Malar Hospital Organization Structure & Design Prepared By: Group 5 DoMS, IIT Madras, Batch of 2010 Cotnact: [email_address]

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. 06/07/09

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.

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) 06/07/09

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)

Organizational Life Cycle Formation Growth Maturity Decline Malar Hospital F & C stage Formalization of rules Stable structure Emphasis on efficiency 06/07/09

F & C stage

Formalization of rules

Stable structure

Emphasis on efficiency

Effectiveness 06/07/09

Productivity and profit Net Profit for the year ended 31 th 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 06/07/09

Productivity and profit

Net Profit for the year ended 31 th 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

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 06/07/09

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

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 06/07/09

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

Competing Values Approach Flexibility Organization People Control 06/07/09

Structure 06/07/09

Malar Hospital - Structure Structure can be analyzed on following dimensions Level of complexity Centralization Formalization 06/07/09

Structure can be analyzed on following dimensions

Level of complexity

Centralization

Formalization

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 Zonal Director Head of Departments of all 43 departments Teams under each department Wide span of control 06/07/09

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

Zonal Director

Head of Departments of all 43 departments

Teams under each department

Wide span of control

06/07/09

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 06/07/09

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

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 Consent form for admission 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) 06/07/09

Consent form for admission

Cashless facility form for insured patients

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 06/07/09

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 06/07/09

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

Size 06/07/09

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 06/07/09

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

2 – MR co-ordination 2- Marketing initiatives Nurses Ward Boys Trainees 67 visiting consultants 31 DMOs External Contractors 06/07/09

Impact on Structure Medium-sized but multi-specialty hospital Low Vertical but High Horizontal complexity Moderately formalized No direct impact on centralization 06/07/09

Medium-sized but multi-specialty hospital

Low Vertical but High Horizontal complexity

Moderately formalized

No direct impact on centralization

Strategy 06/07/09

External Threats and Strategy Implemented 06/07/09 External 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 players Addition 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

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) 06/07/09

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)

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 06/07/09

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

Strategy - Structure Relationship (Chandler’s Theory) Time Multi specialty Structure Simple Functional Divisional Low High t t + 2 t + 1 06/07/09

Miles and Snow’s Strategy Theory 06/07/09 Strategy type 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

Miles and Snow’s Strategy Theory

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

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 level 06/07/09

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 level

Industry analyses Capital requirements Product-innovation rates High High Low low 06/07/09 “ C” category Highly structured and standardized Centralized structure

“ C” category

Highly structured and standardized

Centralized structure

Environment 06/07/09

Specific Environment 06/07/09

Environmental Uncertainty 06/07/09

Burns & Stalker Model 06/07/09 Characteristic Structure Rigid Task Definition Mechanistic Lateral Communication Organic High Formalization Mechanistic Expertise Influence Organic Centralized Control Mechanistic

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 06/07/09

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

Environment – Structure Relationship 06/07/09

Technology 06/07/09

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 06/07/09

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

Perrow’s Model Malar Hospital Structural Predictions Low on formalization High on centralization Moderately wide on span of control 06/07/09 Few exceptions Many exceptions Ill Defined Task Variability Problem Analyzability CRAFT NON-ROUTINE ENGINEERING ROUTINE Well Defined

Structural Predictions

Low on formalization

High on centralization

Moderately wide on span of control

Thompson’s Model 06/07/09 Transformational Process Resources A B C D E Feedback Output Inputs

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 06/07/09

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

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 06/07/09

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

Culture 06/07/09

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 sphere 06/07/09

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 sphere

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 06/07/09

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

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 06/07/09

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

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 06/07/09

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

Thank you 06/07/09

Thank you