Business Accent

How Healthy Is Your Hospital?

A healthy individual or organisation is more likely to survive the attack of disease or infection. It is but ironic that some hospitals who deliver health are sick themselves

Vivek Shukla

Health is synonymous with vigour and vitality. As a 'doctor of hospitals', I have found out ways to identify the symptoms that point towards the health of a hospital. Here is what you should be looking for, when you do a health check for your or someone else's hospital.

Number of Patients

This goes without saying that if you have enough people who trust you for treating, then you are in business. The required patient flow for breaking even must be there.

Staff Morale

A healthy hospital has highly inspired staff. People are willing to go that extra mile even if they are not paid extra for it. The staff attrition rates are lower than industry levels. It is not difficult to find a nurse or a driver who has been working there for many years.

If the management feels that it has nothing to do with staff matters and it is the HR department's job to manage the 'crowd', it is a bad omen. The bane of our industry is that though our services are delivered through human beings, most of the top managements are more bothered about the latest machines and gadgets to leverage their competitive position.

Walk-in Patients

A very important parameter. If the hospital is dependent on referrals that arise through GPs (who will be paid a commission), it is a red flag. Too many hospitals are like poor Indian farmers, relying on the monsoon (read GP) for a good crop. Little do they visualise about what happens when some other hospital decides to pay a five per cent higher commission to the same GP. I am not even talking about this practice being illegal and unethical. Even business-wise it makes no sense to be dependent upon others to give you customers.

On the other hand, direct walk-in patients in OPD or indoor mean a healthy brand. It means people trust you. You are self reliant. Monsoon or no-monsoon, you are more likely to reap a bumper crop every now or then.

People who Re-visit

A healthy sign for any hospital is the percentage of people who keep their repeat appointment with the doctor. Far too many patients wander away into oblivion without the hospital ever noticing it. Many a times a patient has been given an admission date for getting operated. Does anyone measure what percentage of times the patient actually gets admitted?

Clarity of Value Proposition

What is it that you have and others don't? What makes you distinct? What is the unique value you add to your patients which others don't? If I find the management struggling to answer these questions, I know I have caught a symptom which may point to a serious trouble. Yes, we all know that healthcare is a supplier's market. There are too few hospitals for too many people. However, the scenario is fast changing. The ratios are not the same in big cities. If I have an insurance card and I live in Delhi and I need a heart surgery, I have a list of options. There is Fortis Escorts, Max, Apollo and a number of other players. Here is my mantra— if you are not distinct, you may soon be extinct.

Working Capital

Insurance and TPAs are the order of the day. Your expenses happen today and you get paid for today's work 45 days later. Many hospitals are feeling the heat. Working capital is in short supply. Revenue cycle has to work in your favour. If the finance manager is seen fire-fighting to meet the day-to-day expenses, you can be assured that the health of the hospital is in jeopardy.

Inventory Levels

Stock piling is a habit which is more common than it seems. The pharma company offers a scheme, the pharmacy manager and the purchase jump on to the deal thinking they will save a lot of money. The stock is then gathering dust for many months in the warehouse or in the pharmacy. If you look further, you will hear similar stories about the laboratory reagents, OT consumables and other areas. It is important to ascertain the daily/ weekly/ monthly usage and re-order levels for your stock keeping units. This helps in fighting the cash crunch discussed in the previous point and restores health back to your hospital.

Consultant Alignment

Most hospitals have visiting doctors who operate for a fee. It is a great model if you think in terms of reducing your fixed costs. However, this model is found wanting when I talk about the commitment levels of these doctors to fulfilling the vision of the hospital. They are working for themselves and I don't have any problems with that. What I have a problem with though, is the ignorance of the hospital promoters. They seldom make any efforts to align the visiting doctors to the value system and vision of the hospital. Worse still, they themselves may not be aligned to the purpose of the organisation's existence. It is amazing to see how many CEOs cannot spell out the vision statement that keeps on hanging on the walls all the time.

Capacity Utilisation

Many areas or equipment are under-used in many hospitals. A healthy hospital uses its resources optimally. If you see a lot of areas or equipment that is under used, you should know it is not a healthy sign.

One of the major reasons why the capacities are under utilised in hospitals is that hospitals widen their scope too much. They want to do everything for everyone. This leaves a lot of scope for many specialities not doing well. Here is the mantra—the wider you stretch yourself, the weaker you become. It usually works better to do a few things and do them well.

This list is not exhaustive, though I have attempted to cover as much as possible in the allotted space. However, I am sure that if you can take up a few areas from this list and work on them, the health of your hospital will be better. Prevention, after all, is better than cure!

vivekshukla2006@gmail.com