Economizing Healthcare

Diagnosing Indian healthcare with Dr. Narottam PuriPg. 5

Vol. 1 No. 3 September, 2010

Making healthcare worth itPg. 17

HOSMAC Pulse

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

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HOSMAC Fooundation – the publisher.

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

Editorial Board Table Of Content

Advisory Panel

Creative Consultant

Chief Editor

Narendra Karkera

Isha Khanolkar

Paresh Gujrathi

Dr. Deepa Mohanty

Dr. Rahul Shastri

Dr. Ram Behin

Amit Pandya

Vinay Pagarani

narendra.karkera@hosmac.com

Isha.khanolkar@hosmac.com

paresh.gujrathi@hosmac.com

ipshita.dey@hosmac.com

rahul.shastri@hosmac.com

ram.behin@hosmac.com

mumbai@shapecommu.com

vinay.pagarani@hosmacfoundation.org

Printed by

Kothari Printers, Bangalore

kothariprinters@gmail.com

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.

Executive's note

Dr. Vivek DesaiManaging Director, Hosmac India Pvt. Ltd.

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.

3

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

�be towards rendering affordable healthcare.

�Focus on preventive and promotional health rather than curative care by changing the health seeking behavior through health education and awareness.

�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.

�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

Vision, mission and goals of healthcare organizations should

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.

�Cost-effective infrastructure and processes in the hospitals and not extravagant hospihotels for medical tourism.

�Having a green hospital using energy-saving 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 in-built 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

Pathway to affordable healthcare

Dr. Deepa Mohanty, Consultant — Hosmac, postulates how the private sector can be an active agent to affordable

healthcare in India.

4

RG: Sir, what according to you is affordable healthcare? forces us to buy them from developed nations pushing up the overall cost of tertiary care.

NP: Affordability in terms of healthcare is not much different from any other service. However, in case of healthcare, there is Moreover, there is scarcity of trained manpower required for an added emotional and physical component to the service that tertiary care, this also adds to the cost of such services with the patient has to bear over and above the price of the service. IFor result that such services are rendered 'un'affordable to the instance, if a patient has to get some procedure done that will common masses. save/improve the quality of his life, but has to sell off his land

This, however, can be dealt with by improving the penetration or use up all his savings, thus although he can afford the price of

of health insurance in India, but is missing in India primarily the procedure, but for him and his family, it is an unaffordable

because of the lack of widely acceptable quality standards in procedure.

healthcare sector. NABH is thus an immense improvement from In the Indian context, affordability of healthcare cannot be before, yet a lot needs to be done for its wider acceptance and looked at in isolation, it is intertwined with issues of awareness in the masses, because I firmly believe that ‘good accessibility and the quality of care dispensed. quality costs less’.

RG: Since affordability is one of the more important criteria RG: More and more beds continue to be added to the urban while electing a particular course of clinical treatment, why setting, whereas the most vulnerable population dwells in is speciality care (Cardiac, Neuro, etc) still inaccessible in rural India. How can the Indian healthcare industry check this terms of affordability to a huge part of the population? ‘urbanization’ of healthcare delivery?

NP: There is no one India that healthcare sector caters to, NP: In India, healthcare is not dispensed as a single entity. It along with this, there are myriad variations in paying capacity accords to state directives since ‘health’ is a state subject. and the technology available to the people. Thus, there are lot What this does is that it creates a lot of variations in the way of variables that affect ‘affordability’ of healthcare services which states administer healthcare services to their population, for the population. the result of which is skewing of healthcare indicators because

of extremes variation (of indicators). This, in turn, leads to Amongst the many variable, cost of medical technology,

lopsided availability of trained human resources for delivering especially with respect to tertiary care, is one of the most

healthcare, as Indian healthcare is still predominantly important factor affecting affordability, This, in turn, is as we

‘curative’ rather than ‘preventive’. This skew in availability of don't manufacture good quality, high-end medical technology,

trained professionals is heavily towards areas, where either

In a dialogue with Dr. Narottam Puri, Chairman — NABH, Dr. Rahul Garde taps out some thrilling revelations.

Diagnosing Indian healthcare

Dr. Narottam Puri (centre) with Dr. Abdul Kalam Azad (left)

5

there is good infrastructure and better opportunities for NABH, and making all positions as paid ones, which are themselves, as well as for their children and family. currently only an ‘honorary’ consultant position.

In this setting, it is not that difficult to imagine why there is a Also the kind of application that we are getting now is trend of “urbanization” in healthcare facilities. Having said definitely more than what can be dealt by the existing staff, so that though, recent developments have tried to reverse this there is a need for expansion of the NABH staff so as to ensure trend with viable organizations coming up in tier 2/3/4 cities we can cater to the increasing awareness amongst doctors, across India. The primary benefit being the advantage of huge hospitals, insurance companies and patients about NABH and numbers (Bottom of the Pyramid approach) that these cities its benefits. enjoy with relatively sparse availability of public/private

We have put forth a list of 12 parameters that each accredited healthcare facilities.

hospital has to submit to NABH, regularly. This step has been Thus, as far as I can see, this trend will continue until the taken to ensure we can do a better monitoring and evaluation Government improves the overall infrastructure of the ‘under- of the hospitals, since quality is not the destination, it is a served’ areas so as to provide atleast comparable journey wherein we always strive to improve ourselves and facilities/amenities to the healthcare professional, if not have not only a satisfied patient, but also a satisfied doctor.better.

RG: Does accreditation of hospitals facilitate the factor of RG: How should treatment outcomes be measured and affordability, given the current perception that there is a compared across the country? ‘higher’ cost of quality?

NP: This is a very pertinent question to Indian healthcare; NP: My opinion, as I mentioned in the recent FICCI-Heal currently, because though we do not have any direct indicator conference, is that “Quality costs less.” However, the concept for measuring clinical outcomes, we do have an indirect of ‘quality’ in healthcare in the Indian scenario is a relatively measure in terms of NABH accreditation and the necessary new one and it is generally perceived that in order to attain activities that are required of the healthcare facility. certain standards, one (individual/organization) has to bring

about a lot of change in the protocols and bring in costly In this regard, NABH has recently issued directives to all the

equipments to ensure good quality of service to patients.accredited hospitals to compulsorily report data on quality of hospital services, such as mortality rate amongst various sub However, the basis for quality in healthcare is the other way groups of patients, hospital acquired infection rates, etc. (a round — it is the approach that a hospital should take to ensure total of 12 parameters). patients' safety and well-being; how healthcare services are

delivered with this core principle. Besides, in order to effectively use the NABH standards, healthcare organizations have to understand that these standards can be used a longs ide the c l in ica l guidelines/protocol — their combined usage can be used as a measure of success and quality of services delivered.

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 Thus, it is evident that first there is a dire need for awareness technology available, generally, in tertiary care hospitals in of the concept of quality in the Indian healthcare industry down public and private sector. This also affects movement of senior to the grassroots’ level and from this awareness will emanate doctors as research is to a large extent now dependent on the understanding and acceptance of accreditation and the expensive medical technology. Thus, there are various reasons overall decrease in costs for hospitals since quality would be for movement of doctors and healthcare professionals from implemented from inception stage only.public to private sector.

Having said that, however, even in current scenario In order to check this outflow, the government needs to accreditation does help in significantly reducing the costs for develop the basic infrastructure first, viz. roads, clean water, hospitals in terms of decreasing the ALOS of patients, lesser HAI educational facilities, etc. Sadly this doesn't fall under the rates, better clinical outcomes for patients, improved patient purview of the Health Ministry. Moreover, as our ministries satisfaction rates, etc. Now, some of these offer direct function in silos with little co-ordination, the result is poor quantitative benefits to hospitals and some offer qualitative infrastructure that doesn't allow a doctor and his family to have advantages with the result that ‘quality’ accreditation pays for meaningful future for his family espially children, end result of itself over a long run. Hence to improve affordability of that is movement to cities for better pastures and later in from healthcare for all, accreditation can play an important part.public hospitals to private ones.

RG: What are the possible public private partnership models Unfortunately, we all know these reasons tacitly, but in order in specialty care like cardiac care?for government to act on it, there is a strong need for research

NP: I believe PPP is the only way to deliver “quality” healthcare studies to be done on this subject which will provide us with to the teeming masses of India, while keeping the organization 'scientifically' proven list of causes for such a movement of sustainable. It is a significant step that the Government has healthcare professionals.taken in recent years to improve availability, accessibility and

RG: What measures does NABH take to ensure quality affordability of healthcare services to masses.24 x 7 x 365 days a year?

PPP is like a win-win situation for both the private partner and NP: We are in the process of improving the staff strength of the Government, as it serves the needs of both. Where private

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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?

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 partner gets the advantage of large volumes for its services, can afford. No doubt this course will help in bridging the gap of which decreases the costs for it and improves the profit skilled human resource at primary healthcare levels, and to an margins; at the same time, the Government has in effect been extent — at the secondary level. However, how effective these able to provide for a large section of society — quality 'rural' doctors would be in place of general doctor is open to healthcare at reasonable prices. Like any PPP, the general idea debate. The implementation of this will take time before it can is to utilize the expertise of private sector in operations and have any bearing on healthcare parameters that we intend to management of hospitals, by providing them with land and/or effect for the better.construction (both of which contribute significantly to cost of

project). RG: Sir, how have you balanced a career as an active doctor and hospital administrator with that of an active sports Currently, the Government is able to provide primary and commentator, author and a singer? secondary care to a large extent; however, when it comes to

tertiary care, an overwhelming majority is provided by the NP: It's about doing what you really like doing and having private sector or by very few government hospitals/teaching conviction about it, as with your interests and hobbies; so with hospitals, with the cost of technology and its maintenance as healthcare, you have to have compassion and ability to look one of most important criteria for this gap. This gap can be beyond just the disease and understand how it affects the filled by going in for PPP projects in superspecialty areas like patient. cardiac care, neuro care, joint replacement clinics, etc.

Unfortunately, this is not how medicine is taught in medical RG: What role do you envisage for both central and state colleges in India, so one has to learn this on their own, which is governments to improve healthcare quality? 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 NP: As I have mentioned before, our ministries work in silos us fresh perspective on things. In my opinion, extra curricular with very little coordination amongst them, and this gets even activities in general and sports in particular is very important more complicated because ‘health’ is a state subject. Thus, in for everyone and especially for young healthcare professionals.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-and- The interviewee is also the Advisor — FICCI Health Services and again and keep reinventing the wheel whenever we deliver Advisor — Medical — Fortis Healthcare Ltd. He is the winner of healthcare services to masses. several prestigious awards and recognitions, and a member of

a number of medical associations and industry bodies.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

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 kick-startedits 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

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.

Income in Rupees Expenditure 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 1325,000

When the Income and Expenses were worked out, the following were the results:

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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 day-by-day.

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

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.

The humble beginning in a rented house Five years hence, with its own building

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.

cost-optimizing reforms as it places the consumer's primary The two key drivers of 'healthcare reforms towards interests at the core spiraling off with focused cost-effective affordability' would be innovation and marketing. The efforts in order to satisfy them. marketer, more pertinently the social marketer, would realize

Social marketing has strands of behavioral theory, persuasion the implications of the relationship. After all, 'when you have a psychology and marketing science in its genetic DNA. Social hammer, everything looks like a nail,' the potential of social marketers base their strategies on the proven techniques of marketing to make a difference would not be lost on him. This segmentation of target audience, tailored communication and article seeks to unravel that catalytic potential. marketing mix. (Ref: Exhibit 1)

Social marketing: Concept and theories The effectiveness of social marketing, in changing healthcare

Social marketing is defined as “the application of proven behavior, has been proved through numerous studies; most concepts and techniques drawn from the commercial sector to notably, in the case of mass communication campaigns. One of promote changes in diverse, socially important behaviors.” the oft quoted examples is the significant success of the

American Legacy Foundation's Truth Campaign (1999-2002) The concept of social marketing is inherently promising to the with an anti-smoking message. The prevalence of smoking

Exhibit 1: Five components of the social marketing mix

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among young people in USA decreased from 25.3% to 18%. Apart • Productionfrom propagating the message of protective health behavior

• Motivationrelated 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

Other core components of SCT include: contraceptives.

• Self-efficacyThe last stage tapers into a continual improvement loop to attain perfection. • 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.

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

These processes need to be supplemented with interventions that would drive the target audience, through six specific stages of change.

1. Pre-contemplationSocial marketing as a concept has been in vogue since the '70s. Over a period of time, it has given rise to many theories (Ref: 2. Contemplation Exhibit 3). These theories from the bedrock of social marketing

3. Preparation programs developed by professionals in the field.

4. Action These empirical theoretical models have predictive elements which can encompass a fairly large range of healthcare issues. 5. MaintenanceWhile drafting the healthcare reforms roadmap, a clearer

6. Terminationunderstanding of these time-tested theories might offer tremendous insight and trigger path-breaking ideas. Health Other concepts in the model include:Belief Model (HBM)

• Decisional balance (weighing the pros and cons of change) BM was originally designed to explain why people did not

• Self-efficacy (gauging the productivity of healthcare participate in programs to prevent or detect diseases. Since delivery)then, this model has been subject to interpretation and

extrapolations. • Temptation (the role of negative affect or emotional distress on positive, social situations and craving) Theory of Reasoned Action (TRA)

Diffusion of Innovations TRA considers one's intention to act as the most important indicator of subsequent behavior. This is presumably guided by This is one of the important models for social marketers, who one's attitude and subjective norm toward that behavior. are targeting a large group of people. Kotler & Roberto (1989) Attitude is influenced by one's beliefs about both the outcomes contributed to the diffusion of innovations research through and attributes associated with the behavior. Subjective norms are a function of the opinions (positive or negative) held by significant referent people.

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 2: Basic stages of social marketing

Exhibit 2: Basic stages of social marketing

Exhibit 3: Popular social marketing theories12

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-à-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

down in a hurry, but there is much that we can do to reduce the increasingly cluttered communication bandwidth.

amount of money wasted. Money, which can be put to good use Social marketing has been routinely used to influence health in prevention, rehabilitation and higher quality care.behaviour especially in preaching the virtues of better and

It is important to put competition back in the market and shake hygienic alternatives. Time has come to stretch its power to

up the coalition of stakeholders within the system, so that galvanize the consumer into a proactive mode wherein the

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

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.

The author has a penchant for differential thinking, especially while donning the marketing hat, and can be reached at

.

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

sandip.chaudhuri@hosmac.com

Exhibit 4: Core components of the Health Belief Model

Behavioural& normative

beliefs

Behaviour Attitudes

Intentions

Theory ofReasoned

Action(TRA)

Exhibit 5: Elements of the Theory of Reasoned Action (TRA)

13

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

Unchaahi

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.

Chart 1: Comparison of Public Vs. Private Healthcare Expenditure of Different Countries

Source: ICTPH Concept Paper: Healthcare Solutions – The Path Ahead

Healthcare in India is the most sensitive issue discussed in the country is now in the midst of a dual disease burden of social sector, with all stakeholders expressing strong communicable and non-communicable diseases. This is coupled sentiments about it. Yet no one makes any earnest effort to with spiraling health costs, high financial burden on the poor bring about any significant improvements in the state of affairs. and erosion in their incomes.The deliberations on where we stand in the Human

Health financing in India is currently structured in a way which Development Index, what is the improvement in the health

leads to serious issues of inordinate risk apportioned to those statistics of our nation and the percentage of GDP spent on

very people who can hardly bear it. Out of pocket payments healthcare is a favourite issue passionately debated upon at

constitute 72% of all health expenditure made by a person in a seminars and conferences across the country. The outcome of

year. This compares very unfavourably with the corresponding all health policies, white papers, discussions and strategies is

figures not only of the developed nations, but even with that of evident in what we have today, in terms of a defunct Medical

other developing nations as we see in Chart 1 below (data is Council (although replaced by an expert panel), a completely

shown for 1995, 2006 and what is expected for 2015).unregulated healthcare sector, a highly regulated insurance market and a struggle between the central and state Health episodes are typically financed by a combination of governments on who should initiate health reforms. It is an credit, savings, asset sales, private insurance and social irony that despite having all the diverse health policies, high insurance, which is funded through collected taxes. The investments in the health sector and the numerous committees different nature of out-patient and in-patient expenses leads to formed to address the health issues of the country, we have a significantly different break-up of the sources of financing, as been contending to discover the exact solution to have a demonstrated in Chart 2 below. The current sources of healthy population which can have access to affordable and financing rely inordinately on savings and credit.quality healthcare.

Insurance funds only 1.5% of household health expenditure in India still faces several worrisome health parameters, India. Only 11% of the population is covered by any kind of especially when compared to developed countries. Some of the insurance and that too, primarily, by social insurance. The following statistics from 2007 are indicative. Life expectancy negligible presence of insurance leads to an estimated 20 languishes at 65, as compared to 78.9 in Organization for million people in India falling below the poverty line each year Economic Cooperation and Development (OECD) nations. Infant due to indebtedness arising due to healthcare needs. This is Mortality Rate (IMR) is a massive 55 per 1000, while OECD further complicated by the fact that credit is very expensive in nations have collectively achieved an average of five. These rural India, and capacity to pay is further reduced by national averages, however, mean little, as there is a huge unexpected episodes of diseases.variation between different regions in India. For example,

As shown in Chart 3 above, interest on loans taken for treatment Kerala has achieved an IMR of 13, while Orissa remains far

is a huge component of a distress caused by unexpected health behind at 71. The cost for hospitalization, on average for a rural

outcomes.household, is Rs. 8366, of which Rs. 3040 are indirect costs. Primary care, though not cheap, still counts for a much smaller The challenge in India is to avoid both over- and under-average of Rs. 448 per case, of which Rs. 196 are indirect costs inclusiveness in any healthcare financing model. The such as transportation, loss of wages, and interest costs. The bifurcation of responsibilities between the public and private

17

Chart 2: Sources of household health expenditure. (Sources: NSSO morbidity survey, ICTPH Analysis)

Chart 7: Major heads of household health expenditure. (Sources: NSSO, ICTPH Analysis)

sector is still not clear and thus leads to extra availability of penetration of insurance in these areas which enables people funds for health to a certain class and less or no availability for now to spend on healthcare more liberally by paying a nominal those who actually need it. A section of the population does not amount annually. This encourages delivery of healthcare in have any means to access basic healthcare, while another more quantity and at a higher cost as the user and producer of section spends more than required on healthcare services the service are not concerned about the principles which make which are not essential but only undertaken for cosmetic insurance viable in the long run. Thus, we have a spiral of more reasons or personal satisfaction. Given the above scenario, sales for the insurance companies, more hospitals setting up exploring alternative health - financing options becomes business without any semblance of quality and healthcare costs essential. The goal of a sound health financing mechanism is to 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!

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

Now, let us see how the rural or semi urban sector has been sector has exploited the insurance tariff regime to discount influenced by health insurance. As traditionally viewed in India, health premiums to abysmally low levels not realizing that a health is expected to be public good and the state is required to disaster was imminent. With privatization of the insurance cater to the health needs of the population. This social sector and removal of tariffs on motor and fire insurance, objective combined with political motives has contributed to health insurance costs went up to unexpected levels, or more the creation of many populist health schemes and “Swasthya rightly, to the actual levels where they should have been. This Yojanas” which continue to remain viable on paper and drain led to insurers refusing to provide services at a loss and buyers the coffers without achieving the objectives they are meant either opting out or reducing their insurance covers. for. These schemes tend to slack the health finance mechanism

Despite adverse economic environment across the world, the and create avenues where funds are spent without any Indian health insurance market continued to post record accountability or audit of the usage. In the eagerness to growth in the last two fiscal years (2008-09 and 2009-10). simplify or automate validation processes, the funds are made Moreover, as per estimations, the health insurance premium is accessible to the producers of the healthcare service which expected to grow at a Compounded Annual Growth Rate (CAGR) lures them to provide healthcare either more than required or 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

18

only on documents to act as proof of provision of service. Regulatory and Development Authority (IRDA) would be of Interestingly, rural areas have all of a sudden created immense benefit to the industry in the long run.investment opportunities for hospitals although the need has

Insurance Industry is unique, in the sense that this is an industry existed since a long time. Thus, what is being witnessed is an

where a buyer spends significant money to buy a service which increase in health infrastructure, improvement in health

he hopes he will never have to use! However, when that person insurance awareness, over enthusiasm in launch of populist

is forced to use the service, it is an experience that usually schemes but with all with a significant increase in cost.

leaves a lasting impression. Market downturn and increased Who is at fault for the direction which the insurance industry competition is forcing major changes in the insurance industry has taken? Is it too late for a course correction? Will we be able and in the way insurance companies operate. Competition is to bring stakeholders to a consensus on making insurance a permanently altering the expectations in the minds of vehicle for affordable healthcare? insurance customers on what they should expect. To cope with

this change in expectations, the industry, as a whole, is The answer to all of the above is a “YES”. It is possible to have a

evolving with respect to what it offers to customers. Insurers more systematic approach to make health insurance more

are now striving hard to bring more efficiency in their viable for insurers, hospitals to have a reasonable margin in

operations which will make services better and products their business and consumers to obtain the best quality of

affordable. With a more transparent healthcare sector and health services. All stakeholders must understand that there

viable insurance industry, the end consumer would surely find has to be stratification of the population based on their

health insurance as the right solution for better and affordable economic status, health status and needs. For the insurers,

healthcare. 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

The views expressed above are solely of the author and do not not be expected that insurance must be cheap or subsidized and

represent the views of the employer in way. The author can be all hospitals must be charitable. A clear demarcation in

reached at .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

bishwajit.nayak@futuregenerali.in

19

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 While a business entrepreneur might create entirely new growth. A developing economy does not encompass all its industries, a social entrepreneur comes up with new solutions citizens. Not unless entrepreneurship plays a major role. to social problems. In turn, he impacts the lives of thousands Countless issues ranging from education, pollution, sanitation, with the objective of solving social, economic and/or energy, handicrafts, e-commerce, etc. need to be addressed in environmental problems.an economy like India.

NSEF has a unique set of programs that are executed both at the Against all odds, social entrepreneurs stepped in and started university level and at national level that are turning out to be changing lives through business ideas. A powerful example is very successful in inspiring young people to consider social Husk Power Systems, which produces electricity from rice husk entrepreneurship as an important career option.in inaccessible regions of Bihar, where even the state electricity

Confluence boards have not reached.

An annual event organized by NSEF - the Youth Confluence - acts Such models can be replicated, universally. What's even more as a platform to catalyze social entrepreneurship amongst the emphatic is the fact that these are not dependent on goodwill youth of the entire country, be a place to drive home various funding, but are self-sustained business models, making profits social innovations and different facets of social in addition to uplifting the society.entrepreneurship and a place to mutually learn about effective

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 solutions to the most pressing social problems. The event mission cannot be entrepreneurial. But the fact still remains witnesses a conflux of social entrepreneurs, social venture that organizations solving social problems are often assumed to investors, student leaders who have led campus social be idealistic, philanthropic and lacking business acumen. initiatives and thought leaders in area of social Unless the youth and fresh graduates have an exposure to the entrepreneurship sharing their ideas under one roof.prospects in social entrepreneurship, this avenue can never be

Moving forward, NSEF's strategy is to identify students and fully tapped into. It's essential to reach out and sensitize them

alumni who are passionate about social innovation or on how breakthrough changes can be executed in making social

entrepreneurship through its programs, and equip them to open ventures sustainable.

a centre in their institution and carry out the activities and India is the perfect breeding ground for such enterprises. events. NSEF acts as a resource to facilitate the right pool of

assistance needed to foster social entrepreneurship amongst Three issues needed attention, which had the potential of

this group and help them be change-makers in future.creating many leaders who could take on social issues. First and foremost, was the lack of awareness amongst young people in NSEF comes in by enabling access for students to social India about social entrepreneurship. Second, the huge lacunae enterprises and vice-versa. The role extends to mentoring, in the university education system to create social guidance and immersion experiences to provide students an entrepreneurs. Third, young people who want to start (or have exhaustive knowledge about social entrepreneurship. started) their own social enterprises lack the right resources to Consequently, this will fuel the growth of more such enterprises succeed. and have as a multiplier effect.

With a clear focus, the National Social Entrepreneur Forum (NSEF) was founded in February, 2009 to inspire and equip young

The author is a Business Consultant at Innoversant Solutions people to build organizations which will respond to social

Pvt Ltd, Bangalore. He recently got selected to represent India challenges. NSEF's strategy to reach out to the youth was by

at the United Nations Youth Assembly. He can be reached at e s t a b l i s h i n g c h a p t e r s a t l o c a l c o m m u n i t i e s

.(universities/metros) which conduct various activities to create an ecosystem that will produce the next generation of social entrepreneurs. These ecosystems would serve multiple

nishant.sarawgi@nsef-india.org

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.

20

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 pre-authorisation 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.

VP: Why don't health insurance giants focus on preventive When such malpractices are identified, strict disciplinary care instead of only curative care?action should be taken against such errant hospitals. A ban on

cashless insurance and even on reimbursement at such SS: If you observe the mature markets, preventive focus comes hospitals by all insurance companies for 2-3 years, with the in when the market stabilizes and has a good penetration rate hospital's name made public, could be an effective deterrent. (more than 50-60%). Indian health insurance is still in its

nascent stage, and a lot has to be done in terms of product VP: Cashless medical insurance, where is it going and where innovations, operating efficiencies, fraud detections and will it halt? supply chain management.

SS: Cashless Mediclaim is here to stay. It renders a convenient Once all these areas become fully efficient and the penetration mechanism, and policy-holders are finding it convenient and increases, the exploits will dwindle from improvement in favorable. It is being misinterpreted and abused by the existing systems. It is then that preventive care focus will stakeholders without realizing the true intent of the services become important and the market will start looking at it as a offered.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?

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

Many hospitals use higher billing rates, forge history to less than 24 hours for observation are paid for. The OPD

accommodate pre-existing diseases or make bills without treatments are not covered currently as it's not treated as

patient even being hospitalized. Instead of cutting down on catastrophic financial loss. Also, we must bear in mind that the

TPAs' fees, insurers should pay them as per tariffs and demand product which is so well-known in Indian markets (Mediclaim) is

excellence from them. With proper systems and processes, necessarily a “hospitalization insurance plan” and not a

these loopholes can be plugged. But this will need the insurers' “health insurance plan”.

— especially, PSU insurers who enjoy 70% market share — to take steps with along term perspective rather than short term VP: Where do you think the Indian health insurance industry gains. will stand, five years from now?

VP: In the west, hospital grading has facilitated cashless SS: We will see this industry growing at a CAGR of at least 20% medical insurance. How can India adopt the same? for the next five years. Once the fiscal discipline is in place by

all insurers, we will see innovation in products based on sound SS: The PSU insurers who enjoy the largest market share in

underwriting principles. There will be consolidation in the TPA India have been looking at health insurance as asocial benefit,

industry, and each insurer may go for TPA of their own to control and were not bothered about losses as long as profits from

efficiency, quality and frauds. other portfolios were pouring in. However, with profits from other portfolios (fire, marine, property) being almost More dedicated health insurance companies would enter in vanished, they have woken up to the realities of business. But India with Indian partners. We believe that at some point, the they are expecting the government (or health ministry) to government will make insurance mandatory for people below regulate the healthcare industry. certain threshold to improve penetration and ensure that

everybody has a right to good healthcare. We also feel that with We are of the opinion that they must regulate hospitals for the

more products and increased complexity in market, the role of part that they pay (claims paid), and not wait for any other

intermediaries would become important. agency to intervene. Their monies are at stake, so they have every right to demand efficiency, quality and better rates from their suppliers.

The interviewee is the Founder & Director of India's only Any large corporation, while signing up with vendors ensures Health Insurance Broking Company and has been in Healthcare proper due diligence, expects the vendor to follow best bus ine s s s i n ce 1999 . He can be reached a t practices for consistent service delivery. It then categorizes . To know more, v i s i t them according to the ratings earned during due diligence. This is the practice insurers should also follow.

Though the current grading methodology is too coarse, we expect it to evolve over a period of time.

sudhir@medimanage.comwww.medimanage.com.

22

“Quality marks the search for an ideal after necessity has been But what is quality all about? 'Quality of Care' is not merely satisfied and mere usefulness achieved.” about the availability of medical software or hardware in the

facilities. It is more about ready availability of desirable -William A. Foster

healthcare services and their delivery at the time of need and at The prime focus, as far as development in the health sector is an affordable price. More than that when we talk about quality concerned, has till recently been utterly on the issue of access. healthcare services, it does not only mean the availability of In a country where we are still striving to provide healthcare services, but also the ease with which they are available and the services to one and all, and where universal availability of level of satisfaction they provide to the ones in need. The issues services still remain a yet to be achieved goal, the concept of are complex and the problems multiplex. However, the solution quality has largely existed in the neglected area. lies in putting up a system that aims in thoroughly investigating

and understanding the facilities; making a situational analysis; A few modern facilities, predominantly in the private domain,

devising the gap filling strategies; and accordingly upgrading have come up in the last two decades but their number and

them.coverage are quite limited. Moreover, the costs of these quality services restrict them to cater only to a class apart society. On However, the challenges in the public health sector have been the other hand, public healthcare facilities on district and sub- much more complicated and deep-rooted than its private district level to which the larger population throng to, or most counterpart. This can be attributed to the shortage of facilities, of the private healthcare facilities to which the people depend, lack of optimal manpower, increasing work load and ineffective are yet to address the issue of quality in the services they systems. The main concern among end-users is the quality of deliver. There is a sporadic presence of the voluntary sector services provided in the public health sector. Poor quality of too. services causes loss of customers, end of lives, depletion of

revenue, reduction of material resources, wastage of time, Yet, quality remains a concern in all three segments. While

erosion of recognition and finally diminuation of trust. In fact, inadequate resources, lethargic and sloppy attitude, poor

to correct the malady, the public health sector urgently needs motivation level, callousness and chaos often afflict the public

extensive capacity building and a thorough upgradation in order sector, unethical and exploitative practices in pursuit of profit

to be able to deliver quality care services. It requires a suitable maximization largely plague the private sector. The voluntary

model to be developed, to analyze and overcome the gaps as sector, though shows commitment, is limited in terms of its

per appropriate benchmarks. A facility specific action plan as presence and resources. To achieve better health outcomes,

per the provisions of this model is ought to be prepared and the public sector must become more responsive, the private

implemented under expert supervision. It would initiate a sector — more responsible, and the voluntary sector needs to

process of change which needs to be facilitated over a period of be more resourceful.

time to get inculcated, institutionalized and stabilized in the The blueprints for a healthier planet must optimize the use of system. The health infrastructure is though growing at a decent each, combining the social commitment of the public sector, pace yet the task is enormous, if underserved areas are to be the selfless spirit of the truly voluntary sector, and the covered in totality and the goal of universalization of operational efficiency of the private sector. availability and accessibility to quality healthcare services is to

be realized and actualized.

Accreditation of district hospitals has gained relevance within the excelling healthcare order of India.

Sonali Sinha, Principal Consultant - Hosmac, shows the way ahead.

Validating lessons

23

Availability, affordability and accountability along with developed to traverse the gaps and lay down a comprehensive emphasis on efficiency and effectiveness must characterize the Quality Management System (QMS) for the clinical as well as quality health services, while equity and universal outreach the non-clinical processes to address and ensure quality must be the edifice on which public health policy must erect its service delivery and thereby enhance both employee and programmes. patient satisfaction. The process of implementation has been

challenging yet an encouraging experience throwing open a National Rural Health Mission (NRHM) is one such program that

long way ahead.envisages bringing about a 'paradigm shift' in the healthcare delivery system across the country. In order to achieve the The reality of the success has been impregnated with apt articulated objectives of the NRHM within the available time- conceptualization and planning, development of hospital frame, a multi-pronged strategy has been adopted. Institutional specific QMS, step-by-step systemic implementation and strengthening, in terms of infrastructure and human resource inculcation of the systems and processes through adequate development, has been in the core of it, as these are crucial to capacity building of all concerned and by following a appropriate, adequate and active functioning of Public Health synergistic approach and convergence at various levels. The Delivery System. support from both the district administration and the state

government has been overwhelming in this quest for quality Here's a success story which probably proves that a small push in

and, thereby, improving the functioning of the public health the right direction can yield great results and open the

systems. floodgates for bigger initiatives.

The journey to certification of the district hospitals has been National Health Systems Resource Centre (NHSRC), a technical

quite an experience, and has brought to the fore a few core support wing of Ministry of Health & Family Welfare, Govt. of

issues related to the functionality of these facilities. The key India, has undertaken an initiative for quality improvement in

outcomes of the efforts, summed up as follows, are for the public health systems of the country. It has been realized

everyone to see:that it needs concerted efforts to bring about improvement in the quality and comprehensiveness of services through • Developed an understanding of the objectives of improvement initiatives for service delivery processes. To accreditation and the benefits it accruesrealize this endeavour, NHSRC with the active support of the

• Created a positive and informed attitude towards the Technical Support Partners (TSPs), HOSMAC being one of them,

accreditation systempiloted the quality improvement and accreditation of one of the District Hospitals in each of the eight Empowered Action Group • 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

• Capacity building of all concerned

• Facilitating change through end-users

• Change in attitudinal levels and increased motivation amongst the staff

(EAG) states of India, namely, Chhattisgarh, Jharkhand, Bihar, • Enhanced satisfaction level in the peopleMadhya Pradesh, Uttarakhand, Uttar Pradesh, Orissa and

Rajasthan. It successfully implemented the Quality • Better organized health facilities Management System (QMS) in the hospitals which, after passing

The way aheadthrough the stringent audit processes, have subsequently been awarded with the ISO 9001:2008 certification. The process is The certification/accreditation process of the public health being replicated in the other states of the country as well after facilities is actually a small step ahead to a healthier and the overwhelming success of the pilot phase. happier nation. Taking it beyond the accreditation process will

be the real essence of the entire efforts. The basic objective of the project is to develop and establish a suitable model of Quality Management Systems (QMS) for the The message is simple: Quality Public Healthcare must move District Hospitals that would facilitate quality and process centre stage from the periphery of development planning, so improvement so as to improve the level of organizational that health and economy can nurture each other.performance and patient satisfaction.

As evident, the current functioning of most of the healthcare The author has varied experience of over a decade in facilities in the public sector leaves ample scope for community health & development. She has held positions of improvement in almost every area. The Indian Public Health responsibility in government as well as in non-government Standards (IPHS) provides a framework on desirable manpower, o r g a n i z a t i o n s . S h e c a n b e r e a c h e d a t 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

sonali.sinha@hosmac.com

24

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

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

Ask a Hospital Administrator regarding the ways & means of rather than excellence.improving the hospital's financial bottom line and increase

Program Componentsproductivity at the Profit Centers like OT, ICU, OPD, Lab, Radiology, Pharmacy etc. will top the answer. The other areas Materials management, like other disciplines, requires like departments of marketing, cafeteria service, valet planning and leadership. Starting with a strategic plan that parking, gift shop would also figure. But, stores & materials defines materials management's mission and role within the management would usually features at that bottom of the list, organization, a hospital can achieve excellence if it recognizes if not at all. that materials management, as a support service function.

Materials Management is traditionally treated as a Cost Center, A materials manager first must determine the right things to do akin to the human-resources department .Human Resources & and the right way to do them. This involves providing supplies Materials Management together account for 80% of the and other materials in a consistent, cost-effective manner so hospital's operating budget with a share of approximately 45% that user departments can meet their own goals and and 35% respectively. While little can be done about reducing objectives.the salary expenses of employees, a lot can be done in

Accountabilityreducing costs associated with purchasing and storage of goods. It is estimated that every 5% reduction in supply and Organizational structure is central to improve the materials storage costs equates to a 1% improvement in bottom line management systems. The level at which it is reported to margin of the hospital. executive management shows the importance placed on

materials management throughout a hospital.Most departments in hospitals rely heavily on supplies, and inefficient materials management can be detrimental to a While a close working relationship with a hospital's Accounts & hospital's operations. For smooth operations, departments Finance Manager is essential, direct reporting is not required such as OT, ICU, wards, pharmacy, laboratory, blood-bank and to enhance overall functionality. In lieu of the hospital-wide CSSD require supplies to be in the right place at the right time effects on staffing and customer service, a hospital may choose and in the right quantity. The threat of lax material to have its materials management report to its Chief Operating management systems in hospitals cause the user departments Officer/Hospital Administrator.to create their own systems and, in the process, devote extra

Departments such as pharmacy, food service, and laundry staff, inventory, space, and other resources to ensure that should be considered part of materials management because needed supplies are available.they are involved in buying, storing, processing, and delivering

A rust-proof supply chain

25

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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.

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

include cost of preparing the order, the stationery used, manner.salary of the clerks, telephone costs etc. It is estimated that

3. Human relations ordering cost varies from Rs. 2000 to Rs. 3000 per order in leading hospitals. So hospitals must try to avoid ordering for Continuous training and education of managers/staff items individually. They must place the combined order for members and sharing of responsibility and authority.many items in one order to reduce the costs. Each order has

4. Resource management and Productivity a fixed costs associated with it, and it is independent of the number of items in the order. Balancing the need for high service levels with the cost of

providing those services. This includes all resources Inventory Holding Costs: It is a cost associated with storage involved in materials management-staff, space, inventory, space, refrigeration, insurance, etc. usually not related to and working capital. the unit cost.

5. Technology The Total Cost: It is sum of all the above 3 costs that can be minimized by following Economic Order Quantity (EOQ). Not just automating, but obtaining maximum performance

or benefit from new technology. Optimizing performance:

Performance Indicators To optimize supply chain performance and achieve savings that enhance the bottom line, hospitals should:Excellence in hospital operations requires the development and

continuous use of meaningful performance indicators of � Generate purchase orders for every item purchasedquantitative and qualitative aspects of materials management.

� Ensure the organization is protected from undue vendor While national performance indicators and hospital statistics influenceare good starting points, each hospital must develop its own

detailed standards that are compatible with the organization's � Review contracts regularly to ensure competitivenessoverall strategic direction. Some KPI are:

� Have a contract for each product category� On-hand inventory balance

� Buy only what the organization is sure to use� Inventory Turnover

� Get rid of excess inventory� Average value of order

� Computerize all operations� Hospital - Prime Vendor relationship

� Develop a strategic plan for continued supply chain savings� On-time delivery

Last words� Item utilization rate

Top management should understand the contribution of � Non-Contract Compliance Analysis — identify off-contract, effective materials management to a profitable organization.

high-value, recurring purchases and determine where Only then can they provide the support, time, and other contracts should be established resources to qualified materials managers to increase chances

of success. Without administrative support, to expect stellar � Non-PO Purchases Analysis — identify items ordered through

performances from the best material managers is going to bear non-PO transactions, so corrective actions can be taken and little or no fruit.non-PO purchases eliminated

Materials management has been a vastly neglected area in Most indicators must be tailored to each hospital's specific hospital pperations. If older hospitals seek to retain their circumstances. Items such as on-hand inventory balance must impressive their track record and newer hospitals wish to create be measured continuously, while others, such as item utilization flawless operation systems, an optimized material rate, are measured periodically.management system is the need of the day.

The Costs

The costs incurred by materials management department can The author is a former Head of Materials at Tata Memorial be grouped into three categories:Hospital, Mumbai and American Hospital, Dubai. He can be

� Purchase Costs reached at .

� 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

siddiq.khan@hosmac.com

26

stArchitecture, as a service to human societies, could be defined ever-increasing tendency among 21 century service providers as the provision of fit environments for human activities. The of any kind to take the service to the customer, as opposed to word “fit” may be defined in the most generous terms the customer coming to the service. Technology is enabling this imaginable, but it still does not necessarily imply the erection paradigm shift, and healthcare facility designers could do worse of buildings. Environments may be made fit for human beings than take note. Bob Dylan sang about it, nasally prophetic:

by any number of means. A disease ridden swamp may be “…The times,they are a changin’…”rendered fit by inoculating all those who visit in against

Human environments currently under consideration in urban infection; a natural amphitheater may be rendered fit for

India are constructed environments, static, more or less drama by installing lights and a public address system; a snowy

permanent and designed to operate without the consumption of landscape may be fit by means of a ski-suit, gloves, boots and a

too much mechanical energy. These last two proviso’s are both balaclava. Architecture, indeed, began with the first furs worn

rather relative since no discussion of the present state of by our earliest ancestors or with the discovery of fire — it shows

architecture in urban India could ignore the transitory, pulsing a narrowly professional frame of mind to refer its beginnings

nature of the shanty towns of the poor and at the other extreme solely to the cave or primitive hut.

modern healthcare facilities, embodying high-tech grandeur, The service that architects (healthcare designers included) which, operating as they are in extreme climates, can only be propose to perform for society can often be accomplished kept fit for human activities at the cost of pouring vast without calling in an architect, and the increasing range of quantities of mechanical energy into them in the form of air-technological alternatives to bricks and mortar may as yet set a conditioning and artificial light.term to the custom-sanctioned monopoly of architects as

If we consider automobiles as the manifestation of a complex environment purveyors to the human race (more so centralized

and agitated culture-within-a-culture producing discrete healthcare delivery environments). These alternatives, whose

objects which are themselves environments for human justification is measurable performance rather than some

activities, we could obtain a standard of comparison for the cultural sanction extend, however beyond the provision of

activities of the architectural profession. They may ruefully technological services, and include analytical techniques as

compare the scale of the constructional work produced by the well, so that it is possible to define “hospital” without

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 reference to a patient room or an X-ray machine, but simply as being Le Corbusier’s Parliament House for Chandigarh, and the a complex integration of intrapersonal relationships and development of modern petro-chemical complexes vis-à-vis technical services. To do so would, in fact, be to depart so far Richard Rogers and Renzo Piano’s Pompidou Center in Paris. from the operational lore of the society we inhabit as to

provoke, alarm and discomfort among the engineers, scientists This sincere flattery of technology is one facet of the almost and doctors who, within their specialities, regularly employ fetishistic regard afforded to certain classes of engineers, these techniques. Nevertheless, a moment’s reflection on such nowadays the desire to incorporate engineering forms into phrases as ‘TV Theater’, ‘Radio Concert Hall’ or ‘Virtual architectural design is overwhelming, more recently the work University’ will show how far technological advancement has done by mathematicians in the field of fractals and forms taken made nonsense of concepts that were hitherto building-bound, from the biological sciences provide rich imagery for architects. and yet have gained popular social and cultural acceptance. The pop culture and the visual media also serve as powerful

influences on architectural form. Fragments of history Under the impact of these intellectual and technical juxtaposed with each other and anything else the designer upheavals, the solid reliance of architects, as a profession,

might find at hand have also had their effect on the built form of must eventually give way. Yet theFunctionalist slogan,"a house our cities, especially Mumbai.is a machine for living in" gives nothing away because it

presupposes a house. Far more seditious to the established Prefabricated systems’ building is accepted as “architecture”, attitude of healthcare architects is the proposition that far however there is a division of mind here between architects and from ambulances being substandard hospitals, a hospital is, for engineers. The operational lore of the architectural profession many functions, a substandard ambulance. The profession in India has assimilated prefabrication as a technique applied to tends to dismiss the potential impact of scientific and fairly small repetitive components to be assembled on site. Such technological alternatives to the art of building. There is an an arrangement still leaves the determination of functional

Hussain Varawalla, Mentor — Design Services — Hosmac, provides the artwork for the future role of architects in the

Healthcare Delivery Systems Design.

Chronicles: Building Tomorrow

27

distrust of sociologists they may well find that a great deal of very suggestive research is already at their disposal.

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 volumes securely in the hands of architects, and the physical dealing with.creation of those volumes securely in the hands of traditional-

type site labor. Easier said than done, no doubt. However, in our firm of hospital planners and management consultants, we have But prefabrication, for most of the creative minds in the plastics evolved a specialized and multi-disciplinary approach to the industry, means something quite different. It means the broad spectrum of issues that confront healthcare facility fabrication of components large enough to be effective designers today, right to the extent of letting our staff develop determinants of functional volumes. These designs call for the their fields of interest in keeping with their temperament, off-site fabrication of complete functional volumes such as transcending education and initial job descriptions. Science, bathrooms and kitchens, a procedure that both has structural engineering and aesthetic sensibilities co-exist with a social advantages and makes it possible to complete most of the conscience and business management skills in an environment fabricating work under controlled conditions. The result is a that brings forth the best in all of us. structure put together from large, modular units with universal

joints. Such structures are widely used today to provide critical Healthcare architectural firms have to undergo a healthcare in disaster management programs. The medical metamorphosis into holistic healthcare consultancy firms, they profession in India is also familiar with vaccination and have to realize that there is more to healthcare facility design ophthalmic surgery camps, but no effort has been made to than the skills and knowledge of healthcare architects can provide for these camps “temporary hospitals”, the surgery is competently deal with. We need the help of a variety of often done under substandard conditions and the cases of professionals as equally respected members of the design blindness that result make headlines in the tabloids, to be read team; the architect has to surrender his/her demigod status in and immediately forgotten on the way home from work. the design team and has to accept that there are people out

there who can and must shoulder an equal part of the burden.However, such ideas have hardly touched the general body of architecture at all as yet. Much of the painstaking and valuable Let me leave you with this quotation from Chuang-Tzu, a research that can be shown has been undertaken in conditions Chinese philosopher:that presuppose the existence of rectangular, permanent and

“A man who knows he is a fool is not a great fool.”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

The author has had 20 years of rich experience in healthcare involved than from the findings of the research programs.design building and has worked with Reliance Healthcare

Architects, including healthcare architects, don’t spend much V e n t u r e s L t d . H e c a n b e r e a c h e d a t 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

hussain.varawalla@hosmac.com

28

Playing with the yardstick

Market of Smart Consumer Learning from Other Industry Today, at one end urban consumers wants a Citibank that never Healthcare organizations must become learning organizations. sleep, whereas at the other end, rural consumers appeal for a Don't go industry-specific and look for insight based only on the Grameen Bank. Healthcare service delivery industry is one of industry you belong to. Instead look for the similar challenges the most complex of industries, and in today's smart consumer faced by other industries and how they were overcome. Today is driven market, patients' needs and healthcare service delivery an era, where a competitive strategy is about being different, are turning ever-more complex. It is difficult for organizations bold enough to challenge old concepts and defy conventional and clinicians to keep up. Patients have higher acuity, need industry norms. faster, better and cost-effective services. Some years back, Air Deccan chose to offer low fares and service Consumers will be increasingly stratified with two of the to such hitherto unconnected airports, and attract price largest categories being — e-health and traditional patients. sensitive customers who would otherwise travel by train. In Organizations must define, design and deliver the right fact, Air Deccan identified its competitors as Indian Railway and

customer experience for different types of consumers. not other Airlines. Air Deccan reengineered all its activities and

New Market - Same Old Business Processes truncated all unnecessary overheads like on-board meals,

Established industries like healthcare are usually populated travel agent commissions by promoting online or direct

with old and rigid mindset legacies. Often, systems and ticketing with customer care desks. This helped Air Deccan

processes followed by the organizations are outdated, reduce add-on cost components of the fares, significantly. Now-

inefficient, and completely unnecessary in the current a-days, there are ample airlines offering low cost services,

scenario. Every day patients displeased by a set of non- however, consumers now demand faster service with zero

customer centric process in the organization result in one less waiting time. That led airlines to reengineer their processes

customer to worry about in the future. It highlights the need to further like Installing self check-in kiosk machines and a priority

reduce the number of preventable systems and process luggage tag service to executives traveling on a business trip. It

failures. Thus, it is of utmost importance for the organization further led airlines to make an extensive use of information

to ensure each process that the customer interacts is patient technology to handle today's progressive, demanding

centric and cost effective. consumers like real-time seat and fare selection, e-ticketing,

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.

29

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, documentation-oriented 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.

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

e-check in and customer specific travel plan offers. Similarly, with seamless service. Organizations must simplify the

long queues at bank counters have disappeared significantly a d m i s s i o n , b i l l i n g , d i s c h a r g e , c l a i m s

with the launch of ATMs, ECS, e-banking, mobile banking and submission/reimbursement process for patients, providing

extended banking timing. The way the client does banking has online registration, appointment scheduling, payment,

evolved with the bank's service delivery mechanism, in the prequisite for the various tests, online test reports, access to

recent past.their complete medical information, follow-up visit reminder,

Orbit-Shifting Business Models in Healthcare claims and health updates and healthcare call centers. Let 'I' of Healthcare Industry stand for 'innovation' and not 'inhibition' or

In the avant-garde smart consumer climate, organizations seek 'imitation'. To focus not only on the processes, but also on the

innovative business models crafted from a learning cut across underlying philosophies that drive origination and the way

the industries and sectors. For example, the Arvind Eye Hospital business is conducted. This means to conduct business by

(AEH), one of the orbit-shifting innovators in the healthcare deliberately choosing a different set of activities to deliver a

service delivery industry changed the way ophthalmology unique mix of values.

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

The author has been working in the healthcare industry for up the concept of assembly line operations and standardization.

almost a decade. His key areas of work has been in BPR study of His mind bending initiatives to marry surgery and McDonald's led

hospitals for performance turnaround. He can be reached atto 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.

In the same league of orbit-shifting innovators is another awe-inspiring 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

lalit.mistry@hosmac.com

30

Beyond healthcare building

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.

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.

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.

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,

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.

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.

thMore upcoming events include the ‘5 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.

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.

The author is an industrial engineer, and can be reached at .isha.khanolkar@hosmac.com

Isha Khanolkar, Asst. Manager — Operations — Hosmac, puts into words a newfound advent of Hosmac India Pvt Ltd in

the middle of organized culture.

Concept model - I : BEAMS, Bangalore

Concept model - II : BEAMS, Bangalore

31

Head Office

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HOSMAC FOUNDATION w w w . h o s m a c f o u n d a t i o n . o r g