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Hospitals hold the key to managing healthcare costs


Managing hospital costs is key to managing healthcare costs, said Rajendra Pratap Gupta, Advisor, MoH&FW, in his Special Address at Express Healthcare Excellence Awards held at Healthcare Senate 2017. He based his presentation on five important aspects, namely; global scenario, economies of scale, learnings, emerging models and future of hospitals and healthcare services.

Gupta initially emphasised on the global scenario and what works for different economies. Referring to a comprehensive study, he disclosed details of spending on healthcare by various countries and their efficiency rate including the US, UK, France, etc. He also highlighted the inefficiencies within these systems. Citing the example of NHS he said that more healthcare does not ensure better care. He extrapolated data from several healthcare systems and drew the conclusion that there is no healthcare system in the world that works perfectly.

He went on to explain why healthcare is becoming more and more expensive and how hospitals can influence each other and set examples by  bringing in cost efficiencies within the sector. Gupta provided data related to cost break-up within a hospital setting and urged the audience to carefully analyse their hospital’s operational cost to reduce overall costs. He said that managing operational cost is key to obtain operational efficiencies and to reduce healthcare costs at large. Additionally, he went on to say, “Higher capacity utilisation leads to better productivity per resource, higher bargaining power, thus lowering the cost of inputs, multi-disciplinary working efficiency and larger bouquet of services – all make large hospital chains a compelling value proposition for investors, payers and the patients.” He said this in context of projecting the hospital sector to be the forerunner in India’s growth story.  “Hospitals have a huge opportunity if they maintain economies of scale while improving efficiencies and maintaining the highest quality standards”, he stated.

Finally, he shared information which revealed that value-based care models is the way the go in healthcare. Digitalisation of healthcare services can be another enabler to reduce healthcare costs and provider better, faster and evidence-based care. Accountability of these services will soon become the hallmark for care. At last, he anticipated that consolidation of the hospital sector in India will open many avenues. The industry will therefore need to brace themselves for this opportunity.

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