Healthcare World Conference

'Price Point Competition Does Not Create Long-term Value For The Organisation'

Healthcare delivery space is attractive for PE investors, given potential for high growth, attractive financials as well as potential for value creation. However, limited opportunities for investment exist considering the fragmented nature as well as legal structures prevalent in the industry," said Monika Sood, Head, Healthcare Practices, Feedback Ventures. She was talking at the Healthcare World conference, the much awaited healthcare event organised by Express Healthcare which was held in Mumbai from 21-23rd of January in Mumbai. The conference was graced by the who's who of the healthcare industry and covered a large gamut of topics concerning India's healthcare industry, like financing healthcare, e-health, green healthcare, insurance and healthcare, emerging business models in healthcare, medical equipment in modern healthcare setting, quality and HR issues in healthcare.

Day 1

Financing healthcare Institutions

Dr M Mariappan

Dr Vikram Chhatwal

Dr Vasundhara Atre

Vinayak Deshpande

The conference started with the session on financing healthcare institutions. Dr M Mariappan, Assistant Professor, School of Health Sciences Studies, Tata Institute of Social Sciences moderated this session.

The first speaker Monica Sood spoke on learning from private equity experience in healthcare. Sood said that PE funds will need to invest in creating managerial capability and skill sets in the investee companies and support their growth. Most PE investments have been in the tertiary care space given high revenue and capex potential as well as ease in scaling up. PE investment is available as growth capital and not as seed money for a new venture. Hospital financials as well as PE expectations drive timing of investments.

Established brand (local/regional/national), demonstrated ability to deliver performance, vision for growth are critical to attracting private equity investments. Ancillary segments such as diagnostics, specialty centers, medical furniture and equipment, cosmetic and beauty centers etc are also attractive.

Dr Vikram Chhatwal, CEO, Reliance Health spoke on choosing the right source of capital. What is the right source of capital? Answering to this question, he said that there are many unknowns in a hospital which impact traditional occupancy and cost models. Traditional funding has been predominately based on equity (promoter, friends/family) and debt (financial institutions). "Today's world has presented us with alternative sources of capital like venture capital and private equity, convertible debt instruments, vendor-backed financing, leasing (operating and dry), receivables backed financing, supplier credits, managed inventories and closed-loop technology rentals. And while choosing one should take into consideration use of capital like funding deficit, short vs. long term, equipment financing, land and building, ability of the promoter to fix cost, fixed vs. floating interest rates and IRR expectations on capital," said Dr Chhatwal.

E-Health

The session on E-health dealt with issues like personal health records and telemedicine and was moderated by Bomi Bhote, CEO, Ruby Hall Clinic, Pune. The first speaker for this session—Dr Vasundhara Atre, Senior Anaesthetist, Bombay Hospital gave an extensive presentation on personal health record and home healthcare. Dr Atre said that vague recall and old scars are the only reminders of medical ailments and surgical procedures undergone years back. There is a need felt for a system that would record medical health parameters and permit access to them; enabling the coordination of healthcare based on detailed and accurate health related information and the medical records. The ehealthaccount acts as a secure repository of important medical parameters and integrates them to provide a comprehensive health record. "The information is generated by the people themselves such as symptoms and medications used, the diagnoses and test results originate from doctors. Details of doctors, hospitals, clinics, pharmacies, insurance companies as well as emergency contact details form an integral part of the record," said Dr Atre. She further said that the individuals have anytime, anywhere access to their medical records, which is regularly updated on a real time basis. They can share the information with their health providers. The system saves time while improving quality care. The ehealthaudit analyses the medical history, medical reports and answers to the questionnaire, to give a comprehensive health statement underlining the risk factors and suggesting ways to optimise the modifiable risk factors.

The next speaker Vinayak Deshpande, Business Head, Telemedicine Vertical Maestros, spoke on telemedicine applications. Deshpande said that small number of experts serving large population, care for elderly, the rural urban divide, seeking second opinion, access and convenience and chronic disease management has made telemedicine indispensable in the Indian context. While talking about the major benefits of call centre for remote ambulance monitoring he said that it gives access and convenience, reduces cost, improve patient turnaround efficiency for hospitals, allows early intervention by experts and helps in chronic disease management. "Government's active interest, improving technology aiding better delivery, changing mindset towards new technology increasing telecom density and reliability, access to private funding, consortiums formed for standardisation and smart phones penetration have given impetus to the telemedicine scenario in India," added Deshpande.

Day 2

Second day at the conference gave an intellectual treat to the audience with its wide variety of sessions on healthcare insurance, green building concept in healthcare and medical equipment in modern healthcare setting and a panel discussion.

Healthcare Insurance

Col M Masand

Dr Nayan Shah

The session on healthcare insurance was moderated by Col M Masand, President, Association of Hospital Administrators and CEO of Mumbai's Jaslok Hospital.

Dr Nayan Shah, Director, Paramount Health Services Pvt Ltd spoke on dealing with frauds in health insurance. "Healthcare fraud is an intentional deception or misrepresentation that the individual or entity makes knowing that the misrepresentation could result in some unauthorised benefit to the individual, or the entity or to some other party," said Dr Shah. While talking about the global and Indian scenario of healthcare fraud and abuse, he further said that one unit out of seven spent goes to fraud and abuse and US health insurance per year bears about Rs 36 billion losses. On the other hand, in India, estimated loss is Rs 600-800 crore and is increasing. Consumer, sales distribution channel, providers, TPAs and insurers are the categories of perpetrators of fraud.

Dr Shah touched upon consumer-related frauds and abuses like eligibility frauds with regards to age, occupation, sports habits, life style, enrollment details, suppression of material facts and previous illnesses, suppression of chronic ailment information and health coverage of dependants from other sources, pre policy checkups like impersonation and influencing the diagnostic center, frauds and the time of claims like duplicate filing, false bill preparation, collusion with providers, impersonation and bogus groups for group discount (non-homogenous groups). TPA-related frauds include kickbacks from provider network, collusion with network for inflated/ wrong bills and rewards in the garb of early payments / release of payments to providers as well as TPA employee colluding with fraudsters. Provider- related frauds include wrong surgical categories and surgical details, overcharging for consumables and over investigations. Dr Shah said that consumer-related frauds can be dealt with means like eligibility check criteria, teleinterviewing, tele underwriting, HRA tools for corporates, implementing fraud detection softwares, investigations, taking steps like canceling the policy and control on diagnostic centers. Provider-related frauds can be dealt by cost control techniques and tools, utilisation reviews and medical audits, care pathways, by creating awareness amongst providers and blacklisting of errant providers and publishing the same.

The second speaker Kuldeep Singh, General Manager, National Insurance Co Ltd, spoke on insurance and healthcare. "Insurance business in our country has passed through several phases and has now reached an era of self sustaining. Health sector is the most challenging field for insurance sector as also have opportunities to grow, succeed and serve the insured at the time of need," said Singh. He further said that since majority of the population lives in the rural area and is un-organised the insurers' mediclaim policies shall play a major role.

The impediment with insurers is the selling price is non-dynamic i.e. in the present scenario price is not based on the reality, for want of pure data, being supplied by the various sources i.e. insured /broker and TPA. The health insurance business is a loss-making proposition irrespective of public and private sector insurance company. There is a challenge for insurers to make this portfolio self-sustainability. He further said that there is a challenge for healthcare service providers to serve the majority of population and get handsome returns on the investment. "Even CGHS and other state Government health scheme are willing to pass on the burden of managing healthcare to insurers, through TPA or without TPA's," shared Singh.

Panelists Dr Nayan Shah, Harish Nadkarni, Kuldip Singh, Col Masand and moderator Dr Vivek Desai	Dr HKV Narayan, Dr Sujeet Chatterjee and Dinesh Singh
Dr MK Khanduja, Ankush Gupta and Dr Rashi Agarwal

Panel Discussion

A panel discussion was held on the topic 'Should Accreditation be Made Mandatory for Network Hospitals?' This discussion was moderated by Dr Vivek Desai, MD Hosmac. Col M Masand, Dr Nayan Shah, Kuldip Singh and Harish Nadkarni, a lead assessor of ISO 9000 and a six sigma black belt holder, participated as panelists.

The panelists analysed on the criteria that accreditation mechanisms like NABH, JCI force the hospitals to adopt. Do hospitals give weightage to physical infrastructure and has there been an increase in the tariff structure due to accreditation? Nadkarni said that accreditation may not necessarily mean NABH accreditation, but it also looks at regulatory clearances and that there can be different accreditation systems. While answering the question whether patients ask him whether his hospital is accredited, Col Masand said that patients are not really concerned whether the hospital is accredited or not. Their decision to avail the hospital services are primarily based on the doctor and the information that they get from the hospital website. On asked whether accreditation increases cost of hospitals, Singh opined that he has not come across any increase in tariff so far due to accreditation. "Jaslok's annual salary bill is Rs 30 crore and every year it is going to increase. The cost is going up due to the bill system that we have," stated Col Masand.

Most of the panelists agreed that accreditation is a must for network hospitals, but there should be modification of accreditation criteria to suit physical infrastructure of old hospitals.

Green Building Concept

Vishal Bali

Dr Nagendra Swamy

Anil Kamath

Kuldip Singh

The session on green building concept was moderated by Micah Joseph, Secretary and Director-Administration, Nanavati Hospital. Sameer Mehta, COO, Hosmac Projects gave a presentation on 'practicing sustainable architecture for healthcare building. "Green means sustainable use of resources to meet our needs without depriving the future generation of non-renewable resources," said Mehta. While talking about conventional site development, he said that site development more often than not translates into lesser 'relief' areas, lesser relief areas mean lesser green spaces which mean an increase in the 'heat island effect'. Eco- friendly site development can be done by protecting and enhancing the site's existing natural areas as a therapeutic resource for patients, staff, and visitors and siting the building near mass transit systems for ease of people transport.

Conventionally, selection for the materials for construction and interiors are primarily based upon the availability of the materials rather than its impact on the environment. And for green material selection, the product should be manufactured from recycled materials / renewable resources. Building materials should be extracted and manufactured locally to minimise the energy utilisation in their transportation.

Shailesh Dalvie, CEO, Kohinoor Hospital spoke on 'Green Building-A Guide for Healthcare Institutes'. While talking about Kohinoor Hospital's LEED accreditation process, Dalvie said that more than 30 per cent energy conservation is achieved through smart solutions for insulation, high performance glass in façade, polystyrene insulation, plantation on the roof, solar panels for hot water, high COP chillers, heat recovery wheel, variable frequency drive on chillers, secondary chilled water loop, variable frequency drive on cooling tower pumps and AHUs. The smart lighting design and intelligent crystallisation of light fixtures ensure conservation of energy. "In the landscaping, the focus has been in using native plants like roheo, chlorophytum, bahunia purpuria, bahunia blackiana, plumeri alba, pisonia alba, polyathia longifolia etc that require less water for survival. Sustainable and indigenous building materials such as FSC wood, concrete with high content, re-rolled steel, recycled frame work have been used throughout the exterior facade, flooring and walls," shared Dalvie.

Medical Equipment in Modern Healthcare Setting

Dr HKV Narayan, Medical Superintendent, Tata Memorial Hospital, moderated the session on medical equipment in modern healthcare setting. Dr Sujeet Chatterjee, CEO, Dr LH Hiranandani Hospital spoke on how medical equipment is an uncompromising need in healthcare today. Said Dr Chatterjee, "Medical equipment is an uncompromising need which is based on three fundamental aspects which includes purchase, repair and maintenance." Medical equipment today encompasses diagnostic which has the capacity of making precise diagnosis with better imaging techniques. We witness greater dependence on such like technology. Today this high end technology has also penetrated in tier two and three cities. While talking about purchase specifications he said that need assessment is crucial, homework is mandatory, specifications should be dictated by the end user (specialist) and the biomedical engineer and the hospital should not pick the specifications from the catalogue of the manufacturer. He further said that purchase manufacturer does not educate, he will try to convince you to buy what is offered not what is needed. Performa invoices if revealed should not be taken as sacrosanct.

The next speaker Dinesh Singh, National Marketing Manager, Dreager gave a presentation on care area solution. "The challenges for healthcare enterprise include healthcare budget cuts, need for cost transparency, need for efficiency in patient care processes and limited availability of trained personnel. On the other hand, healthcare budgets for treating the individual patients are fattening," said Singh.

Dr HKV Narayan said, “Whenever a decision making process is done in terms of a medical technology, few points like requirement of the technology, whether there are competent technologies available in the vicinity and its impact on the patient care should be taken into consideration by the hospital before going for the procurement process."

Day 3

The third day at the conference witnessed power-packed sessions on topics like business models, quality and training and manpower issues in healthcare.

Emerging Business Models

Joy Chakraborty

Brig Joe Curian

Micah Joseph

Dr Akash Rajpal

The session on 'emerging business models' was moderated by Brigadier Joe Curian.

The first speaker for this session was Vishal Bali, CEO, Fortis Hospitals Limited who spoke on 'The Evolving Business of Healthcare & India's Largest Healthcare Merger'. Bali divulged the top global healthcare trends in his speech. "We are seeing the shift to personalised care. How deep down are hospitals going in connecting to the consumer has become crucial and this trend of consumer perspective is only going to increase. The trend of prevention is catching on in healthcare along with medical tourism which is the fastest growing trend. On the other hand, we see that hospitals are going virtual with medical technology and linkages of technology with patients and their families." He further said that meeting the need of older people is going to get more crucial. Country like India is struggling with the lack of good employable people where we are short of 80 million beds and 320 million workforce.

According to Bali, some of the very fine trust driven institutions, which did not focus on being viable died and therefore hospitals need to become viable, profitable and need to give back to the country. And the drivers for change are competition, consolidation and consumerism. "Today, larger healthcare players in India are consolidating at larger space. We at Wockhardt started focusing on consumerism in healthcare with the group taking itself in tier I and tier II cities. It is also important for all of us to understand that price point competition does not create long term value for the organisation in the market," stated Bali. It is also important to grow health insurance sector in India to create affordability in the long run. Also, the hospitals have to look keenly into how can they exploit the opportunity of online space in healthcare. While taking about the Fortis Wockhardt deal, which is considered India's largest healthcare merger, he said, "With the acquisition of 10 Wockhardt Hospitals, Fortis has basically acquired more than 20 years of experience. The deal has added 1,902 beds to the Fortis network of hospitals and has extended its reach to 39 hospitals in 22 cities. Also the entire clinical and management team of 3,000 employees is a part of the new entity. The most sensitive issue in this deal was how to handle talented people. Integrating 3,000 people in the system was a challenge for me. Merger's biggest issue is meeting two cultures, however Fortis family was very supportive and we saw zero per cent attrition taking place."

Next speaker Anil Kamath, MD, Wockhardt Hospitals Limited, spoke on making a success of PPP. "PPP will fulfill their corporate social responsibilities if given a free hand. Government should not go back on commitment. FSI on land for hospitals to be increased for corporate, especially in metros. We should use professionals like chartered and cost accounting firms for unbiased monitoring and reports and have a joint advisory board to address concerns of the public and Government and to give suggestions. Also there should be a professional independent team to deal with BPL patients and screen them," stated Kamath while analysing whether PPP model work for healthcare in the Indian scenario. Said Curian, "Ultimately every PPP model must make sense in terms of quality efficiency, equity and sustainability."

Quality in Healthcare

Joy Chakraborty, Director-Administration, Hinduja Hospital gave a presentation on 'Hospital Accreditation - Committing Quality in Healthcare'. Talking about the quality improvement initiatives taken at Hinduja hospital while getting accreditation, Chakraborty said, "We followed a thumb rule that every department has to take up new topic every month. Timeout procedures were implemented in case of high risk patients. We also made a proper reporting system with incident and sentinel event reporting, kept posters in patient care areas, did credentialing and privileging for our consultants." He further said that accreditation is not the end of quality journey and every activity should be practiced like nobody is watching you.

The next speaker Dr Nagendra Swamy, Director, Shared Strategic Services, Manipal Health Systems spoke on challenges in implementing quality in hospitals. Dr Swamy said that requirements for accreditation ensure identifying credible accreditation body, internationally-recognised standards, independent surveyors system, engagement of all staff and management, active patient participation and increased transparency. "Conveying the message of quality to all sects of employees, managing the mindset—need to change working relationship in teams and also changing the mindset weighing the perception vs. reality, creating strong leadership across the organisation at various levels are the challenges in implementing quality in hospitals. "Challenges in implementing accreditation standards in the hospital include understanding the actual interpretations of the standards by one and all, maintaining persistent commitment from various stakeholders, balancing medical facts Vs patient emotions, fulfilling the requirements of the standards by optimal usage of resources disproving 'quality is expensive', preparedness for emergencies and infrastructural requirement," stated Dr Swamy.

Dr Akash S Rajpal, AGM Operations, Dr LH Hiranandani Hospital, Mumbai spoke on challenges on the path to quality. Said Dr Rajpal, "It is crucial to make the essence of mission and your quality policy essential, keep a short term vision, understand the purpose of the quality standards and link quality improvement as a driver for organisational growth. It is also essential to look at quality beyond accreditation and improve effective communication." Dr Gustav Daver, Medical Director, Hinduja Hospital moderated this session.

Training and Manpower Issues in Healthcare

Brig Joe Curian, the first speaker for the session on training and manpower issues in healthcare spoke on 'HR- as a strategic component in healthcare'. Said Brig Curian, "Healthcare is not about producing a pin or a spoke, moreover this is an industry where every patient is unique. Healthcare in India today has unfortunately not woken up fully to the issues of man management and career development." How to get the best from your human resource? "We created a system of merit rating. My suggestion is that in addition to minimum qualification, one needs to also look for the soft skills requirement in healthcare industry. Give your human resource the freedom and they will develop. Only look for basic qualities like attitude, creativity and team work," opined Brig Curian. He further said that any industry by itself should become a matter of choice and not chance. Today people are coming to healthcare industry by choice.

Ankush Gupta, Senior Manager - HR, Hinduja Hospital gave a presentation on training and issues in healthcare. Gupta said that today's biggest challenge that the healthcare industry is facing is talent pool deficit. Average bed to human capital ratio is 1:4. If we look at Mumbai's healthcare scenario, close 1,000 beds have been commissioned in last five years—translating into 4,000 employment opportunities. Another 1,500 to 2,000 beds are under development-translating into another 6,000-8,000 employment opportunity.

However, existing hospitals are facing a deficit of 5-7 per cent of human capital. "Healthcare delivery mechanism is facing an acute human capital shortage and the available human capital also has the deficit of talent pool and skill sets. The only way to meet the challenge is to embark on an employee development programme which can serve as pipeline for additional supply of talent pool to meet the requirements of expansions and replacement of loss of talent," opined Gupta.

Dr Rashi Agarwal, Director, PRAXIS spoke on salary, attrition and retention of staff in hospitals. "When less productive employees leave the organisation, such attrition can be considered as healthy or good attrition. When your high performers are leaving which has direct impact on your productivity, it can be considered as bad attrition. Strategies for retention of employees are to induce the feeling of 'being looked after' by the organisation. Work environment should foster an environment of teamwork, communicate openly, train your frontline, supervisors and administrators, show your employees that you value them, make room for fun, give people the best equipment and supplies possible," said Dr Agarwal. She also emphasised on giving the employees career advancement opportunities which will include an effective orientation programme, training programmes which will encourage learning, objective performance management systems. "It is also important to evaluate key result areas twice a year and make a place for rewards and recognition," she added.

Dr MK Khanduja, MD, BSR Healthcare moderated the session concluded saying that, "Training even though is costly at the initial period, is an investment in the long run."

EH News Bureau