Wednesday, August 4, 2010
Paradigm shift in the healthcare delivery
- Identifying transformational changes in healthcare sector
Be it Green or Brown field projects, Indian medical entrepreneurs are currently riding high over the wave of ‘new ventures’. Not to forget the fact that these ventures are grabbing headlines with announcements flowing in on a consistent basis since few years. Having contemplated and wondered over this seemingly positive and upward trend in our healthcare segment, I do tend to believe that this is an s a significant change in the healthcare scenario. I’m certain that it is the next milestone for our industry that has traveled quite far, from the times of being just a ‘defragmenter assortment’ of clinics and few ‘big’ hospitals. When healthcare is in this transcendental phase, I feel that it would be pertinent to share my thoughts on this important change.
Current Scenario: Advantage India
Consider this- The size of the middle class population of India so huge that it overtakes the population of United States! The expected life span has drastically improved and an ageing population means demand of more healthcare attention. Owing to education and lifestyle improvements, people are becoming health conscious and are demanding more quality healthcare. The development of new strains of infectious diseases and growing contagious diseases is another cause. The new-age lifestyle has led to new-age diseases, with stress-related disorders becoming more common. People are looking for quality healthcare services from the providers and are also expecting that these should be available near to them and must be customized to suit their expectations. Moreover many studies conducted by government and private research organizations indicate the need for more hospitals and healthcare facilities to tackle the growing demand. All these factors have resulted in rising demand of healthcare in India.
The Demand
India needs over 6,800 more hospitals in rural areas to provide basic health facilities to people, mentions the annual Economic Survey released recently. India's healthcare sector has been growing rapidly and is estimated to be worth $40 billion by 2012. Revenues from the healthcare sector account for 5.2 per cent of the GDP, making it the third largest growth segment in India. India has only 0.7 beds per 1,000 people - far below the global average of 2.6. India needs to add 2 million beds to the existing 1.1 million by 2027 to manage the increasing healthcare requirement of the population. All these factors have attracted hospital stock holders, industry leaders and private investors to hospital care delivery by leaps and bounds.
So Far, So Good
The initial statistics from ongoing studies indicate that there is a minor increase in the number of beds/1000. Corporate hospitals are moving into the rural soil and are becoming pioneers of the rural healthcare boom. The ease of service availability is the biggest achievement of this trend with multi-speciality hospitals succeeding in offering multiple services in one place. People no longer have to travel wide and far for different medical requirement. This move has also brought to the fore the cost effectiveness of the Indian healthcare industry in comparison with the other countries.
The healthcare industry has also focused a lot on improving the quality of services provided. In fact the success rates of the Indian healthcare providers equals to or at times much better than its counterparts even in developed countries. The new trend in the healthcare industry has increased employment opportunities. There are more than 5 million people employed in this industry and the healthcare sector is the largest employer in the country second only to the education sector.
The healthcare explosion has opened up a brand new vista – medical tourism. The cost effectiveness and high-quality medical services available in India have made our country the medical hub of the world. World-class treatments at unbeatable costs are provided at corporate hospitals and this has marked India on the global map as the preferred destination for complex medical and surgical treatments.
Foreign Direct Investments
Foreign Direct Investments (FDI) in Indian Hospitals: New generations of entrepreneurs are in the forefront whether, it is green field or brown, they are in the war footing to get funds. A good amount of investment is flowing for Indian Hospitals since the year 2000 or the past decade. And the good news is that this flow isn’t stopping yet with more FDIs expected to come into the healthcare business, be it the hospitals, clinics or diagnostic centers.
According to RBI note on Foreign Investments in India (April 1, 2007), ‘From January 2000, FDI is permitted up to 100 percent under the automatic route in hospitals in India’. This means that no government approval is required as long as the Indian company files with the regional office of the RBI within 30 days of receipt of inward remittances and file the required documents along with form FC-GPR with that Office within 30 days of issue of shares to the nonresident investors. Controlling stake is also permitted in hospitals for foreign investors. Foreign Investment Promotion Board approval is currently required only for foreign investors with prior technical collaboration, but nevertheless it is allowed up to 100 percent.
The result of this rule is already noticeable, with small investments to the range of $1 to $2 million being received for several small or mid size hospitals to double digit funding for major medical city projects in India. It is worth studying the FDI in hospitals, According to one estimate, foreign investors have tapped only 10 percent of the Indian healthcare market and thus the scope for FDI remains large. There is huge potential for Indian entrepreneurs and medical leaders to bring this capital for Indian healthcare.
Paradigm Shift
Healthcare industry has gone beyond providing treatment and has created multiple other focus areas such as clinical protocols, clinical pathways, use of technology extensively from Computerized Physician Order Entry (CPOE), patient network & RFID, telemedicine, medical call centers, e-health, health on mobiles, knowledge portals, online medical simulation to improve quality of training for service staff and electronic medical records.
The industry is fueled by more corporate companies getting into healthcare, health insurance, corporatisation of the traditional hospitals, startup of health chains in both urban and rural areas, medi-cities and health tourism. There is a paradigm shift in healthcare delivery not only for the affluent but also the poor thanks to the public-private partnerships with the government for various health/subsidiary services contributing to improve the overall quality of care—such as ambulance services, facilities management, diagnostics, urban health facilities and mobile medical units for rural areas. All these players play respective roles in their business and this paradigm shift is a good start for the country.
The Impact
Overall, as a consequence of this paradigm shift, there has been an accelerated demand for high-quality systems & processes in healthcare enterprises. There has also been a marked increase in the number of enterprises/ organizations going for accreditation, like the NABH or JCI. In retrospect, Quality has become the order of the day. To cite an example, NABH accreditation is based on optimum standards and professional accountability, and it encourages healthcare organizations to pursue continual excellence. The objectives of this accreditation are patient safety, provision of high quality of care, and achievement of global standards. Achievement of these objectives needs not only accreditations but also a continuous mechanism for monitoring and evaluation.
Amidst this constant endeavor to raise the quality bar, the challenges for them are not just limited to maintaining high standards, but also maintain efficient systems and accurate processes to attain the objectives. The same challenges get magnified, in an enterprise environment with chain of hospitals functioning in a geographically dispersed state. While transformations occur, to face them, organizations have to closely work with people, process, and technology, thereby establishing a world-class infrastructure to meet global standards in healthcare.
This is the first of a ten-part series of articles connected to healthcare ICT. These thought leadership based articles will be featuring healthcare delivery, technology and industry challenges. This will provide invaluable insight into new technology developments, tips and techniques that healthcare service providers can adopt to help increase their patient service & quality, improve operational efficiencies and drive greater margins.
We would be covering topics such as the trends in the healthcare segment and the PARADIGM SHIFT in the current business models, Healthcare Market Delivery and who are all the players in each segment, CHALLENGES that would come with respect to managing such business models, APPROACH to such challenges, Details of ISSUES of such challenges function, HOW should a ICT plan for such hospital enterprises can be done, What are the direct benefits for Management Information Systems and DASHBOARDS?, What are technology transformations required for such a model (Decentralised and Centralised), What are the Implementation and Training Transformation and What are the scalability / maintainability and many more niche areas within theoperational effectiveness.
We are sure that this will interest anyone who are visioning industry leadership within their fraternity. Keep reading this series of articles and attain & share knowledge.
We would be covering topics such as the trends in the healthcare segment and the PARADIGM SHIFT in the current business models, Healthcare Market Delivery and who are all the players in each segment, CHALLENGES that would come with respect to managing such business models, APPROACH to such challenges, Details of ISSUES of such challenges function, HOW should a ICT plan for such hospital enterprises can be done, What are the direct benefits for Management Information Systems and DASHBOARDS?, What are technology transformations required for such a model (Decentralised and Centralised), What are the Implementation and Training Transformation and What are the scalability / maintainability and many more niche areas within theoperational effectiveness.
We are sure that this will interest anyone who are visioning industry leadership within their fraternity. Keep reading this series of articles and attain & share knowledge.
Be it Green or Brown field projects, Indian medical entrepreneurs are currently riding high over the wave of ‘new ventures’. Not to forget the fact that these ventures are grabbing headlines with announcements flowing in on a consistent basis since few years. Having contemplated and wondered over this seemingly positive and upward trend in our healthcare segment, I do tend to believe that this is an s a significant change in the healthcare scenario. I’m certain that it is the next milestone for our industry that has traveled quite far, from the times of being just a ‘defragmenter assortment’ of clinics and few ‘big’ hospitals. When healthcare is in this transcendental phase, I feel that it would be pertinent to share my thoughts on this important change.
Current Scenario: Advantage India
Consider this- The size of the middle class population of India so huge that it overtakes the population of United States! The expected life span has drastically improved and an ageing population means demand of more healthcare attention. Owing to education and lifestyle improvements, people are becoming health conscious and are demanding more quality healthcare. The development of new strains of infectious diseases and growing contagious diseases is another cause. The new-age lifestyle has led to new-age diseases, with stress-related disorders becoming more common. People are looking for quality healthcare services from the providers and are also expecting that these should be available near to them and must be customized to suit their expectations. Moreover many studies conducted by government and private research organizations indicate the need for more hospitals and healthcare facilities to tackle the growing demand. All these factors have resulted in rising demand of healthcare in India.
The Demand
India needs over 6,800 more hospitals in rural areas to provide basic health facilities to people, mentions the annual Economic Survey released recently. India's healthcare sector has been growing rapidly and is estimated to be worth $40 billion by 2012. Revenues from the healthcare sector account for 5.2 per cent of the GDP, making it the third largest growth segment in India. India has only 0.7 beds per 1,000 people - far below the global average of 2.6. India needs to add 2 million beds to the existing 1.1 million by 2027 to manage the increasing healthcare requirement of the population. All these factors have attracted hospital stock holders, industry leaders and private investors to hospital care delivery by leaps and bounds.
So Far, So Good
The initial statistics from ongoing studies indicate that there is a minor increase in the number of beds/1000. Corporate hospitals are moving into the rural soil and are becoming pioneers of the rural healthcare boom. The ease of service availability is the biggest achievement of this trend with multi-speciality hospitals succeeding in offering multiple services in one place. People no longer have to travel wide and far for different medical requirement. This move has also brought to the fore the cost effectiveness of the Indian healthcare industry in comparison with the other countries.
The healthcare industry has also focused a lot on improving the quality of services provided. In fact the success rates of the Indian healthcare providers equals to or at times much better than its counterparts even in developed countries. The new trend in the healthcare industry has increased employment opportunities. There are more than 5 million people employed in this industry and the healthcare sector is the largest employer in the country second only to the education sector.
The healthcare explosion has opened up a brand new vista – medical tourism. The cost effectiveness and high-quality medical services available in India have made our country the medical hub of the world. World-class treatments at unbeatable costs are provided at corporate hospitals and this has marked India on the global map as the preferred destination for complex medical and surgical treatments.
Foreign Direct Investments
Foreign Direct Investments (FDI) in Indian Hospitals: New generations of entrepreneurs are in the forefront whether, it is green field or brown, they are in the war footing to get funds. A good amount of investment is flowing for Indian Hospitals since the year 2000 or the past decade. And the good news is that this flow isn’t stopping yet with more FDIs expected to come into the healthcare business, be it the hospitals, clinics or diagnostic centers.
According to RBI note on Foreign Investments in India (April 1, 2007), ‘From January 2000, FDI is permitted up to 100 percent under the automatic route in hospitals in India’. This means that no government approval is required as long as the Indian company files with the regional office of the RBI within 30 days of receipt of inward remittances and file the required documents along with form FC-GPR with that Office within 30 days of issue of shares to the nonresident investors. Controlling stake is also permitted in hospitals for foreign investors. Foreign Investment Promotion Board approval is currently required only for foreign investors with prior technical collaboration, but nevertheless it is allowed up to 100 percent.
The result of this rule is already noticeable, with small investments to the range of $1 to $2 million being received for several small or mid size hospitals to double digit funding for major medical city projects in India. It is worth studying the FDI in hospitals, According to one estimate, foreign investors have tapped only 10 percent of the Indian healthcare market and thus the scope for FDI remains large. There is huge potential for Indian entrepreneurs and medical leaders to bring this capital for Indian healthcare.
Paradigm Shift
Healthcare industry has gone beyond providing treatment and has created multiple other focus areas such as clinical protocols, clinical pathways, use of technology extensively from Computerized Physician Order Entry (CPOE), patient network & RFID, telemedicine, medical call centers, e-health, health on mobiles, knowledge portals, online medical simulation to improve quality of training for service staff and electronic medical records.
The industry is fueled by more corporate companies getting into healthcare, health insurance, corporatisation of the traditional hospitals, startup of health chains in both urban and rural areas, medi-cities and health tourism. There is a paradigm shift in healthcare delivery not only for the affluent but also the poor thanks to the public-private partnerships with the government for various health/subsidiary services contributing to improve the overall quality of care—such as ambulance services, facilities management, diagnostics, urban health facilities and mobile medical units for rural areas. All these players play respective roles in their business and this paradigm shift is a good start for the country.
The Impact
Overall, as a consequence of this paradigm shift, there has been an accelerated demand for high-quality systems & processes in healthcare enterprises. There has also been a marked increase in the number of enterprises/ organizations going for accreditation, like the NABH or JCI. In retrospect, Quality has become the order of the day. To cite an example, NABH accreditation is based on optimum standards and professional accountability, and it encourages healthcare organizations to pursue continual excellence. The objectives of this accreditation are patient safety, provision of high quality of care, and achievement of global standards. Achievement of these objectives needs not only accreditations but also a continuous mechanism for monitoring and evaluation.
Amidst this constant endeavor to raise the quality bar, the challenges for them are not just limited to maintaining high standards, but also maintain efficient systems and accurate processes to attain the objectives. The same challenges get magnified, in an enterprise environment with chain of hospitals functioning in a geographically dispersed state. While transformations occur, to face them, organizations have to closely work with people, process, and technology, thereby establishing a world-class infrastructure to meet global standards in healthcare.
Was this topic useful to you? What are your thoughts on this major trend in the healthcare industry? Do you agree that this is the onset of a huge change in the healthcare sector? Please do post your comments. In the next issue, I will be taking a quick walk through the giants in the healthcare industry and who are the pioneers & early game changers in healthcare service side Post me your queries or feedback on information@21chms.com
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