Description
what attracts corporates towards hospitality sector
HEALTHCARE AND HOSPITAL INDUSTRY
Healthcare industry is a wide and intensive form of services which are related to well being of human beings. Health care is the social sector and it is provided at State level with the help of Central Government. Health care industry covers hospitals, health insurances, medical software, health equipments and pharmacy in it.
Right from the time of Ramayana and Mahabharata, health care was there but with time, Health care sector has changed substantially. ith
improvement in Medical Science and technology it has gone through considerable change and improved a lot.
!he ma"or inputs of health care industries are as listed below# $. $$ $$$. Hospitals Medical insurance Medical software
$%. Health equipments
Health care service is the combination of tangible and intangible aspect with the intangible aspect dominating the intangible aspect. $n fact it can be said to be completely intangible, in that, the services &consultancy' offered by the doctor are completely intangible. !he tangible things could include the bed, the d(cor, etc. )fforts made by hospitals to tangibli*e the service
offering would be discussed in details in the unique characteristics part of the report.
Different types of health care services availa le in In!ia
Hospitals +athology Clinics ,lood ,an-s Meditation Centres )mergency services li-e .mbulances, etc. /nline Medical Services !elemedicine 0aturopathy 1oga Centres 2itness Centres 3aughter Clubs Health Spas
$n
the Constitution
of $ndia, health is a state sub"ect. Central govt4s
intervention to assist the state govt is needed in the areas of control and eradication of ma"or communicable 5 non6 communicable diseases, policy formulation, international health, medical 5 para6medical education along with regulatory measures, drug control and prevention of food adulteration, besides activities concerning the containment of population growth including safe motherhood, child survival and immuni*ation +rogram. !he plan outlay for central sector health programme in the .nnual +lans 788968: is Rs.8;<.;< crore including a foreign aid component of Rs.=<< Crore. . ma"or portion of outlay is for the control and eradication of diseases li-e malaria, , blindness being implemented under Centrally sponsored schemes. .nother ma"or component of the central sector health programme is purely Central schemes through which financial assistance is given to institutions engaged in various health related activities. !hese institutions are
responsible for contribution in the field of control of communicable 5 non6 communicable diseases, medical education, training, research and parent 6care. $n our pro"ect our focus has been the hospital sector which is the ma"or component of the healthcare industry.
The Hospital In!"stry
So#e $acts
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$ndia4s healthcare industry is currently worth Rs 9>,<<< crore which is roughly = percent of the G?+. !he industry is e@pected to grow at the rate of 7> percent for the ne@t si@ years which amounts to an addition of Rs 8,<<< crores each year.
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!he national average of proportion of households in the middle and higher middle income group has increased from 7=A in 788< to ;< A in 7888.
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!he population to bed ratio in $ndia is 7 bed per 7<<<, in relation to the H/ norm of 7 bed per ><<.
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$n $ndia, there e@ists space for 9B<<< to 7<<<<< hospital beds. +rivate insurance will drive the healthcare revenues. Considering the rising middle and higher middle income group we get a conservative estimate of ;<< million insurable lives
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/ver the last five years, there has been an attitudinal change amongst a section of $ndians who are spending more on healthcare.
Corporate hospitals mushroomed in the late eighties. !he boom remained shortlived and out of the ;; listed hospital scrips, most are being trading below par. .n increasingly fragmented mar-et, lac- of statistics, capital intensive operations and a long gestation period are all wise reasons to shy
away from investing in the healthcare industry. Government and trust hospitals dominate the scene. Many of the trust hospitals suffer from poor management. Good corporate hospitals are still too few to amount to a critical mass. Corporate hospitals failed a decade ago because they emerged in isolation and weren4t part of a larger phenomenon. However, now, there are the insurance companies, the hospital hardware and the software companies that have come together to create the boom.
$actors Attractin% Corporates In the Healthcare Sector
Reco%nition as an in!"stry# $n the mid :<4s, the healthcare sector was recogni*ed as an industry. Hence it became possible to get long term funding from the 2inancial $nstitutions. !he government also reduced the import duty on medical equipment4s and technology, thus opening up the sector. Since the 0ational Health +olicy &the policy4s main ob"ective was CHealth 2or .ll4 by the 1ear ;<<<' was approved in 78:>, little has been done to update or amend the policy even as the country changes and the new health problems arise from ecological degradation. !he focus has been on epidemiological profile of the medical care and not on comprehensive healthcare. Socio&Econo#ic Chan%es' !he rise of literacy rate , higher levels of income and increasing awareness through deep penetration of media channels, contributed to greater attention being paid to health. ith the rise in the
system of nuclear families, it became necessary for regular health chec-6ups and increase in health e@penses for the bread6earner of the family. (ran! Develop#ent' Many family run business houses, have set6up charity hospitals. ,y lending their name to the hospital, they develop a good image in the mar-ets which further improves the brand image of products from their other businesses. E)tension To Relate! ("siness' Some pharmaceutical companies li-e oc-hardt and Ma@ $ndia, have ventured into this sector as it is a direct e@tension to their line of business. Openin% Of The Ins"rance Sector' $n $ndia, appro@. D<A of the total health e@penditure comes from self paid category as against governments contribution of ;B6>< A. . ma"ority of private hospitals are e@pensive for a normal middle class family. !he opening up of the insurance sector to private players is e@pected to give a shot in the arms of the healthcare industry. Health $nsurance will ma-e healthcare affordable to a large number of people. Currently, in $ndia only ; million people & <.; A of total population of 7 billion', are covered under Mediclaim, whereas in developed nations li-e ES. about 9B A of the total population are covered under some insurance scheme. General $nsurance Company, has never aggressively mar-eted health insurance. Moreover, G$C ta-es upto D months to process a claim and reimburses customers after they have paid for treatment out of their own poc-ets. !his will give a great advantage to private players li-e Cigna which is planning to launch Smart Cards that can be used in hospitals, patient guidance facilities, travel insurance, etc.
!he Consultants, 2inanciers and $nsurance .gencies are to benefit from this boom. !he insurers will use ++/s, that will grow into HM/s, to assume insurance ris-s on clients behalf. Medical )quipments, Medical Software and Hospitals will see the biggest boom.
THE SER*ICE +AR,ETIN- TRIAN-LE'
HOSPITAL
DOCTOR
PATIENT
? Co#pany' Here, the hospital is the company that dreams up an idea of service offering &treatment', which will satisfy the customer4s &patient4s' e@pectations &of getting cured'. ? C"sto#er' !he patient who see-s to get cured is the customer for the hospital as he is the one who avails the service and pays for it. ? Provi!er' ?octor, the inseparable part of the hospital is the provider, as he is the one who comes in direct contact with the patient. !he reputation of the hospital is directly in the hands of the doctor. . satisfied patient is a very important source of word of mouth promotion for the organi*ation.
Classification of Hospitals
HOSPITALS
Objective
Ownership Teachingcu Research
Path !#vern ent
Size A""#path
District
Se i-!#vt !enera" $#"untar% Agencies
A%urve'
Ta"u)
H# e#
Specia"
Pri ar% Hea"th& Centre
(nani Private& Charitab"e Others Teaching
-Enique
Characteristics# 6
!he service industry has the following characteristics.
7' $ntangibility# 6
$ntangibility means that a customer would have to visuali*e the service offering. Since the offering cannot be seen or felt there would be no stoc- and hence one would not be able to "eep a trac- of the sales etc. !his characteristic also ma-es it different to measure the benefits and utilities of the product. .n individual would only be able to e@perience the same.
$n the product service continuum, hospitals fall in the brac-et of highly intangible where the service has credence qualities. i' !he services of a doctor i.e. the consulatation provided by the doctor , his diagnosis etc cannot be touched felt or seen. /ne can only visulalise the same. ii' !hey can also not measure the benefits. !hese can only be e@perienced by the customer. !here is no ownership over the doctor or the services provided by him . !he remedial measures to overcome intangibility are#6
a' !he mar-eter should visuali*e the productFservice for the patient.$n case of hospitals any visual of the hospital displaying the well maintained interiors, the hi6tech equipments used for treatment would help to tangibilise the product.
b' .ssociation# 6 !he association of a hospital with any well -nown personality would help as a good image building e@ercise . $t would
also give the customer a certain level of confidence regarding the services provided in the hospital.
2or &eg 7'6 Hospitals li-e the !ata Memorial Hospital or the Hindu"a hospital are associated with Corporate Houses. !hey are owned by these corporate families. Hence a customer is sure about the services provided in these hospitals. &eg ;'!he ?inanath Mangesh-ar Hospital. Since it is owned by 3ata Mangesh-ar the customer is sure to receive quality services.
c'+hysical Representation #6
$ntangibility could also be overcome in case of hospital through physical Representation in the form of #6 7'Color6 !he Red Cross signifies the Hospital. ;'Eniforms6 !he white uniforms of the ?octors .nd 0urses in enemy hospitals. >'Symbols G !he Red Cross is the common logo with which people indentify hospitals. .lso logos of hospitals li-e oc-hardt.
=',uildings G $n case of hospitals the e@ternal appearance of the building or the maintenance i.e how well maintained it is
d'?ocumentation G!here are a numbers of hospitals which have received $S/ 8<<< certificates. & )g' .pollo Hospital.
;' +erishability
. services cannot be stored . So if the service is not consumed immediately then it loses its value.
2or )g G $f a doctor does not reach his dispensary on time or has his clinic loc-ed for that particular day. He loses all his patients for that day. . situation may also arise when the doctor may be unable to attend to some of his patients due to a huge rush. $n such a case again the doctor could lose out on all his patients.Same would be the situation faced by the hospitals. $n such a case the hospital too may lose all its patients for that day.
6Solution to the problem of perishability
a' $n such a situation the doctor can appoint an assistant who could cater to the e@cess patients or he could have students training under him who during their course of training could also help him with the e@cess patients.
&)g'6 Ra"govind Hospital in C,? appoints interns of Medical College for night duty on a stipend
b' +ea- time )ssential Services
$n a rush hour situation when there are too many customers to attend to only essential services should be catered to. 2or &eg 7' $n hospitals during the late night when accident reportings are high all hands are required at the trauma centers &eg ;' +art time volunteers for national )mergencies.
>' %ariability
$t means that the quality of service provided to different people may not be the same. &ie' $rrespective of the fact that the "ob carried out by them is the same the service quality may differ because they may be from different bac-grounds have different aptitude, s-ills, attitude etc
2or )g #6 ; ?octors, one from a municipal hospital and another from a reputed hospital may treat a person for the same problem. ,ut their quality
might differ. $n such a case doctorsFhospitals are the internal customers and the patients are the e@ternal customers.
Since a transaction is always two way communication, a customers willingness, bac-ground, attitude etc may also effect the transaction 2or & )g' 6 . patient may want to avail of a doctors services but may not be able to afford the services. &)g' . patient suffering from .rthritis may be required to lose weight for
further treatment. ,ut the patient may not have the driveFwillingness to lose weight .
Solutions
7'!he internal customers or the fresh recruiters could be given training. !hey could be given a chance to perform the small parts of an operation in order to gain e@perience.
7'!he doctors could be given training and could be updated with all the latest happenings in the medical field in regular intervals. 2or &)g ' .M. prescribes for its member doctors D wee-s training every year and D months training every D years.
7'!raining of )@ternal customers & )g' ?iabetic patients are trained to in"ect insulin on their own
& )g ' $n Case of health care services, a gym instructor may teach his members to use the gym equipments on their own.
& )g ' .uto ?iagnostic equipments are used in hospital. !hese -ind of training programmes provided to the e@ternal customer helps to increase the quality of transaction.
='$nseparability 6
2or any service to ta-e place it is necessary that both the service provider and the customer be present in the location at the same time
& eg' .n operation cannot be conducted without the doctors presence. .s a result a number of patients due to geographical distances lose out on the opportunity to get themselves treated from the very best surgeons and doctors.
Solutions !his can be overcome to a certain e@tent through the following#6
7'!raining of internal customer6 Here one e@perienced person can provide training to the amateurs. 2or )g . surgeon during an operation is surrounded by interns watching the operation. !hey could also carry out some small parts of the operation.
;'$nnovational Service6 +sychiatrists have innovated group therapy where they call in 7<H patients together to an oval conference table and encourage them to talabout themselves and their ailments.
>' %ideo Conferencing ,usiness Conferences, Consultancy and the Medical world ./nly recently have instructions for operation through video conferencing been initated but mostly video conferencing has been used in the medical world as a pedagogical tool.&eg' . unique and rare brain tumour operation can be broadcast live all over the world to subscribed medical colleges. &&&&&&&&&&&&&&&&
. Ps of #ar/etin% for hospitals
? +roduct# !he service product is an offering of commercial intent having features of both intangible and tangible, see-ing to satisfy the new wants and demands of the consumer. Hospital industry is action oriented and there is a lot of interaction with the customers &patients'. !he service product of the hospitals normally have the following features# o Iuality 3evel# hen we tal- about mar-eting 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. !hese services which include laboratory, blood6ban-s, catering, radiology and laundry, in a true sense determine the quality of services made available by medical and para6medical personnel. !hey get a strong base for treatment since the diagnostic aspect determines a direction. !o get the best result from /!, it is natural that equipments are properly sterlised. $n addition, the dresses and clothes are also required to be made bacteria free. !he patients are required to wear disinfected linen which should be made available. !he radiology department should have hi6tech facilities -eeping in view the pressure of wor-. /f late, we find
sophisticated equipments and unless hospitals ma-e the same services available the same, the quality of services cannot be improved. o .ccessories# !his 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 e@tra. Hospitals have different wards 6 General and Special. Certain hospitals provide services for the family members of the patients &when they are not from the same city' G accommodation and catering.
o +ac-aging# $t is the bundling of many services into the core service. )g# .pollo hospital offers a full health chec-6up to the patients. Similarly other hospitals also offer pac-age deals for health chec-6ups. 2or e@ample if a person has to undergo a bypass surgery, he can pay a lump sum amount during admission, say rupees 7 la-h for all procedures, tests, stay, etc, at once. o +roduct line# hospitals through their services offer many choices to the patients and cover a wide range of customer needs. 2or e@ample# .pollo hospital has dental department, cardiology department, etc. and within the dental department it has dental surgery, root canal, etc. o ,rand name# !he hospitals, to differentiate themselves, and their services from others use a brand name. !he intangibility
factor of the service ma-es it all the more important for the hospitals to do so.
? +lace Ender hospital mar-eting, distribution of Medicare services plays a crucial role. !his focuses on the instrumentality of almost all who are found involved in ma-ing services available to the ultimate users. $n case of hospitals the location of hospital plays a very important role. !he -ind of services a hospital is rendering is also very important for determining the location of the hospital. )g. !ata memorial hospital speciali*es in cancer treatment and is located at a centre place unli-e other normal hospitals, which you can find all over other places. $t can be unambiguously accepted that the medical personnel need a fair blending of two important properties i.e. G they should be professionally sound and should have in6depth -nowledge at psychology. . particular doctor might be famous for his case handling records but he may not be made available for all the patients because of the place factor. 0ow in this case the service provided, that is the doctor may be a visiting doctor for different hospitals at different locations to beat the place factors. Enli-e other service industries, under hospital mar-eting all efforts should be for ma-ing available to the society the best possible medical aid.
$n a country li-e $ndia, which is geographically vast and where ma"ority of the population lives in the rural areas, place factor for the hospitals play a very crucial role. . typical small village F town may be having small dispensaries but they will not have super speciality hospitals. 2or that they will have to be dependent on the hospitals in the urban areas.
? +eople Ender hospital mar-eting the mar-eting mi@ variable people includes all the different people involved in the service providing process &internal customers of the hospitals' which includes doctors, nurses, supporting staff etc. !he earliest and the best way of having control on the quality of people will be by approving professionally sound doctors and other staff. Hospital is a place where small activity underta-en can be a matter of life and death, so the people factor is very important. /ne of the ma"or classifications of hospitals is G private and government. $n the government hospital the people factor has to be specially ta-en care of. $n $ndian government hospitals e@cept a few almost all the hospitals and their personnel hardly find the behavioural dimensions significant. $t is against this bac-ground that even if the users get the quality medical aid they are found dissatisfied with the rough and indecent behaviour of the doctors. Ender hospital mar-eting a right person for the right "ob has to be appointed and they should be adaptable and possess versatility. !he patients in the hospitals are already suffering from trauma, which has to be understood by the doctors and other staff. !he people of the hospital should be constantly motivated to give the best of their effort.
? +rocess +rocess generally forms the different tas-s that are performed by the hospital. !he process factor is mainly dependent on the si*e of the hospital and -ind of service it is offering. . typical process involved in a medium si*ed hospital can be as follows. &
.part from this flow there are other allied activities li-e record -eeping administration at services etc which fall under the process factor. !hese stages do not e@ist separately but are interlin-ed. !he most important elements are lines of communication within the setup. !he e@perience of the patient depends on the final interplay of all these factors.
? +hysical evidence $t does play an important role in health care services, as the core benefit a customer see-s is proper diagnosis and cure of the problem. 2or a local small time dispensary or hospital physical evidence may not be of much help. $n recent days some ma"or super speciality hospitals are using physical evidence for distinguishing itself as something unique. +hysical evidence can be in the form of smart buildings, logos, mascots etc. a smart building infrastructure indicates that the hospital can ta-e care of all the needs of the patient. )@amples 6 7. 3ilavati 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. ;. 2ortis and .pollo hospitals have a unique logo, which can be easily identified. +hysical evidence also helps in beating the intangibility factor.
? +romotion# Hospitals for promotion use either advertisement or +R or both after
ta-ing into consideration the target customers, media type, budget and the sales promotion. Since a few years the prime times in !.%. are reserved for advertising social issues li-e family planning, use of different types of
contraceptives, care for the girl child and so on. !hese commercials use the common man approach for reference group appeal. $n case of health care products and services use for Jcommon manK appeal is widely prevalent. !he use of celebrities is not as effective as that of a common man. .n ordinary person thin-s that if it wor-s well for people li-e him, it will also wor- equally well for him. !he identification with the common man is easy and quic-. ,esides !%, other media of promotion are to be used innovatively. Enli-e the urban area, in rural areas newspapers and maga*ines do not have the same impact in conveying messages. $n villages, hoardings and wall writings near the mar-ets and recreation centers attract the attention of villagers. !his mar-et consists of 7:< million strong middle income group and a small income group. !his group has a large discretionary income. !hese discerning consumers are very careful in choosing health care services. !he last decade has witnessed a health, appearance and nutrition conscious population.
!he health care field has become very competitive. .lthough around one6 fourth of our population stays in urban $ndia, three fourths of the total doctors have engaged themselves in this part. Many of these doctors visit the contiguous rural areas, but they may operate from the urban area. !he patients of upper middle and upper income group have a wide choice to ma-e from a number of clinics and hospitals. !herefore, many hospitals have abandoned traditions and adopted mar-eting strategies to woo more and more patients to their clinics. ord6of6mouth plays a very important role in promotion of hospitals. . person in need of a health care service does not -now for sure where to search for relevant information. He consults his family members, relations and friends first. !he patients who come to a hospital generally have the old patients of that hospital as referrals. ord6of6mouth plays
an important role during information acquisition stage of the customers as there are no ob"ective performance measures to "udge the various alternatives available to them. !herefore, satisfied past patients of a hospital can bring more number of patients to that hospital than a number of advertisements. $n a competitive mar-et place, the images of the firms swill affect their competitive standing. /ne factor that is li-ely to have a significant impact on the health care scene is the growth of hospital chains such as .pollo Hospitals, ,irla Health Centres ,etc. .rtificial heart transplants and other comple@ operations although are few in number and generate a small portion of the total revenue, they help in generating word6of6
mouth which health care providers are actually interested. Many of these companies are spending a lot in corporate advertising for $mage building.
+ar/etin% hospitals
Mar-eting in Hospitals Mar-eting is unethicalK was the frequent refrain in the eighties, when very few hospitals realised that it was necessary to incorporate mar-eting as an integral function in the hospital operations. ,ut the ma"or argument at that time lay in understanding whether this professional profitability orientation and was really !his required argument for its viability, became oc-hardt
sustainability.
however
favourable in the late nineties as corporate companies li-e
and Ma@ $ndia started venturing into the hospital industry, apart from the ongoing mergers and acquisitions that were already ta-ing place at that time. )ven the !+.s started building tie6ups with corporate clients and there was already an abysmal utilisation of resources in the e@isting hospitals. $n addition to the above a ma"or factor that contributed to the acceptance of mar-eting in hospitals was an increase in the delivery of services. C+erception of patients4 was another important consideration for hospitals, as they felt that the patients would ta-e them as profit oriented organisation
rather than service oriented organisation. Eltimately, mar-eting was accepted only by a few while the others discarded the concept. Hospitals who accepted mar-eting also carried out their functioned by concentrating around corporate clients. 3ately it has been felt that many $ndian hospitals have a dilemma regarding the functions of mar-eting. $n an era where hospitals are e@periencing a ma"or shift in their clientele, they are worried more about the patients4 perception of hospitals and therefore the concept of brand restructuring and brand engineering is vital. .s hospitals spend millions of rupees in technology and infrastructure, it becomes necessary, that they attract patients and generate funds. $n order, to do the same, the hospitals follow various mar-eting and brand building e@ercises. Some of them are listed below#
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Many hospitals have eminent personalities from the industry in their ,oard of trustees. !his indirectly leads to increase in, inflow of patients, wor-ing in the companies of these !rustees. ,esides the presence of eminent personalities creates a sense of confidence in the minds of people.
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+rivate hospitals can attract their shareholders by offering discounts. 2or e@ample, a special discount of ;< A on all preventive health chec-s is offered to all shareholders of .pollo Hospitals 3imited.
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Hospitals have long6term understanding with ++/4s &+referred +rovider /rgani*ation', which further have understanding with corporates. .ny case of sic-ness found in the employees of these
corporates refer them to the ++/4s , which further sends them to the hospital for chec-6ups and treatment.
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!he success rate of crucial operations and surgeries, reflect the technological and -nowledge6 based edge of the hospital over the competitors. Such successes are discussed in health maga*ines and newspapers, which becomes a natural advantage for the hospital.
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Some hospitals by means of their past trac- record have created a niche mar-et for themselves. 2or e@ample, Hindu"a Hospital is -nown for its high6quality healthcare at reasonable rates, whereas 3ilavati Hospital is -nown for its five6star services.
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Hospitals hold seminars and conferences relating to specific diseases, where they invite the doctors from all round the country, for detailed discussion. !his ma-es the hospital well -nown amongst the doctors, who could in future refer complicated cases to the hospital.
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Hospitals can also promote medical colleges. !his helps them to generate e@tra resources in form of fees, using the same infrastructure.
SO+E PLAYERS
!he .pollo Group of Hospitals
?riven by its line of being the Jarchitect of healthcareK in $ndia, the .pollo Hospitals Group, comprising of one of the largest networ-s of ;D hospitals, 7< clinics and over 7<,<<< employees across the country,
represents the changing face of healthcare in $ndia contemporary and corporatised. $t has been the first private company to administer health insurance in the country and $ndraprastha .pollo Hospital in ?elhi is the fourth largest corporate hospital in the world. !he .pollo group is $ndia4s first corporate hospital, the first to set6up hospital outside the country and the first to attract foreign investment. ith ;D<< beds, .pollo is one of .sia4s largest healthcare players. !he recent merger between its > group companies, $ndian Hospitals Corporation 3td., ?eccan hospitals Corporation 3imited and /m Sindoori Hospitals 3imited, will help the group raise money at a better rate and by consolidating inventory, it will save around 7<A of the material cost. !he group is planning to invest Rs. ;<<< crore , to bulid around 7B new hospitals, in $ndia, Sri 3an-a, 0epal and Malaysia.
.pollo claims to maintain the best of medical standards with a record of over 9.= million treated patients, >,7B,<<< preventive health chec-s done, 8:.B percent success rate in =B,<<< cardiac surgeries, etc. .nd helping the company maintain a balance between the corporate culture and rigorous medical e@cellence is recognition of $! as intrinsic to every process, whether it is day6to6day running of hospitals, education or telemedicine. !he application of $! in the day6to6day wor-ing of the largest hospital of the group, $ndraprastha .pollo, throws light on the e@tent of the automation drive within the company. !he management realised the fact that in order to have a modern hospital in place all the wor- processes had to be related to $!. Hence, the need for an end6to6end integrated solution. !his led to the implementation of the Hospital $nformation System &H$S', which was an integral part of the hospital inception pro"ect. !he hospital today boasts of an integrated H$S, which provides for end6to6 end integration of the various processes and functional areas within the hospital to ma-e for a seamless wor-flow. !he wor- processes of the hospital are primarily divided into two areas the patient &comprising of in6 patient and out6patient' and the non6patient all the bac-6end departments li-e house-eeping, engineering, finance, materials, purchase and HR?. !he wor-flow process starts with the patient see-ing an appointment with the doctor. H$S contains all the information relating to appointment schedules of the doctors. ?epending on the availability of the doctor, the patient is given the date and time of appointment. !his information is then
fed into the system and the updated information is available to the doctor in real6time. /n the date of his appointment, the patient registers himself at the counter by filling up of a form, which contains all the basic information related to the patient. !his data is feeded into the system with a Enique Hospital $dentifier &EH$' number allotted to the patient so that by the time the patient meets the doctor, he already has all the required basic information. !his is followed by 7B minutes of consultation with the doctor after which the doctor gives his prescription, the data is again -eyed into the system as a patient record under his EH$ and is accessible for quic- reference. /ne of the biggest advantages of H$S is that any medically relevant information related to the patient is available at the clic- of a button, thereby saving precious time, which means a lot when it comes to saving a life. H$S also acts as a -ind of )R+ for the hospital with its automation of various bac-6end areas li-e financial, accounting and inventory, which are integrated with the patient areas wherever required. !he hospital has also developed a very effective mailing system for its employees, which is based on Microsoft )@change. !he company4s $ntranet is being used to run mailing applications as well as information relating to company policies, leave information and basic information relating to the company. !elemedicine Healthcare for all
. very significant $! initiative of the .pollo Hospitals Group, and of great relevance to a developing country li-e $ndia in ta-ing healthcare to the masses, is the area of telemedicine. $ncorporated in 7888, .pollo !elemedicine )nterprises &.!)3', the telemedicine division of the .pollo Hospitals Group, has already set up over 7< telemedicine lin-s between the .pollo $nstitutions at ?elhi, Hyderabad and Chennai and distant locations across the country. $t has developed competence in developing cost6 effective turn-ey telemedicine solutions.
!eleme6dicine ensures that the benefits of hi6tech medicine can go to everyone, and not "ust to people who live in big cities. !he group has forged alliances with government organisations li-e the $ndian Space Research /rganisation &$SR/' for %S.! bandwidth and ipro for hardware, to
provide telemedicine facilities to far6flung and rural areas. !he division is wor-ing towards developing a strong .pollo !elemedicine 0etwor-, which allows the participant sites to collaborate with institutions in the country and abroad, and provides their clientele access to better healthcare in areas not adequately served by the medical community. . patient and his doctor can interact with specialists based in the specialty centers and receive second opinion or interpretations to comple@ medical cases. !he patient reports can be transmitted from a consulting canter to a specialty canter using the telemedicine software and the communication lin-, which could be $S?0 or %S.! connectivity.
/ther Services offered by .pollo# 6.pollo +harmacy .pollo +harmacy operates round the cloc- catering to all your medicine needs. 6Caf( .pollo Caf( .pollo is a sit down dining facility of the hospital. $t offers a wide selection of snac-s and a variety of meals.
6.pollo 2ood +la*a !here is food facility located in the atrium of the hospital serving a delightful array of delicacies.
!imings # :.<<am 6 8#<<pm
62ast 2ood Cafe 2or the convenience of $CE attendants there is a ;= hours cafe in the $CE lobby. 6Gift Shop !he Gift Shop carries a wide range of gifts including Confectionery, Cards, ,oo-s, 0ewspapers, Maga*ines and other novelties. 6,an- 2acilities
6!he /riental ,an- of Commerce
!he $ndraprastha .pollo ,ranch of the /riental ,an- of Commerce is located at one of the Gates. ,an- Hours Monday to 2riday # 7<#<<am 6 ;#<<pm Saturday # 7<#<<am 6 7;#<<pm !he ban- remains closed on Sundays and 0ational Holidays.
6!he $C$C$ .!M Counter !he $C$C$ .!M counter is also located in the hospital.
6 2ortis Healthcare 2ortis is the late Ranba@y4s +arvinder Singh4s privately owned company. !he company is a ;B< crore, ;<< bed cardiac hospital, located in the town of Mohali. !he company also has 7; cardiac and information centres in and around the town, to arrange travel and stay for patients and family. !he company has plans of increasing the capacity to around >9B beds and also plans to tie up with an overseas partner. Ma@ $ndia .fter selling of his sta-e in Hutchison Ma@ !elecom, .nal"it Singh has decided to invest around ;<< crores, for setting up worldclass healthcare services in $ndia. Ma@ $ndia plans a three tier structure of medical services G Ma@ Consultation and ?iagnostic Clinics, Ma@Med, a 7B< bed multispeciality hospital and Ma@ General, a =<< bed hospital. !he company has already tied up with Harvard Medical $nternational, to underta-e clinical trials for drugs, under research abroad and setting up of Ma@ Eniversity, for education and research. )scorts
)H$RC located in 0ew ?elhi has more than ;;< beds. !he hospital has a total 99 Critical Care beds to provide intensive care to patients after surgery or angioplasty, emergency admissions or other patients needing highly speciali*ed management including !elecardiology &)CG transmission through telephone'. !he )H$RC is unique in the field of +reventive Cardiology with a fully developed programme of Monitored )@ercise, 1oga and Meditation for 3ife style management. /CLH.R?! and ?E0C.0S G3)0).G3)S $0!)R0.!$/0.3 also have ma"or e@pansion plans. !his report is prepared by Mona +andit and +arin Mehta of Sydneham $nstitute of Management e@clusively for $ndia $nfoline as part of their pro"ect curriculum.
Opport"nities
ith global revenues of appro@imately ESM ;.: trillion, the healthcare industry is the world4s largest industry and $ndia is emerging as a ma"or player in this industry, because of its high population.
.s per the $nsurance Regulatory and ?evelopment .uthority &$R?.', the $ndian healthcare industry has the potential to show the same e@ponential growth that the software and pharmaceutical industries have shown in the past decade. 2urther, as per the $R?., only 7< percent of the mar-et potential has been tapped till date and mar-et studies indicate a >B percent growthin thecomingyears.
. big opportunity for the industry emerges from the privatisation of the insurance segment, which would e@trapolate into a new delivery system in $ndia. !here is a vast insurable population in $ndia, given that only ; million people ie <.; percent of the total population are covered under Mediclaim. .ccording to a recent study, there are >7B million potentially insurable lives in the country. . orld Health /rganisation report states that $ndia needs to add :<,<<<
hospital beds each year to meet the demand of its population. !he huge shortage of beds outlines a ma"or opportunity for the industry.
!he healthcare industry is a fast growing industry and coupled with strength of $ndian innovative and scientific manpower and also low costs, it is slowly achieving -ey industry status in $ndia.
The $"t"re
Healthcare industry is booming all over the world. $n the ES it is already the largest service sector. .nd world6wide it is slated to be a M= trillion mar-et by ;<<B. . orld ,an- Report in 0ovember 7888 points at the emergence
of large6scale, investor6owned hospitals in the country as a NdramaticN development. !he Corporate hospitals will play a positive role in the healthcare sector by ta-ing the load off government hospitals, whose performance hasn4t been upto the mar-. !he Healthcare $ndustry is on the threshold of a ma"or Growth Spiral which shall assimilate all new technologies to provide cost effective Healthcare. $t shall not only employ the largest chun- of all available capital but shall also employ a large proportion of the s-illed wor- force. !he Healthcare $ndustry is poised to become the biggest )mployer in all Countries. $t shall also be the biggest consumer of all new technologies. Specifically, in the ne@t decade, it is anticipate that the Healthcare $ndustry shall grow at an accelerated pace and will achieve a Growth Rate of : 6 7< A per annum in $ndia and a Growth Rate of = 6 : A per annum in most of the Countries of third orld. .s a result, most of the Countries in the
world &/ther than ES.' shall add more Hospital ,eds. !his accelerated growth will require a large body of s-illed Healthcare +roviders. .s a result, the Medical )ducation Sector, including Medical and all +ara6medical staff, shall also witness a faster growth. $t is anticipated
that the numbers of s-illed Healthcare +roviders shall double in ne@t decade. !he addition of Hospital ,eds shall catalyse a Growth in Hospital )quipment $ndustry. $t shall also fuel the growth of +harmaceutical $ndustry. $t shall specifically affect the Medical and Surgical Supply Segment and there too, the +rosthetic ?evices Segment shall witness a very rapid growth. $n the ne@t decade, the )arthOs +opulation shall reach a pea- number. !his, coupled with availability of better Healthcare shall lead to a higher )@pectancy of 3ife at ,irth. !he average age of )arthOs +opulation shall increase. !his will require a far superior understanding of Multiple /rgan Syndromes and there treatments. !here shall be a shift in focus of providing Healthcare. !he Hospitals shall tend to be the providers of .cute 5 $ntensive HealthcareP while new cost effective modalities shall provide intermediate care or nursing only care. !hese new modalities shall not follow the rigid standards as set for Hospitals 5 shall employ a smaller number of trained medical manpower. !hese modalities shall augment the Home Care, as is available in the Qoint 2amily )nvironment to more than half the population of world today. !his will necessitate a greater interaction between the Healthcare +rovider, the Medical Charge and the other segments of Healthcare $ndustry. !his growth of Healthcare $ndustry shall be supported by +olitical ill and
Social Enderstanding at all levels of any Society. $t must, therefore, meet
the new challenges, by providing cost effective Healthcare in a manner that improves the Iuality of Humane 3ife.
So#e S"%%estions for i#provin% the position of the hospitals
7. !he general perception that large hospitals, with high bed6occupancy rate, are profitable, is misleading. Global e@perience shows that hospital with more than ;B< beds don4t do well. Many $ndian hospitals are following the ES healthcare industry, by decreasing the average length of stay of patients and increasing patient turnover. ES research shows that :<A of the revenues form a patient comes in the first 9; hours post6 admission. Hospitals generate a lot of revenues from General $nspection, because the patient turnover is very high. . large percent of revenues come from speciali*ed services li-e operations and surgeries. $t is because of these reasons that many corporates are planning for a small 7<< beds speciali*ed hospitals, which caters to specific diseases li-e cardiac, cosmetic surgery, neurology etc. Research shows that there e@ist a lot of space for super6speciali*ed hospitals with 7<<67B< beds, which generate revenues equivalent to large B<< bed general hospital. !ypically large hospitals with appro@imately B<< bed capacity ta-es about 867< years to brea- even whereas super6 specialty hospitals with about 7<< beds ta-e about D69 years to breaeven. !herefore, going in for super6speciality hospitals seems to be a more viable option today. ;. Hospitals could also generate revenues from medicines if they are supplying them in6house. Some hospitals ma-e it mandatory for the
patients to buy medicines from the hospital4s chemist shop. . margin of 7B6;< A can be charged for such medicinal supplies. !hough many hospitals run by !rusts do not earn this way, but new entrants or corporates for whom private healthcare sector is a direct e@tension of their line of business & eg. +harma companies', can generate good returns from medicine supply.
>. Health +lan pac-ages can be provided by hospitals to family and corporate. 2or e@ample 2amily Health +lan Services &2H+', a subsidiary of .pollo clients. Hospitals does health management of employees of its
ith a wide net wor- of Hospitals and Healthcare providers
countrywide, and a tie 6up with General $nsurance Corporation of $ndia, 2H+ offers a range of services to employees and dependants, such as +reventive Healthcare, Corporate Counselling, welfare +rogrammes, Claims .dministration, +atient6care Coordination and so on. So 2H+Os healthcare pac-ages, optimi*e the benefits while -eeping the cost under control. =. .part from preventive healthcare, stress management programs could be provided. 2or e@ample C)ffective Stress Management +rogramme4 offered by oc-hardt Hospital.!his programme provides a medical perspective of
stress and is conducted by a medical professional. !he programme includes a series of one6to6one sessions, with a clinical +sychologist highlighting the factors responsible for inducing stress, and the methodologies, which can be adopted to cope with this phenomenon practically.
B. Hospitals can become integrated healthcare systems i.e. when medicines, food services, laundry and linen etc will become NpurchasedN services. !hese third6party operations will increase the profit margins. D. Mergers could be used for synergy of s-ills 6 i.e. to help the merged organisations benefit from one anotherOs individual strengths by applying them across the board. $t also helps them to ma-e "oint investments in branding or information technology and also to react effectively to the changed mar-et forces. .lternatively hospitals can go in for Group +urchases, as in ES.. !he buying power of large G+/s in ES. li-e +remier, %H. F EHC and .meri0et gives them the clout to e@ert price pressure on suppliers, particularly for products in lower demand. .nd as G+/s have consolidated, manufacturers have offered bigger discounts to hang on to their contracts. So there e@ists a lot of supply management opportunity, which will affect spending productivity.
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doc_470855989.doc
what attracts corporates towards hospitality sector
HEALTHCARE AND HOSPITAL INDUSTRY
Healthcare industry is a wide and intensive form of services which are related to well being of human beings. Health care is the social sector and it is provided at State level with the help of Central Government. Health care industry covers hospitals, health insurances, medical software, health equipments and pharmacy in it.
Right from the time of Ramayana and Mahabharata, health care was there but with time, Health care sector has changed substantially. ith
improvement in Medical Science and technology it has gone through considerable change and improved a lot.
!he ma"or inputs of health care industries are as listed below# $. $$ $$$. Hospitals Medical insurance Medical software
$%. Health equipments
Health care service is the combination of tangible and intangible aspect with the intangible aspect dominating the intangible aspect. $n fact it can be said to be completely intangible, in that, the services &consultancy' offered by the doctor are completely intangible. !he tangible things could include the bed, the d(cor, etc. )fforts made by hospitals to tangibli*e the service
offering would be discussed in details in the unique characteristics part of the report.
Different types of health care services availa le in In!ia
Hospitals +athology Clinics ,lood ,an-s Meditation Centres )mergency services li-e .mbulances, etc. /nline Medical Services !elemedicine 0aturopathy 1oga Centres 2itness Centres 3aughter Clubs Health Spas
$n
the Constitution
of $ndia, health is a state sub"ect. Central govt4s
intervention to assist the state govt is needed in the areas of control and eradication of ma"or communicable 5 non6 communicable diseases, policy formulation, international health, medical 5 para6medical education along with regulatory measures, drug control and prevention of food adulteration, besides activities concerning the containment of population growth including safe motherhood, child survival and immuni*ation +rogram. !he plan outlay for central sector health programme in the .nnual +lans 788968: is Rs.8;<.;< crore including a foreign aid component of Rs.=<< Crore. . ma"or portion of outlay is for the control and eradication of diseases li-e malaria, , blindness being implemented under Centrally sponsored schemes. .nother ma"or component of the central sector health programme is purely Central schemes through which financial assistance is given to institutions engaged in various health related activities. !hese institutions are
responsible for contribution in the field of control of communicable 5 non6 communicable diseases, medical education, training, research and parent 6care. $n our pro"ect our focus has been the hospital sector which is the ma"or component of the healthcare industry.
The Hospital In!"stry
So#e $acts
•
$ndia4s healthcare industry is currently worth Rs 9>,<<< crore which is roughly = percent of the G?+. !he industry is e@pected to grow at the rate of 7> percent for the ne@t si@ years which amounts to an addition of Rs 8,<<< crores each year.
•
!he national average of proportion of households in the middle and higher middle income group has increased from 7=A in 788< to ;< A in 7888.
•
!he population to bed ratio in $ndia is 7 bed per 7<<<, in relation to the H/ norm of 7 bed per ><<.
• •
$n $ndia, there e@ists space for 9B<<< to 7<<<<< hospital beds. +rivate insurance will drive the healthcare revenues. Considering the rising middle and higher middle income group we get a conservative estimate of ;<< million insurable lives
•
/ver the last five years, there has been an attitudinal change amongst a section of $ndians who are spending more on healthcare.
Corporate hospitals mushroomed in the late eighties. !he boom remained shortlived and out of the ;; listed hospital scrips, most are being trading below par. .n increasingly fragmented mar-et, lac- of statistics, capital intensive operations and a long gestation period are all wise reasons to shy
away from investing in the healthcare industry. Government and trust hospitals dominate the scene. Many of the trust hospitals suffer from poor management. Good corporate hospitals are still too few to amount to a critical mass. Corporate hospitals failed a decade ago because they emerged in isolation and weren4t part of a larger phenomenon. However, now, there are the insurance companies, the hospital hardware and the software companies that have come together to create the boom.
$actors Attractin% Corporates In the Healthcare Sector
Reco%nition as an in!"stry# $n the mid :<4s, the healthcare sector was recogni*ed as an industry. Hence it became possible to get long term funding from the 2inancial $nstitutions. !he government also reduced the import duty on medical equipment4s and technology, thus opening up the sector. Since the 0ational Health +olicy &the policy4s main ob"ective was CHealth 2or .ll4 by the 1ear ;<<<' was approved in 78:>, little has been done to update or amend the policy even as the country changes and the new health problems arise from ecological degradation. !he focus has been on epidemiological profile of the medical care and not on comprehensive healthcare. Socio&Econo#ic Chan%es' !he rise of literacy rate , higher levels of income and increasing awareness through deep penetration of media channels, contributed to greater attention being paid to health. ith the rise in the
system of nuclear families, it became necessary for regular health chec-6ups and increase in health e@penses for the bread6earner of the family. (ran! Develop#ent' Many family run business houses, have set6up charity hospitals. ,y lending their name to the hospital, they develop a good image in the mar-ets which further improves the brand image of products from their other businesses. E)tension To Relate! ("siness' Some pharmaceutical companies li-e oc-hardt and Ma@ $ndia, have ventured into this sector as it is a direct e@tension to their line of business. Openin% Of The Ins"rance Sector' $n $ndia, appro@. D<A of the total health e@penditure comes from self paid category as against governments contribution of ;B6>< A. . ma"ority of private hospitals are e@pensive for a normal middle class family. !he opening up of the insurance sector to private players is e@pected to give a shot in the arms of the healthcare industry. Health $nsurance will ma-e healthcare affordable to a large number of people. Currently, in $ndia only ; million people & <.; A of total population of 7 billion', are covered under Mediclaim, whereas in developed nations li-e ES. about 9B A of the total population are covered under some insurance scheme. General $nsurance Company, has never aggressively mar-eted health insurance. Moreover, G$C ta-es upto D months to process a claim and reimburses customers after they have paid for treatment out of their own poc-ets. !his will give a great advantage to private players li-e Cigna which is planning to launch Smart Cards that can be used in hospitals, patient guidance facilities, travel insurance, etc.
!he Consultants, 2inanciers and $nsurance .gencies are to benefit from this boom. !he insurers will use ++/s, that will grow into HM/s, to assume insurance ris-s on clients behalf. Medical )quipments, Medical Software and Hospitals will see the biggest boom.
THE SER*ICE +AR,ETIN- TRIAN-LE'
HOSPITAL
DOCTOR
PATIENT
? Co#pany' Here, the hospital is the company that dreams up an idea of service offering &treatment', which will satisfy the customer4s &patient4s' e@pectations &of getting cured'. ? C"sto#er' !he patient who see-s to get cured is the customer for the hospital as he is the one who avails the service and pays for it. ? Provi!er' ?octor, the inseparable part of the hospital is the provider, as he is the one who comes in direct contact with the patient. !he reputation of the hospital is directly in the hands of the doctor. . satisfied patient is a very important source of word of mouth promotion for the organi*ation.
Classification of Hospitals
HOSPITALS
Objective
Ownership Teachingcu Research
Path !#vern ent
Size A""#path
District
Se i-!#vt !enera" $#"untar% Agencies
A%urve'
Ta"u)
H# e#
Specia"
Pri ar% Hea"th& Centre
(nani Private& Charitab"e Others Teaching
-Enique
Characteristics# 6
!he service industry has the following characteristics.
7' $ntangibility# 6
$ntangibility means that a customer would have to visuali*e the service offering. Since the offering cannot be seen or felt there would be no stoc- and hence one would not be able to "eep a trac- of the sales etc. !his characteristic also ma-es it different to measure the benefits and utilities of the product. .n individual would only be able to e@perience the same.
$n the product service continuum, hospitals fall in the brac-et of highly intangible where the service has credence qualities. i' !he services of a doctor i.e. the consulatation provided by the doctor , his diagnosis etc cannot be touched felt or seen. /ne can only visulalise the same. ii' !hey can also not measure the benefits. !hese can only be e@perienced by the customer. !here is no ownership over the doctor or the services provided by him . !he remedial measures to overcome intangibility are#6
a' !he mar-eter should visuali*e the productFservice for the patient.$n case of hospitals any visual of the hospital displaying the well maintained interiors, the hi6tech equipments used for treatment would help to tangibilise the product.
b' .ssociation# 6 !he association of a hospital with any well -nown personality would help as a good image building e@ercise . $t would
also give the customer a certain level of confidence regarding the services provided in the hospital.
2or &eg 7'6 Hospitals li-e the !ata Memorial Hospital or the Hindu"a hospital are associated with Corporate Houses. !hey are owned by these corporate families. Hence a customer is sure about the services provided in these hospitals. &eg ;'!he ?inanath Mangesh-ar Hospital. Since it is owned by 3ata Mangesh-ar the customer is sure to receive quality services.
c'+hysical Representation #6
$ntangibility could also be overcome in case of hospital through physical Representation in the form of #6 7'Color6 !he Red Cross signifies the Hospital. ;'Eniforms6 !he white uniforms of the ?octors .nd 0urses in enemy hospitals. >'Symbols G !he Red Cross is the common logo with which people indentify hospitals. .lso logos of hospitals li-e oc-hardt.
=',uildings G $n case of hospitals the e@ternal appearance of the building or the maintenance i.e how well maintained it is
d'?ocumentation G!here are a numbers of hospitals which have received $S/ 8<<< certificates. & )g' .pollo Hospital.
;' +erishability
. services cannot be stored . So if the service is not consumed immediately then it loses its value.
2or )g G $f a doctor does not reach his dispensary on time or has his clinic loc-ed for that particular day. He loses all his patients for that day. . situation may also arise when the doctor may be unable to attend to some of his patients due to a huge rush. $n such a case again the doctor could lose out on all his patients.Same would be the situation faced by the hospitals. $n such a case the hospital too may lose all its patients for that day.
6Solution to the problem of perishability
a' $n such a situation the doctor can appoint an assistant who could cater to the e@cess patients or he could have students training under him who during their course of training could also help him with the e@cess patients.
&)g'6 Ra"govind Hospital in C,? appoints interns of Medical College for night duty on a stipend
b' +ea- time )ssential Services
$n a rush hour situation when there are too many customers to attend to only essential services should be catered to. 2or &eg 7' $n hospitals during the late night when accident reportings are high all hands are required at the trauma centers &eg ;' +art time volunteers for national )mergencies.
>' %ariability
$t means that the quality of service provided to different people may not be the same. &ie' $rrespective of the fact that the "ob carried out by them is the same the service quality may differ because they may be from different bac-grounds have different aptitude, s-ills, attitude etc
2or )g #6 ; ?octors, one from a municipal hospital and another from a reputed hospital may treat a person for the same problem. ,ut their quality
might differ. $n such a case doctorsFhospitals are the internal customers and the patients are the e@ternal customers.
Since a transaction is always two way communication, a customers willingness, bac-ground, attitude etc may also effect the transaction 2or & )g' 6 . patient may want to avail of a doctors services but may not be able to afford the services. &)g' . patient suffering from .rthritis may be required to lose weight for
further treatment. ,ut the patient may not have the driveFwillingness to lose weight .
Solutions
7'!he internal customers or the fresh recruiters could be given training. !hey could be given a chance to perform the small parts of an operation in order to gain e@perience.
7'!he doctors could be given training and could be updated with all the latest happenings in the medical field in regular intervals. 2or &)g ' .M. prescribes for its member doctors D wee-s training every year and D months training every D years.
7'!raining of )@ternal customers & )g' ?iabetic patients are trained to in"ect insulin on their own
& )g ' $n Case of health care services, a gym instructor may teach his members to use the gym equipments on their own.
& )g ' .uto ?iagnostic equipments are used in hospital. !hese -ind of training programmes provided to the e@ternal customer helps to increase the quality of transaction.
='$nseparability 6
2or any service to ta-e place it is necessary that both the service provider and the customer be present in the location at the same time
& eg' .n operation cannot be conducted without the doctors presence. .s a result a number of patients due to geographical distances lose out on the opportunity to get themselves treated from the very best surgeons and doctors.
Solutions !his can be overcome to a certain e@tent through the following#6
7'!raining of internal customer6 Here one e@perienced person can provide training to the amateurs. 2or )g . surgeon during an operation is surrounded by interns watching the operation. !hey could also carry out some small parts of the operation.
;'$nnovational Service6 +sychiatrists have innovated group therapy where they call in 7<H patients together to an oval conference table and encourage them to talabout themselves and their ailments.
>' %ideo Conferencing ,usiness Conferences, Consultancy and the Medical world ./nly recently have instructions for operation through video conferencing been initated but mostly video conferencing has been used in the medical world as a pedagogical tool.&eg' . unique and rare brain tumour operation can be broadcast live all over the world to subscribed medical colleges. &&&&&&&&&&&&&&&&
. Ps of #ar/etin% for hospitals
? +roduct# !he service product is an offering of commercial intent having features of both intangible and tangible, see-ing to satisfy the new wants and demands of the consumer. Hospital industry is action oriented and there is a lot of interaction with the customers &patients'. !he service product of the hospitals normally have the following features# o Iuality 3evel# hen we tal- about mar-eting 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. !hese services which include laboratory, blood6ban-s, catering, radiology and laundry, in a true sense determine the quality of services made available by medical and para6medical personnel. !hey get a strong base for treatment since the diagnostic aspect determines a direction. !o get the best result from /!, it is natural that equipments are properly sterlised. $n addition, the dresses and clothes are also required to be made bacteria free. !he patients are required to wear disinfected linen which should be made available. !he radiology department should have hi6tech facilities -eeping in view the pressure of wor-. /f late, we find
sophisticated equipments and unless hospitals ma-e the same services available the same, the quality of services cannot be improved. o .ccessories# !his 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 e@tra. Hospitals have different wards 6 General and Special. Certain hospitals provide services for the family members of the patients &when they are not from the same city' G accommodation and catering.
o +ac-aging# $t is the bundling of many services into the core service. )g# .pollo hospital offers a full health chec-6up to the patients. Similarly other hospitals also offer pac-age deals for health chec-6ups. 2or e@ample if a person has to undergo a bypass surgery, he can pay a lump sum amount during admission, say rupees 7 la-h for all procedures, tests, stay, etc, at once. o +roduct line# hospitals through their services offer many choices to the patients and cover a wide range of customer needs. 2or e@ample# .pollo hospital has dental department, cardiology department, etc. and within the dental department it has dental surgery, root canal, etc. o ,rand name# !he hospitals, to differentiate themselves, and their services from others use a brand name. !he intangibility
factor of the service ma-es it all the more important for the hospitals to do so.
? +lace Ender hospital mar-eting, distribution of Medicare services plays a crucial role. !his focuses on the instrumentality of almost all who are found involved in ma-ing services available to the ultimate users. $n case of hospitals the location of hospital plays a very important role. !he -ind of services a hospital is rendering is also very important for determining the location of the hospital. )g. !ata memorial hospital speciali*es in cancer treatment and is located at a centre place unli-e other normal hospitals, which you can find all over other places. $t can be unambiguously accepted that the medical personnel need a fair blending of two important properties i.e. G they should be professionally sound and should have in6depth -nowledge at psychology. . particular doctor might be famous for his case handling records but he may not be made available for all the patients because of the place factor. 0ow in this case the service provided, that is the doctor may be a visiting doctor for different hospitals at different locations to beat the place factors. Enli-e other service industries, under hospital mar-eting all efforts should be for ma-ing available to the society the best possible medical aid.
$n a country li-e $ndia, which is geographically vast and where ma"ority of the population lives in the rural areas, place factor for the hospitals play a very crucial role. . typical small village F town may be having small dispensaries but they will not have super speciality hospitals. 2or that they will have to be dependent on the hospitals in the urban areas.
? +eople Ender hospital mar-eting the mar-eting mi@ variable people includes all the different people involved in the service providing process &internal customers of the hospitals' which includes doctors, nurses, supporting staff etc. !he earliest and the best way of having control on the quality of people will be by approving professionally sound doctors and other staff. Hospital is a place where small activity underta-en can be a matter of life and death, so the people factor is very important. /ne of the ma"or classifications of hospitals is G private and government. $n the government hospital the people factor has to be specially ta-en care of. $n $ndian government hospitals e@cept a few almost all the hospitals and their personnel hardly find the behavioural dimensions significant. $t is against this bac-ground that even if the users get the quality medical aid they are found dissatisfied with the rough and indecent behaviour of the doctors. Ender hospital mar-eting a right person for the right "ob has to be appointed and they should be adaptable and possess versatility. !he patients in the hospitals are already suffering from trauma, which has to be understood by the doctors and other staff. !he people of the hospital should be constantly motivated to give the best of their effort.
? +rocess +rocess generally forms the different tas-s that are performed by the hospital. !he process factor is mainly dependent on the si*e of the hospital and -ind of service it is offering. . typical process involved in a medium si*ed hospital can be as follows. &
.part from this flow there are other allied activities li-e record -eeping administration at services etc which fall under the process factor. !hese stages do not e@ist separately but are interlin-ed. !he most important elements are lines of communication within the setup. !he e@perience of the patient depends on the final interplay of all these factors.
? +hysical evidence $t does play an important role in health care services, as the core benefit a customer see-s is proper diagnosis and cure of the problem. 2or a local small time dispensary or hospital physical evidence may not be of much help. $n recent days some ma"or super speciality hospitals are using physical evidence for distinguishing itself as something unique. +hysical evidence can be in the form of smart buildings, logos, mascots etc. a smart building infrastructure indicates that the hospital can ta-e care of all the needs of the patient. )@amples 6 7. 3ilavati 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. ;. 2ortis and .pollo hospitals have a unique logo, which can be easily identified. +hysical evidence also helps in beating the intangibility factor.
? +romotion# Hospitals for promotion use either advertisement or +R or both after
ta-ing into consideration the target customers, media type, budget and the sales promotion. Since a few years the prime times in !.%. are reserved for advertising social issues li-e family planning, use of different types of
contraceptives, care for the girl child and so on. !hese commercials use the common man approach for reference group appeal. $n case of health care products and services use for Jcommon manK appeal is widely prevalent. !he use of celebrities is not as effective as that of a common man. .n ordinary person thin-s that if it wor-s well for people li-e him, it will also wor- equally well for him. !he identification with the common man is easy and quic-. ,esides !%, other media of promotion are to be used innovatively. Enli-e the urban area, in rural areas newspapers and maga*ines do not have the same impact in conveying messages. $n villages, hoardings and wall writings near the mar-ets and recreation centers attract the attention of villagers. !his mar-et consists of 7:< million strong middle income group and a small income group. !his group has a large discretionary income. !hese discerning consumers are very careful in choosing health care services. !he last decade has witnessed a health, appearance and nutrition conscious population.
!he health care field has become very competitive. .lthough around one6 fourth of our population stays in urban $ndia, three fourths of the total doctors have engaged themselves in this part. Many of these doctors visit the contiguous rural areas, but they may operate from the urban area. !he patients of upper middle and upper income group have a wide choice to ma-e from a number of clinics and hospitals. !herefore, many hospitals have abandoned traditions and adopted mar-eting strategies to woo more and more patients to their clinics. ord6of6mouth plays a very important role in promotion of hospitals. . person in need of a health care service does not -now for sure where to search for relevant information. He consults his family members, relations and friends first. !he patients who come to a hospital generally have the old patients of that hospital as referrals. ord6of6mouth plays
an important role during information acquisition stage of the customers as there are no ob"ective performance measures to "udge the various alternatives available to them. !herefore, satisfied past patients of a hospital can bring more number of patients to that hospital than a number of advertisements. $n a competitive mar-et place, the images of the firms swill affect their competitive standing. /ne factor that is li-ely to have a significant impact on the health care scene is the growth of hospital chains such as .pollo Hospitals, ,irla Health Centres ,etc. .rtificial heart transplants and other comple@ operations although are few in number and generate a small portion of the total revenue, they help in generating word6of6
mouth which health care providers are actually interested. Many of these companies are spending a lot in corporate advertising for $mage building.
+ar/etin% hospitals
Mar-eting in Hospitals Mar-eting is unethicalK was the frequent refrain in the eighties, when very few hospitals realised that it was necessary to incorporate mar-eting as an integral function in the hospital operations. ,ut the ma"or argument at that time lay in understanding whether this professional profitability orientation and was really !his required argument for its viability, became oc-hardt
sustainability.
however
favourable in the late nineties as corporate companies li-e
and Ma@ $ndia started venturing into the hospital industry, apart from the ongoing mergers and acquisitions that were already ta-ing place at that time. )ven the !+.s started building tie6ups with corporate clients and there was already an abysmal utilisation of resources in the e@isting hospitals. $n addition to the above a ma"or factor that contributed to the acceptance of mar-eting in hospitals was an increase in the delivery of services. C+erception of patients4 was another important consideration for hospitals, as they felt that the patients would ta-e them as profit oriented organisation
rather than service oriented organisation. Eltimately, mar-eting was accepted only by a few while the others discarded the concept. Hospitals who accepted mar-eting also carried out their functioned by concentrating around corporate clients. 3ately it has been felt that many $ndian hospitals have a dilemma regarding the functions of mar-eting. $n an era where hospitals are e@periencing a ma"or shift in their clientele, they are worried more about the patients4 perception of hospitals and therefore the concept of brand restructuring and brand engineering is vital. .s hospitals spend millions of rupees in technology and infrastructure, it becomes necessary, that they attract patients and generate funds. $n order, to do the same, the hospitals follow various mar-eting and brand building e@ercises. Some of them are listed below#
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Many hospitals have eminent personalities from the industry in their ,oard of trustees. !his indirectly leads to increase in, inflow of patients, wor-ing in the companies of these !rustees. ,esides the presence of eminent personalities creates a sense of confidence in the minds of people.
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+rivate hospitals can attract their shareholders by offering discounts. 2or e@ample, a special discount of ;< A on all preventive health chec-s is offered to all shareholders of .pollo Hospitals 3imited.
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Hospitals have long6term understanding with ++/4s &+referred +rovider /rgani*ation', which further have understanding with corporates. .ny case of sic-ness found in the employees of these
corporates refer them to the ++/4s , which further sends them to the hospital for chec-6ups and treatment.
•
!he success rate of crucial operations and surgeries, reflect the technological and -nowledge6 based edge of the hospital over the competitors. Such successes are discussed in health maga*ines and newspapers, which becomes a natural advantage for the hospital.
•
Some hospitals by means of their past trac- record have created a niche mar-et for themselves. 2or e@ample, Hindu"a Hospital is -nown for its high6quality healthcare at reasonable rates, whereas 3ilavati Hospital is -nown for its five6star services.
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Hospitals hold seminars and conferences relating to specific diseases, where they invite the doctors from all round the country, for detailed discussion. !his ma-es the hospital well -nown amongst the doctors, who could in future refer complicated cases to the hospital.
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Hospitals can also promote medical colleges. !his helps them to generate e@tra resources in form of fees, using the same infrastructure.
SO+E PLAYERS
!he .pollo Group of Hospitals
?riven by its line of being the Jarchitect of healthcareK in $ndia, the .pollo Hospitals Group, comprising of one of the largest networ-s of ;D hospitals, 7< clinics and over 7<,<<< employees across the country,
represents the changing face of healthcare in $ndia contemporary and corporatised. $t has been the first private company to administer health insurance in the country and $ndraprastha .pollo Hospital in ?elhi is the fourth largest corporate hospital in the world. !he .pollo group is $ndia4s first corporate hospital, the first to set6up hospital outside the country and the first to attract foreign investment. ith ;D<< beds, .pollo is one of .sia4s largest healthcare players. !he recent merger between its > group companies, $ndian Hospitals Corporation 3td., ?eccan hospitals Corporation 3imited and /m Sindoori Hospitals 3imited, will help the group raise money at a better rate and by consolidating inventory, it will save around 7<A of the material cost. !he group is planning to invest Rs. ;<<< crore , to bulid around 7B new hospitals, in $ndia, Sri 3an-a, 0epal and Malaysia.
.pollo claims to maintain the best of medical standards with a record of over 9.= million treated patients, >,7B,<<< preventive health chec-s done, 8:.B percent success rate in =B,<<< cardiac surgeries, etc. .nd helping the company maintain a balance between the corporate culture and rigorous medical e@cellence is recognition of $! as intrinsic to every process, whether it is day6to6day running of hospitals, education or telemedicine. !he application of $! in the day6to6day wor-ing of the largest hospital of the group, $ndraprastha .pollo, throws light on the e@tent of the automation drive within the company. !he management realised the fact that in order to have a modern hospital in place all the wor- processes had to be related to $!. Hence, the need for an end6to6end integrated solution. !his led to the implementation of the Hospital $nformation System &H$S', which was an integral part of the hospital inception pro"ect. !he hospital today boasts of an integrated H$S, which provides for end6to6 end integration of the various processes and functional areas within the hospital to ma-e for a seamless wor-flow. !he wor- processes of the hospital are primarily divided into two areas the patient &comprising of in6 patient and out6patient' and the non6patient all the bac-6end departments li-e house-eeping, engineering, finance, materials, purchase and HR?. !he wor-flow process starts with the patient see-ing an appointment with the doctor. H$S contains all the information relating to appointment schedules of the doctors. ?epending on the availability of the doctor, the patient is given the date and time of appointment. !his information is then
fed into the system and the updated information is available to the doctor in real6time. /n the date of his appointment, the patient registers himself at the counter by filling up of a form, which contains all the basic information related to the patient. !his data is feeded into the system with a Enique Hospital $dentifier &EH$' number allotted to the patient so that by the time the patient meets the doctor, he already has all the required basic information. !his is followed by 7B minutes of consultation with the doctor after which the doctor gives his prescription, the data is again -eyed into the system as a patient record under his EH$ and is accessible for quic- reference. /ne of the biggest advantages of H$S is that any medically relevant information related to the patient is available at the clic- of a button, thereby saving precious time, which means a lot when it comes to saving a life. H$S also acts as a -ind of )R+ for the hospital with its automation of various bac-6end areas li-e financial, accounting and inventory, which are integrated with the patient areas wherever required. !he hospital has also developed a very effective mailing system for its employees, which is based on Microsoft )@change. !he company4s $ntranet is being used to run mailing applications as well as information relating to company policies, leave information and basic information relating to the company. !elemedicine Healthcare for all
. very significant $! initiative of the .pollo Hospitals Group, and of great relevance to a developing country li-e $ndia in ta-ing healthcare to the masses, is the area of telemedicine. $ncorporated in 7888, .pollo !elemedicine )nterprises &.!)3', the telemedicine division of the .pollo Hospitals Group, has already set up over 7< telemedicine lin-s between the .pollo $nstitutions at ?elhi, Hyderabad and Chennai and distant locations across the country. $t has developed competence in developing cost6 effective turn-ey telemedicine solutions.
!eleme6dicine ensures that the benefits of hi6tech medicine can go to everyone, and not "ust to people who live in big cities. !he group has forged alliances with government organisations li-e the $ndian Space Research /rganisation &$SR/' for %S.! bandwidth and ipro for hardware, to
provide telemedicine facilities to far6flung and rural areas. !he division is wor-ing towards developing a strong .pollo !elemedicine 0etwor-, which allows the participant sites to collaborate with institutions in the country and abroad, and provides their clientele access to better healthcare in areas not adequately served by the medical community. . patient and his doctor can interact with specialists based in the specialty centers and receive second opinion or interpretations to comple@ medical cases. !he patient reports can be transmitted from a consulting canter to a specialty canter using the telemedicine software and the communication lin-, which could be $S?0 or %S.! connectivity.
/ther Services offered by .pollo# 6.pollo +harmacy .pollo +harmacy operates round the cloc- catering to all your medicine needs. 6Caf( .pollo Caf( .pollo is a sit down dining facility of the hospital. $t offers a wide selection of snac-s and a variety of meals.
6.pollo 2ood +la*a !here is food facility located in the atrium of the hospital serving a delightful array of delicacies.
!imings # :.<<am 6 8#<<pm
62ast 2ood Cafe 2or the convenience of $CE attendants there is a ;= hours cafe in the $CE lobby. 6Gift Shop !he Gift Shop carries a wide range of gifts including Confectionery, Cards, ,oo-s, 0ewspapers, Maga*ines and other novelties. 6,an- 2acilities
6!he /riental ,an- of Commerce
!he $ndraprastha .pollo ,ranch of the /riental ,an- of Commerce is located at one of the Gates. ,an- Hours Monday to 2riday # 7<#<<am 6 ;#<<pm Saturday # 7<#<<am 6 7;#<<pm !he ban- remains closed on Sundays and 0ational Holidays.
6!he $C$C$ .!M Counter !he $C$C$ .!M counter is also located in the hospital.
6 2ortis Healthcare 2ortis is the late Ranba@y4s +arvinder Singh4s privately owned company. !he company is a ;B< crore, ;<< bed cardiac hospital, located in the town of Mohali. !he company also has 7; cardiac and information centres in and around the town, to arrange travel and stay for patients and family. !he company has plans of increasing the capacity to around >9B beds and also plans to tie up with an overseas partner. Ma@ $ndia .fter selling of his sta-e in Hutchison Ma@ !elecom, .nal"it Singh has decided to invest around ;<< crores, for setting up worldclass healthcare services in $ndia. Ma@ $ndia plans a three tier structure of medical services G Ma@ Consultation and ?iagnostic Clinics, Ma@Med, a 7B< bed multispeciality hospital and Ma@ General, a =<< bed hospital. !he company has already tied up with Harvard Medical $nternational, to underta-e clinical trials for drugs, under research abroad and setting up of Ma@ Eniversity, for education and research. )scorts
)H$RC located in 0ew ?elhi has more than ;;< beds. !he hospital has a total 99 Critical Care beds to provide intensive care to patients after surgery or angioplasty, emergency admissions or other patients needing highly speciali*ed management including !elecardiology &)CG transmission through telephone'. !he )H$RC is unique in the field of +reventive Cardiology with a fully developed programme of Monitored )@ercise, 1oga and Meditation for 3ife style management. /CLH.R?! and ?E0C.0S G3)0).G3)S $0!)R0.!$/0.3 also have ma"or e@pansion plans. !his report is prepared by Mona +andit and +arin Mehta of Sydneham $nstitute of Management e@clusively for $ndia $nfoline as part of their pro"ect curriculum.
Opport"nities
ith global revenues of appro@imately ESM ;.: trillion, the healthcare industry is the world4s largest industry and $ndia is emerging as a ma"or player in this industry, because of its high population.
.s per the $nsurance Regulatory and ?evelopment .uthority &$R?.', the $ndian healthcare industry has the potential to show the same e@ponential growth that the software and pharmaceutical industries have shown in the past decade. 2urther, as per the $R?., only 7< percent of the mar-et potential has been tapped till date and mar-et studies indicate a >B percent growthin thecomingyears.
. big opportunity for the industry emerges from the privatisation of the insurance segment, which would e@trapolate into a new delivery system in $ndia. !here is a vast insurable population in $ndia, given that only ; million people ie <.; percent of the total population are covered under Mediclaim. .ccording to a recent study, there are >7B million potentially insurable lives in the country. . orld Health /rganisation report states that $ndia needs to add :<,<<<
hospital beds each year to meet the demand of its population. !he huge shortage of beds outlines a ma"or opportunity for the industry.
!he healthcare industry is a fast growing industry and coupled with strength of $ndian innovative and scientific manpower and also low costs, it is slowly achieving -ey industry status in $ndia.
The $"t"re
Healthcare industry is booming all over the world. $n the ES it is already the largest service sector. .nd world6wide it is slated to be a M= trillion mar-et by ;<<B. . orld ,an- Report in 0ovember 7888 points at the emergence
of large6scale, investor6owned hospitals in the country as a NdramaticN development. !he Corporate hospitals will play a positive role in the healthcare sector by ta-ing the load off government hospitals, whose performance hasn4t been upto the mar-. !he Healthcare $ndustry is on the threshold of a ma"or Growth Spiral which shall assimilate all new technologies to provide cost effective Healthcare. $t shall not only employ the largest chun- of all available capital but shall also employ a large proportion of the s-illed wor- force. !he Healthcare $ndustry is poised to become the biggest )mployer in all Countries. $t shall also be the biggest consumer of all new technologies. Specifically, in the ne@t decade, it is anticipate that the Healthcare $ndustry shall grow at an accelerated pace and will achieve a Growth Rate of : 6 7< A per annum in $ndia and a Growth Rate of = 6 : A per annum in most of the Countries of third orld. .s a result, most of the Countries in the
world &/ther than ES.' shall add more Hospital ,eds. !his accelerated growth will require a large body of s-illed Healthcare +roviders. .s a result, the Medical )ducation Sector, including Medical and all +ara6medical staff, shall also witness a faster growth. $t is anticipated
that the numbers of s-illed Healthcare +roviders shall double in ne@t decade. !he addition of Hospital ,eds shall catalyse a Growth in Hospital )quipment $ndustry. $t shall also fuel the growth of +harmaceutical $ndustry. $t shall specifically affect the Medical and Surgical Supply Segment and there too, the +rosthetic ?evices Segment shall witness a very rapid growth. $n the ne@t decade, the )arthOs +opulation shall reach a pea- number. !his, coupled with availability of better Healthcare shall lead to a higher )@pectancy of 3ife at ,irth. !he average age of )arthOs +opulation shall increase. !his will require a far superior understanding of Multiple /rgan Syndromes and there treatments. !here shall be a shift in focus of providing Healthcare. !he Hospitals shall tend to be the providers of .cute 5 $ntensive HealthcareP while new cost effective modalities shall provide intermediate care or nursing only care. !hese new modalities shall not follow the rigid standards as set for Hospitals 5 shall employ a smaller number of trained medical manpower. !hese modalities shall augment the Home Care, as is available in the Qoint 2amily )nvironment to more than half the population of world today. !his will necessitate a greater interaction between the Healthcare +rovider, the Medical Charge and the other segments of Healthcare $ndustry. !his growth of Healthcare $ndustry shall be supported by +olitical ill and
Social Enderstanding at all levels of any Society. $t must, therefore, meet
the new challenges, by providing cost effective Healthcare in a manner that improves the Iuality of Humane 3ife.
So#e S"%%estions for i#provin% the position of the hospitals
7. !he general perception that large hospitals, with high bed6occupancy rate, are profitable, is misleading. Global e@perience shows that hospital with more than ;B< beds don4t do well. Many $ndian hospitals are following the ES healthcare industry, by decreasing the average length of stay of patients and increasing patient turnover. ES research shows that :<A of the revenues form a patient comes in the first 9; hours post6 admission. Hospitals generate a lot of revenues from General $nspection, because the patient turnover is very high. . large percent of revenues come from speciali*ed services li-e operations and surgeries. $t is because of these reasons that many corporates are planning for a small 7<< beds speciali*ed hospitals, which caters to specific diseases li-e cardiac, cosmetic surgery, neurology etc. Research shows that there e@ist a lot of space for super6speciali*ed hospitals with 7<<67B< beds, which generate revenues equivalent to large B<< bed general hospital. !ypically large hospitals with appro@imately B<< bed capacity ta-es about 867< years to brea- even whereas super6 specialty hospitals with about 7<< beds ta-e about D69 years to breaeven. !herefore, going in for super6speciality hospitals seems to be a more viable option today. ;. Hospitals could also generate revenues from medicines if they are supplying them in6house. Some hospitals ma-e it mandatory for the
patients to buy medicines from the hospital4s chemist shop. . margin of 7B6;< A can be charged for such medicinal supplies. !hough many hospitals run by !rusts do not earn this way, but new entrants or corporates for whom private healthcare sector is a direct e@tension of their line of business & eg. +harma companies', can generate good returns from medicine supply.
>. Health +lan pac-ages can be provided by hospitals to family and corporate. 2or e@ample 2amily Health +lan Services &2H+', a subsidiary of .pollo clients. Hospitals does health management of employees of its
ith a wide net wor- of Hospitals and Healthcare providers
countrywide, and a tie 6up with General $nsurance Corporation of $ndia, 2H+ offers a range of services to employees and dependants, such as +reventive Healthcare, Corporate Counselling, welfare +rogrammes, Claims .dministration, +atient6care Coordination and so on. So 2H+Os healthcare pac-ages, optimi*e the benefits while -eeping the cost under control. =. .part from preventive healthcare, stress management programs could be provided. 2or e@ample C)ffective Stress Management +rogramme4 offered by oc-hardt Hospital.!his programme provides a medical perspective of
stress and is conducted by a medical professional. !he programme includes a series of one6to6one sessions, with a clinical +sychologist highlighting the factors responsible for inducing stress, and the methodologies, which can be adopted to cope with this phenomenon practically.
B. Hospitals can become integrated healthcare systems i.e. when medicines, food services, laundry and linen etc will become NpurchasedN services. !hese third6party operations will increase the profit margins. D. Mergers could be used for synergy of s-ills 6 i.e. to help the merged organisations benefit from one anotherOs individual strengths by applying them across the board. $t also helps them to ma-e "oint investments in branding or information technology and also to react effectively to the changed mar-et forces. .lternatively hospitals can go in for Group +urchases, as in ES.. !he buying power of large G+/s in ES. li-e +remier, %H. F EHC and .meri0et gives them the clout to e@ert price pressure on suppliers, particularly for products in lower demand. .nd as G+/s have consolidated, manufacturers have offered bigger discounts to hang on to their contracts. So there e@ists a lot of supply management opportunity, which will affect spending productivity.
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