Malar Hospital Organization Structure & Design

Prepared By: Group 5DoMS, IIT Madras, Batch of 2010

Cotnact: sarang.bhutada@gmail.com

Introduction to Fortis – Malar Hospital Subsidiary of Fortis Healthcare Ltd Fortis Healthcare, paid Rs 34.6 crores for a 48.8

percent stake in Malar Hospital in 2008

FORTIS HEALTHCARE LIMITED:

Leading healthcare group in India matching international standard

First hospital opened in “1999” at Mohali Hallmark is “patient-centricity” approach At present it has 22 hospitals and 2,500 beds.

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Malar Hospital Located in South Chennai 5 super specialty centers setup

• MALAR Heart Institute (MHI-Commencing shortly at Malar)

• MALAR Institute for Renal Sciences (MIRS) • MALAR Specialty Centre for Joints (MSCJ) • MALAR Health care for OBG and

Gynecology • MALAR Health care Centre for Diabetes

(MHCD)

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Organizational Life Cycle

Formation

Growth

Maturity

Decline

MalarHospital

F & C stage•Formalization of rules

•Stable structure

•Emphasis on efficiency

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Effectiveness

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Productivity and profit Net Profit for the year ended 31th March 2008

was Rs 77.56 Lac Profitability ratio is a healthy 26 percent Occupancy rate 70-80 %

Quality Wealth of medical expertise with the finest

talent amongst doctors, nurses, technicians and management professionals

Utilization of environment Located in best of residential locations

Malar Hospital - Effectiveness

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Evaluation by external entities Financial audits are conducted every year by

external auditors ISO 9001:2000 certified by International

Certification Services Limited

Emphasis on Training and Development New joiners go through an initial training

program Fortis training centers are also used

Participation Community outreach programs for senior

citizens named “Arokya”, Kids & Teens

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Applying strategic – constituencies approach Shareholders: Profit margins of 26 percent Doctors and Administrative Staff:

Competitive remuneration, Learning opportunities

Patients: Multi-specialty, Quality Service Community: Various community outreach

programs Government: Transparent in operations

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Competing Values Approach

Flexibility

OrganizationPeople

Control 905/03/23

Structure

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Malar Hospital - Structure Structure can be analyzed on following

dimensions Level of complexity Centralization Formalization

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Complexity Horizontal Differentiation

37 Medical departments covering the entire breadth of medical specialities

6 other departments (HR, Finance, Marketing and Sales, Materials, Engineering and Nursing)

Social Specialization – Doctors Functional Specialization – Nurses, Technicians

Vertical differentiation 3 levels of Hierarchy

1. Zonal Director2. Head of Departments of all 43 departments3. Teams under each department

Wide span of control

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Formalization Standard operating procedures (SOP) High level of standardization for

administrative tasks Low level formalization for Doctors Subcontracts are highly formalized Recruitment process is highly formalized

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Doctor writes ARF to initiate the process

Patient registers the ARF at the reception

Admission confirmed after two forms filled

Patient/Family counseled about the estimated expenditure/ hospital rules & guidelines

Patient informed about interim bills on a daily basis. Bills settlement at the time of discharge

The doctor/nurse hands over the signed discharge summary and other relevant

documents.

Patient discharged after paying the bills in cash, debit/credit card or demand draft

1. Consent form for admission

2. Cashless facility form for insured patients

Patient expected to bring previous consultation & investigation records

Bills prepared at billing office (Admin)

Patient Cycle at Malar – A formalized procedure

Treatment carried out. Follows the consulting cycle (next slide)

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DMO allotted a patient, based on availability

DMO provides initial consultation. Refers to a specialist unit, if needed

Nurses divided into geographical zones, but are flexible on availability

Observations by DMO/subsequent departments are recorded on a chart

Diagnosis and treatment under a nurse, DMO/visiting consultant

Nurse/DMO confirms completion of treatment, based on expertise

Divided floor-wise & then department wise

These include diagnosis, tests, subjective tests, objective & subjective comments

Consultation Cycle at Malar – A formalized procedure

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Centralization All departments are controlled by Head of

Departments Heads report to Zonal Director Autonomy for each individual in the

organization is limited

Financially – Highly Centralized Functionally – Moderately Decentralized

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Size

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Malar Hospital - Size Medium-sized organization No apparent change in size, after Fortis

deal 37 departments 250-bed facility 256 full-time staff Workforce divided into department heads

and teams

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2 – MR co-ordination2- Marketing initiatives

NursesWard BoysTrainees

67 visiting consultants31 DMOs

External Contractors

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Impact on Structure Medium-sized but multi-specialty hospital Low Vertical but High Horizontal complexity Moderately formalized No direct impact on centralization

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Strategy

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External Threats and Strategy ImplementedExternal factors Strategy

Increasing cost of funds Cost effective business model

Availability of funds from Financial institutions

Focus on improvement in revenues, improvement of occupancy rate

Stiff competition from other playersAddition of departments, quality health care, improvement in infrastructure facilities, focus on high end health care services

Unexpected eventualities Improvement in infrastructure and increase in buffer capacity

Change in regulatory framework Constant interaction with the market

Changes in parent company Company will try to increase its own brand value

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Different types of strategies

Corporate strategy Brand Extension by opening medical

college & school

Business strategy Focus on improvement in revenues and

cash-flow by enhancing neuro and ortho departments

Enhancing the facilities in Cardiac department

Focus on high end health care services (Minimal Invasive Surgery)

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Functional strategy Use of strong HIS backbone, and PACS

technology to safely transmit patient information Use of HL7 and DICOM standards for

telemedicine purpose Self-defining and self-expiring passwords for

maximum privacy

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Strategy - Structure Relationship (Chandler’s Theory)

Time

Multi specialty

Structure Simple Functional

Divisional

Low High

t t + 2 t + 1

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Miles and Snow’s Strategy Theory

Strategytype

Description Structure

Analyzer • High level of standardization, routinization and mechanization for efficiency• Also flexible in reacting to increased competition and changes in the market

• High Formalization

• Moderately centralized control

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Porter’s Competitive Strategy Differentiation focus strategy

Focused on upper middle class citizens of Chennai

Differentiated itself by emphasizing on high technology, patient-centric centers, high end health care service

Impact on structure Moderately flexible structure Moderate complexity in terms of hierarchy Moderate formalization at higher level Highly formalized, moderately decentralized

decision making at operational level2805/03/23

Industry analyses

“C” category• Highly structured and standardized• Centralized structure

Capital requirements

Product-innovation rates

High

High

Low

low

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Environment

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Specific Environment

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Environmental Uncertainty

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Burns & Stalker Model

Characteristic Structure

Rigid Task Definition Mechanistic

Lateral Communication Organic

High Formalization Mechanistic

Expertise Influence Organic

Centralized Control Mechanistic 3305/03/23

Lawrence and Lorsch Theory Fair collaboration exists Collaboration between the departments

defines the quality of service to the customer

Internal environment varies between departments

matches differentiation and integration activities

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Environment – Structure Relationship

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Technology

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Technology @ Malar Hospital Technology is applicable at all stages:

Input, Conversion and Output Inputs: Skills and Expertise of Personnel,

Softwares like HIS Conversion: Medical equipment and techniques

and Work procedures Output: Infrastructure (Ambulance etc), Periodic

checkups

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Perrow’s Model Few exceptions Many exceptions

Ill Defined

Task Variability

Problem Analyzability

CRAFTCRAFT NON-ROUTINENON-ROUTINE

ENGINEERINGENGINEERINGROUTINEROUTINE

Well Defined

Malar Hospital

Structural Predictions

Low on formalization

High on centralization

Moderately wide on span of control3805/03/23

Thompson’s Model

Transformational Process

Resources A B C D E

Feedback

Output

Inputs

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Intensive Technology Model Form of task interdependence

Reciprocal

Main type of coordination Mutual adjustment

Strategy for reducing uncertainty Specialism and diversity of task activities

Cost of coordination High

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Structural Predictions High Complexity ---37 medical departments leads to high horizontal differentiation

Low Formalization ---Low formalization in the way doctors’ work

Moderate Decentralization ---Financially – Highly Centralized

---Functionally – Moderately Decentralized

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Culture

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Value system Confrontation

Facing, rather than shying away from, problems

Authenticity Congruence between claims and actions

Pro activity Take initiative, pre-plan, take preventive action

Autonomy Use and give freedom to plan and act in one’s

sphere4305/03/23

Collaboration Give and ask for help to and from others

Experimentation Use and encourage innovative approaches to

solve problems

Direction Clear objectives and performance expectations

Management support Managers provide clear communication,

assistance, and support to subordinates

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Control Number of rules and regulations, amount of direct

supervision used to control employee behaviour

Trust Maintain confidentiality of information, integrity in

dealings

Conflict Tolerance Employees are encouraged to air conflicts and

criticisms openly

Reward System Reward allocations are based on employee

performance

Forgiving Nature

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Major Culture changes at Malar Hospital on its inception was positioned as

an elite hospital Changed its positioning as it realised the

acute need for quality health care in the poorer sections of the society

In 2008, Malar hospital was taken over by Fortis group Major decisions were taken by the owning

family and now the board of directors have taken the place.

More patient friendly than before. The look and feel of the hospital underwent a

major change 4605/03/23

Thank you

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