Healthcare and hospital_industr1


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Healthcare and hospital_industr1

  1. 1. HEALTHCARE AND HOSPITAL INDUSTRYHealthcare industry is a wide and intensive form of services which arerelated to well being of human beings. Health care is the social sector and itis provided at State level with the help of Central Government. Health careindustry covers hospitals, health insurances, medical software, healthequipments and pharmacy in it.Right from the time of Ramayana and Mahabharata, health care was therebut with time, Health care sector has changed substantially. Withimprovement in Medical Science and technology it has gone throughconsiderable change and improved a lot.The major inputs of health care industries are as listed below:I. HospitalsII Medical insuranceIII. Medical softwareIV. Health equipmentsHealth care service is the combination of tangible and intangible aspect withthe intangible aspect dominating the intangible aspect. In fact it can be saidto be completely intangible, in that, the services (consultancy) offered bythe doctor are completely intangible. The tangible things could include thebed, the décor, etc. Efforts made by hospitals to tangiblize the service
  2. 2. offering would be discussed in details in the unique characteristics part ofthe report. Different types of health care services available in IndiaHospitalsPathology ClinicsBlood BanksMeditation CentresEmergency services like Ambulances, etc.Online Medical ServicesTelemedicineNaturopathyYoga CentresFitness CentresLaughter ClubsHealth Spas
  3. 3. In the Constitution of India, health is a state subject. Central govt’sintervention to assist the state govt is needed in the areas of control anderadication of major communicable & non- communicable diseases, policyformulation, international health, medical & para-medical education alongwith regulatory measures, drug control and prevention of food adulteration,besides activities concerning the containment of population growth includingsafe motherhood, child survival and immunization Program. The plan outlayfor central sector health programme in the Annual Plans 1997-98 isRs.920.20 crore including a foreign aid component of Rs.400 Crore. A majorportion of outlay is for the control and eradication of diseases like malaria, ,blindness being implemented under Centrally sponsored schemes.Another major component of the central sector health programme is purelyCentral schemes through which financial assistance is given to institutionsengaged in various health related activities. These institutions areresponsible for contribution in the field of control of communicable & non-communicable diseases, medical education, training, research and parent-care.In our project our focus has been the hospital sector which is the majorcomponent of the healthcare industry.
  4. 4. The Hospital IndustrySome Facts • India’s healthcare industry is currently worth Rs 73,000 crore which is roughly 4 percent of the GDP. The industry is expected to grow at the rate of 13 percent for the next six years which amounts to an addition of Rs 9,000 crores each year. • The national average of proportion of households in the middle and higher middle income group has increased from 14% in 1990 to 20 % in 1999. • The population to bed ratio in India is 1 bed per 1000, in relation to the WHO norm of 1 bed per 300. • In India, there exists space for 75000 to 100000 hospital beds. • Private insurance will drive the healthcare revenues. Considering the rising middle and higher middle income group we get a conservative estimate of 200 million insurable lives • Over the last five years, there has been an attitudinal change amongst a section of Indians who are spending more on healthcare.Corporate hospitals mushroomed in the late eighties. The boom remainedshortlived and out of the 22 listed hospital scrips, most are being tradingbelow par. An increasingly fragmented market, lack of statistics, capitalintensive operations and a long gestation period are all wise reasons to shy
  5. 5. away from investing in the healthcare industry. Government and trusthospitals dominate the scene. Many of the trust hospitals suffer from poormanagement. Good corporate hospitals are still too few to amount to acritical mass.Corporate hospitals failed a decade ago because they emerged in isolationand weren’t part of a larger phenomenon. However, now, there are theinsurance companies, the hospital hardware and the software companies thathave come together to create the boom.Factors Attracting Corporates In the Healthcare SectorRecognition as an industry: In the mid 80’s, the healthcare sector wasrecognized as an industry. Hence it became possible to get long term fundingfrom the Financial Institutions. The government also reduced the importduty on medical equipment’s and technology, thus opening up the sector.Since the National Health Policy (the policy’s main objective was ‘Health ForAll’ by the Year 2000) was approved in 1983, little has been done to updateor amend the policy even as the country changes and the new healthproblems arise from ecological degradation. The focus has been onepidemiological profile of the medical care and not on comprehensivehealthcare.Socio-Economic Changes: The rise of literacy rate , higher levels of incomeand increasing awareness through deep penetration of media channels,contributed to greater attention being paid to health. With the rise in the
  6. 6. system of nuclear families, it became necessary for regular health check-upsand increase in health expenses for the bread-earner of the family.Brand Development: Many family run business houses, have set-up charityhospitals. By lending their name to the hospital, they develop a good image inthe markets which further improves the brand image of products from theirother businesses.Extension To Related Business: Some pharmaceutical companies likeWockhardt and Max India, have ventured into this sector as it is a directextension to their line of business.Opening Of The Insurance Sector: In India, approx. 60% of the totalhealth expenditure comes from self paid category as against governmentscontribution of 25-30 %. A majority of private hospitals are expensive for anormal middle class family. The opening up of the insurance sector to privateplayers is expected to give a shot in the arms of the healthcare industry.Health Insurance will make healthcare affordable to a large number ofpeople. Currently, in India only 2 million people ( 0.2 % of total population of1 billion), are covered under Mediclaim, whereas in developed nations likeUSA about 75 % of the total population are covered under some insurancescheme. General Insurance Company, has never aggressively marketed healthinsurance. Moreover, GIC takes upto 6 months to process a claim andreimburses customers after they have paid for treatment out of their ownpockets. This will give a great advantage to private players like Cigna whichis planning to launch Smart Cards that can be used in hospitals, patientguidance facilities, travel insurance, etc.
  7. 7. The Consultants, Financiers and Insurance Agencies are to benefit from thisboom. The insurers will use PPOs, that will grow into HMOs, to assumeinsurance risks on clients behalf. Medical Equipments, Medical Software andHospitals will see the biggest boom.
  8. 8. THE SERVICE MARKETING TRIANGLE: HOSPITAL DOCTOR PATIENT Company: Here, the hospital is the company that dreams up an idea of service offering (treatment), which will satisfy the customer’s (patient’s) expectations (of getting cured). Customer: The patient who seeks to get cured is the customer for the hospital as he is the one who avails the service and pays for it. Provider: Doctor, the inseparable part of the hospital is the provider, as he is the one who comes in direct contact with the patient. The reputation of the hospital is directly in the hands of the doctor. A satisfied patient is a very important source of word of mouth promotion for the organization.
  9. 9. Classification of Hospitals HOSPITALS Objective Ownership Path Size Allopath District Teaching- Government cum- Research Ayurved Taluk Semi-Govt General Homeo Primary Voluntary Health Agencies Centre Special Unani Private Charitable Teaching Others
  10. 10. -Unique Characteristics: -The service industry has the following characteristics.1) Intangibility: - Intangibility means that a customer would have to visualizethe service offering. Since the offering cannot be seen or felt therewould be no stock and hence one would not be able to jeep a track ofthe sales etc. This characteristic also makes it different to measurethe benefits and utilities of the product. An individual would only beable to experience the same.
  11. 11. In the product service continuum, hospitals fall in the bracket of highly intangible where the service has credence qualities. i) The services of a doctor i.e. the consulatation provided by the doctor , his diagnosis etc cannot be touched felt or seen. One can only visulalise the same. ii) They can also not measure the benefits. These can only be experienced by the customer. There is no ownership over the doctor or the services provided by him .The remedial measures to overcome intangibility are:- a) The marketer should visualize the product/service for the patient.In case of hospitals any visual of the hospital displaying the well maintained interiors, the hi-tech equipments used for treatment would help to tangibilise the product. b) Association: - The association of a hospital with any well known personality would help as a good image building exercise . It would
  12. 12. also give the customer a certain level of confidence regarding the services provided in the hospital. For (eg 1)- Hospitals like the Tata Memorial Hospital or the Hinduja hospital are associated with Corporate Houses. They are owned by these corporate families. Hence a customer is sure about the services provided in these hospitals. (eg 2)The Dinanath Mangeshkar Hospital. Since it is owned by Lata Mangeshkar the customer is sure to receive quality services.c)Physical Representation :- Intangibility could also be overcome in case of hospital through physical Representation in the form of :- 1)Color- The Red Cross signifies the Hospital. 2)Uniforms- The white uniforms of the Doctors And Nurses in enemy hospitals. 3)Symbols – The Red Cross is the common logo with which people indentify hospitals. Also logos of hospitals like Wockhardt. 4)Buildings – In case of hospitals the external appearance of the building or the maintenance i.e how well maintained it is
  13. 13. d)Documentation –There are a numbers of hospitals which have receivedISO 9000 certificates. ( Eg) Apollo Hospital.2) PerishabilityA services cannot be stored . So if the service is not consumed immediatelythen it loses its value.For Eg – If a doctor does not reach his dispensary on time or has his cliniclocked for that particular day. He loses all his patients for that day. A situation may also arise when the doctor may be unable to attend tosome of his patients due to a huge rush. In such a case again the doctorcould lose out on all his patients.Same would be the situation faced by thehospitals. In such a case the hospital too may lose all its patients for thatday.-Solution to the problem of perishabilitya) In such a situation the doctor can appoint an assistant who could cater tothe excess patients or he could have students training under him who duringtheir course of training could also help him with the excess patients.
  14. 14. (Eg)- Rajgovind Hospital in CBD appoints interns of Medical College fornight duty on a stipendb) Peak time Essential Services In a rush hour situation when there are too many customers to attendto only essential services should be catered to.For (eg 1) In hospitals during the late night when accident reportings arehigh all hands are required at the trauma centers (eg 2) Part time volunteers for national Emergencies. 3) VariabilityIt means that the quality of service provided to different people may notbe the same. (ie) Irrespective of the fact that the job carried out by themis the same the service quality may differ because they may be fromdifferent backgrounds have different aptitude, skills, attitude etcFor Eg :- 2 Doctors, one from a municipal hospital and another from areputed hospital may treat a person for the same problem. But their quality
  15. 15. might differ. In such a case doctors/hospitals are the internal customersand the patients are the external customers. Since a transaction is always two way communication, a customerswillingness, background, attitude etc may also effect the transactionFor ( Eg) - A patient may want to avail of a doctors services but may not beable to afford the services.(Eg) A patient suffering from Arthritis may be required to lose weight forfurther treatment. But the patient may not have the drive/willingness tolose weight .Solutions1)The internal customers or the fresh recruiters could be given training.They could be given a chance to perform the small parts of an operation inorder to gain experience.1)The doctors could be given training and could be updated with all thelatest happenings in the medical field in regular intervals.For (Eg )AMA prescribes for its member doctors 6 weeks training every year and 6months training every 6 years.
  16. 16. 1)Training of External customers ( Eg) Diabetic patients are trained to inject insulin on their own( Eg ) In Case of health care services, a gym instructor may teach hismembers to use the gym equipments on their own.( Eg ) Auto Diagnostic equipments are used in hospital.These kind of training programmes provided to the external customerhelps to increase the quality of transaction.4)Inseparability -For any service to take place it is necessary that both the service providerand the customer be present in the location at the same time( eg) An operation cannot be conducted without the doctors presence. As aresult a number of patients due to geographical distances lose out on theopportunity to get themselves treated from the very best surgeons anddoctors.SolutionsThis can be overcome to a certain extent through the following:-
  17. 17. 1)Training of internal customer- Here one experienced person can provide training to the amateurs.For Eg A surgeon during an operation is surrounded by interns watching theoperation. They could also carry out some small parts of the operation.2)Innovational Service- Psychiatrists have innovated group therapy where they call in 10+patients together to an oval conference table and encourage them to talkabout themselves and their ailments.3) Video Conferencing Business Conferences, Consultancy and the Medical world .Onlyrecently have instructions for operation through video conferencing beeninitated but mostly video conferencing has been used in the medical worldas a pedagogical tool.(eg) A unique and rare brain tumour operation can bebroadcast live all over the world to subscribed medical colleges.
  18. 18. 7 Ps of marketing for hospitals  Product: The service product is an offering of commercial intent havingfeatures of both intangible and tangible, seeking to satisfy the new wantsand demands of the consumer. Hospital industry is action oriented and thereis a lot of interaction with the customers (patients). The service product ofthe hospitals normally have the following features: o Quality Level: When we talk about marketing hospitals, it is natural that we are very particular about managing our services in the right fashion. Supportive services play an important role in improving the quality of medicare. These services which include laboratory, blood-banks, catering, radiology and laundry, in a true sense determine the quality of services made available by medical and para-medical personnel. They get a strong base for treatment since the diagnostic aspect determines a direction. To get the best result from OT, it is natural that equipments are properly sterlised. In addition, the dresses and clothes are also required to be made bacteria free. The patients are required to wear disinfected linen which should be made available. The radiology department should have hi-tech facilities keeping in view the pressure of work. Of late, we find
  19. 19. sophisticated equipments and unless hospitals make the same services available the same, the quality of services cannot be improved.o Accessories: This is a very good way of segmenting customers. Many hospitals provide additional services such as catering, laundry, yoga sessions, cafeterias, etc. for the customers (patients)who are willing to pay extra. Hospitals have different wards - General and Special. Certain hospitals provide services for the family members of the patients (when they are not from the same city) – accommodation and catering.o Packaging: It is the bundling of many services into the core service. Eg: Apollo hospital offers a full health check-up to the patients. Similarly other hospitals also offer package deals for health check-ups. For example if a person has to undergo a bypass surgery, he can pay a lump sum amount during admission, say rupees 1 lakh for all procedures, tests, stay, etc, at once.o Product line: hospitals through their services offer many choices to the patients and cover a wide range of customer needs. For example: Apollo hospital has dental department, cardiology department, etc. and within the dental department it has dental surgery, root canal, etc.o Brand name: The hospitals, to differentiate themselves, and their services from others use a brand name. The intangibility
  20. 20. factor of the service makes it all the more important for the hospitals to do so.  PlaceUnder hospital marketing, distribution of Medicare services plays a crucialrole. This focuses on the instrumentality of almost all who are found involvedin making services available to the ultimate users. In case of hospitals thelocation of hospital plays a very important role. The kind of services ahospital is rendering is also very important for determining the location ofthe hospital.Eg. Tata memorial hospital specializes in cancer treatment and is located ata centre place unlike other normal hospitals, which you can find all overother places.It can be unambiguously accepted that the medical personnel need a fairblending of two important properties i.e. – they should be professionallysound and should have in-depth knowledge at psychology. A particular doctormight be famous for his case handling records but he may not be madeavailable for all the patients because of the place factor. Now in this casethe service provided, that is the doctor may be a visiting doctor fordifferent hospitals at different locations to beat the place factors.Unlike other service industries, under hospital marketing all efforts shouldbe for making available to the society the best possible medical aid.
  21. 21. In a country like India, which is geographically vast and where majority ofthe population lives in the rural areas, place factor for the hospitals play avery crucial role. A typical small village / town may be having smalldispensaries but they will not have super speciality hospitals. For that theywill have to be dependent on the hospitals in the urban areas.
  22. 22.  PeopleUnder hospital marketing the marketing mix variable people includes all thedifferent people involved in the service providing process (internalcustomers of the hospitals) which includes doctors, nurses, supporting staffetc. The earliest and the best way of having control on the quality of peoplewill be by approving professionally sound doctors and other staff.Hospital is a place where small activity undertaken can be a matter of lifeand death, so the people factor is very important. One of the majorclassifications of hospitals is – private and government. In the governmenthospital the people factor has to be specially taken care of. In Indiangovernment hospitals except a few almost all the hospitals and theirpersonnel hardly find the behavioural dimensions significant. It is againstthis background that even if the users get the quality medical aid they arefound dissatisfied with the rough and indecent behaviour of the doctors.Under hospital marketing a right person for the right job has to beappointed and they should be adaptable and possess versatility. The patientsin the hospitals are already suffering from trauma, which has to beunderstood by the doctors and other staff. The people of the hospitalshould be constantly motivated to give the best of their effort.
  23. 23.  ProcessProcess generally forms the different tasks that are performed by thehospital. The process factor is mainly dependent on the size of the hospitaland kind of service it is offering. A typical process involved in a mediumsized hospital can be as follows.Apart from this flow there are other allied activities like record keepingadministration at services etc which fall under the process factor. Thesestages do not exist separately but are interlinked. The most importantelements are lines of communication within the setup. The experience of thepatient depends on the final interplay of all these factors.
  24. 24.  Physical evidenceIt does play an important role in health care services, as the core benefit acustomer seeks is proper diagnosis and cure of the problem. For a local smalltime dispensary or hospital physical evidence may not be of much help. Inrecent days some major super speciality hospitals are using physical evidencefor distinguishing itself as something unique.Physical evidence can be in the form of smart buildings, logos, mascots etc. asmart building infrastructure indicates that the hospital can take care of allthe needs of the patient.Examples - 1. Lilavati hospital has got a smart building, which helps, in developing in the minds of the people, the impression that it is the safest option among the different hospitals available to the people. 2. Fortis and Apollo hospitals have a unique logo, which can be easily identified.Physical evidence also helps in beating the intangibility factor.
  25. 25.  Promotion:Hospitals for promotion use either advertisement or PR or both aftertaking into consideration the target customers, media type, budget andthe sales promotion.Since a few years the prime times in T.V. are reserved for advertisingsocial issues like family planning, use of different types ofcontraceptives, care for the girl child and so on. These commercials usethe common man approach for reference group appeal. In case of healthcare products and services use for “common man” appeal is widelyprevalent. The use of celebrities is not as effective as that of a commonman. An ordinary person thinks that if it works well for people like him, itwill also work equally well for him. The identification with the commonman is easy and quick.Besides TV, other media of promotion are to be used innovatively. Unlikethe urban area, in rural areas newspapers and magazines do not have thesame impact in conveying messages. In villages, hoardings and wallwritings near the markets and recreation centers attract the attentionof villagers. This market consists of 180 million strong middle incomegroup and a small income group. This group has a large discretionaryincome. These discerning consumers are very careful in choosing healthcare services. The last decade has witnessed a health, appearance andnutrition conscious population.
  26. 26. The health care field has become very competitive. Although around one-fourth of our population stays in urban India, three fourths of the totaldoctors have engaged themselves in this part. Many of these doctorsvisit the contiguous rural areas, but they may operate from the urbanarea. The patients of upper middle and upper income group have a widechoice to make from a number of clinics and hospitals. Therefore, manyhospitals have abandoned traditions and adopted marketing strategies towoo more and more patients to their clinics.Word-of-mouth plays a very important role in promotion of hospitals. Aperson in need of a health care service does not know for sure where tosearch for relevant information. He consults his family members,relations and friends first. The patients who come to a hospital generallyhave the old patients of that hospital as referrals. Word-of-mouth playsan important role during information acquisition stage of the customersas there are no objective performance measures to judge the variousalternatives available to them. Therefore, satisfied past patients of ahospital can bring more number of patients to that hospital than anumber of advertisements.In a competitive market place, the images of the firms swill affect theircompetitive standing. One factor that is likely to have a significantimpact on the health care scene is the growth of hospital chains such asApollo Hospitals, Birla Health Centres ,etc. Artificial heart transplantsand other complex operations although are few in number and generate asmall portion of the total revenue, they help in generating word-of-
  27. 27. mouth which health care providers are actually interested. Many of thesecompanies are spending a lot in corporate advertising for Image building.
  28. 28. Marketing hospitalsMarketing in Hospitals Marketing is unethical” was the frequent refrain in the eighties, when very few hospitals realised that it was necessary to incorporate marketing as an integral function in the hospital operations. But the major argument at that time lay in understanding whether this professional orientation was really required for its viability, profitability and sustainability. This argument however became favourable in the late nineties as corporate companies like Wockhardt and Max India started venturing into the hospital industry, apart from the ongoing mergers and acquisitions that were already taking place at that time. Even the TPAs started building tie-ups with corporate clients and there was already an abysmal utilisation of resources in the existing hospitals. In addition to the above a major factor that contributed to the acceptance of marketing in hospitals was an increase in the delivery of services.‘Perception of patients’ was another important consideration for hospitals, asthey felt that the patients would take them as profit oriented organisation
  29. 29. rather than service oriented organisation. Ultimately, marketing wasaccepted only by a few while the others discarded the concept. Hospitalswho accepted marketing also carried out their functioned by concentratingaround corporate clients. Lately it has been felt that many Indian hospitalshave a dilemma regarding the functions of marketing. In an era wherehospitals are experiencing a major shift in their clientele, they are worriedmore about the patients’ perception of hospitals and therefore the conceptof brand restructuring and brand engineering is vital.As hospitals spend millions of rupees in technology and infrastructure, itbecomes necessary, that they attract patients and generate funds. In order,to do the same, the hospitals follow various marketing and brand buildingexercises. Some of them are listed below: • Many hospitals have eminent personalities from the industry in their Board of trustees. This indirectly leads to increase in, inflow of patients, working in the companies of these Trustees. Besides the presence of eminent personalities creates a sense of confidence in the minds of people. • Private hospitals can attract their shareholders by offering discounts. For example, a special discount of 20 % on all preventive health checks is offered to all shareholders of Apollo Hospitals Limited. • Hospitals have long-term understanding with PPO’s (Preferred Provider Organization), which further have understanding with corporates. Any case of sickness found in the employees of these
  30. 30. corporates refer them to the PPO’s , which further sends them to the hospital for check-ups and treatment.• The success rate of crucial operations and surgeries, reflect the technological and knowledge- based edge of the hospital over the competitors. Such successes are discussed in health magazines and newspapers, which becomes a natural advantage for the hospital.• Some hospitals by means of their past track record have created a niche market for themselves. For example, Hinduja Hospital is known for its high-quality healthcare at reasonable rates, whereas Lilavati Hospital is known for its five-star services.• Hospitals hold seminars and conferences relating to specific diseases, where they invite the doctors from all round the country, for detailed discussion. This makes the hospital well known amongst the doctors, who could in future refer complicated cases to the hospital.• Hospitals can also promote medical colleges. This helps them to generate extra resources in form of fees, using the same infrastructure.
  31. 31. SOME PLAYERSThe Apollo Group of HospitalsDriven by its line of being the “architect ofhealthcare” in India, the Apollo HospitalsGroup, comprising of one of the largestnetworks of 26 hospitals, 10 clinics and over10,000 employees across the country,represents the changing face of healthcarein India contemporary and corporatised. It has been the first privatecompany to administer health insurance in the country and IndraprasthaApollo Hospital in Delhi is the fourth largest corporate hospital in the world.The Apollo group is India’s first corporate hospital, the first to set-uphospital outside the country and the first to attract foreign investment.With 2600 beds, Apollo is one of Asia’s largest healthcare players. Therecent merger between its 3 group companies, Indian Hospitals CorporationLtd., Deccan hospitals Corporation Limited and Om Sindoori HospitalsLimited, will help the group raise money at a better rate and by consolidatinginventory, it will save around 10% of the material cost. The group is planningto invest Rs. 2000 crore , to bulid around 15 new hospitals, in India, SriLanka, Nepal and Malaysia.
  32. 32. Apollo claims to maintain the best of medical standards with a record ofover 7.4 million treated patients, 3,15,000 preventive health checks done,98.5 percent success rate in 45,000 cardiac surgeries, etc. And helping thecompany maintain a balance between the corporate culture and rigorousmedical excellence is recognition of IT as intrinsic to every process,whether it is day-to-day running of hospitals, education or telemedicine.The application of IT in the day-to-day working of the largest hospital ofthe group, Indraprastha Apollo, throws light on the extent of theautomation drive within the company. The management realised the fact thatin order to have a modern hospital in place all the work processes had to berelated to IT. Hence, the need for an end-to-end integrated solution. Thisled to the implementation of the Hospital Information System (HIS), whichwas an integral part of the hospital inception project.The hospital today boasts of an integrated HIS, which provides for end-to-end integration of the various processes and functional areas within thehospital to make for a seamless workflow. The work processes of thehospital are primarily divided into two areas the patient (comprising of in-patient and out-patient) and the non-patient all the back-end departmentslike housekeeping, engineering, finance, materials, purchase and HRD.The workflow process starts with the patient seeking an appointment withthe doctor. HIS contains all the information relating to appointmentschedules of the doctors. Depending on the availability of the doctor, thepatient is given the date and time of appointment. This information is then
  33. 33. fed into the system and the updated information is available to the doctor inreal-time.On the date of his appointment, the patient registers himself at the counterby filling up of a form, which contains all the basic information related tothe patient. This data is feeded into the system with a Unique HospitalIdentifier (UHI) number allotted to the patient so that by the time thepatient meets the doctor, he already has all the required basic information.This is followed by 15 minutes of consultation with the doctor after whichthe doctor gives his prescription, the data is again keyed into the system asa patient record under his UHI and is accessible for quick reference.One of the biggest advantages of HIS is that any medically relevantinformation related to the patient is available at the click of a button,thereby saving precious time, which means a lot when it comes to saving alife. HIS also acts as a kind of ERP for the hospital with its automation ofvarious back-end areas like financial, accounting and inventory, which areintegrated with the patient areas wherever required.The hospital has also developed a very effective mailing system for itsemployees, which is based on Microsoft Exchange. The company’s Intranet isbeing used to run mailing applications as well as information relating tocompany policies, leave information and basic information relating to thecompany.Telemedicine Healthcare for all
  34. 34. A very significant IT initiative of the Apollo Hospitals Group, and of greatrelevance to a developing country like India in taking healthcare to themasses, is the area of telemedicine. Incorporated in 1999, ApolloTelemedicine Enterprises (ATEL), the telemedicine division of the ApolloHospitals Group, has already set up over 10 telemedicine links between theApollo Institutions at Delhi, Hyderabad and Chennai and distant locationsacross the country. It has developed competence in developing cost-effective turnkey telemedicine solutions.Teleme-dicine ensures that the benefits of hi-tech medicine can go toeveryone, and not just to people who live in big cities. The group has forgedalliances with government organisations like the Indian Space ResearchOrganisation (ISRO) for VSAT bandwidth and Wipro for hardware, toprovide telemedicine facilities to far-flung and rural areas. The division isworking towards developing a strong Apollo Telemedicine Network, whichallows the participant sites to collaborate with institutions in the countryand abroad, and provides their clientele access to better healthcare in areasnot adequately served by the medical community.A patient and his doctor can interact with specialists based in the specialtycenters and receive second opinion or interpretations to complex medicalcases. The patient reports can be transmitted from a consulting canter to aspecialty canter using the telemedicine software and the communication link,which could be ISDN or VSAT connectivity.
  35. 35. Other Services offered by Apollo:-Apollo PharmacyApollo Pharmacy operates round the clock catering to all your medicineneeds.-Café ApolloCafé Apollo is a sit down dining facility of the hospital. It offers a wideselection of snacks and a variety of meals.-Apollo Food PlazaThere is food facility located in the atrium of the hospital serving adelightful array of delicacies.Timings : 8.00am - 9:00pm-Fast Food CafeFor the convenience of ICU attendants there is a 24 hours cafe in the ICUlobby.-Gift ShopThe Gift Shop carries a wide range of gifts including Confectionery, Cards,Books, Newspapers, Magazines and other novelties.-Bank Facilities-The Oriental Bank of Commerce
  36. 36. The Indraprastha Apollo Branch of the Oriental Bank of Commerce islocated at one of the Gates.Bank HoursMonday to Friday : 10:00am - 2:00pmSaturday : 10:00am - 12:00pmThe bank remains closed on Sundays and National Holidays.-The ICICI ATM CounterThe ICICI ATM counter is also located in the hospital.- Fortis HealthcareFortis is the late Ranbaxy’s Parvinder Singh’s privately owned company. Thecompany is a 250 crore, 200 bed cardiac hospital, located in the town ofMohali. The company also has 12 cardiac and information centres in andaround the town, to arrange travel and stay for patients and family. Thecompany has plans of increasing the capacity to around 375 beds and alsoplans to tie up with an overseas partner.Max IndiaAfter selling of his stake in Hutchison Max Telecom, Analjit Singh hasdecided to invest around 200 crores, for setting up worldclass healthcareservices in India. Max India plans a three tier structure of medical services– Max Consultation and Diagnostic Clinics, MaxMed, a 150 bed multispecialityhospital and Max General, a 400 bed hospital. The company has already tiedup with Harvard Medical International, to undertake clinical trials for drugs,under research abroad and setting up of Max University, for education andresearch.Escorts
  37. 37. EHIRC located in New Delhi has more than 220 beds. The hospital has atotal 77 Critical Care beds to provide intensive care to patients aftersurgery or angioplasty, emergency admissions or other patients needinghighly specialized management including Telecardiology (ECG transmissionthrough telephone). The EHIRC is unique in the field of PreventiveCardiology with a fully developed programme of Monitored Exercise, Yogaand Meditation for Life style management.WOCKHARDT and DUNCANS GLENEAGLES INTERNATIONAL also havemajor expansion plans.This report is prepared by Mona Pandit and Parin Mehta of SydnehamInstitute of Management exclusively for India Infoline as part of theirproject curriculum.
  38. 38. OpportunitiesWith global revenues of approximately US$ 2.8 trillion, the healthcareindustry is the world’s largest industry and India is emerging as a majorplayer in this industry, because of its high population. As per the Insurance Regulatory and Development Authority (IRDA), theIndian healthcare industry has the potential to show the same exponentialgrowth that the software and pharmaceutical industries have shown in thepast decade. Further, as per the IRDA, only 10 percent of the marketpotential has been tapped till date and market studies indicate a 35 percentgrowthin thecomingyears. A big opportunity for the industry emerges from the privatisation of theinsurance segment, which would extrapolate into a new delivery system inIndia. There is a vast insurable population in India, given that only 2 millionpeople ie 0.2 percent of the total population are covered under Mediclaim.According to a recent study, there are 315 million potentially insurable livesin the country.A World Health Organisation report states that India needs to add 80,000hospital beds each year to meet the demand of its population. The hugeshortage of beds outlines a major opportunity for the industry. The healthcare industry is a fast growing industry and coupled withstrength of Indian innovative and scientific manpower and also low costs, itis slowly achieving key industry status in India.
  39. 39. The FutureHealthcare industry is booming all over the world. In the US it is already thelargest service sector. And world-wide it is slated to be a $4 trillion marketby 2005. A World Bank Report in November 1999 points at the emergenceof large-scale, investor-owned hospitals in the country as a "dramatic"development. The Corporate hospitals will play a positive role in thehealthcare sector by taking the load off government hospitals, whoseperformance hasn’t been upto the mark.The Healthcare Industry is on the threshold of a major Growth Spiral whichshall assimilate all new technologies to provide cost effective Healthcare. Itshall not only employ the largest chunk of all available capital but shall alsoemploy a large proportion of the skilled work force. The HealthcareIndustry is poised to become the biggest Employer in all Countries. It shallalso be the biggest consumer of all new technologies.Specifically, in the next decade, it is anticipate that the HealthcareIndustry shall grow at an accelerated pace and will achieve a Growth Rate of8 - 10 % per annum in India and a Growth Rate of 4 - 8 % per annum in mostof the Countries of third World. As a result, most of the Countries in theworld (Other than USA) shall add more Hospital Beds.This accelerated growth will require a large body of skilled HealthcareProviders. As a result, the Medical Education Sector, including Medical andall Para-medical staff, shall also witness a faster growth. It is anticipated
  40. 40. that the numbers of skilled Healthcare Providers shall double in nextdecade.The addition of Hospital Beds shall catalyse a Growth in Hospital EquipmentIndustry. It shall also fuel the growth of Pharmaceutical Industry. It shallspecifically affect the Medical and Surgical Supply Segment and there too,the Prosthetic Devices Segment shall witness a very rapid growth.In the next decade, the Earths Population shall reach a peak number. This,coupled with availability of better Healthcare shall lead to a higherExpectancy of Life at Birth. The average age of Earths Population shallincrease. This will require a far superior understanding of Multiple OrganSyndromes and there treatments. There shall be a shift in focus ofproviding Healthcare. The Hospitals shall tend to be the providers of Acute& Intensive Healthcare; while new cost effective modalities shall provideintermediate care or nursing only care.These new modalities shall not follow the rigid standards as set forHospitals & shall employ a smaller number of trained medical manpower.These modalities shall augment the Home Care, as is available in the JointFamily Environment to more than half the population of world today. This willnecessitate a greater interaction between the Healthcare Provider, theMedical Charge and the other segments of Healthcare Industry.This growth of Healthcare Industry shall be supported by Political Will andSocial Understanding at all levels of any Society. It must, therefore, meet
  41. 41. the new challenges, by providing cost effective Healthcare in a manner thatimproves the Quality of Humane Life.
  42. 42. Some Suggestions for improving the position of the hospitals1. The general perception that large hospitals, with high bed-occupancy rate, are profitable, is misleading. Global experience shows that hospital with more than 250 beds don’t do well. Many Indian hospitals are following the US healthcare industry, by decreasing the average length of stay of patients and increasing patient turnover. US research shows that 80% of the revenues form a patient comes in the first 72 hours post- admission. Hospitals generate a lot of revenues from General Inspection, because the patient turnover is very high. A large percent of revenues come from specialized services like operations and surgeries. It is because of these reasons that many corporates are planning for a small 100 beds specialized hospitals, which caters to specific diseases like cardiac, cosmetic surgery, neurology etc. Research shows that there exist a lot of space for super-specialized hospitals with 100-150 beds, which generate revenues equivalent to large 500 bed general hospital. Typically large hospitals with approximately 500 bed capacity takes about 9-10 years to break even whereas super- specialty hospitals with about 100 beds take about 6-7 years to break even. Therefore, going in for super-speciality hospitals seems to be a more viable option today.2. Hospitals could also generate revenues from medicines if they are supplying them in-house. Some hospitals make it mandatory for the
  43. 43. patients to buy medicines from the hospital’s chemist shop. A margin of 15-20 % can be charged for such medicinal supplies. Though many hospitals run by Trusts do not earn this way, but new entrants or corporates for whom private healthcare sector is a direct extension of their line of business ( eg. Pharma companies), can generate good returns from medicine supply.3. Health Plan packages can be provided by hospitals to family and corporate. For example Family Health Plan Services (FHP), a subsidiary of Apollo Hospitals does health management of employees of its clients.With a wide net work of Hospitals and Healthcare providers countrywide, and a tie -up with General Insurance Corporation of India, FHP offers a range of services to employees and dependants, such as Preventive Healthcare, Corporate Counselling, welfare Programmes, Claims Administration, Patient-care Coordination and so on. So FHPs healthcare packages, optimize the benefits while keeping the cost under control.4. Apart from preventive healthcare, stress management programs could be provided. For example ‘Effective Stress Management Programme’ offered by Wockhardt Hospital.This programme provides a medical perspective of stress and is conducted by a medical professional. The programme includes a series of one-to-one sessions, with a clinical Psychologist highlighting the factors responsible for inducing stress, and the methodologies, which can be adopted to cope with this phenomenon practically.
  44. 44. 5. Hospitals can become integrated healthcare systems i.e. when medicines, food services, laundry and linen etc will become "purchased" services. These third-party operations will increase the profit margins.6. Mergers could be used for synergy of skills - i.e. to help the merged organisations benefit from one anothers individual strengths by applying them across the board. It also helps them to make joint investments in branding or information technology and also to react effectively to the changed market forces. Alternatively hospitals can go in for Group Purchases, as in USA. The buying power of large GPOs in USA like Premier, VHA / UHC and AmeriNet gives them the clout to exert price pressure on suppliers, particularly for products in lower demand. And as GPOs have consolidated, manufacturers have offered bigger discounts to hang on to their contracts. So there exists a lot of supply management opportunity, which will affect spending productivity.