Healthcare India- Innovation – Access – Growth

Healthcare  in India - innovation - Access - Growth

Healthcare in India – Innovation – Access – Growth

Healthcare  in India seems to finally be coming of age , came  across a  few  very interesting business models , new ventures  , which should ideally solve  for  existing gaps in the market. Thought would share them with you:

The Glocal Story : In a country such as ours  with  a population of 1.23 Billion, where 22% of the  population is below the  poverty line  (Earning less than Rs. 33.3 (urban) and  Rs.27.2 (rural)), the need for  subsidized / low  cost quality healthcare is  quite clearly evident.  To top that about 70% of our population is rural . Two ex  civil servants did see this gaping hole and  decided to fill it. Glocal healthcare established its first 100 bedded secondary care hospital in Sonamukhi , WestBengal in the year 2010, since then 4  more hospitals have been comisioned in 3 and 4 tier  cities. Whats  even more interesting is that  a plan for commissioning  50 more such hospitals over the next 2  years  is in the pipeline. The total bed capacity would be a whooping 5500 once the plan is executed.

That  is insane but why does it work for them because they use  a Basic model which they have tested over the last five years and perfected to some degree and this includes

1) Well defined catchment area a tier 3 or 4 tier city with a  population of 1 lac urban and 5  lac rural

2) Well defined service mix only  secondary care  well defined specialities ( as per the CEO only 42 diseases account for almost 95% of the disease burden in rural areas)

3) Low project cost – An investment  of only Rs. 8 Crores for the comissioning of the entire hospital  including  civil work, equipment and housing for doctors. (Low land cost, no frills, less area, modular approach and  inhouse construction). And a total of 6- 8  months only for completion.

3) Low fixed cost – A Staff of only 100 for the 100 bedded hospital  which includes 12 onroll doctors thus low fixed costs

4) Utilization of resources which a  bigger corporate hospital would shy away from for example local medicos are welcomed into the hospital and  made part of the care giving team .

5)Partnerships for resource development. Training provided by  a partner agency  to nursing aids and technicians thus filling a  gap in terms of manpower scarcity.

I think this would be the gist of the model  and  of-course the main central  proposition of  quality healthcare at 20 – 40% less than the market rate.

Will the model be a success when scalled up is yet to be seen. Though there is a  definite need for such healthcare, however currently the model works because  it is supported by a state government insurance / Cashless healthcare provision scheme . This accounts for 55% of their business.  But atleast its a  refreshing new approach to healthcare.

The DaVita Nephrolife partnership –  According to recent studies around 17% of the  indian urban population suffers from Chronic Kidney Disease.  Dialysis is a  harsh reality for these patients a  regular affair and no matter how  dark it may sound Nephrolife has  been able to see this demand. With a  potential  market size  of $350 million growing at 20 odd  % annually somebody had to get organised. With what started out as a stand alone dialysis centre in Bangalore  in 2009 after their partnership with DaVita and NEA in 2011 has grown to a network of 14 centres in  a short span of 2  years.  Whats special about this partnership is that the partners not only infused funds  in the tune of $25 million but also brought along with them experience  in previous healthcare  projects and for DaVita healthcare specifically experience in their chosen speciality of Nephrology and Dialysis.

The Key to success be flexible ,  partner, see the bigger picture and  focus on the game.

1) Be Flexible – Various formats of basic business model  – Stand alone  Dialysis centres,  Satellite Dialysis centres , Stand alone integrated Kidney care  centres, Box in Box model for tertiary and secondary care hospitals (either  on rental model or as  a JV)

2) Partner  – The flow of funds  helps when establishing such  a capital intensive setup. Per bed cost is estimated at around the $25 – 40000 mark, however returns are  expected at an EBITA of around 20%. And along with that comes the administrative expertise and  knowhow. Local partners further  reduce capital burdens as well as provide stronger local networks.

3) See the Bigger  Picture: The concept with DaVita  Nephrolife is to provide integrated Kidney care services to build a  care network  , not just  Dialysis  but rather  an entire spectrum of care ranging from prevention ,  diagnosis, Dialysis and end stage kidney disease management (Transplant) , be it through their centre or a  partner centre.

4) Focus on  the game  –  whats interesting is that they realise the chronic nature of most kidney disease and the  importance of establishing long lasting relationships. The single  speciality focus also gives them a certain degree of advantage over multispeciality centres which  can at times  be distracted.

Again its  for time to tell whether  these Healthcare ventures  would succeed  in the future. However its nice to see a new approach to Healthcare in India  an approach based around flexibility,  partnerships and real patient needs.

Disclaimer: The views expressed in this  post are my own and  are  not meant to be derogatory  to any institution or organisation. These are just my thoughts and  these are open for further  discussion and  development. Please do comment and  share and  let’s get some universal cognition into this. Thank you for your patience and  tolerance.

Defining your KPI’s – What is your Hospital Measuring ?

KPIs what are you measuring

Ill start with a  Cliche  – “What is not measured is not done”, but  i truly believe  in the power of measurement  and that’s why measuring all that you have envisioned for your hospital becomes critical.  But then how good are our hospitals at measuring?

Before we can really answer that question we need to identify what it is exactly that we our measuring.  I have come across a few discussions which were based entirely around what hospitals should measure and honestly every individual seems to have his / her own response.  Yes there are some basic KPIs such  as  ALOS , Occupancy, Revenue etc that keep cropping up from time to time however  I haven’t really come across a  really well defined KPI directory that you can choose from .  And sadly enough some  rare  managers and administrators that I have come across  are not  even aware of  the  entire  implication that a  particular KPI has  on the  functioning  of the  hospital.

My attempt here is not to define a directory for you but rather to set a direction to our way of thinking about KPIs

So what do hospitals measure?

Our entire KPI classification is based around

 Clinical Quality  – e.g. Medication errors, outcomes, mortality, hospital acquired infection , repeated surgeries, readmissions etc

Operational Quality – e.g. waiting times,  Going  above  estimates, Consultation quality, Discharge times, Admission times etc

Operational efficiency – e.g. ALOS, Volume growth, Cost per bed, Material cost  %, utilization rates, Your basic time motion studies regarding process efficiency etc

Financial health – eg. EBITA, Debtors outstanding, Case mix, Revenue source mix, Cash to debtor’s ratio, Cash flow etc.

This is definitely not all inclusive in terms of KPIs or categories but basically top of the head stuff. I have  also seen people merge Operational quality and efficiency but id rather keep them separated.

Wow that’s quite a lot of things to measure  if you think about it and  we haven’t even quite scratched the surface yet.  How will I keep an eye on the ball when I’m being bombarded with balls? The answer my friend is simple identify what’s important for you

So what is important for you? Prioritise

The KPI dashboard that you are most concerned about is directly related to the level / nature of involvement that you have with the organization.

If you are a C level executive your KPI dashboard might be entirely different from let’s say someone related solely to Operations which might be different from the individual heading Quality. When i say different it doesn’t mean there is no overlap there will be overlaps but functionalities are different.

So a CEO would have some of these things on his / her  mind  –  EBITA , Material Expenditure, Volumes for critical procedures , Case Mix , ALOS, Debtors , Utilization etc.

And then this further would percolate down to departmental levels.  Eg OPD would have different Performance indicators such as waiting times, doctor punctuality, material consumption, Staff attendance, Overtimes, Complains, average consultation times, volumes,  etc .Marketing would have measures  like – call volunmes, sector wise revenue, cost per  customer  acquisition ,  doctor wise  performance, activity vs conversion etc

I would say define your parameters well at the departmental levels to drive true quality and efficiency.

Ideally a C level manager should look at about 30 – 50 selected indicators on a daily basis and then selectively look at indicators from departmental levels which show huge discrepancy from the expected values or unusual results. Focus can also be shifted while working on specific projects. Please note it’s difficult to keep an eye  on 170 parameters so prioritise and reorganize your dashboard  on regular intervals

At the departmental level each department should be encouraged to develop their own KPI bout 20 – 30 against which they measure themselves. Please remember while defining your KPI it’s important to understand why you are measuring it and whether you need to include it, be specific and be selective.  Also VOC (voice of customer) must  be imbibed into your Dashboard structure. Lastly  identify the correct method to measure the KPI you are defining a lot of times time is wasted on goose  chases with either  the  wrong  data or  erroneous  data  collection.


This is the tough part here is where you record, review and correct and this is not only for a particular phenomenon that you  are  measuring  but also your dashboard structure add omit and refine the  dashboard as  you go along. But before  that  i can not stress on the  importance of getting the  message across to your entire hospital team. The  grass root level must understand the  importance of  an entry they make or the data they capture to ensure the quality of data and the  success of the system.

What would be the benefit?

The answer is simple consistent quality service provided with efficiency and accuracy.

HIS / BI Tools

I am certain there are quite a few HIS systems as well as Business Intelligence tools which integrate with your HIS systems to raise alarm and to bring things to your notice. However treat them as tools but don’t be over dependent on them. Because solutions which come in a tin are not necessarily the solutions we need.

Authors note:

My overall experience with KPI mapping in hospitals in India is that we are inept at measurement.  Most hospitals basically follow a basic set of indicators that are commonly predefined and taught in Hospital Management courses, however creative development of newer indicators seems rare.  A problem that is causing this is that management professionals are not necessarily keen at sharing their knowledge,  and the knowledge share which happens is mostly of data which is already out there in the  public domain.  Also as an industry there is a lot to learn from the Manufacturing sector and we must keep our minds open to newer possibilities through cross industrial / sector learning. In the end Collective Cognition is the need of the hour.

Disclaimer: The views expressed in this  post are my own and  are  not meant to be derogatory  to any institution or organisation. These are just my thoughts and  these are open for further  discussion and  development. Please do comment and  share and  let’s get some universal cognition into this. Thank you for your patience and  tolerance.

Value Based Healthcare Delivery

I recently came across this talk by Michael Porter about healthcare that he had delivered at Harvard  Business  School though the  talk was  generally about the healthcare system in the US  however  i felt that  it was quite  relevant  to healthcare  systems in general across the globe.

One  of the  most  important things that he talked about was  Value Creation and  improving the  Value delivery system. But then the question which arises is what is the  true value.  How do we  define Value becomes  critical , is it just patient outcomes , is it cost of delivery , could it be a  generalised figure and  he defines  it quite comprehensively  he says that it the patient health outcomes achieved  relative to the money spent to achieve those outcomes.  Which becomes a  simplified outcomes as numerator and cost as denominator.

This is  quite  a shift  in our existing way of  measuring success  which are either  based around profit maximisation, or Volume  delivered, or  access to healthcare in general. Quality as  it stands currently is  based entirely around the  process definition and  improvement. Be it any guideline we  follow NABH or JCI its  mostly process based. Process improvement  is very important  however outcomes  are  even more important.  And  are we really measuring the  clinical outcomes. If the  system is to improve  then the competition has to move from being profit or  process based to becoming outcome based and then to value creation and thats the  only way we can get a  handle on the spiralling costs of healthcare delivery.

So how do we really shift the  focus to value.

Lets Look at Outcomes outcomes need to defined per  patient and  his / her medical condition. We need to look at survival,  functional status, independence, residual defect / illness. Yes it is an intensive  exercise  but the  results would truly be  enlightening and  a true move towards the  goal  of quality. Define the  Outcome parameters for any surgery / medical treatment that is meted out including survival rates, extension of survival period, dependence of medication etc etc.

Secondly identify your costs. For some strange reason healthcare seems to shy away from a  practice which is so commonly followed in the manufacturing  sector and this is ABC (Activity based Costing ) .For Healthcare i would suggest a  time related Activity based  costing. Whats even more  specific is that it will  be a  patient based time related activity based costing.  We tend to see ourselves as distinct departments and subunits and we tend to do our costings similarly too(that  is if we do our costings). However a  true costing exercise must capture the entire cost related to the  patients  journey through  care  pathways. And through this way we should be able to define  the true value of a  patient outcome. The focus needs to be on the  Outcome , and  existing technology in terms of HIS  systems must integrate these costing parameters  but  the  end result could truly be transformational .

I personally look  forward to a  day where  we will focus on the right performance indicators though that  is a  different post in itself. But  i think this could very well be a move  in the right direction be it for a private hospital, a charitable trust or a  public trust.  Efficiency , effectiveness  both would be  effectively measured and  documented and  true value would lead to better profits / access/ volumes so this is a  win win no matter  which way you take  it.

Here is the  Video if you are  interested , apologies for the poor sound quality.

Disclaimer: The views expressed in this  post are my own and  are  not meant to be derogatory  to any institution or organisation. These are just my thoughts and  these are open for further  discussion and  development. Please do comment and  share and  let’s get some universal cognition into this. Thank you for your patience and  tolerance.

Primary Healthcare in Rural Areas- A collective approach

As awareness is increasing towards health related issues, entrepreneurs & companies are coming forward with various initiatives for providing healthcare services in urban & rural India. Urban landscape is still satisfactory but rural areas are still void of such services.  These Initiatives vary from use of technology like telemedicine to tackling financial issue through rural insurance with microfinance or public-private partnership to setup health centres and many more. But sometime I wonder that what would be chances of setting up a successful rural healthcare model when the efforts are made in isolation keeping specific areas in mind. Is it feasible to apply it across country without understanding what the rural India wants & what is their needs?

I prefer to see the issue from patient’s perspective as what they require from healthcare delivery system. In my view, basic but affordable treatment at appropriate time by an adequately skilled physician is enough for the most of the rural population. For preventing diseases we should also address issues like basic hygiene, malnutrition & sanitation.

Incidence of non-communicable disease is around 35% in rural areas which contribute almost 68% of total Indian population in 2009. NCD anyways require tertiary care with advance intervention but must be diagnosed in early stage to reduce the adverse impact. Major cause of mortality among rural population is communicable diseases which usually require medical treatment not surgical intervention hence a basic infrastructure with proper medication in sufficient.

Then what are the obstacles for providing primary healthcare to rural India? Do we require magic to get it changed? I see it’s a mix of Infrastructure, Financing, cost of care and administrative policies issues. This is combined with absence of people awareness towards their health needs.

We already have an old infrastructure but needs to be expended so that PHC get setup in every small town having mix of doctors from different discipline of medicine (Allopath, Ayurveda, Homeopathy) to have cross discipline plan of care. These PHC to be covered by BLS equipped ambulances stationed strategically and shared between nearby villages. Cluster of PHCs to be supported by secondary care hospital. These PHC & secondary care hospital can be run by private healthcare providers on a contract basis that will give efficiency and effectiveness to the system. Comprehensive system to be setup for collecting, evaluating & monitoring healthcare performance indicators to be setup for future planning & identifying the effectiveness.

There is a need of various awareness campaigns focusing separately on preventive aspect of communicable diseases & life style alterations to prevent non-communicable disease. A nation-wide network of NGOs, healthcare providers should be built for training and developing local resources.

Policy makers should focus on promoting innovation in field of affordable medical consumable, equipment & technology by creating favourable environment for entrepreneurs & investors. Separate tax structure for the doctor and health care workers working in rural area, Conducive environment for pharmaceutical companies supplying in rural areas, tax exemptions for equipment used in rural areas & promoting new comers in healthcare delivery are some of the measures that may inspire service providers to work in rural areas. Healthcare should be priority in the local government’s agenda.

Promoting & structuring medical tourism is important to strengthen private sector financially and make them to lower indigenous pricing by cross subsidization. State sponsored health insurance coverage including medicines and making health insurance as mandatory. NGOs can initiate and create a pool of volunteers willing to support rural family for their healthcare needs by financing their health insurance.

Controlling the cost of care is the most important aspect for continuing primary healthcare delivery model. Now it’s time to realize the power of indigenous medicines system (AYUSH) which is known to most of the rural India. Focusing on preventive medicine & lifestyle improvements, wide use of technology for communication and information sharing and developing resources in local community for spreading awareness can help us to reduce the cost of care. Inventory management system to be developed & run by the private sector including medicine & consumable.

It doesn’t require Magic to create primary healthcare as right to every citizen. It can be achieved by a collective & systemic approach with full commitment. This has to be a joint effort from policy makers, healthcare industry, NGOs and every individual that can make a difference.

Disclaimer: The views expressed in this post are purely the thought of the author and are not meant to be derogatory to any institution or organisation. The author is open to further discussions. Thank you for your patience and tolerance.