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THE HEALTHCARE INDUSTRY IN
INDIA
B Y-
S H A M I K B I S WA S
P. S A I S W E TA
TO N Y A U G U S T I N E
M E H U L P U J A R I
S H I VA M S O D H I
A J AY U PA D H YAY
INDUSTRY ANALYSIS
ON
INTRODUCTION
 India has embarked on a journey of healthcare
system transformation
 Growth in the next decade is going to be closely
linked to the nature and the extent of reform
 The Indian healthcare industry is expected to evolve
substantially over the next decade, along with the
country to make great progress towards achieving it’s
long-term healthcare vision
SCENARIO IN INDIA
Source: Central Bureau of Health Intelligence, 2005 and 2010. McKinsey Analysis
Source: Central Bureau of Health Intelligence, 2005 and 2010. McKinsey Analysis
Source: World Health Organization, Global Health Expenditure database
A Conceptual Framework for Innovation in Healthcare
E S T A B L I S H E D - 1 9 7 5
N U M B E R O F B E D S - 1 3 5 0
N U M B E R O F S P E C I A L T Y S E R V I C E S - 1 5
N U M B E R O F S U P E R S P E C I A L T Y S E R V I C E S -
2 0
N U M B E R O F S T A F F - 2 0 0 7
N U M B E R O F M E D I C A L P E R S O N N E L - 4 4 0
N U M B E R O F N U R S I N G P E R S O N N E L – 9 5 0
D A I L Y A V E R A G E O U T P A T I E N T S - 1 8 5 0
D A I L Y A V E R A G E A D M I S S I O N S - 1 4 8
St. John’s Medical College
Hospital
SERVICE TRIANGLE
 COMPANY(HOSPITAL)
PROVIDER( DOCTOR) CUSTOMER(PATIENT)
7P’S IN A HOSPITAL
 PRODUCT
In order to provide effective and reliable services, the
hospital is fully equiped with various facilities.
The facilities in St. Johns Hospital are
 Essential medical facilities like x- ray and ultra
sound are available in hospital premises.
 There are 4 O.T and 2 labour O.T available .
 There are 11 bed ICU and % bed NICU.
 PLACE
Under hospital marketing, distribution of medicare
services plays a crucial role. In case of hospitals the
location of hospital plays a very important role.
 Avoid inconvinience
 Adequate transport and communication facilities
 Avoid congestion
 PROMOTION
Hospitals for promotion use either advertisement or
PR or both after taking into consideration the target
customers, media type, budget and the sales
promotion.
PROMOTION PERSONAL
TECHNIQUES IMPERSONAL
 PRICE
 Super deluxe class:
AC single occupancy with modern amenities and utmost
ambience
 Private class: 2900rs per night
Two patients in a room with decent facilities like washroom and
sofas, etc.
 Cubical class:
It’s a 4 and 6 beded partitioned room with open balcony and
supervision of skilled staff.
 General class:
It is a non ac room with no partition between different patients.
Its accommodation charges are comparatively very less.
 PEOPLE
It includes the doctors, nurses, supporting staff, patients,
etc.
The people in St. Johns hospital are constantly motivated
to give the best of their effort.
 By providing regular on the job training of employees to
ensure continuous improvement in health care.
 Utilizing services of professionally medical consultants.
 Use of the latest technology.
 PROCESS
Process generally forms the different tasks that are
performed by the hospital. The process factor is mainly
dependent on the size of the hospital and kind of
service it is offering. There are 2 different types of
processes:
Outpatient
Inpatient
 PHYSICAL EVIDENCE
It is the environment in which the service is delivered
with physical or tangible commodities and where the
hospital and the customer interacts. It does play an
important role in health care services, as the core
benefit a customer seeks is proper diagnosis and cure
of the problem. It can be in the form of smart building.
Logos, mascots, etc.
SERVICE FLOWER
 CORE PRODUCT
Treatment of patients
 EXPECTED PRODUCT
Infrastructure to support reasonable number of beds.
Operation theatres.
Equipment-like cardio-respiratory supportive
equipment.
 AUGMENTED PRODUCT
Ambience
Automation equipment
Central air conditioning.
Services In St. John’s
 Specialty services – Anesthesiology, general medicines,
pediatrics, psychiatry
 Super specialty services – Cardiology, Oncology,
Neurology, gastroenterology
 Diagnostic facilities – CT scan, X-ray, Radio therapy
 Supportive service departments – Billing, IT, Laundry
 Ancillary service departments
 Specialized services – Outpatient services, daycare
 Counseling services
 Preventive services
 Credit services
Servicing process
 Customer – Service = Experience
 Organization – Service = Process design & managed to
create customer experience
 Process – Explains method & sequences in which
service operating system works and how linked
together to create a value proposition to customers
 Steps – Design blueprint
Managing customers
Creating a prompt service
Service Blueprint
 To design new service or redesign
 What to be constructed
 What is visible
 What are the fail points
 Create – Key activities
Linkage between activities
 Distinguishes –
Customer experience – Front stage
What activities staff do - Back stage
Service Re-design
 Revitalizes the process that has been outdated
 External – Technology, Competition, Customer needs,
New diseases
 Internal – Customer complaints, extensive information
exchange, unnecessary procedures
 Results :
Reduced service failure
Quality
Productivity
Customer satisfaction
Reduced cycle time
Updated technology
Cost Reduction Schemes
 Medical college – Cost reduction
 Camps
 Implemented Insurance system
 RSBY scheme
Service Process Delivery
Internet Based Support
System (for improving
Service Quality)
Quality as Payment
schemes
I T I S P R O V I D I N G C U S TO M E R S E RV I C E T H AT W I L L AT T R A C T A N D
R E TA I N C U S TO M E R S A N D H AV E A P O S I T I V E I M PA C T O N T H E
B O T TO M L I N E O F A N Y B U S I N E S S - - N O M AT T E R W H E R E I T I S
L O C AT E D O R W H AT P R O D U C T O R S E RV I C E I T P R O V I D E S
SERVICE RECOVERY
SITUATIONS
 A family member complains about a long wait-time.
 A patient demands a different doctor.
 An elderly patient refuses more tests.
 A patient demands a specific test.
 A patient accuses the staff of thievery.
 A patient objects to all the "foreigners" on staff.
 A husband insists his test results be kept from his
wife.
STEPS FOR SERVICE RECOVERY
 Apologize
 Solve the problem
 Give the customer something of value as
compensation
 Create a service recovery process
 Train employees
Changing Factors/Indicators
 Driven by consumer desires for choice but also bring
a degree of consumer cost responsibility.
 Changes in technology that allow for more direct to
consumer marketing of health services:
 Laser eye surgery
 Complementary medicine
 Fast CT scans
Changing Factors/Indicators (Contd.)
 Insurance Plans are offering “tiered” plans.
 Lowest cost (co-pay, deductible) to use lower cost hospitals.
 More cost to use higher cost hospitals
 Highest cost to go out of network.
Pricing Strategies (Healthcare)
Comparative Pricing
 Maintaining a relative position compared to
competitors.
 Always 10% higher than the competition based on perceived
value in the market.
 Used in managed care (per diem) negotiations.
 Problem – You need to know their prices.
 Problem – You need to make sure it does not look
like collusion.
Discount Pricing
 For volume, for cash on the spot, etc.
 $199 each for Heart, Chest and Abdominal CT’s –
but $30 off if you take all three together. (Bundled
package)
Introductory Offers
 A certain amount off for the first 100 users of ----
 A real offer from a Cosmetic Surgery practice.
Incentive Pricing
 Reduced per diem to direct employees to a specific
network.
 Reduced prices to use services off hours.
 Diagnostic Imaging.
 Lab Tests
 Phase 4 Cardiac Rehab
 “Two for One” – Contact lenses, massage therapy
visits
Loss Leader
 Optical shops (Lower price exam if you get glasses).
 Dental practices (Low price cleaning to get other
services).
 Free or low price health screenings
 Itis a public service but it is also a loss leader.
Market Share Capture Pricing
 Using deep pockets to buy share with a low price.
 Use lower prices in managed care negotiations to keep a
competitor out of the network.
 Use lower prices to be in the “low cost” tier to capture volume.
Pricing on the Margin
 Pricing at the direct cost of the next unit in the door.
 A desperation strategy to capture share or generate
cash.
Skim Pricing
 Take advantage of cutting edge newness or
exclusivity to skim off a quick profit
 First Fast CT in town
 First PET scanner in the market.
Year-End Cafeteria
 Unique to health care (so far)
 Use up pre-tax cafeteria benefits before the end of
the year.
 Resulting in lots of elective-service advertising in December.
Access Pricing
 Paying per year for access to a boutique medical
group (e.g. - $3,000 for a family gets immediate
access).
Key Players
Promotional tools
 Campaigns and exhibitions
 Websites
 Word of mouth
 Brochures
 Educational activities
 CRM
Special thanks,
Dr.Kishore murthy
MBBS, PGHSM, (IIM-B)M.phil
Department Of hospital
administartion

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Service analysis

  • 1. THE HEALTHCARE INDUSTRY IN INDIA B Y- S H A M I K B I S WA S P. S A I S W E TA TO N Y A U G U S T I N E M E H U L P U J A R I S H I VA M S O D H I A J AY U PA D H YAY INDUSTRY ANALYSIS ON
  • 2. INTRODUCTION  India has embarked on a journey of healthcare system transformation  Growth in the next decade is going to be closely linked to the nature and the extent of reform  The Indian healthcare industry is expected to evolve substantially over the next decade, along with the country to make great progress towards achieving it’s long-term healthcare vision
  • 3. SCENARIO IN INDIA Source: Central Bureau of Health Intelligence, 2005 and 2010. McKinsey Analysis
  • 4. Source: Central Bureau of Health Intelligence, 2005 and 2010. McKinsey Analysis
  • 5. Source: World Health Organization, Global Health Expenditure database
  • 6. A Conceptual Framework for Innovation in Healthcare
  • 7. E S T A B L I S H E D - 1 9 7 5 N U M B E R O F B E D S - 1 3 5 0 N U M B E R O F S P E C I A L T Y S E R V I C E S - 1 5 N U M B E R O F S U P E R S P E C I A L T Y S E R V I C E S - 2 0 N U M B E R O F S T A F F - 2 0 0 7 N U M B E R O F M E D I C A L P E R S O N N E L - 4 4 0 N U M B E R O F N U R S I N G P E R S O N N E L – 9 5 0 D A I L Y A V E R A G E O U T P A T I E N T S - 1 8 5 0 D A I L Y A V E R A G E A D M I S S I O N S - 1 4 8 St. John’s Medical College Hospital
  • 9. 7P’S IN A HOSPITAL  PRODUCT In order to provide effective and reliable services, the hospital is fully equiped with various facilities. The facilities in St. Johns Hospital are  Essential medical facilities like x- ray and ultra sound are available in hospital premises.  There are 4 O.T and 2 labour O.T available .  There are 11 bed ICU and % bed NICU.
  • 10.  PLACE Under hospital marketing, distribution of medicare services plays a crucial role. In case of hospitals the location of hospital plays a very important role.  Avoid inconvinience  Adequate transport and communication facilities  Avoid congestion
  • 11.  PROMOTION Hospitals for promotion use either advertisement or PR or both after taking into consideration the target customers, media type, budget and the sales promotion. PROMOTION PERSONAL TECHNIQUES IMPERSONAL
  • 12.  PRICE  Super deluxe class: AC single occupancy with modern amenities and utmost ambience  Private class: 2900rs per night Two patients in a room with decent facilities like washroom and sofas, etc.  Cubical class: It’s a 4 and 6 beded partitioned room with open balcony and supervision of skilled staff.  General class: It is a non ac room with no partition between different patients. Its accommodation charges are comparatively very less.
  • 13.  PEOPLE It includes the doctors, nurses, supporting staff, patients, etc. The people in St. Johns hospital are constantly motivated to give the best of their effort.  By providing regular on the job training of employees to ensure continuous improvement in health care.  Utilizing services of professionally medical consultants.  Use of the latest technology.
  • 14.  PROCESS Process generally forms the different tasks that are performed by the hospital. The process factor is mainly dependent on the size of the hospital and kind of service it is offering. There are 2 different types of processes: Outpatient Inpatient
  • 15.
  • 16.
  • 17.  PHYSICAL EVIDENCE It is the environment in which the service is delivered with physical or tangible commodities and where the hospital and the customer interacts. It does play an important role in health care services, as the core benefit a customer seeks is proper diagnosis and cure of the problem. It can be in the form of smart building. Logos, mascots, etc.
  • 19.  CORE PRODUCT Treatment of patients  EXPECTED PRODUCT Infrastructure to support reasonable number of beds. Operation theatres. Equipment-like cardio-respiratory supportive equipment.  AUGMENTED PRODUCT Ambience Automation equipment Central air conditioning.
  • 20. Services In St. John’s  Specialty services – Anesthesiology, general medicines, pediatrics, psychiatry  Super specialty services – Cardiology, Oncology, Neurology, gastroenterology  Diagnostic facilities – CT scan, X-ray, Radio therapy  Supportive service departments – Billing, IT, Laundry  Ancillary service departments  Specialized services – Outpatient services, daycare  Counseling services  Preventive services  Credit services
  • 21. Servicing process  Customer – Service = Experience  Organization – Service = Process design & managed to create customer experience  Process – Explains method & sequences in which service operating system works and how linked together to create a value proposition to customers  Steps – Design blueprint Managing customers Creating a prompt service
  • 22. Service Blueprint  To design new service or redesign  What to be constructed  What is visible  What are the fail points  Create – Key activities Linkage between activities  Distinguishes – Customer experience – Front stage What activities staff do - Back stage
  • 23. Service Re-design  Revitalizes the process that has been outdated  External – Technology, Competition, Customer needs, New diseases  Internal – Customer complaints, extensive information exchange, unnecessary procedures  Results : Reduced service failure Quality Productivity Customer satisfaction Reduced cycle time Updated technology
  • 24. Cost Reduction Schemes  Medical college – Cost reduction  Camps  Implemented Insurance system  RSBY scheme
  • 26. Internet Based Support System (for improving Service Quality)
  • 28.
  • 29. I T I S P R O V I D I N G C U S TO M E R S E RV I C E T H AT W I L L AT T R A C T A N D R E TA I N C U S TO M E R S A N D H AV E A P O S I T I V E I M PA C T O N T H E B O T TO M L I N E O F A N Y B U S I N E S S - - N O M AT T E R W H E R E I T I S L O C AT E D O R W H AT P R O D U C T O R S E RV I C E I T P R O V I D E S SERVICE RECOVERY
  • 30. SITUATIONS  A family member complains about a long wait-time.  A patient demands a different doctor.  An elderly patient refuses more tests.  A patient demands a specific test.  A patient accuses the staff of thievery.  A patient objects to all the "foreigners" on staff.  A husband insists his test results be kept from his wife.
  • 31. STEPS FOR SERVICE RECOVERY  Apologize  Solve the problem  Give the customer something of value as compensation  Create a service recovery process  Train employees
  • 32. Changing Factors/Indicators  Driven by consumer desires for choice but also bring a degree of consumer cost responsibility.  Changes in technology that allow for more direct to consumer marketing of health services:  Laser eye surgery  Complementary medicine  Fast CT scans
  • 33. Changing Factors/Indicators (Contd.)  Insurance Plans are offering “tiered” plans.  Lowest cost (co-pay, deductible) to use lower cost hospitals.  More cost to use higher cost hospitals  Highest cost to go out of network.
  • 35. Comparative Pricing  Maintaining a relative position compared to competitors.  Always 10% higher than the competition based on perceived value in the market.  Used in managed care (per diem) negotiations.  Problem – You need to know their prices.  Problem – You need to make sure it does not look like collusion.
  • 36. Discount Pricing  For volume, for cash on the spot, etc.  $199 each for Heart, Chest and Abdominal CT’s – but $30 off if you take all three together. (Bundled package)
  • 37. Introductory Offers  A certain amount off for the first 100 users of ----  A real offer from a Cosmetic Surgery practice.
  • 38. Incentive Pricing  Reduced per diem to direct employees to a specific network.  Reduced prices to use services off hours.  Diagnostic Imaging.  Lab Tests  Phase 4 Cardiac Rehab  “Two for One” – Contact lenses, massage therapy visits
  • 39. Loss Leader  Optical shops (Lower price exam if you get glasses).  Dental practices (Low price cleaning to get other services).  Free or low price health screenings  Itis a public service but it is also a loss leader.
  • 40. Market Share Capture Pricing  Using deep pockets to buy share with a low price.  Use lower prices in managed care negotiations to keep a competitor out of the network.  Use lower prices to be in the “low cost” tier to capture volume.
  • 41. Pricing on the Margin  Pricing at the direct cost of the next unit in the door.  A desperation strategy to capture share or generate cash.
  • 42. Skim Pricing  Take advantage of cutting edge newness or exclusivity to skim off a quick profit  First Fast CT in town  First PET scanner in the market.
  • 43. Year-End Cafeteria  Unique to health care (so far)  Use up pre-tax cafeteria benefits before the end of the year.  Resulting in lots of elective-service advertising in December.
  • 44. Access Pricing  Paying per year for access to a boutique medical group (e.g. - $3,000 for a family gets immediate access).
  • 46. Promotional tools  Campaigns and exhibitions  Websites  Word of mouth  Brochures  Educational activities  CRM
  • 47. Special thanks, Dr.Kishore murthy MBBS, PGHSM, (IIM-B)M.phil Department Of hospital administartion