The Nagar Panchayat Hospital provides healthcare services to residents of Vallabh Vidyanagar, Gujarat. It is overseen by the local civic administration and a health committee. The hospital aims to provide medical support, immunization, and prevent disease prevention. However, it faces challenges with sustainability, centralized decision making, and lack of formal systems. A revamped system is proposed, establishing a board to oversee the hospital, recruiting more staff, and allocating surpluses to growth, infrastructure, and community programs to make the hospital more self-sufficient.

1. Nagar Panchayat Hospital
Group 10:
Jis Tom Sunny
Rizwana Gouse
Steeve Irimpan
V. S. Seeja
Vinod C.

2. Panchayat
• Situated in Vallabh Vidyanagar, Gujarat.
• Elections were held once in every five years.
• Elected members were responsible for the civic
amenities of the township.
• Sub-committees of five members to oversee the
day-to-day operations.
• Major source of revenue were from octroi (60%)
• Major source of income from return on
investment, penalties, donations and borrowings.

3. Hospital
• Part of local civic administration.
• Health committee was set up for solving minor
policy issues.
• CMO was in charge of the day-to-day operations.
• Objectives of the hospital
 To provide domiciliary medical support to the residents of
the township.
 To undertake immunization services under the maternal and
child health programme.
 To undertake preventive programmes for checking
outbursts of epidemics.

4. Cont…
• Sources of revenue were through fees and donations.
• Hospital had a total staff of 9 members and was done
centrally.
• The challenge was to make it a self-sustaining unit.
• CMO floated a project for the students of a leading
business school.

5. • Suggestive measures
 Pharmacy division- no proper inventory management
model
 Maternity unit- ensure that the occupancy rate of the
maternity ward is high
 Equipment purchase-investment for equipment should be
sought as a grant either from the Panchayat or from the
state government or from a private donor.
• Implemented these recommendations in right earnest.

6. Growth of the hospital
• Occupancy rate had gone up.
• Hired gynaecologist to visit hospital alternatively.
• Labour room and the operating room for tubectomy were
renovated.
• Investment for an ENT specialist, Sonography unit and ECG
unit
• Upgraded opthalmology division and public awareness
campaigns for population control, family welfare and polio
prevention.
• Revenue from laboratory fees had more than tripled and
the revenue from the sales of medicine had quadrupled,
from around Rs.2.90 lakhs in 1993-94 to Rs.11.57 lakhs in
1998-99.

7. Dispensary Revenue
1600000
1400000
1200000
1000000
800000
Dispensary Revenue
600000
400000
200000
0
1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99

8. Areas of Concern
• Panchayat not ploughing the surplus back into
healthcare.
• Cash donations to hospital going to general pool of
panchayat
• Major decisions are centralized . Eg: Staffing
• Operations now scaled up : Informal measures of CMO
will not provide the required results
• What if the CMO leaves ?? Indicative of lack of proper
system.
• Impressive Growth yet ….fragile foundation system

9. The Key Questions
• Existing System Vs Autonomy
• Profits Vs Service
• Sustainability of the system
• One man show Vs Team Performance
Putting all eggs in one basket?????

10. ANALYSIS
1. 7-S Framework
2. Porters Five Force Framework

11. 7-S Framework
• STRATEGY
Low Cost
Low cost generic medicines
Providing facilities at 50 % of market price

12. • STRUCTURE
Panchayat Members
Health Committee ( 5 members )
Chief Medical Officer
Staff members ( 8 members)

13. • SYSTEM
 Inventory Management System
 Financial System
Deposition of receipts and Release of cheques for
expenses with the Panchayat daily.
Surplus generated going to general pool for cross
subsidization
Cash donations going to Panchayat

14. • STAFFING
 Understaffed
 Centralized
 Informal measures of staffing
 Requirement of staff to be more capable to
meet the increasing hospital demands.
The number of patient registrations has increased
from 12000 in 1993 to 25000 per annum

15. • SKILLS
Medical Skills, Administrative Skills
• STYLE
Autocratic leadership style of the CMO
Non-interference of the Panchayat in hospital
administration
• SHARED VALUES
Providing quality healthcare at an affordable cost.

16. Porters five force model
• Threat of new entrants in the market
Moderate
not low : what if a hospital emphasizing charity comes
not high : capital intensive.
• Bargaining power of buyers
Low income people: low
High income people: high

17. • Bargaining power of suppliers
Low cost medicine : low
Branded medicine : high
• Threat of substitute
Moderate
• Rivalry among existing firms
Low

18. ACTION PLAN

19. • Initiative to be taken by the Panchayat to create a
shareholding pattern for the Hospital.
• Elections conducted among shareholders to elect the
board members.
• CMO on the board as a representative of medical staff.
• Final decisions on policies and administrative matters
to be taken by this board.
• Recruitment of a Secretary to handle daily
administrative duties
• Recruitment of Doctors and Support staff by a panel of
medical practitioners.

20. • Recruitment : One year contract followed by
permanent posting
• Surplus Allocation
10% to Panchayat
30% for infrastructure development in the
hospital
30% for growth (diversification)
20% reach out (awareness) programme
10% for employee welfare

21. • For Revenue generation : Attract patients towards
primary services.
Charges are as follows :
General Consultation : Rs.4
Special Consultation : Rs.10
(Validity of the registration is for 3 weeks only)
Increase in Awareness Programmes and Medical
Campaigns

22. vs
Revamped System
Existing System Team of doctors
Autocratic leadership Better Succession Plan
Workload reduced, Better
High Workload
Salary
No team to support Better Empowerment
him Better Delegation
Need for Better Administration