Leadership & Human Capital Development In Healthcare People Hosp Orchid Dr Dev Taneja Aug2012

Leadership & Human Capital Development in Healthcare - Issues & Challenges

People HospHotel Orchid, Mumbai. 29th Aug 2012

Dr Dev TanejaM.S.(Gen.Surgery)

MBA – Healthcare Mgt. (NUS Business School, Singapore)

Director TachRoyal Healthcare Consultancy Services

Navi Mumbai

Performance Improvement

• Performance – Clinical, Operations & Finance

• Utilisation Reviews & Trend Analysis

• Human Capital Review

• BPR / Change Mgt.

IT in Health

• HIS

• ERP

• Business Intelligence / Health Analytics

• State / National Health Information Network (SHIN / NHIN) for Public Health

Quality & Service Excellence

• NABH / NABL

• JCI

• Service Excellence Culture

Strategic Business Consulting

• Planning & Positioning

• Marketing Strategy

• Balanced Score Card

Healthcare & Hospital Planning

• Formation Reports

• Commissioning

• Roll Out & Stabilisation

• Facility Up gradation

• Expansion

Leadership & Human Capital Development

• HR Strategy & OD

• Leadership & Management Development

• Training & HC Development

Our Service Offerings

2TachRoyal Healthcare Consulting Services

Indian Healthcare Sector

The Indian Healthcare sector is growing at 16 % per annum and is worth about $ 45 billion

(PE pulse on Healthcare & Life Sciences, Venture Intelligence Report. July 2009)

FICCI – E & Y Report

CII – Mckinksey Report


The General Environment

• Low Public Health Spend

• Strong GDP Growth

• Per Capital Income - > $ 1000

• Rapid Urbanization 30 to 50

• Rapid Industrialization

• 100 % FDI in HC sector

• Tax Incentives against

investments in hospitals

• Literacy is increasing

• Growing Health Awareness

The Healthcare Environment

• Health Ins. CAGR 35 %

• Hospitals CAGR 12 to 15 %

• Non hospital based HC segment – 70 %

• Major Players –Tertiary Care Focus

• No Strong Player – Secondary Care

• Uptrend in Life Style Diseases

• No Major Player – Providing Integrated

HC services in HC Value chain

• Shortage of Hospital beds

• Accreditation – NABH, JCI

• Informed Consumer demands

“ NOT ONLY CURE BUT CARE AS WELL”

• Increasing Ability to Pay

• HC has become a viable business

• Limited No. of National / Regional Players

• Low Industry Maturity

The Healthcare Environment in India


The Hospital Business Groups in India

National Level - Apollo Hospitals

- Fortis Hospitals

Regional - Max Healthcare

- Care Hospital

- Manipal Healthcare

Newer Capital Light HC Models

- Vasan Eye Care

- Nova Medical Centers etc.


PRE- SERVICEMarket/Marketing ResearchTarget MarketServices offered/BrandingPricingPromotionDistribution/Logistics

POINT-OF-SERVICEClinical Operations

QualityProcess Innovation

MarketingPatient SatisfactionProduct DevelopmentMarket DevelopmentPenetrationEnhancementDifferentiation

AFTER-SERVICEFollow up

ClinicalMarketing

BillingFollow on

ClinicalMarketing

ORGANISATIONAL CULTUREShared Assumptions Shared Values Behavioral Norms

ORGANISATIONAL STRUCTUREFunction Division Matrix

STRATEGIC RESOURCESFinancial Human Information Technology

The HCO Value Chain

SERVICE

DELIVERY

SUPPORT

SERVICES 6TachRoyal Healthcare Consulting Services

Strategic Resources

Healthcare will emerge as one of the larger sector providing employment in India

Human Resource requirements change depends on whether the organisation is expanding, contracting, or maintaining scope

Either you have to impart training or recruit people with newer skill sets

TachRoyal Healthcare Consulting Services 7

Competing on Excellence

The New Basis of Healthcare Strategy

TachRoyal Healthcare Consultancy Services

• OrganisationArchitecture

• Systems & Processes

• MIS

• HR

• Finance

• IT in Health

• Strategic Alliances

• Clinical Quality

• Service Excellence

• Technology

• Marketing

• Payors

• Vision, Mission & Goals

• Benchmarking

• Balanced Score Card

Corporate Planning & Positioning

ClinicalProgramsPhysicianEngagement

OrganisationStructure, Values & Culture

Strategic Resources

Strategic Business Planning


Dr Dev Taneja’s SPM Model

REPORTS

SOP

SYSTEM

Structure Process Manpower

Building

Equipments

BALANCED GROWTH OF HOSPITAL (S)

ERP

Tools & Training


Emerging Challenges in the Healthcare Sector


Evolution of Health Financing in India

• Financial Risk with Patients

• Seller (Health Provider - Hospital) Power High

• Low Buyer (Patient) Power. Forced to buy services per Sellers inflated Tariffs

Out of Pocket

• Financial Risk with Health Insurance Cos

• Seller(Provider) Power remained High

• Hospitals worked on Cost Plus Models leading to high payouts by Insurance Cos there by threatening health insurance industries viability

Introduction of Health Insurance

• Health insurance Buyer (Payer) Power has increased

• Fixed Tariff to qualify as Preferred Provider Network Partner

• Majority of Hospitals after initial resistance signed Fixed Tariff Rate List of Insurance Industry (GIPSA)

• Financial Risk shifted to Providers (Hospitals)

Pro Active Health Ins. Cos

1986

2010

TachRoyal Healthcare Consulting Services13

Existing Healthcare - Cost Plus Model

• Being Effective was enough

• No Costing Challenges for business viability

• Hidden inefficiencies in hospitals

• HIS – Mostly Transaction oriented

• Performance Improvement – Patchy. Limited Enterprise Focus

Emerging Healthcare - At Cost Model

• Not only Effective but Efficient as well

• Service line Costing – Financial Discipline for business viability

• Empowered & Engaged Employees

• Clinical Quality & Service Excellence

• Strategic Application of IT for Performance Improvement



Highest PE Investment in Healthcare – Jan to June 2012 is USD 749 millions

( Care H – 110m, DM H – 100m, Vasan EC – 100m, Specialty H – 77m,

Super Religare – 66m & Nova Medical Centres – 54m)

( IT & ITES – 601m, BFSI – 501m, Energy – 414m, Manufacturing – 156m)

Source: PwC Venture Intelligence Report Data. ET, Mumbai 24thAug 2012

Active

• Involved in Management

• Involve Partners with rich industry experience

• Ramp up the business model

• Improve valuations

• Exit with superior returns

• Examples In Healthcare 1. Hospital Corporation of America, USA – KKR, Bain Capital, Merill Lynch 2. Parkway Health, Singapore -Texas Pacific Group (TPG)

Passive

• Passive Patient Investors

• Don’t involve industry experts in the team

• Get involved once signs of financial distress or erosion of value becomes apparent

• Later the new found activism by the fund managers is not appreciated by the promoters leading to acrimonious relations

• Exit with sub-optimal or even negative returns

• Common experience in India with investments in Healthcare vertical

Investment Returns – Based on Involvement of Fund Managers


• Str. Alignment - Mission, Vision, Goals, Positioning & Branding

• Reactive / Ad Hoc Decision making

• Don’t appreciate the challenges of the scaled up business modelStrategic Focus

• Weak organisational Culture, Values & Governance

• Inability to attract & retain talented professional managers & other manpowerLeadership & Governance

• Low organisational maturity and Weak Org. Support Structure

• Effectiveness Vs Efficiency – Clinical, Operational & Financial

• Limited Project Mgt. Skills – Project delays leading to time & cost over runsSystems & Processes

• Limited use of IT for improving productivity, monitoring & control and decision making

• HIS systems capture only transactional data. No ERP / BIIT in Health

• Accreditation Reactive. Clinical Quality Outcomes not benchmarked

• No strategic development of Organisational Service Culture

Clinical outcomes &

Services Excellence

• Promoters don’t appreciate the investor’s concerns for superior value creation and time bound exit concerns

• Post M & A integration issues - Culture, Systems & Processes, HR etc.

Variance in Promoter & Investor Expectations

Post Investment – Investor Pain Points vis-a-vis Promoters


Hospital Cost Structure

EBITDA Margin

All figures as a % of Gross Hospital Revenue

Hospital Cost Structure

17.7%

22.6%

1.5%

7.1%13.0%

10.6%

6.1%

5.4%

15.9%

EBITDA Labor Expenses & salaries M arketing & PR

M aintenance Pharmacy Consumables

Utilities Administrative expenses Doctors Share

Operating Margin

20TachRoyal Healthcare Consulting ServicesSource: E & Y

Human Resources: Synopsis

Human capital is the fulcrum of healthcare services. The Indian tertiary healthcare segment, like many other service industries in the country, is faced with acute manpower shortages. The industry faces shortage of:

– Management cadre

– Doctors

– Nurses

– Technicians to support various services

Human Resources Spectrum in a Hospital

Technicians Nurses Doctors Management Others

Gap in nurses (2012)

929,8261,133,826

2,400,000

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2006 2012 (E) Demand (2012)

1,2

60

,00

0

Manpower crunch is particularly felt in the availability of qualified nursing staff. It is pertinent to note that globally there is a shortage of trained nursing staff. An Ernst & Young study states that the country will be short of 12 Lakh nurses by 2012, if a target of 2 nurses per doctor is to be achieved.

As hospitals belong to the service industry, poor quality of services in terms of poor nurse to patient ratio, ineffective management or doctors shortage will directly impact revenues.

21

Source: E & Y

Human Resources: HR PracticesA significant number of trained manpower, particularly nurses, are leaving India for better career prospects. We believe the high attrition maybe due to:

•Lower domestic compensation levels

•Poor HR practices in Indian hospitals

Therefore, it is imperative for hospitals to take urgent steps to improve their internal HR practices and increase the HR personnel to hospital staff ratio.

Further, in professionalising hospital management, there is an urgent need to create a larger cadre of healthcare management professionals. Management by trained professionals will cause the necessary shift from doctor-led practice to service-centric management.

150

195

134

0

50

100

150

200

250

80-140 141-220 221-400

Number of hospital beds

Nu

mb

er

of

em

plo

yees p

er

HR

pers

on

Gap in Doctors (2012)

592,915

736,915

1,200,000

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2006 2012 (E) Demand (2012)

46

3,0

00


According to the defined parameters, only nurses with GNM or higher qualification are allowed to practice in tertiary care hospitals in urban India. Coupled with serious shortage forecasted (shortage of 12 lakh by 2012) and their migration to foreign countries exacerbated by a global shortage of nursing professionals, this could seriously jeopardize growth of the healthcare industry

Availability of fully qualified nurses The average percentage of fully qualified nurses is 31%.

Human Resources: Qualification

31%

69%

Qualified nurses "Unqualified" nurses

Hospitals hire four different cadres of nurses:• Nurse Trainees: Unqualified “nurses”, trained on the job• ANM (Auxiliary Nurse & Midwife): Allowed to practice only in rural, under-served areas• GNM (General Nurse & Midwife): Qualified & allowed to practice• B.Sc Nursing: Qualified & allowed to practice & teach• M.Sc Nursing: Qualified nursing instructor


The attrition of nurses is a major cause of concern for the hospitals. The rate of attrition for trained ICU nurses is even higher.

The possible reasons being:

Hospital nurses perceive problems related to understaffing which effects the quality of care patients receive.

Nurses leave because of better salaries offered abroad.

High patient to nurse staffing ratio leading to nurse burnout.

High patient to nurse staffing ratios are associated with higher mortality rates, greater incidence of medical complications and errors resulting in poor job satisfaction.

Attrition of nursing staff The attrition rate of nurses across the hospitals is on an average 15% per year

Human Resources: Attrition

Worst

Median

14.17%

.06%

40%

15%

Best

Average


Human Resources: Attrition

0%

5%

10%

15%

20%

25%

30%

35%

40%

Attrition Rates

1 2 3 4 5 6 7 8 9 10

Hospitals

Nursing Attrition


A good surrogate measure for the quality

of ICU care is the nurses to bed ratio.

The median number of nurses per ICU bed in India is 1. Several hospitals are below this figure as well. The recommended standard is to employ 2 nurses per bed in an ICU, as outlined by the ISCCM (Indian Society for Critical Care Medicine).

The nursing patient ratio and the total number of nursing staff required by each unit depends on many variables. An artificially ventilated patient needs at least one nurse at the bedside at all times. A ventilated patient with more intricate support, such as, dialysis and inotropic support may need two nurses.

Considering the importance of an ICU to any hospital’s growth strategy, as pointed out in earlier sections of our study, and to provide a satisfactory patient experience, hospitals need to give due emphasis to this area.

The median number of nurses per bed in the ICU is 1.

Human Resources: ICU Care

Nurses per ICU bed

0

0.4

0.8

1.2

1.6

2

1 2 3 4 5 6 7 8 9 10 11 12 13


The recommended HR : employee ratio in other service industries is between 80-100.

Our interaction with hospitals has shown that poor emphasis on HR has led to low levels of job satisfaction in the industry.The relatively high attrition rates (in the vicinity of 15-20%) for nurses may be attributable to the same. Attrition amongst doctors, which also tends to be high, may also be partly attributable to the same, although there are other important factors, namely educational cycles and higher salaries elsewhere, which also come into play.

Apart from controlling attrition, HR plays a major role in;

• Talent Acquisition / Management

• Performance Management

• Reward Management

• Personnel Development

HR department plays a crucial role

in retaining certain employee

groups in hospitals.

The median ratio of total employees: HR personnel is 180:1

Human Resources: Management

150

195

134

0

50

100

150

200

250

80-140 141-220 221-400

Number of hospital beds

Nu

mb

er o

f e

mp

loyees p

er H

R

perso

n


Chapter Standards Objective elements

AAC 15 78

COP 18 105

MOM 13 61

PRE 5 30

HIC 9 46

CQI 6 39

ROM 5 25

FMS 9 43

HRM 13 47

IMS 7 41

TOTAL 100 515

NABH


Healthcare Manpower - Fresh Talent

Like fresh Engineering graduates, majority of them are not adequately trained for employment

They need training at the induction level

Failure to have solid induction program leads to variation in

- Clinical Quality

- Service Standards

Even existing employees require periodic assessment, skill up

gradation & training


Credentialing & Governing Bodies in Healthcare Sector

Except for doctors, nurses & para-medics there is no

credentialing / Licensing available for other employees in the healthcare sector

We don’t have well developed National Level Professional Governing bodies for other employees in the healthcare sector

e.g. 1) ACHE & FACHE for hospital Administrators

2) IT - CPHIMS

3) Finance - CHFP

4) HR - ASHHRA

We don’t have Organised forum’s to interact and learn from each others – Random events like People Hosp do take place


Leadership

Governance

Values & Culture

People Alignment


Definition of Organisational Culture

Shared Assumptions

Shared Values &

Behavioral Norms

( Control, Collaboration, Competence, Cultivation)

Maintain

Change


Competitive Organisation PosturingStrategically - REACTOR POSTURE

Reactor’s do not have a strategy or plan and are inconsistent & unstable in their response to environment changes

They lack consistent approaches to strategy & structure unlike proactive strategies of Defender, Prospector & Analyser

Such organisation’s are without a clear strategy or have a mismatch between strategy & implementation.

Evidence suggests that reactors are able to hone their competencies and transform themselves into more viable postures

Understanding the organisation’s preferred strategic posture & communicating it throughout organisation provides decision guidelines & it will also help to shape the culture of the organisation


THREE MAJOR REASONS THAT ORGANISATIONS BECOME REACTORS

1. Top management may not have clearly articulated the

organisation’s strategy

2. Management does not fully shape the organisation’s structure & processes to fit a chosen strategy

3. Management tends to maintain organisation’s current strategy - structure relationship despite overwhelming environmental changes


Service Excellence A Differentiation & Competitive Factor

Healthcare is a Service Industry

Service Excellence is a good business strategy

Patients today want “NOT ONLY CURE BUT CARE AS WELL“

Strong Customer experiences improves goodwill, demand & utilisation of hospital services

Directed towards both external & internal customers

Improves employee self esteem & productivity

Service Culture

Needs to be built across the organisation

Involves training and standardisation of service delivery practices

Its not one time exercise but a continues process

Requires continuous measurement and control

Its time consuming hence involving consultants optimises outcomes


Personal Experience With Service Excellence Implementation

Total Employees – 403(Excluding Doctors)

Nos.

Less than 10th Std. 98 24%

12th & Diploma Holders 138 34%

Graduates 145 36%

Postgraduates 22 5%


To Assess Initial Employees Soft Skills capabilities

HOD / In charge Level Survey was conducted

Confidence

Time Management

Leadership

Communication

Empathy

Attitude

Inter-Personal Skills

Information Management Skills

Patient Focus

Planning & Organisation

Innovativeness


Initial HOD Soft Skill Assessment

Activity A B C

High Patient Interaction - Clinical 58% 26% 16%

High Patient Interaction - Non Clinical 30% 53% 17%

High Patient Interaction - Average 44% 40% 16%

No Patient Interaction 58% 32% 10%


What is taught in Hospitality sector?

Building Service Culture 12 Hrs

Behaviour 6 Hrs

Communication 6 Hrs

Personality Development 9 Hrs

Grooming 10 Hrs

Scenarios - Hotel Industry 50 Hrs

Grievance Handling 10 Hrs

Satisfying Customer Needs 10 Hrs

Motivation / Leadership 6 Hrs

Note: This is done over a period of 6 to 9 months 39TachRoyal Healthcare Consulting Services


How mature Healthcare Organisations are dealing with them?

Per HCO’s Mission & VisionThey have their Strategic HR planning in place


Can We do it in India ?

Yes

Adopt & Apply

Balanced Score CardBenchmarking


Board of Directors

Governance & Stewardship

Culture

Meritocracy

Employee Engagement

Human Capital

Job Design & Compensation

Talent Acquisition & Retention

HC Development

Capability & Competency

Learning Organisation

Leadership

Leadership Talent Pool

Succession Planning

Transformation & Change

Management

Job Provider Employer of ChoiceHR Positioning



Should We Interact briefly?

Thank You

Dr Dev Taneja

Founder & Director

• M.S.(Gen.Surgery)

• MBA – Healthcare Mgt. (NUS Business School, Singapore)

• Ex – COO, Global Hospitals

• Ex – VP – Planning, Systems & Strategy, Sevenhills Hospital, Mumbai

• Ex – Healthcare Executive , Parkway Health, Singapore

Mr. Pradeep Bapat

Director – Leadership & Human Capital Development

• Masters in HR

• Certifications in my SAP ECC 6.0 in HR, Change Mgt. & Employee Engagement

• Over 25 yrs of Industry Experience

• Ex – VP – Human Resources, Sevenhills Hospital, Mumbai

Team TachRoyal – A Group of Senior Healthcare Industry Professionals & Partners

Contact Info:

Dr Dev TanejaM.S. (Gen.Surgery), MBA – Healthcare Mgt. (National University of Singapore)

701, Viceroy ParkPlot No. 53, Sector 44ASeawoods Darave, Nerul (W).Navi Mumbai. 400706

Cell: +91- 9987708685E-mail: [email protected]

[email protected]


mailto:[email protected]

Leadership & Human Capital Development In Healthcare People Hosp Orchid Dr Dev Taneja Aug2012

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Transcript of Leadership & Human Capital Development In Healthcare People Hosp Orchid Dr Dev Taneja Aug2012