SMART HOSPITALS has organized a Round Table Meet at Pune recently which was well attended. Session was about empowering Small Hospitals to pick up early warning signals of Business Stress. We are sharing the News Letter for your information. We spent lot of efforts to conduct the Market Survey and to organise a program to educate the industry. Hope you will like it..... All we need is - FEEDBACK , after all that liking business... Happy Reading !!!

1. O N F I N A N C I A L S W O T & T U R N A R O U N D
S T R AT E G I E S F O R S M A L L & M I D
S I Z E D H O S P I TA L S
A ROUND TABLE MEET
V I S I T E D P U N E O N 4 T H
M A Y 2 0 1 9
@ H O T E L R A M E E G R A N D F O R
www.smarthospitals.events
NEWSLETTER
JULY 2019 | Vol. 01 | Issue 01

2. 2
ABOUT THE PROGRAM
Changing Business Dynamics in the Healthcare Entrepreneurial
ecosystem in the Country is bringing new dimensions to the
way of doing businesses. External environment in the Healthcare
ecosystem in the country is causing many imbalances to the
internal environment inside Hospitals.
Falling revenues, Increasing Expenses, wafer thin margins in
businesses are some key reasons for the Business Stress.
Entrepreneurial fatigue is cited as one of the key reasons for
closing of several small hospitals in the country.
Recent reports about small and mid-sized hospitals closing points
to a growing malady. But this is the segment of hospitals that is
essential for the wellbeing of the society as communities cannot
depend only on large Hospitals.
Hospitals of all sizes are going through turbulence at the moment.
While Hospital owners are resorting to firefighting mode to
address balances on daily basis, they lose sight of the fact that
businesses are getting into distress mode and they lose sight of
these early stage ailments which may choke the system totally at
a later stage.
High time Hospital business owners stay tuned to capturing
the early stage ailments in the business and start focussing on
treating the same in the initial stages itself.
There are ways and means of identifying early warning signals,
arresting the Business Stress from further escalation. The process
of business decline can be identified through various warning
signals that could have contributed to the decline process. These
warning signals are noticed in both the internal and external
business environments.
The Round Table Meet was organized to help Hospital owners
to identify early stage stress in the business and take remedial
action to arrest further damage to the business. Impending stress
for longer time may totally bring the business to a halt and push
them into a total shutdown mode.
The Session had around 50 participants and was attended by
Hospital Owners & Decision makers from various parts of the
country.
The Session had an opening speech by Dr Krishna Shankar, Vice
President, Star Health Insurance. Dr. Sameer Satpute, Regional
Head, Star Health Insurance too participated in the session.
Key Highlights of the Program
SMART SURVEY
Speaker:
Mrs. Rama Venugopal, Executive Director, Value Added
Corporate Services Pvt Ltd, Chennai
Speaker:
Dr Krishna Shankar, Vice President,
Star Health Insurance
Dr Krishna briefed the audience about increasing Insurance
penetration and various initiatives taken by health insurers in
serving the various stakeholders of the healthcare industry. He
also spoke about the Empanelment Process of Star Health and
invited all the Hospitals to participate in Star Health Empanelment
Process.
He has highlighted various industry initiatives done by Star Health
Insurance across India is keen to listen to the voice of the industry
on insurance related matters on regular basis by attending industry
meets.
Mrs Rama Venugopal spoke about how the Smart Hospitals Team
has picked up enough signals listed below, in the marketplace,
over the last 2 years, the business stress faced by Small and Mid-
sized Healthcare facilities.
• Mounting Financial Stress
• Shutdown of Small Hospitals
• Medical Entrepreneurs exiting businesses
• Corporate Brands taking over Small Hospitals for O&M
• Clamping down of Stressed Assets by Bankers
• Medical Practitioners quitting practice citing fatigue, burnout,
lack of motivation, regulatory challenges
To validate what we have observed in the market, Smart Hospitals
Team lead by Mrs Rama Venugopal, Executive Director, Value
Added Corporate Services P Ltd and Dr Aniruddha Chimote,
Director, Hosconnn Consulting Services Pvt Ltd have rolled out
a market survey to capture the voice of the industry by asking
pertinent questions related to :
• Falling Revenues
• Increasing Expenses
• Managing Finances
• Managing day to day Hospital Operations
• Stressful Loan repayments
• Regulatory Environment
• Changing market dynamics - Patient expectations vis-a-vis
their willingness to pay for the Services

3. 3
BUSINESS STRESS: EARLY WARNING SIGNS
Speaker:
Dr. Aniruddha Chimote, Director, Hosconnn
Consulting Services Pvt Ltd, Nasik.
Healthcare is under pressure globally. Many of the problems
that we face are more global than local. Patient expectations are
changing globally, regulations are changing globally, and margins
are under pressure globally.
However, some problems are unique to India. India is a home
to unstructured healthcare. It probably has one of the highest
numbers of small and mid-sized hospitals. Most of these are
single owner driven or owned by a small group of doctors.
Doctors have always been thinking about healing others. They
never realise that the business of healthcare can also become
sick. It is the need of the hour to recognize that healthcare is
afterall a business. And just like any other business it goes through
its cycles of ups and downs. Healthcare was also touted to be a
recession proof business. But there are fundamental differences
between healthcare and other businesses. Firstly, healthcare
is a business of service to the humanity. This human quotient
puts healthcare in a different league. Secondly, healthcare needs
huge Capex on which returns are low and are spread over a long
period of time. The OPEX required is also high given the fact that
hospitals need to maintain a state of “readiness” at all times.
So, staff, equipment and medicines all have to be kept available
irrespective of its frequency of use. Hospitals also need to invest
in continuous training to keep the skill sets and morale in top
shape.
Doctors, while being experts in the medical health of their patients
are poor at diagnosing the sickness in their organisations. For far
too long they feel that low turnouts are a result of a seasonal cycle
and keep ignoring the low revenues. They do not seek timely help
from the experts to prevent this sickness from damaging the core
of their business. The overall situation is complicated by the fact
that there is not set of benchmarks that doctor owners can be
educated upon to identify the stress in their business. So, the
analogy has to be drawn from industrial sickness.
There are four distinct stages of industrial sickness
1. Normal Units: all the functional areas namely; production,
marketing, finance and personnel are normal and efficient,
and the unit is generating profit.
2. Tending Towards Sickness: the net worth of the business is
positive, debt to equity ratio is satisfactory but there is some
initial aberration in the functional areas mentioned above.
There is decline in the profits in the last year and losses are
expected in the current year.
3. Incipient Sickness: Deterioration in the above functional
areas continues, cash losses from the last year are expected
to worsen the current year.
4. Sickness: deterioration expected in the debt-equity ratio in
the current year. The unit’s functional areas have become
inefficient and the cash losses are expected to mount further.
It must be noted that industries do not fall sick overnight rather
the process of failure can take number of years. This implies that
the signs of sickness may be discernible quite early in the life
of an industry. These warning signs in several functional areas
are termed as ‘signals. In fact, the timely identification of various
signals makes the detection of sickness easier. Therefore, the
various signals need to be identified and monitored at an early
stage of sickness.
Here are some early warning signals to watch for.
C-Suite Turn-Over - Well run hospitals don’t have much turn-over
in the C-Suite unless there is a planned retirement, merger or
an acquisition that necessitates it. Instead they have continuity
and consistency in senior level management, strategy, execution
and results. Excessive C-Suite turn-over is usually a sign that
a hospital is not meeting its clinical and/or financial goals and
change is required. It may also be a signal that the institution has
deeper problems that have not yet come to light. Be especially
careful when you see changes at the CEO, COO and CFO level.
Key People Resignations - When key departmental managers
or key employees that have been with the hospital for a long
time leave abruptly it should be a cause for concern. This is
often an early warning that something is amiss and that the key
employees are leaving because they foresee unfavorable results
that will require significant organizational or operational changes.
Lay-Offs- Early Retirement - Every hospital periodically adjusts
it’s clinical and support staffing to meet its current requirements
and net margin goals. Layoffs that exceed 3% of the total number
of employees or repeated layoffs and asking employees to take
early retirement are cause for concern.

4. 4
In-Patient/Out-Patient Volume Drops - Key hospital personnel
can tell you if their inpatient or out-patient volume has dropped.
Look for a drop from the previous quarter and previous year. When
patient volume drops variable expenses must drop immediately or
their will be no operating margin.
Slow Payment - Payments for out-standing invoices have
slowed and are often past-due that is cause for alarm. It’s often
an indication that the hospital does not have enough days of
operating cash on hand or the level is shrinking and as a result
they are conserving their existing cash by not paying their
suppliers on time.
Bond Ratings Decreased (NFPs) - If a hospital is not meeting its
financial obligations it can face a credit downgrade. This makes
it more difficult to get additional credit to meet its short-term
financial obligations as well as obtain funds for capital equipment,
renovation or new construction.
Quality Scores are below average or accreditation issues -
When good employees leave it leaves a vacuum in training and
competency of the remaining employees. Quality is the first
parameter to take a hit. And the news of low-quality travels fast.
If accreditation is due for renewal, then issues can crop up during
the process and hospitals may lose their accreditations altogether.
Negative publicity causes negative public perception resulting in
lower patient volumes and additional financial problems.
Market Share Decreases - lower footfalls, patients preferring
other hospitals eventually ends up in reduction of market share.
Partnerships/Alliances Being Explored - It is not uncommon for
a stand-alone community hospital to seek a partnership, alliance,
merger or acquisition to stay afloat and be able to raise cash to
meet its cash and capital requirements.
Doctors need to understand what a business ‘S’ curve means.
Any business typically goes through a curve that resembles the
English alphabet S. There are typically four phases of a business;
The start-up phase of infancy where the business is just being
set-up and begins operations, an expansion phase or a growth
phase where the organization actually starts earning money, the
phase of maturity where the revenues are at its peak and an
eventual phase of decline where things start slowing down and
eventually stop.
The decline is inevitable unless businesses can reinvent
themselves in time. Making a commitment to reinvention doesn’t
come naturally because the revenues are surging, and the profits
are robust. But what is happening is that long before the revenues
hit the peak the competition on which the whole business model
was based has expired. If business owners can keep that in
sight and reinvent their models, then they can flip the curve and
get into a second growth phase. Business owners must come
up with their own Blue Ocean Strategic moves to reinvent their
businesses.
Predictive Indicators & Navigating Turbulence
Speaker:
Speaker: Mr. R. Venkatakrishnan, FCA, Founder
& Partner, RVKS Associates Practicing Chartered
Accountant, Chennai
The world is in a midst of VUCA world were Volatility, Uncertainty,
Complexity & Ambiguity are the new normal of every business.
The healthcare Industry is no exception and it is imperative that
they recognize that it is critical for healthcare organizations need
to be ahead of the curve, if it wants to be in a position to deal with
the various uncertainties that prevails in the system. It is not just
external competition from other healthcare organizations but a
whole host of other sources external to industry from Technology,
Government Regulations, Social pressure, Social Media pressure
to name a few.
In such an environment, it is therefore very important that
healthcare organizations equip themselves to deal with the
pressures and stress that exist in the system. These are only
going to increase as the time goes by and it is not going to be
going away in a tearing hurry. In such a situation, monitoring the
performance of the organizations or the pressure points that are
building up have to be chosen in a manner that is reflective of the
whole organizational performance and should not be restricted
only to a couple of parameters. Additionally, it is important that
these are predictive parameters not just in one functional area
but it should encompass a more balanced comprising of not just
financial but covers market, customer, process, quality related,
including human resources with learning & development. The
metrics that are chosen should be such that they are a mix of
both lead indicators as well as lag indicators. Lag indicators are
essentially those indicators that represent performance after the
event is complete or after the activity is completed. However,
there are some lead indicators or pointers that would represent
the flow of the organizations performance and would represent
early warning signals. For example, if you take into consideration,
if a hospital one of the lead indicators would be the number of
out- patients as that would be a key driver for In- patients. It is not
necessary to exactly define every lead indicator, and these would
have to be carefully chosen in the context of every organization
to ensure that they represent the true drivers of organizational
performance.

5. 5
Navigating Turbulence To navigate such an uncertain or turbulent
time, it is critical that every healthcare organization, specifically
the small & medium ones, should start thinking ahead of times.
One of the biggest advantages of these smaller establishment
is that they are driven by the passion of the owners and are
therefore more agile to take decisions dynamically as and when
the situations demands.
Every organization in such an environment has therefor to put the
customer, in this case the patient or their family at the center
of the universe. It needs to move away from a situation, where
the patient has to go to many healthcare organizations to resolve
an issue or an ailment, which in management parlance would be
referredtoas“onetomany”.Nowwiththepatientareatthecenter
of the universe, we need to shift inward this from one to many,
to, many to one. If many establishments now re-focus working
within themselves on the betterment & well-being of the patients,
the patient experience would significantly enhance creating
better loyalties and referrals. Time has come for this smaller
healthcare organizations to collaborate amongst themselves to
make themselves a one stop solution for the patients. This is akin
to a multispecialty hospital without having to go through all the
challenges and the size that it demands. Retaining the advantages
of being small but at the same time facilitating the provision of all
services to the patient with the same amount of flexibility, would
require a collaborative approach. The collaborations need not be
necessarily only on operational issues, but it can be on support
areas like Technology, Human resources, Operating leases of
equipments, purchasing to get better discounts and so on so
forth. To a large extent, the opportunities in collaborating amongst
the healthcare organizations is going to be dependent only on the
imagination that we can bring to the table.
Later, at a most strategic level, it is impossible to examine into
more regular partnerships, merges acquisitions or the like but
that is not necessarily the only solution or the necessary solution
to deal with turbulence. There are huge advantages in retaining
the nimbleness and flexibility that comes along with smaller
organizations and every opportunity should be examined to ensure
if these are all exhausted before going to more complicated or
complex solutions to deal with the turbulence that we are going
to be confronted with.
A decade ago, due to a lack of high-class healthcare facilities,
the affording class in Udaipur, Rajasthan, preferred to go to
Ahmedabad, Gujarat, whether it was for Cardiac, Neuro or
Oncology ailments or joint replacements. The Government-
run Rabindra Nath Tagore Medical College catered to the non-
affording class. To curb this outflow, many private hospitals
sprung up in the last couple of years- like Pacific Medical College
Hospital, The Ananta Institute of Medical Sciences & Research
Centre, Geetanjali Medical College and Hospital, GBH American
Hospital and a mega corporate brand with Fortis Healthcare’s tie-
up with the JK Group.
The city had a supply well over the demand with bed strength
of over 9,000 for a population of around 4.5 lakh in the city and
another 5 lakh in the periphery. Of the 9,000 beds, around 5,000
beds are in the 6 medical college hospitals – 1 government and 5
private colleges. Around 67% of Rajasthan’s population is covered
under Bhamashah Swasthya Bima Yojana, a State Govt. health
scheme that enables cashless medical treatment to in-patients.
Under this scheme the non-affording class began availing free
treatments at the centers that were empanelled under the
scheme.
Over time, institutes began reeling under the pressure of financial
crisis and stringent regulations. One institute to have stood out of
the turmoil, braved the rough weather and emerge as a center for
excellence and a self-sustainable project was Udaipur’s Geetanjali
Medical College and Hospital (GMCH).
He was the CEO, GMCH then and this story narrates about how he
brought around this turnaround process.
Challenges
In spite of the grand infrastructure and cutting-edge technology,
the hospital was not self-sustainable till 2016. The major reasons
were low occupancy rate, OPD footfall, revenue leakage and lack
of benchmarked services. For GMCH, 50% of its patients are
covered under the state Govt. Bhamashah scheme and another
25% fall under various corporate and TPAs. Just 25% of the
patient pool is the paying type.
The Turnaround process
Dr. Kishor Pujari took charge as CEO of GMCH in July 2016. He
came from a hospital management background having worked
both in India and overseas. He was entrusted the herculean
task of turning around the hospital, making it into a center of
excellence of highest clinical standards. With the leadership
of Ankit Agarwal, Executive Director, Dr Kishor Pujari designed
strategies for revenue upscaling, cost optimization and building a
roadmap for high quality clinical care.
Institute: Geetanjali Medical College and Hospital (GMCH)
Established in: 2008
Type: Super specialty tertiary care teaching hospital
Bed strength: 1150 beds
Campus: 35 acres
Student intake: 150 MBBS, 105 PG, 2 DM Neurology
Accreditation: NABH 4th edition, March 2018
TURNAROUND STRATEGY – WHAT DID I DO
IN MY PREVIOUS ORGANIZATION ?
Speaker:
Speaker: Dr. Kishor Pujari C00, Ruby Hall Clinic, Pune

6. 6
Industry Partner’s Session - Johnson &
Johnson
Speaker:
Speaker: Mr. Vivek Suryawanshi, Area Sales
Manager – West, Johnson & Johnson
To illustrate the evolution process stepwise:
• Curtailing manpower cost – resources were analyzed and
classified into 3 categories namely absolutely required,
required and not required. These included doctors, nurses,
ward boys, administrative staff and housekeeping. The not
required category was done away with. With this the 2,400
strong workforce shrunk by around 9% thereby reducing the
manpower cost by around 7%.
• Streamlining departments and processes – it was
found that long queues at registration desks, diagnostics
and pharmacy often drove patients away to other centers.
Patient management system was given a face-lift. Token
system was introduced, three more pharmacies were
opened so with this there was a pharmacy on each floor.
Patient waiting time was drastically decreased and they felt
more comfortable with the conveniences.
• Trimming down cost of operations – a team was formed to
look into reducing the cost of consumables by renegotiating
better rates with the vendors. In laboratory services, it
renegotiated all previous rental contracts for lower and
better rates.
• Plugging revenue leakages – pilferages were stopped,
appropriate measures were taken to check agents who
stood around the emergency entrance just to woo away
patients to other hospitals, material management system
was strengthened and it was make mandatory for all
consumables, drugs and inventory to be entered in the
system before dispatch and use. This tightened control on
wastage.
• Boosting revenue – since GMCH saw both paying and
non-paying patients, to ensure that paying patients also felt
comfortable and had an overall good experience, a separate
and modern block with OP & IP facilities with luxury and
super luxury rooms was constructed for them. A corporate
management was put in charge of this wing.
• Clinical excellence initiatives - Health care service was
standardized throughout the process from entry to exit,
protocols were laid down at every patient touch points,
teams started to measure key quality indicators that helped
monitor the clinical process and outcomes in all areas.
Periodic reports were submitted to the management based
on which strategy changes were formulated.
• Focus on revenue driver - the management revised the
tariff of multiple services and focused on the super-specialty
services that generated major revenues like cardiac sciences,
oncology, onco-surgery radiation, neuro-sciences, nephro-
urology, IVF and others. Targeted marketing was done.
These steps brought great results. OPD footfall shot up to around
1,100 per day and bed occupancy went up to around 800.
Revenue increased by 35% in the last two years.
In March 2018, GMCH received the full accreditation (4th Edition)
by National Accreditation Board for Hospitals and Healthcare
(NABH) making GMCH the first medical college and large teaching
hospital to be NABH accredited in the state of Rajasthan.
Lessons learnt
A medical institute with robust infrastructure, manpower and
technology could become unprofitable. Reasons range from
oversaturated market to the institute’s lack of Professional
Management.
Adopting measures to stop revenue leakages and focus on cost
optimization highlighted the evolution of this 1,150-bed medical
college hospital towards being a self-sustainable project. Dr.
Kishor Pujari and his team’s acumen and versatility have made
GMCH a role model for others.
Today hospitals are increasingly under pressure to rationalize costs
and improve revenue. It has become essential for hospitals to use
technology that can help them achieve this. We understand the
needs of hospitals and offer them a solution that can reduce their
instrument reprocessing time and instrument repair cost thus
helping them improve their OT turnaround. This helps hospitals
in increasing the surgeries that can be performed with existing
resources. Our STERRAD gas plasma sterilizer is the latest in low
temperature instrument sterilization technology.
Early Stage Business ailments in Hospitals are
Treatable
Entrepreneurs must constantly look out for early stage
disturbances to the business, which in turn may lead to severe
ailments, if not detected and treated early.
Small and mid sized Hospitals can seek the help of Professionals
to conduct a Business Health Check - Diagnostic Study of the
business to identify early warning signs to sickness and focus on
prevention to arrest late stage sickness.
Conclusion Note

7. www.smarthospitals.events
Smart Hospitals Social Media Handles