virtual University’ will show how far technological advancement has made nonsense of concepts that were hitherto building-bound, and yet have gained popular social and cultural acceptance. Under the impact of these intellectual and technical upheavals, the solid reliance of architects, as a profession, must eventually give way. Yet the Functionalist slogan,"a house is a machine for living in" gives nothing away because it presupposes a house. Far more seditious to the established attitude of healthcare architects is the proposition that far from ambulances being substandard hospitals, a hospital is, for many functions, a substandard ambulance. The profession tends to dismiss the potential impact of scientific and technological alternatives to the art of building. There is an 27
ever-increasing tendency among 21stcentury service providers of any kind to take the service to the customer, as opposed to the customer coming to the service. Technology is enabling this paradigm shift, and healthcare facility designers could do worse than take note. Bob Dylan sang about it, nasally prophetic: “…The times,they are a changin’…” Human environments currently under consideration in urban India are constructed environments, static, more or less permanent and designed to operate without the consumption of too much mechanical energy. These last two proviso’s are both rather relative since no discussion of the present state of architecture in urban India could ignore the transitory, pulsing nature of the shanty towns of the poor and at the other extreme modern healthcare facilities, embodying high-tech grandeur, which, operating as they are in extreme climates, can only be kept fit for human activities at the cost of pouring vast quantities of mechanical energy into them in the form of airconditioning and artificial light. If we consider automobiles as the manifestation of a complex and agitated culture-within-a-culture producing discrete objects which are themselves environments for human activities, we could obtain a standard of comparison for the activities of the architectural profession. They may ruefully compare the scale of the constructional work produced by the automobile culture with that entrusted to architects; they may enviously admire the apparently close communion that exists between users and producers, the direct way in which designers and stylists seem to be able to apprehend the needs of motorists and satisfy them, but they surely need not draw lessons from the work of stylists about the possibility of tailoring aesthetics to fit the aspirations or the social status of the clients. Urban Indian architects are only too aware of this possibility, and indeed make it a certainty at every given opportunity. However, there is no ambition to imitate automobile form in contemporary architectural design. The operational lore of architects seems not to include the idea of expendability. On the other hand the forms of the more permanent products of technology are liable to imitation – to cite a notorious example, the development of cooling towers for power stations have been paralleled by a series of pseudo-cooling towers, an example being Le Corbusier’s Parliament House for Chandigarh, and the development of modern petro-chemical complexes vis-à-vis Richard Rogers and Renzo Piano’s Pompidou Center in Paris. This sincere flattery of technology is one facet of the almost fetishistic regard afforded to certain classes of engineers, nowadays the desire to incorporate engineering forms into architectural design is overwhelming, more recently the work done by mathematicians in the field of fractals and forms taken from the biological sciences provide rich imagery for architects. The pop culture and the visual media also serve as powerful influences on architectural form. Fragments of history juxtaposed with each other and anything else the designer might find at hand have also had their effect on the built form of our cities, especially Mumbai. Prefabricated systems’ building is accepted as “architecture”, however there is a division of mind here between architects and engineers. The operational lore of the architectural profession in India has assimilated prefabrication as a technique applied to fairly small repetitive components to be assembled on site. Such an arrangement still leaves the determination of functional
distrust of sociologists they may well find that a great deal of very suggestive research is already at their disposal.
volumes securely in the hands of architects, and the physical creation of those volumes securely in the hands of traditionaltype site labor. But prefabrication, for most of the creative minds in the plastics industry, means something quite different. It means the fabrication of components large enough to be effective determinants of functional volumes. These designs call for the off-site fabrication of complete functional volumes such as bathrooms and kitchens, a procedure that both has structural advantages and makes it possible to complete most of the fabricating work under controlled conditions. The result is a structure put together from large, modular units with universal joints. Such structures are widely used today to provide critical healthcare in disaster management programs. The medical profession in India is also familiar with vaccination and ophthalmic surgery camps, but no effort has been made to provide for these camps “temporary hospitals”, the surgery is often done under substandard conditions and the cases of blindness that result make headlines in the tabloids, to be read and immediately forgotten on the way home from work. However, such ideas have hardly touched the general body of architecture at all as yet. Much of the painstaking and valuable research that can be shown has been undertaken in conditions that presuppose the existence of rectangular, permanent and static buildings. The fruits of such work often wear a characteristic air of grid-like simplicity, which, it should be noted, derives more from the mental disposition of the men involved than from the findings of the research programs. Architects, including healthcare architects, don’t spend much of their time reading research data; in fact they don’t spend much of their time reading anything at all (tabloids en route homewards?). Via market and motivation research, and the long accumulation of sociological data, considerable scientific data on the behavior of people in various environments already exists, and when designers can overcome their long-standing
The youngsters today might have some good words of advice for the architectural profession in India today, especially those designing healthcare facilities. They might say: “Get with the scene, dudes…” There are a whole lot of exciting things happening in the world outside, technical and scientific developments, information on which is easily available in today’s connected, wired world. We healthcare architects need to open our minds to this plethora of information to improve the way we approach the design of our projects. A lot of it is couched in very technical language, anathema to us ‘creative’ thinkers. As was hinted at in the beginning paragraphs of this article, we need to transcend the traditional limitations of our professional training to embrace a more holistic view of what we are trying to do and be more creative in finding solutions by going to the roots of the problems we are dealing with. Easier said than done, no doubt. However, in our firm of hospital planners and management consultants, we have evolved a specialized and multi-disciplinary approach to the broad spectrum of issues that confront healthcare facility designers today, right to the extent of letting our staff develop their fields of interest in keeping with their temperament, transcending education and initial job descriptions. Science, engineering and aesthetic sensibilities co-exist with a social conscience and business management skills in an environment that brings forth the best in all of us. Healthcare architectural firms have to undergo a metamorphosis into holistic healthcare consultancy firms, they have to realize that there is more to healthcare facility design than the skills and knowledge of healthcare architects can competently deal with. We need the help of a variety of professionals as equally respected members of the design team; the architect has to surrender his/her demigod status in the design team and has to accept that there are people out there who can and must shoulder an equal part of the burden. Let me leave you with this quotation from Chuang-Tzu, a Chinese philosopher: “A man who knows he is a fool is not a great fool.”
The author has had 20 years of rich experience in healthcare design building and has worked with Reliance Healthcare Ventures Ltd. He can be reached at hussain.varawalla@hosmac.com.
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Playing with the yardstick
The changing face of healthcare demand and service delivery system has compelled the industry to look beyond and learn. Lalit Mistry, Principal Consultant - Hosmac, illustrates.
Market of Smart Consumer Today, at one end urban consumers wants a Citibank that never sleep, whereas at the other end, rural consumers appeal for a Grameen Bank. Healthcare service delivery industry is one of the most complex of industries, and in today's smart consumer driven market, patients' needs and healthcare service delivery are turning ever-more complex. It is difficult for organizations and clinicians to keep up. Patients have higher acuity, need faster, better and cost-effective services. Consumers will be increasingly stratified with two of the largest categories being — e-health and traditional patients. Organizations must define, design and deliver the right customer experience for different types of consumers. New Market - Same Old Business Processes Established industries like healthcare are usually populated with old and rigid mindset legacies. Often, systems and processes followed by the organizations are outdated, inefficient, and completely unnecessary in the current scenario. Every day patients displeased by a set of noncustomer centric process in the organization result in one less customer to worry about in the future. It highlights the need to reduce the number of preventable systems and process failures. Thus, it is of utmost importance for the organization to ensure each process that the customer interacts is patient centric and cost effective.
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Learning from Other Industry Healthcare organizations must become learning organizations. Don't go industry-specific and look for insight based only on the industry you belong to. Instead look for the similar challenges faced by other industries and how they were overcome. Today is an era, where a competitive strategy is about being different, bold enough to challenge old concepts and defy conventional industry norms. Some years back, Air Deccan chose to offer low fares and service to such hitherto unconnected airports, and attract price sensitive customers who would otherwise travel by train. In fact, Air Deccan identified its competitors as Indian Railway and not other Airlines. Air Deccan reengineered all its activities and truncated all unnecessary overheads like on-board meals, travel agent commissions by promoting online or direct ticketing with customer care desks. This helped Air Deccan reduce add-on cost components of the fares, significantly. Nowa-days, there are ample airlines offering low cost services, however, consumers now demand faster service with zero waiting time. That led airlines to reengineer their processes further like Installing self check-in kiosk machines and a priority luggage tag service to executives traveling on a business trip. It further led airlines to make an extensive use of information technology to handle today's progressive, demanding consumers like real-time seat and fare selection, e-ticketing,
of economies of scale is not radical. In fact, the doctor describes his way as "the Wal-Mart approach." Let's Reengineer The Indian healthcare industry has traditionally accentuated on process improvement tools and technology in the bid to stay competitive. It's increasingly important in the recent scenario for the healthcare industry to adopt new business models and tools to materialize business objectives. Business Process Reengineering (BPR) might be the much-needed shot in the arm that organizations need for a turnaround of business performance. It involves rethinking the nature of the business and the organization; a complete re-conception of how the system and processes should function. The word 'process', in most of the cases, is perceived as boring, documentationoriented and a mundane set of procedures, thereby, planting a monotonous perception among professionals. On the contrary, having an innovative business model with competitive strategy and vision of going for “max it�, reengineering core processes, adopting technology to the max and best possible use of available resources can bring in path-breaking differences to organizations.
e-check in and customer specific travel plan offers. Similarly, long queues at bank counters have disappeared significantly with the launch of ATMs, ECS, e-banking, mobile banking and extended banking timing. The way the client does banking has evolved with the bank's service delivery mechanism, in the recent past. Orbit-Shifting Business Models in Healthcare In the avant-garde smart consumer climate, organizations seek innovative business models crafted from a learning cut across the industries and sectors. For example, the Arvind Eye Hospital (AEH), one of the orbit-shifting innovators in the healthcare service delivery industry changed the way ophthalmology surgeries are done across the world. Dr. Govindappa Venkataswamy realized a break-through proposition coming across a McDonald's restaurant during his trip to USA. He picked up the concept of assembly line operations and standardization. His mind bending initiatives to marry surgery and McDonald's led to the, now world-famous, assembly line eye surgery techniques that intensify the surgeon's productivity by factor of ten. They standardized everything systems, departments, equipments and services. The AEH business model ensures that millions of poor are operated for free or nearly free, and that the hospital still makes good operating profit. Over the years, AEH has shared its best practices, processes and methods with other organizations; yet, none of them is able to replicate it. Though, this may be due to the fact that they focus purely on systems and processes of AEH, and cold-shoulder the underlying philosophies that drive AEH.
New e-business models will emerge very soon and challenge present-day medical delivery vehicles. Hence, functional silos prevalent in healthcare must be eliminated and duly replaced with seamless service. Organizations must simplify the admission, billing, discharge, claims submission/reimbursement process for patients, providing online registration, appointment scheduling, payment, prequisite for the various tests, online test reports, access to their complete medical information, follow-up visit reminder, claims and health updates and healthcare call centers. Let 'I' of Healthcare Industry stand for 'innovation' and not 'inhibition' or 'imitation'. To focus not only on the processes, but also on the underlying philosophies that drive origination and the way business is conducted. This means to conduct business by deliberately choosing a different set of activities to deliver a unique mix of values.
The author has been working in the healthcare industry for almost a decade. His key areas of work has been in BPR study of hospitals for performance turnaround. He can be reached at lalit.mistry@hosmac.com.
In the same league of orbit-shifting innovators is another aweinspiring model - the Narayana Hrudayalaya. A Dr. Devi Shetty model has already turned some standard industry practices on their heads. The way doctors are compensated besides innovative business processes that enable to increase the surgeries per doctor by multi-folds. Going beyond, to make the healthcare affordable by conceptualizing a micro-insurance plan for healthcare called Yeshasvini, in association with the Karnataka state government, initiated a tele-medicine programme, in cooperation with Indian Space Research Organisation (IRSO). Through this programme, medical expertise has been made accessible to people even in remote rural areas of Karnataka. Narayana Hrudayalaya Health City, Bangalore and Rabindranath Tagore International Institute of Cardiac Sciences, Kolkata are the group's two-heart hospitals performing about 12% of the total heart surgeries done in the country. Dr. Shetty has shown that "it is possible to fulfill a great social need without compromising on the profitability and his premise 30
Beyond healthcare building
Isha Khanolkar, Asst. Manager — Operations — Hosmac, puts into words a newfound advent of Hosmac India Pvt Ltd in the middle of organized culture. In the process of vitalizing the healthcare industry, Hosmac is abuzz with events and activities. The influx of newfangled recruits has brought in renewed perspectives, experiences and best practices. Hosmac Projects is going full steam ahead with the Ram Manohar Lohia Project. The steel structure was erected in record time with the CWG 2010 closing in. The Beams Project, where Hosmac was entrusted the mandate of design build for a series of daycare delivery centers has gained ground at Bengaluru, Hyderabad and Indore. The Turnkey Design Department too has a slew of projects under execution; viz. a design review of hospitals by the BAPS Group, Gujarat; medical planning for the Actrec Group and a turnkey project for Orange Hospitals, Udaipur. Albeit the unruly Mumbai rains continue to vex the city, Hosmac's Project Management Consultancy team handling the 500-bedded Parkway Khubchandani Project progressed undeterred. Analogously, the spirit echoes at the Westbank Hospital Site, Kolkata as well.
Concept model - II : BEAMS, Bangalore
On the other hand, the Consultancy team eminently sewed up a flagship project of PPP for GoAP along with IFC (World Bank); plus, another PPP in Medical & Paramedical Education for GoUP. Hosmac Consultancy is currently associated with more than 25 ongoing projects spread across various services of healthcare consultancies, in India and UAE.
The Foundation has also tied up with the NSEF (National Social Entrepreneurship Forum), which carries a single-minded mission of promoting social entrepreneurship in universities across India. The Foundation has organized a blood donation camp with the Mahatma Gandhi Seva Mandir, Mumbai, for all of Hosmac's employees.
In the domain of Public Health Consultancy, Hosmac is helping district hospitals in Chaibasa, Gangtok, Korba and Deogarh achieve and maintain ISO 9001:2008 Certification. In turn improving their quality levels.
More upcoming events include the ‘5th Healthcare Conclave' on September 28, 2010 at Hotel Taj Bengal, Kolkata where Hosmac is to partner with the Confederation of Indian Industries (CII) as Knowledge Partner for the second year in a row. Hosmac will prepare the regional status report on the Healthcare Scenario in the Eastern Region, in addition to technical details and case studies.
As the Knowledge Partner for FICCI Heal 2010, Hosmac has published a report on “Healthcare For All: Global Standards With Local Touch.” It emphasizes the concept of Global Healthcare,
Hosmac is also proud to associate itself with Informa India for the first edition of Hospital Infrastructure India 2010 in Mumbai between December 7-9. A platform that will bring together healthcare planners, engineers, architects engaged in major healthcare building projects with hospital suppliers of the best services in planning, design building, operations, management and refurbishment of hospital facilities. With the festive season around the corner, an air of enthusiasm hangs over the Hosmac workplace, as major projects are near completion. We wait with bated breath to see what else the year has in store for us, as the journey so far has been an exhilarating one. We will continue to strive, even harder than before, and bring India's healthcare up to speed with the best in the world. Concept model - I : BEAMS, Bangalore
and elaborates on the critical aspects of healthcare delivery. A shot in the arm pummeled Hosmac Foundation with the release of Hosmac Pulse in July, and has been busy in creating beneficial relationships with other like-minded organizations. The Foundation has tied up with Smile Foundation, an NGO formed in 2002 by a group of corporate professionals, who decided to finance, handhold and support genuine grassroots' initiatives targeted at providing education and health to underprivileged children. Hosmac Foundation has opted for the employee engagement and pay roll giving program, and is looking forward to organizing various activities for the children. 31
The author is an industrial engineer, and can be reached at isha.khanolkar@hosmac.com.
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