Case Study Xploryze Rohtak

8/11/2019 Case Study Xploryze Rohtak

1/16

1

The Making of a Business

Gauraav Thakar

Pranit Upadhyay

Indian Institute of ManagementRohtak


2/16

2

ETHICS BEHIND THE ENTERPRISE

The profit oriented model of Dr. Ram Mathur and Dr. Sharma is NOTjustified on

various levels.I will apply, for the benefit of the sick, all measures [that] are required,avoiding those twin traps of overtreatment and therapeutic nihilism.

I will remember that there is art to medicine as well as science, and thatwarmth, sympathy, and understanding may outweigh the surgeon's knife orthe chemist's drug. -Hippocratic Oath

Ethically the consequences of the intensions of Dr. Ram Mathur and Dr. Sharmaare not justified. This violates the basic principles of ethics and all that themedical profession stands for.

Principle of Beneficence: Obligation to promote the good of the patient isbasic. This includes all patients, privileged and under privileged

Principle of Justice as Fairness: Decisions must be fair, and withholdingtreatment is not an option

Principle of Equity: Equity in terms of services provided

Principle of Do No Harm:Withholding critical and timely treatment canendanger lives. It negates the purpose of health care


3/16

3


Quoting from the case

Dr. Mathur, although since his college days knew the power of doctors, wasnow getting the practical experience. He could see how people were ready tosell of their belongings to get their family members treated. Perhaps, medical

service was a place where price elasticity of demand was very low.

This human instinct as understood by Dr. Mathur is true, but it should

never become the underlying principle of operating a health careestablishment like a hospital

We are going to build the best medical facility in Delhi. We will change thewhole system of medical facilities in this city.

This vision cannot be realized if the masses including the middle classcannot afford the facilities and services

Example:MedantaThe Medicity: A multi-super specialty institutes located inGurgaon is for the elite. No doubt that the facilities they provide are worldclass but since even the upper middle classes cannot easily afford to availthese services, the landscape of NCR Health Care sector remains unchanged


4/16

4


Dr. Ram Mathur and Dr. Sharmawant the best of equipment. Theywant to create a world class facility.

They have major financialconstraints in terms of the initialcapital, set-up costs and operatingcosts among other out flows

No economies of scale

A utilitarian approach may not be

viable financially Sustainability is the key. Subsidized

orpro bono publicomodels sufferon the long term viability front.Social good is not a startstopprocess, it must be a continuous

self-sustaining system

Ideally this sounds very good, but can this be implemented?

A sustainable model which identifiesthe needy

Subsidized healthcare can beprovided to those identified

The program must be wellintegrated into the Vision andMission of the Hospital and itsManagement

Quality of services must be

maintained Efficiency of services to reduce

operating costs

Constraints Basis for Solution Framework


5/16

5

Hospital Setup and Project Management

Vision and

Mission

Type/Size/ Structure/

Location of Hospital

Staff andEquipmentRequired

Permission /ClearancesRequired

Project Capital Planning. Cost-Benefit

Analysis. Break Even Analysis

Initial Setup Costs and Operating Costs

Details of Project Cost Financing Pattern

Loan Repayment Schedule &Interest Calculation

Projected Profit & Loss Statement

Working Capital Requirement

Projected Balance Sheet

Cash Flow Statement & IRR

DSCR in the base case & differentcapacity models

Sensitivity Analysis

Hiring top notch doctors

Accreditations and Affiliations

Technical Aspects of Equipment

Policy and Procedures Vendor Management

Intricate Details


6/16

6

Hospital Setup and Project Management

Core Team

Dr. Sharma

Dr. Mathur

Dr. Aswini

Real EstateandInfrastructure

Medical Staff

Doctors,Nurses, etc.

Mandatory

GovernmentRegulations &Legal Aspects

FinancialAspects

Working Policy

andProcedures

Hospital Flows

VendorManagement

Own or Lease of facility

Outsourcing to a real estate agent Identifying medical suppliers

Partnering with vendors for

equipment

IT partner for Hospital

Implementing best industry

practices

Optimization of Hospital Flows:Admission Discharge Transfer,

Outpatient, Emergency

Hire an experienced lawyer

specialized in healthcare sector

Hiring best

doctors in the

respective

specialties Hospital and

Medical

Community

affiliations


7/167

Service Operations

What gets measured, gets managed.Peter Drucker

The following aspects of operations should be considered:

Material Management:Waste control and deposal, Resource optimization,inventory management

Supply Chain Management:Vendor and supplier integration into value web

Process / Value Stream Mapping

De-bottlenecking flows: Patient wait time, operation theatre idle time, etc.

LEAN/6 Sigma

Define Measure Analyze Improve Control (DMAIC):For optimizing existingprocesses

Define Measure Analyze Design Verify (DMADV):For optimal new processes

Other Aspects Include:Scalability, Flexibility, Expandability, TherapeuticEnvironment, Cleanliness and Sanitation, Controlled Circulation, Aesthetics,Security and Safety

The two major hospital flows have been designed in the subsequent slides

Outpatient Flow

Inpatient Flow


8/168

Patient InflowTelephonic Appointment Direct Walk-in

Registration Counter

(Registration, MRD Folder

Creation)Medical Records

Insurance

Verification /

Billing Consultation

Room

Medical

Record

Self Pay / Copay for

consultation

Service

Waiting

Area

Vitals /

Medical History

(Nurse)

P

Verify Eligibility

before telephonic

appointment Eligibility

Verification

For

Established patient

Physical Examination

& Consultation

(Physician/ Nurse

Practitioner)

To Medical

Record

Consent for Self

Pay (In case of

Eligibility Denial)

Health Care Delivery FlowOutpatient

Service OperationsDesigning Process Flows


9/169

Health Care Delivery FlowOutpatient (Cont.)

P Order Entry

Other Dept

Services

Radiology

ServicesLab

Services

Medical RecordBilling /

Claim submission

Processing

& Reporting

Orders

Follow-up

AppointmentPharmacy

Dispense

Medications

Billing / Rx

Claim submission

P1

Eligibility / Coverage

Verification

To Medical

Record



10/1610

Health Care Delivery FlowInpatient

P1

Admission/Bed

Allocation

Revisit

Counter

Billing

CounterConsultation

Notes

Examine

Patient MRAdmission

Request

Financial

Information

Centre

Scheduling

Bed ReservationAdvance/

Billing Clearance

Medical Record

Examine Patient

Medical RecordIP Consultation

Consulting

Doctor

Lab OrderPrescribe

Drug/DietBlood Order Surgery

Operation

Theatre

Monitor PatientAdvice

Discharge

Discharge

PatientDischarge Summary

Billing



11/1611

The model we propose is a Health Management Organization (HMO) Model. The

concept of managed healthcare is in the evolving stages in India.

Proposed Model for Competitive Advantage

Subscribers

Patients Patients are

enrolled underdifferent benefitschemes

Insurance costreduces

There is nodeductible for thepatient

Ease of payment,cashless facilitiesin networkhospitals

PayerI

nsurance Insurance players

get customers

Concept of SelfFunding Insurance

especially forcorporates islucrative business

Good healthcare =Low Insurance cost

ProviderH

ospitals Makes expensive

world classfacilities availableto the middle class

Insuranceempowerscustomers andensures regularcheck-ups

Profitable for thehospitals asservices areprovided as percoverage andbenefits


12/1612


12

Primary

Provider

Subscribers

Pharmacy Hospital (Secondary Provider)

Enrollee

Payer (Insurance Agencies)

Pro Bono
http://www.doctorswithoutborders.org/outreach/bol/angola/hospital.jpghttp://www.stoptb.org/images/aids.patient.jpghttp://www.stoptb.org/images/aids.patient.jpghttp://images.google.com/imgres?imgurl=www.tradecenter.sm/valpharma/capsules.jpg&imgrefurl=http://www.tradecenter.sm/valpharma/&h=193&w=212&prev=/images?q=capsules&svnum=10&hl=en&lr=&ie=UTF-8&oe=UTF-8&sa=Ghttp://images.google.com/imgres?imgurl=www.mayoph.com/images/99C118.JPG&imgrefurl=http://www.mayoph.com/previous_1.htm&h=387&w=474&prev=/images?q=postal+letter+cover&svnum=10&hl=en&lr=&ie=UTF-8&oe=UTF-8&sa=Ghttp://images.google.com/imgres?imgurl=shop-equip.com/images_specials/pears_chemist.jpg&imgrefurl=http://shop-equip.com/sprojects.shtml&h=283&w=400&prev=/images?q=pharmaceutical+shop&svnum=10&hl=en&lr=&ie=UTF-8&oe=UTF-8&sa=Nhttp://images.google.com/imgres?imgurl=www.nhp.org/photos/doctor.jpg&imgrefurl=http://www.nhp.org/providers/index.asp&h=282&w=201&prev=/images?q=doctor&svnum=10&hl=en&lr=&ie=UTF-8&oe=UTF-8http://www.doctorswithoutborders.org/outreach/bol/angola/hospital.jpg


13/1613


This model enables the hospital to cater to the middle classes as well as the

rich who can afford the world class treatment It is a winwin situation for the HospitalPatientsInsurance Companies

The entire value web is optimized. Competitors in the NCR region are notmodeled in this way i.e. The HospitalInsurance nexus is not leveraged

Patients are empowered as they can choose exactly what benefits and

coverage they want and pay the insurer accordingly Patients subscribers have many distinct advantages over traditional hospitals:

Reduced risk as compared to conventional insurance

Reduced premiums

Reduced co-payments

No deductibles or annual maximums

The hospital can exploit an edge over its competitors on the following factors:

World class facilities and equipment with multi super specialty

Insurance coverage ensuring affordability in patients time of need

Self Funding schemes for corporates, hospice and palliative care model can

also give this hospital an edge.


14/1614

Financials

Assumptions

Number of Beds: 150

Average In patient stay: 4 days

Average daily out patients = 200

Uniform salary of interns,residents, attending anddepartment heads

Salary assumed at 3 lacs permonth

Lab, claims, overheads, etc. havenot been factored

Set up cost and capital structure

will determine break even

Number and depth of specialtieswill determine initial costs

Year 1

Number ofvisits

AverageSales

Inpatient

13688

35000

479080000

OutPatient 73000 700 51100000

Gross revenue 53,01,80,000

Allowance percentage 5

Net revenue 50,36,71,000

Salaries and wages -

Doctors 10,80,00,000

Salaries and wages - Staff

1,00,00,000Malpractice insurance 1,00,00,000

Travel and education 10,00,000

General insurance 1,50,00,000

Subscriptions 5,00,000

Medical Supplies 12,00,00,000

Electricity 30,00,000

Water 2,00,000

Equipment rental 8,00,00,000

Building lease

5,00,00,000

Other operating expenses 1,03,779

Total operating expenses 39,78,03,779

Net profit (loss) 10,58,67,221

Gross margin (%) 21.0%


15/1615

References

What's the Secret?: To Providing a World-class Customer Experience, John Wiley & Sons, DiJulius,John R., (2008)

Managing Services: Using Technology to Create Value, McGraw-Hill, Boston, Davis, Mark M. andJanelle Heineke, (2003)

Service operations management: Improving service delivery, Robert Johnston and Graham Clark

Service management and operations, Cengiz Haksever, Barry Render and Roberta S. Russell

The management of service operations, J. Nevan Wright and Peter Race

Service operations Management: Strategy, design, and delivery,Christine Hope and AlanMhlemann

Successful service operations management, Richard Metters, Kathryn King-Metters and MadeleinePullman

MANAGING A MODERN HOSPITAL, 2E: edited by: A V Srinivasan, Corporate Planner-IndianNetwork, Hyderabad

HOSPITAL MANAGEMENT: An Evaluation,A.K. Malhotra

Hospital Management, Dr S M Jha

The Rise And Fall Of HMOs: Jan Coombs

Then Why Does it Still Hurt? Jack Schroder (2000)

Process f low designs and m odels are or ig inal work.


16/1616

Thank you!!!

Case Study Xploryze Rohtak

Documents

Transcript of Case Study Xploryze Rohtak