Vivek Shukla, Senior Advisor, Frost and Sullivan – Healthcare and Life Sciences MENASA, gives an insight on how hospitals should evolve to provide better services and improve healthcare outcomes
As we know change is the only constant. As time lapses, industries and businesses evolve. Healthcare is no exception.
Hospitals of the future will have to keep pace with changing times. The norms are already being challenged. Disruption is inevitable in any industry. Typewriters were done in with computers, film roll cameras are now replaced by digital ones, large incision surgeries are now being replaced by laparoscopic ones and people can now Google their symptoms and even their doctor’s prescription!
As an industry moves from the growth to a maturity phase, the consensus around the paradigms in which the industry was operating are challenged. Since there are still players who want to make a mark and create a market for themselves, they see enough incentive in disrupting the current paradigms. We are likely to witness the same in the way hospitals are managed and provide services. Traditional methods of providing care are being challenged and new dimensions are emerging.
The peculiar nature of healthcare where the user is not necessarily the payer, will have far reaching consequences as the payers seek to take control of their profitability.
As health insurance penetration increases, the rules of the game will change rapidly. Hospitals will have to work at reducing rejections and creating formidable revenue cycle management protocols. We are witnessing interesting developments in international markets that have higher percentage of insured lives. There are places where the price for procedures is capped by the insurance companies and the hospitals cannot charge on a fee-for-service model. There are even markets where insurance companies are ‘recovering’ any excess payments that they have paid to the providers in the past months. In some countries, there are capitation models in play and HMOs are common. Much of this is likely to come to India as years go by. The hospitals of future need to watch carefully as the insurance penetration story unfolds.
In the same breath as we talk about insurance, we will need to speak about costs. When pricing is under pressure, hospitals with lean cost structures will stand to gain. Markets will be dominated by hospitals with higher margins. They will hire the best doctors, they will invest in brand building and they will have deeper pockets to acquire superior technology, they can even offer volume discounts to the payers. As I write this, there are hospitals in the country who have actively engaged in getting clear on the costs of their top procedures and investigations. They intend to use this information to price their services and negotiate better with the payers.
There is one caveat though whenever I speak of costs in healthcare. We must not attempt at reducing costs by endangering quality and patient outcomes. That attempt, if made, will inevitably backfire. The aim has to be superior or at least the same quality with a lower cost. Counter intuitive as it may sound, because we think quality comes at a cost, but good quality can actually reduce costs and waste.
A game changer in future will also be how the hospitals are led. I reckon ‘carrot and stick’ leadership will be juiced out and will not render itself useful in future. Leaders who can move and inspire their teams and employees will be in demand and will succeed more often than not. They will create agile organisations that quickly adapt to the changing times. Their hospitals will move faster and gain lead on various fronts. Leaders who continue to flog their teams for performance and leaders who keep using greed of incentive to extract performance will see dwindling enthusiasm and higher attritions. The new era will be an era where extracting commitment will score big time over extracting compliance.
The inner resistance amongst employees and departments is invariably a function of poor leadership. It is amazing to see the quantum of growth and execution that is choked because department heads or various team members continue to harbour differences. Worse still, leaders do not take to conflict resolution upfront. Usually, these issues are put on the back burner with a hope that they will get resolved on their own. Seldom does that happen. Hospitals that will thrive in the future will be the ones where the culture of working as a team is intentionally created. They will have leaders who galvanise teams and lead by example. This way, they will create nimble organisations that will make use of the dynamic markets and resulting opportunities.
Close to the subject of inspirational leadership is the issue of retaining and grooming high quality talent. Unless hospital leaders create more leaders, the direction and speed of change will be compromised. Hospitals of future will have higher staff engagement and lower attrition levels.
Needless to say, the supply of trained technical manpower including doctors and nurses will not be able to keep pace with the increase in demand in the coming years. Failure to retain talent will add to the woes and pose a threat to further growth. There is also a possibility of reverse brain drain of doctors as more Centres of Excellence develop in India. Hospitals in future will not shy away from crossing borders to bring back doctors and managers that have gone away because of better opportunities abroad.
Cross pollination of ideas will be crucial to survival in healthcare. Learning from other players, industries and other countries will enable hospitals to keep pace with the changing times. We already see learnings from other industries being deployed in modern healthcare. Healthcare at home is one such example. Taking a cue from manufacturing, are a couple of hospitals that have embarked upon vertical integration of business and are producing the implants or consumables that they then use for their patients. Others are working closely with their vendors to ensure that the quality of supplied goods is ensured for better outcomes. This not only includes surgical goods, but also includes services like IT systems.
Technology will be a critical element that will change the way hospitals operate in future. We have already seen a sea change in medical technology over the past decades. One of the likely game changers in future would be artificial intelligence. Imagine preliminary diagnosis is done without the need of a doctor. Or hands of a robot performing a surgery and not a human being. You may even have nursing robots in future. Hospitals will have to keep pace with technological advances to insulate themselves from being redundant. Needless to say, technology will need investment. This takes us to one of the points made earlier about better cost control. We will see that cost leaders in the industry will be more likely to adopt new technology and disrupt the dynamics of the game, thereby creating a chance for themselves to continue to lead further.
Hospitals will rethink the way they manage patients with chronic medical conditions. The number of such patients is rising with each passing day.
Remote health monitoring, as a system to manage chronic medical conditions, has already gained ground. People in some parts of the world are already monitoring and trying to manage their blood sugar and blood pressure levels from the comforts of their home. The services are getting extended to ECG and even ultrasounds.
I also see an increase in the ‘focus factories’ as compared to ‘all services under one roof’ model. As the supply of healthcare increases, the ubiquitous multi-specialty hospitals will have to give way to single specialty experts. This will go way beyond eye hospitals, birthing centres or IVF Centres. There is already a small chain that only does bariatric surgeries. As time goes by, we will witness more providers who do only one procedure or master only one specialty. Focus factories have better utilisation, steeper learning curves and higher profitability.
The future will also see an added focus on prevention. More and innovative ways to prompt people to stay healthy, get check-ups done and prevent ailments will be seen. We can expect some hospitals to have dedicated prevention wings where the otherwise healthier people will visit and get preventive check-ups done.
Cross border travel for healthcare, popularly known as medical tourism, will continue to evolve. Every other day we see new studies and predictions on the number of medical travellers that will seek or arrive for treatment in some country or the other. Indian hospitals seem to have found their markets and are competing hard to get more and more international patients. This will be an interesting space to watch out for in the coming years.
Hospitals of tomorrow will make drastic progress in the way they use, create and manage their medical records. Predictive medical conditions and preventive interventions can significantly alter the rules of the game. Managing the entire cycle of care instead of episodic management of conditions will get enabled with next generation electronic medical records. This will also ensure retention of patients for longer periods, whereby making patient retention and subsequent cross-selling an important aspect of the business.
The laws that govern healthcare providers are evolving as the time goes by. This is likely to continue and we will see more clarity when it comes to fixing responsibility and liability. The interests of both the provider and the patient will be safeguarded in a better way. Consumer Protection Act, IPC provisions with regards to healthcare and Civil Laws, will all evolve and impact how care is provided. Hospitals who keep themselves abreast with these developments are less likely to be affected adversely in case of a litigation.
The list of how healthcare delivery will evolve can go on. The bottom-line for hospitals of the future is – they need to closely watch the key dynamics that have a bearing on their functioning and be quick to adapt in case there is a definitive change.