The Indian Healthcare Industry is growing at 15% per annum. Due to low industry maturity, it faces an uphill task in terms of Human Capital & Leadership
Leadership & Human Capital Development In Healthcare People Hosp Orchid Dr Dev Taneja Aug2012
1. Leadership & Human Capital Development in
Healthcare - Issues & Challenges
People Hosp
Hotel Orchid, Mumbai. 29th Aug 2012
Dr Dev Taneja
M.S.(Gen.Surgery)
MBA – Healthcare Mgt. (NUS Business School, Singapore)
Director
TachRoyal Healthcare Consultancy Services
Navi Mumbai
2. Our Service Offerings
Strategic Business Healthcare & Hospital Leadership & Human
Consulting Planning Capital Development
• Planning & Positioning • Formation Reports • HR Strategy & OD
• Marketing Strategy • Commissioning • Leadership &
• Balanced Score Card • Roll Out & Stabilisation Management
• Facility Up gradation Development
• Expansion • Training & HC
Development
Performance Quality & Service
IT in Health
Improvement Excellence
• Performance – Clinical, • HIS • NABH / NABL
Operations & Finance • ERP • JCI
• Utilisation Reviews & • Business Intelligence / • Service Excellence
Trend Analysis Health Analytics Culture
• Human Capital Review • State / National Health
• BPR / Change Mgt. Information Network
(SHIN / NHIN) for Public
Health
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3. Indian Healthcare Sector
The Indian Healthcare sector is growing at 16 % per
annum and is worth about $ 45 billion
(PE pulse on Healthcare & Life Sciences, Venture
Intelligence Report. July 2009)
FICCI – E & Y Report
CII – Mckinksey Report
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4. The Healthcare Environment in India
The General Environment The Healthcare Environment
• Low Public Health Spend • Health Ins. CAGR 35 %
• Strong GDP Growth • Hospitals CAGR 12 to 15 %
• Per Capital Income - > $ 1000 • Non hospital based HC segment – 70 %
• Rapid Urbanization 30 to 50 • Major Players –Tertiary Care Focus
• Rapid Industrialization • No Strong Player – Secondary Care
• 100 % FDI in HC sector • Uptrend in Life Style Diseases
• Tax Incentives against • No Major Player – Providing Integrated
investments in hospitals HC services in HC Value chain
• Literacy is increasing • Shortage of Hospital beds
• Growing Health Awareness • Accreditation – NABH, JCI
• Informed Consumer demands
“ NOT ONLY CURE BUT CARE AS WELL”
• Increasing Ability to Pay
• HC has become a viable business
• Limited No. of National / Regional Players
• Low Industry Maturity
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5. The Hospital Business Groups in India
National Level - Apollo Hospitals
- Fortis Hospitals
Regional - Max Healthcare
- Care Hospital
- Manipal Healthcare
Newer Capital Light HC Models
- Vasan Eye Care
- Nova Medical Centers etc.
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6. The HCO Value Chain
S
E PRE- SERVICE POINT-OF-SERVICE
AFTER-SERVICE
R
Market/Marketing Research Clinical Operations
V Follow up
I Target Market Quality
Clinical
C
Services offered/Branding Process Innovation
E Marketing
Pricing Marketing
Billing
D
Promotion Patient Satisfaction
E Follow on
L Distribution/Logistics Product Development
Clinical
I Market Development
V Marketing
E Penetration
R Enhancement
Y
Differentiation
S
U
P ORGANISATIONAL CULTURE
P Shared Assumptions Shared Values Behavioral Norms
O
R
T
ORGANISATIONAL STRUCTURE
S Function Division Matrix
E
R
V
I STRATEGIC RESOURCES
C Financial Human Information Technology
E
S TachRoyal Healthcare Consulting Services 6
7. Strategic Resources
Healthcare will emerge as one of the larger sector
providing employment in India
Human Resource requirements change depends
on whether the organisation is expanding,
contracting, or maintaining scope
Either you have to impart training or recruit
people with newer skill sets
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11. Dr Dev Taneja’s SPM Model
BALANCED GROWTH OF HOSPITAL (S)
ERP
Building
Tools &
Training
Equipments SYSTEM REPORTS
SOP
Structure Process Manpower
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12. Emerging Challenges in the
Healthcare Sector
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13. Evolution of Health Financing in India
• Financial Risk with Patients
1986 • Seller (Health Provider - Hospital) Power High
Out of Pocket • Low Buyer (Patient) Power. Forced to buy services
per Sellers inflated Tariffs
Introduction • Financial Risk with Health Insurance Cos
• Seller(Provider) Power remained High
of Health • Hospitals worked on Cost Plus Models leading to
high payouts by Insurance Cos there by threatening
Insurance health insurance industries viability
• Health insurance Buyer (Payer) Power has increased
• Fixed Tariff to qualify as Preferred Provider Network
Pro Active Partner
2010
Health Ins. Cos • Majority of Hospitals after initial resistance signed
Fixed Tariff Rate List of Insurance Industry (GIPSA)
• Financial Risk shifted to Providers (Hospitals)
13
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14. Existing Healthcare - Cost Plus Model
• Being Effective was enough
• No Costing Challenges for business viability
• Hidden inefficiencies in hospitals
• HIS – Mostly Transaction oriented
• Performance Improvement – Patchy. Limited Enterprise Focus
Emerging Healthcare - At Cost Model
• Not only Effective but Efficient as well
• Service line Costing – Financial Discipline for business viability
• Empowered & Engaged Employees
• Clinical Quality & Service Excellence
• Strategic Application of IT for Performance Improvement
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16. Highest PE Investment in Healthcare – Jan to June 2012 is USD 749 millions
( Care H – 110m, DM H – 100m, Vasan EC – 100m, Specialty H – 77m,
Super Religare – 66m & Nova Medical Centres – 54m)
( IT & ITES – 601m, BFSI – 501m, Energy – 414m, Manufacturing – 156m)
Source: PwC Venture Intelligence Report Data. ET, Mumbai 24thAug 2012
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17. Investment Returns – Based on Involvement of Fund Managers
Active Passive
• Involved in Management • Passive Patient Investors
• Involve Partners with rich industry • Don’t involve industry experts in the
experience team
• Ramp up the business model • Get involved once signs of financial
• Improve valuations distress or erosion of value becomes
• Exit with superior returns apparent
• Later the new found activism by the
fund managers is not appreciated by
• Examples In Healthcare
the promoters leading to acrimonious
1. Hospital Corporation of America,
relations
USA – KKR, Bain Capital, Merill Lynch
2. Parkway Health, Singapore - • Exit with sub-optimal or even negative
Texas Pacific Group (TPG) returns
• Common experience in India with
investments in Healthcare vertical
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18. Post Investment – Investor Pain Points vis-a-vis Promoters
• Str. Alignment - Mission, Vision, Goals, Positioning & Branding
Strategic Focus • Reactive / Ad Hoc Decision making
• Don’t appreciate the challenges of the scaled up business model
• Weak organisational Culture, Values & Governance
Leadership & Governance • Inability to attract & retain talented professional managers & other manpower
• Low organisational maturity and Weak Org. Support Structure
Systems & Processes • Effectiveness Vs Efficiency – Clinical, Operational & Financial
• Limited Project Mgt. Skills – Project delays leading to time & cost over runs
• Limited use of IT for improving productivity, monitoring & control and
IT in Health decision making
• HIS systems capture only transactional data. No ERP / BI
Clinical outcomes & • Accreditation Reactive. Clinical Quality Outcomes not benchmarked
• No strategic development of Organisational Service Culture
Services Excellence
• Promoters don’t appreciate the investor’s concerns for superior value
Variance in Promoter & creation and time bound exit concerns
Investor Expectations • Post M & A integration issues - Culture, Systems & Processes, HR etc.
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20. Hospital Cost Structure
Hospital Cost Structure EBITDA Margin
17.7%
15.9%
Operating Margin
5.4%
6.1%
22.6%
10.6%
1.5%
13.0%
7.1%
EBITDA Labor Expenses & salaries M arketing & PR
M aintenance Pharmacy Consumables
Utilities Administrative expenses Doctors Share
All figures as a % of Gross Hospital Revenue
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Source: E & Y
21. Human Resources: Synopsis
Human Resources Spectrum in a Hospital
Technicians Nurses Doctors Management Others
Human capital is the fulcrum of healthcare services. The Indian tertiary healthcare segment, like many other service
industries in the country, is faced with acute manpower shortages. The industry faces shortage of:
– Management cadre
– Doctors
– Nurses
– Technicians to support various services
Gap in nurses (2012)
Manpower crunch is particularly felt in the availability of
3,000,000
qualified nursing staff. It is pertinent to note that globally there is
2,400,000
a shortage of trained nursing staff. An Ernst & Young study states 2,500,000
that the country will be short of 12 Lakh nurses by 2012, if a
1,260,000
2,000,000
target of 2 nurses per doctor is to be achieved.
1,500,000
1,133,826
929,826
As hospitals belong to the service industry, poor quality of 1,000,000
services in terms of poor nurse to patient ratio, ineffective 500,000
management or doctors shortage will directly impact revenues. -
2006 2012 (E) Dem and (2012)
2
1
Source: E & Y
22. Human Resources: HR Practices
Gap in Doctors (2012)
A significant number of trained manpower, particularly
463,000
1,400,000
nurses, are leaving India for better career prospects. We 1,200,000
1,200,000
believe the high attrition maybe due to: 1,000,000
800,000 736,915
•Lower domestic compensation levels 600,000
592,915
•Poor HR practices in Indian hospitals 400,000
200,000
Therefore, it is imperative for hospitals to take urgent steps -
2006 2012 (E) Demand (2012)
to improve their internal HR practices and increase the HR
personnel to hospital staff ratio.
250
Further, in professionalising hospital management, there is
Number of employees per HR
200
an urgent need to create a larger cadre of healthcare
195
management professionals. Management by trained 150
person
professionals will cause the necessary shift from doctor-led 150
134
practice to service-centric management. 100
50
0
80-140 141-220 221-400
Number of hospital beds
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Source: E & Y
23. Human Resources: Qualification
Availability of fully qualified nurses The average percentage of fully qualified nurses is
31%.
Hospitals hire four different cadres of nurses: According to the defined parameters, only nurses
• Nurse Trainees: Unqualified “nurses”, trained on with GNM or higher qualification are allowed to
the job practice in tertiary care hospitals in urban India.
• ANM (Auxiliary Nurse & Midwife): Allowed to Coupled with serious shortage forecasted (shortage of
practice only in rural, under-served areas 12 lakh by 2012) and their migration to foreign
• GNM (General Nurse & Midwife): Qualified & countries exacerbated by a global shortage of nursing
allowed to practice professionals, this could seriously jeopardize growth
• B.Sc Nursing: Qualified & allowed to practice & of the healthcare industry
teach
• M.Sc Nursing: Qualified nursing instructor
31%
69%
Qualified nurses "Unqualified" nurses
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Source: E & Y
24. Human Resources: Attrition
Attrition of nursing staff The attrition rate of nurses across the hospitals is on an
average 15% per year
.06%
Best The attrition of nurses is a major cause of concern for the
hospitals. The rate of attrition for trained ICU nurses is even
14.17% higher.
15%
Median Average The possible reasons being:
Hospital nurses perceive problems related to understaffing
which effects the quality of care patients receive.
Worst
40% Nurses leave because of better salaries offered abroad.
High patient to nurse staffing ratio leading to nurse
burnout.
High patient to nurse staffing ratios are associated with
higher mortality rates, greater incidence of medical
complications and errors resulting in poor job satisfaction.
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Source: E & Y
26. Human Resources: ICU Care
A good surrogate measure for the quality The median number of nurses per bed in the ICU is 1.
of ICU care is the nurses to bed ratio.
The median number of nurses per ICU bed in India is 1.
Several hospitals are below this figure as well. The
recommended standard is to employ 2 nurses per bed in
an ICU, as outlined by the ISCCM (Indian Society for
Critical Care Medicine).
Nurses per ICU bed The nursing patient ratio and the total number of nursing
staff required by each unit depends on many variables. An
2
artificially ventilated patient needs at least one nurse at
1.6 the bedside at all times. A ventilated patient with more
1.2
intricate support, such as, dialysis and inotropic support
may need two nurses.
0.8
Considering the importance of an ICU to any hospital’s
0.4 growth strategy, as pointed out in earlier sections of our
0
study, and to provide a satisfactory patient experience,
1 2 3 4 5 6 7 8 9 10 11 12 13 hospitals need to give due emphasis to this area.
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Source: E & Y
27. Human Resources: Management
HR department plays a crucial role The median ratio of total employees: HR personnel is 180:1
in retaining certain employee
groups in hospitals. The recommended HR : employee ratio in other service industries is
between 80-100.
Our interaction with hospitals has shown that
poor emphasis on HR has led to low levels of
250
job satisfaction in the industry.
Number of employees per HR
200 The relatively high attrition rates (in the vicinity of 15-20%) for
195 nurses may be attributable to the same. Attrition amongst doctors,
150
which also tends to be high, may also be partly attributable to the
person
150
100
134 same, although there are other important factors, namely
educational cycles and higher salaries elsewhere, which also come
50 into play.
Apart from controlling attrition, HR plays a major role in;
0
80-140 141-220 221-400 • Talent Acquisition / Management
Number of hospital beds
• Performance Management
• Reward Management
• Personnel Development
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Source: E & Y
28. Chapter Standards Objective
elements
AAC 15 78
COP 18 105
MOM 13 61
PRE 5 30
HIC 9 46
CQI 6 39
ROM 5 25
FMS 9 43
NABH HRM 13 47
IMS 7 41
TOTAL 100
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29. Healthcare Manpower - Fresh Talent
Like fresh Engineering graduates, majority of them are not
adequately trained for employment
They need training at the induction level
Failure to have solid induction program leads to variation in
- Clinical Quality
- Service Standards
Even existing employees require periodic assessment, skill up
gradation & training
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30. Credentialing & Governing Bodies
in Healthcare Sector
Except for doctors, nurses & para-medics there is no
credentialing / Licensing available for other employees in the
healthcare sector
We don’t have well developed National Level Professional
Governing bodies for other employees in the healthcare
sector
e.g. 1) ACHE & FACHE for hospital Administrators
2) IT - CPHIMS
3) Finance - CHFP
4) HR - ASHHRA
We don’t have Organised forum’s to interact and learn from
each others – Random events like People Hosp do take place
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33. Competitive Organisation Posturing
Strategically - REACTOR POSTURE
Reactor’s do not have a strategy or plan and are inconsistent & unstable in their
response to environment changes
They lack consistent approaches to strategy & structure unlike proactive strategies of
Defender, Prospector & Analyser
Such organisation’s are without a clear strategy or have a mismatch between strategy
& implementation.
Evidence suggests that reactors are able to hone their competencies and transform
themselves into more viable postures
Understanding the organisation’s preferred strategic posture & communicating it
throughout organisation provides decision guidelines & it will also help to shape the
culture of the organisation
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34. THREE MAJOR REASONS THAT ORGANISATIONS
BECOME REACTORS
1. Top management may not have clearly articulated the
organisation’s strategy
2. Management does not fully shape the organisation’s structure
& processes to fit a chosen strategy
3. Management tends to maintain organisation’s current
strategy - structure relationship despite overwhelming
environmental changes
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35. Service Excellence
A Differentiation & Competitive Factor
Healthcare is a Service Industry Service Culture
Service Excellence is a good Needs to be built across the
business strategy organisation
Patients today want “NOT ONLY Involves training and
CURE BUT CARE AS WELL“ standardisation of service
delivery practices
Strong Customer experiences
Its not one time exercise but a
improves goodwill, demand & continues process
utilisation of hospital services
Requires continuous
Directed towards both external & measurement and control
internal customers Its time consuming hence
Improves employee self esteem & involving consultants optimises
productivity outcomes
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36. Personal Experience With Service Excellence
Implementation
Total Employees – 403
(Excluding Doctors)
Nos.
Less than 10th Std. 98 24%
12th & Diploma Holders 138 34%
Graduates 145 36%
Postgraduates 22 5%
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37. To Assess Initial Employees Soft Skills capabilities
HOD / In charge Level Survey was conducted
Confidence Inter-Personal Skills
Time Management Information
Leadership Management Skills
Communication Patient Focus
Empathy Planning &
Organisation
Attitude
Innovativeness
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38. Initial HOD Soft Skill Assessment
Activity A B C
High Patient Interaction - Clinical 58% 26% 16%
High Patient Interaction - Non Clinical 30% 53% 17%
High Patient Interaction - Average 44% 40% 16%
No Patient Interaction 58% 32% 10%
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39. What is taught in Hospitality sector?
Building Service Culture 12 Hrs
Behaviour 6 Hrs
Communication 6 Hrs
Personality Development 9 Hrs
Grooming 10 Hrs
Scenarios - Hotel Industry 50 Hrs
Grievance Handling 10 Hrs
Satisfying Customer Needs 10 Hrs
Motivation / Leadership 6 Hrs
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Note: This is done over a period of 6 to 9 months
40. Leadership & Human Capital Development
How mature Healthcare Organisations are
dealing with them?
Per HCO’s Mission & Vision
They have their Strategic HR planning in place
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52. Team TachRoyal – A Group of Senior Healthcare Industry Professionals & Partners
Dr Dev Taneja
Founder & Director
• M.S.(Gen.Surgery)
• MBA – Healthcare Mgt. (NUS Business School, Singapore)
• Ex – COO, Global Hospitals
• Ex – VP – Planning, Systems & Strategy, Sevenhills Hospital, Mumbai
• Ex – Healthcare Executive , Parkway Health, Singapore
Mr. Pradeep Bapat
Director – Leadership & Human Capital Development
• Masters in HR
• Certifications in my SAP ECC 6.0 in HR, Change Mgt. & Employee Engagement
• Over 25 yrs of Industry Experience
• Ex – VP – Human Resources, Sevenhills Hospital, Mumbai
53. Contact Info:
Dr Dev Taneja
M.S. (Gen.Surgery),
MBA – Healthcare Mgt. (National University of Singapore)
701, Viceroy Park
Plot No. 53, Sector 44A
Seawoods Darave, Nerul (W).
Navi Mumbai. 400706
Cell: +91- 9987708685
E-mail: drdevtaneja@tachroyalhcs.com
drdevtaneja@gmail.com
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