Here is how India’s healthcare organisation can stay ahead of its time
Once, during a team meeting, one of my bosses explained to us how Leonardo da Vinci’s creative vision and ability to see the future enabled him to predict many scientific discoveries. Leonardo was indeed an inventive genius and was ahead of his time in many ways. He anticipated about many scientific discoveries, including those by Copernicus, Galileo, Newton and Darwin. Moreover, he went further to turn their principles into practical applications, from calculators to helicopters, hydrodynamics to solar power.
Just when we were discussing Leonardo da Vinci’s exemplary vision, our boss asked if any one of us could explain his secret mantra?
Well, all of us had different answers. Some called him gifted. Some said because Leonardo was a mathematician, he learnt patterns that existed in nature and used it in his work and imagination. Different interpretations and hypothesis existed in that room, but the answer lied in a simple thought- the way Leonardo saw the world around him.
While pondering over this piece of knowledge that I received that day, I realised its true essence. Most geniuses around the world simply look at things and patterns in nature differently and that’s why they come up with innovations, strategies and techniques that are ahead of its time. Off course, this demands us to stretch our minds. Indeed, this is worthwhile and can teach us some interesting business lessons.
World over, many prosperous industries and entrepreneurs have adopted this theory to build successful businesses. This philosophy teaches us to look beyond the present scenarios and learn velocity ratios that exist within various industries.
What is the rate of change within a particular industry? What is the momentum at which business models change within an industry? How quickly new products enter a market? So on and so forth.
What’s more compelling is that this urges us to understand how industries, businesses and economies react to a certain situation and also helps us in joining the dots to predict future course of actions.
Well, presently there are fewer organisations who have adapted to this culture but in the near future, this can become the way of life that most industries and nations will adopt.
In fact, in a recent automobile industry gathering, CP Gurnani, MD and CEO, Tech Mahindra, spoke about the future of the automobile industry and stated, “The future will not see the big beating the small, the future will see the fast beating the slow.” He said this in context of the changing business environment in the future for the automobile industry across the world. Further, during his address, he also urged organisations to become ready in order to embrace the changes and challenges that the future brings along.
If we carefully analyse, his anticipation is not just applicable to his industry, but industries across verticals, big and small.
So where does the healthcare sector stand when it comes to being future ready?
Future scenario worldwide
Across the globe, healthcare organisations and government systems are trying to be prepared for future disruptions, challenges and opportunities. Digital technologies have been increasingly utilised to fast track healthcare delivery, improve systems and achieve business growth. According to a PwC report, the global market for connected healthcare will expand by a third every year to reach £37billion by 2020. As per a Deloitte report, global healthcare spend is projected to reach $8.7 trillion by 2020.
This shows that there will be more demand for healthcare services as the population of most of the developed countries begin to age and more and more lifestyle related diseases crop up. However, as global markets climb the growth ladder there are some areas of concern as some of the well known healthcare systems have begun to dwindle.
UK’s failing government sector but growing private sector
America caught between a political crossfire
Currently, North America’s growth rate is expected to be at 4.3 per cent and Latin America will grow at 2.4 per cent as reported by Deloitte. However, some experts are of the opinion that the American market is expected to slow down due to its political crisis. While Donald Trump struggles to put together a plan to repeal and replace Obamacare, its healthcare sector will continue to be pressurised.
The Chinese race against time
The Chinese healthcare spending has rapidly increased in the past decade. Its population of individuals aged 60 or older is set to rise 90 per cent to 240 million by 2020, according to the World Health Organisation. This has been a growth driver for hospitals and the medical device sector.
The healthcare sector in China is therefore set to become a $1 trillion a year business by 2020, according to a report by consulting firm McKinsey & Company. It’s medical device sector is growing at 14 per cent per annum as per its stock market report in January this year. The market is dominated by foreign brands such as Siemens, GE Healthcare and Philip Healthcare apart from its budding domestic device market. However, some experts believe that the sector is racing at full speed over the past few decades, yet it can’t possibly move fast enough to keep pace with its nation’s changing social and economic dynamics. Its rising older population can become a barrier to its growth.
Some Indian experts see this as an opportunity for India.
“Developed countries across the world will struggle to deal with two simultaneous problems – a large population of aged and non-productive citizens and a declining fertility rate. Their entire social security apparatus was built on the pyramidal assumptions of a sufficiently large working population whose taxes will contribute towards healthcare and pensions for retirees. As fertility rates in developed nations fall below the replacement rate and automation displaces low-wage jobs, the growth of the non-productive population will outpace the growth of the working population. This leads to a massive underfunding of future pension and healthcare liabilities which will impact how much money is available to pay for healthcare,” analyses, Viren Shetty, Senior VP – Strategy & Planning, Narayana Hrudayalaya Hospital.
Abhay Soi, CMD, Radiant Life Care, “Immediate competitor markets such as those based in the Middle East have started to witness stagnation. Therefore, a lot of the middle-eastern healthcare group are now venturing into India. In comparison to this, India’s healthcare providers offer, quality healthcare solutions by the best of experts at an affordable cost that gives us an edge over other markets.”
In such circumstances, does the India healthcare sector stand a chance to prove its worth and work ahead of its time? Can it become the biggest healthcare market that serves the entire world?
Does this sound absurd to you?
Think again….
India’s path to glory
As per the Ministry of Statistics and Programme Implementation, GoI, India had 34.8 per cent of youth population counted in the year 2011. The ministry also published a report that stated that it has the largest share of youth population in the world and it will continue to hold so for the next 20 years. This has provided a greater opportunity for the country to reap this demographic dividend for making rapid economic growth.
Again if we look at our progressive healthcare sector, it is dominated by the private sector which is witnessing a constant transformation with new ideas, approaches and techniques being adopted to achieve clinical excellence, better patient outcomes and business success. It has also begun its journey towards creating sustainable solutions for patients in many ways.
According to a report by the Healthcare Federation of India (Nathealth), the sector is expected to become a $145 billion industry by 2018 and a $280 billion industry by 2025. India is also known to be the ‘Pharmacy of the World’ and is estimated to be worth `10,000 crore sector, growing at a CAGR of 22.9 per cent. Over 80 per cent of the anti-retroviral drugs used globally to combat AIDS (Acquired Immuno Deficiency Syndrome) are supplied by Indian pharmaceutical firms. The sector is said to create 58,000 additional job opportunities and is expected to grow up to 45 per cent by 2025, as per experts from IIHMR University, Jaipur.
As per Brand Equity Foundation, the country is witnessing 22-25 per cent growth in medical tourism and healthcare providers expect the industry to double to $6 billion by 2018 from $3 billion now. Medical tourist arrivals in India increased by more than 50 per cent to 200,000 in 2016 from 1,30,000 in 2015. The Healthcare Information Technology (IT) market is valued at $1 billion in April 2016 and is expected to grow 1.5 times by 2020. Rural India, which accounts for over 70 per cent of the population, is set to emerge as a potential demand source. A total of 3,598 hospitals and 25,723 dispensaries across the country offer AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy) treatment, thus ensuring availability of alternative medicine and treatment to the people.
What’s more, Indian doctors and nurses are spread across the world offering their expertise and services to several nations.
The future does look bright in many ways and with such great potential can we envision India to be the healthcare provider of the world?
Are healthcare organisations prepared to stay ahead of their time? And what are the steps to needed to be taken to move in this direction? Is being future-ready the answer?
Defining future-ready for Indian organisations
Gunther Sonnenfeld, HigherOrderVC and ExileLeadership, in his blog on building an infrastructure for the next economy writes, “Being ready means being ready to be valuable, and to produce value in groups. Whereas in the past, we thought of the future as an element that exists ‘over there’, the future is really right now, which requires us to be in the moment and to act within it. So being ‘future ready’ really means having an expressive capacity to create value.”
Putting this in perspective for healthcare organisations, Shetty believes, “A future-ready organisation is one that doesn’t pretend to know exactly what the future holds and bet the farm on that outcome. Rather, a future-ready organisation bets on a couple of likely scenarios and invests small amounts of money and attention on independent projects to test them out. The core business operates as per usual but generates enough of a surplus that can go towards these micro-experiments. Furthermore, a future-ready organisation knows that margins will dip over time, so in order to meet the growth imperative, they add complementary business lines that strengthen the core business or move towards higher value-added services that leverage their innate strengths. Finally, a future-ready organisation is one that isn’t afraid to move into businesses that cannibalise the sacred cash cow, as long as it ensures that the whole business will survive over the long run.”
“A hospital needs a good strategy and financial fitness to achieve its goals within set timelines. A future-ready hospital requires a patient-centric culture which promotes and reinforces innovation and adaption along with a skilled and empowered staff. Every organisation also needs efficient processes like well-defined standard operating procedures, operational flexibility and technology to maintain highest levels of clinical excellence”, opines Gautam Khanna, CEO, PD Hinduja Hospital.
Similarly, Tony Mira, President and CEO, MiraMed Global Services, says that his organisation is already on the path to be future ready and shares, “It takes a commitment to your unique circumstances. There is no ‘cookie cutter’ approach to success. A company needs an inspiring leadership and top management must be receptive to change and ready to adapt to the changing trends and disruptions in the industry. A future-ready organisation must, of course, ensure its commitment to technology is ongoing and its financial situation is stable in order to maintain a long-term growth plan and execution of ideals. Ongoing training of staff and focus on nurturing staff with unique skill sets and specialists in a diverse range of expertise, based on the changing trends and industry expectations, will be a priority and challenge. A company that is not receptive to change and adapt will have a difficult time competing and surviving. Only then, we can keep our employees happy and motivated in the long term, can we win the hearts of our client. We can also focus on being future ready, irrespective of any uncertainties or market changes which may, can or could impact the business in the long term.”
The pre-requisites
As stated by these experts, we understand that organisations who are prepared to take advantage of opportunities, are committed to sustainable growth, focussed on constant innovation that meets the needs of the consumers, embrace technology and create an inclusive work culture are the ones who are braced for the future. There are four important characteristics that will lead organisations to be future ready.
Invest in innovation
The first step in this direction would be to focus on innovation. Says Dr Rajeev Boudhankar, CEO, Bhatia Hospital, “Innovations in the delivery of healthcare can result in more-convenient, more effective and less-expensive treatments for today’s time-stressed and increasingly empowered healthcare consumers. For example, a health plan can involve consumers in the service delivery process by offering low-cost, high-deductible insurance, which can give members greater control over their personal healthcare spending. Or a health plan (or service provider) can focus on becoming more user-friendly. Patients, after all, are like other consumers: They want not only a good product—quality care at a good price—but also ease of use.”
Further, he suggests, “Innovative business models, particularly those that integrate healthcare activities, can increase efficiency, improve care, and save consumers time. You can roll a number of independent players up into a single organisation—horizontal integration—to generate economies of scale. Or you can bring the treatment of a chronic disease under one roof—vertical integration—and make the treatment more effective and convenient. In the latter case, patients get one-stop shopping and are freed from the burden of coordinating their care with myriad providers (for example, the ophthalmologists, podiatrists, cardiologists, neurologists, and nephrologists who care for diabetics). Such ‘focussed healthcare Unions,’ can cut costs by improving patients’ health. Furthermore, they reduce the likelihood that an individual’s care will fall between the cracks of different medical disciplines.”
Adding to this, Mira suggests, “Focus on R&D, where much investment and time should be spent and strategise your goals with a well-planned and an organised deadline-bound timeframe. Unless we prioritise our goals and services based on the changing trends, as well as the surging client expectations, the road ahead may be complicated. We must have an analytical insight and a smart ability to predict various options based with a futuristic vision. Companies need to reconnect with their customers more than ever before and try to understand their future needs. Don’t assume what is working for today will work for tomorrow. Usually the customer is last to tell you their future needs, you need to ask. By the time they tell you its too late and you potentially are in the process of losing them as a customer.”
People centric policies
Increasing workforce fluidity, offering challenging growth opportunities, making room for more ownership by distributing authorities etc., are strategies that work for fast-moving organisations today. A Wall Street Journal article titled, ‘Together We Innovate’, explains the importance of employees working together in an effort to pull new ideas from multiple sources regardless of hierarchy or rank. It states that, “most companies continue to assume that innovation comes from that individual genius, or, at best, small, sequestered teams that vanish from sight and then return with big ideas.” The article expounds on the fact that “most innovations are created through networks — groups of people working in concert.” To achieve this, leaders will need to be cognizant of their employees’ strengths and build upon it in a synergetic manner.
Soi, is of the opinion that success in an healthcare business can be achieved only by a collaborative approach within the organisation, where the team embraces change and is open to innovation at a greater speed. To nurture a team that is capable of all that, a company first needs to be nimble and flexible themselves. It has to build a team that is forward looking.
He says that within his organisation, they have created a system where each and every department works in tandem with each other. They have leaders at every level. This gives every employee a career path and an assured future. Also, every morning leaders and representatives of all departments gather together for a briefing and to share each department’s action plan for the day. The communication of this meeting is circulated among the rest to ensure a seamless flow of function. This, technique he says have benefited them in increasing efficiencies within the organisation which reflects an increased profitability ratio in the last five years. The company is currently growing at 50 per cent CAGR. Soi attributes this success to his team and their smart working style.
Similarly, leaders who can think on their feet, and take informed decisions are those that will manoeuvre their organisations to winning positions. Therefore, healthcare organisations need to look at building strong leaderships at all levels who can lead the the rest of the workforce to optimal performance outcomes.
Solution over function
The only way to provide a value preposition that differentiates your organisation from the rest will be by way of providing for a solution rather than a function. Giving an example of how Hinduja Hospital provide value to their patients, Khanna informs, “We continuously upgrade our medical technology thus bringing the latest medical treatment for our patients. We utilise information technology for enhancing patient experience and to further increase our efficiency. To provide more value to our patients, we have started a homecare service through our Care@Home initiative, wheelchair-friendly transportation services etc.”
“Embracing the changes and challenges that the future brings, and moving ahead while expanding business capabilities through diversification of services is also imperative,” opines Mira.
Revenue cycle management
One cannot compromise on the most crucial aspect- financial stability of an organisation for which revenue cycle management plays a significant role. Healthcare revenue cycle is a dynamic process and as per experts it is in a continuous state of evolution. Therefore, healthcare organisations, especially, hospitals face several challenges that range from billing errors to failure to have certain processes, lack of data and improper policies etc. However, it is vital for providers to look at ways they can improve their organisation’s revenue cycle.
“A large number of hospitals are dependent on processing insurance-related services, along with helping out clinicians and doctors in diagnosis and treating various medical complications. The increase in an ageing population, along with a vast variety of health-related complications on the rise, enhanced technology with smart-based models and RCM processes help in ensuring proper treatments. Medical technology has evolved to the next level and slowly in the coming years these disruptions will become dominant along with world class benchmarks like the ICD-10 format in medical coding. The potential opportunities for future-ready organisations are enormous and commitment to this should be a major goal in ensuring your future,” explains Mira.
The big dream
Finally, I would like to once again poop this question, can India become the biggest healthcare market that serves the entire world?
Perhaps yes! Healthcare leaders mentioned above believe it. Will the entire healthcare fraternity in India be convinced of this concept? I leave it for each one of you to think…
In my opinion, if every healthcare service provider, research organisation, manufacturing sector and every leaders move towards being future ready or even more, stay ahead of our time, then India can be the healthcare provider of the world in the coming years.
Reiterating on the lessons that can be learnt from Leonardo da Vinci’s creative vision. Every healthcare organisation in India will need to understand the velocity ratios that exist in this industry as well as, worldwide. It will be really interesting to study how healthcare markets world over are functioning- what are their challenges, their demands and strengths etc. This will facilitate us to find those white spaces that we can fill in providing the perfect value preposition to the world.