World of healthcare: Challenges and Opportunities

Dr Rajesh Gulia

Healthcare is transforming with brisk pace, creating both new opportunities and threats for physicians. The population is becoming more health conscious and better informed about the benefits and value of primary and preventive as well as specialised care, writes Dr Rajesh Gulia, Chief Urologist and Director, Mayo Hospital, Mohali, for Elets News Network (ENN).

As the middle class expands, health becomes a higher priority due to which healthrelated spending has increased. Lifestyle-related diseases are also becoming more prevalent than traditional infectious diseases.

There is a shortage of trained healthcare professionals. Physicians of urban areas are not well organised and they can’t be differentiated from the myriad of less qualified providers.

Patients are becoming better informed and more sophisticated consumers of healthcare, but they do not know where to turn for high quality care.

Over 3.6 million additional hospital beds will be required by 2034 just to attain a ratio of 3.5 beds per thousand people (Countries like China, Thailand, and Korea have a ratio of over 4 per 1,000).

Corporate companies are also developing hospitals which compete with traditional physician owned nursing homes.

The Clinical Establishments Bill will give further impetus to the institutionalisation of standards and clinical protocols. Emerging clinical management, patient billing and reporting requirements are driving the need for administrative infrastructure in the physician practice.

Medical technology is an increasingly important part of the diagnostic process. Today the technology is moving out of the ‘hospital’ setting to stand alone and retail centers. Apollo has created over 60 franchised physician clinics offering facilities for specialist consultation, diagnostics (e.g. lab, imaging, radiology, and nuclear medicine), preventive health checks, telemedicine and 24-hour pharmacy, all under one roof.

Health insurance dragnet and their growing Power

Health insurance is important vertical of healthcare ecosystem. It has already covered 10 per cent of healthcare expenditures and is growing at more than 20 per cent per year. This is largely due to increasing awareness about the importance of healthcare insurance which provides a right vehicle to tackle financial needs.

Corporations are also recognising the importance of healthcare for their employees and offering programmes for them. The Government strategy is shifting from providing care to offering insurance. State and local Governments are instituting a variety of schemes to improve access to healthcare for the lower income population. Rashtriya Swasthya Bima Yojana (RSBY) is expected to cover 60 million BPL families by 2020 and other jurisdictions are also copying this concept. Recently announced ‘Ayushman Bharat’ – the National Health Protection Scheme is right step in this direction.

Coming to terms with the inevitable

We are beginning to see the inevitable next steps in the evolution of healthcare and insurance in India. With claims exceeding revenues, insurers are beginning to negotiate or dictate payment rates for services by hospitals and physicians, analyse healthcare costs, expand coverage to less expensive non-hospital settings, promote preventive care and early detection. Governments and independent third parties are collecting information on quality and cost. Large corporate hospitals are taking position to effectively balance the inevitable power of the insurance companies and meeting the growing administrative requirements. But the independent physicians are at high risk of losing access to patients and their ability to set prices.

Proposed Strategy

To strengthen the private medical practice, one strategy is to create an ‘Organised Physician Association’ (OPA) that balances the flexibility and independence of an independent practice with the leverage and efficiency of an organised group.

This strategy has proven successful in the US as their insurance market evolved through similar phenomena.

These organisations should be owned and governed by physicians and should have professional management to capitalise on opportunities, respond to market requirements and remove barriers to success.

This enables independent physicians to build the critical mass necessary to compete effectively for patients and protect their income from erosion by larger and better organised hospitals and insurance companies without losing control of their individual practices.

OPAs are owned and governed by physicians, have a sustainable business model and provide services and support to the owners and participating physicians to strengthen and expand their medical practices. They are likely to include a cross section of well trained and qualified primary and specialty care physicians in close geographic proximity interested in expanding and improving their practices.

The power of the group would be used to gain the economies and efficiencies necessary to attract and treat more patients. It would also be used to improve the health of the patients and increasing the income of the physicians.

Physicians that recognise and understand the coming changes in healthcare and insurance and position themselves to capitalise on these changes will not only survive in this new environment, but will thrive. Change is scary and difficult but the status quo is doomed to decline. Effective change must not only address the changes in the market but it should also take into consideration the objectives and requirements of the physician.

Requirements for success of an OPA include:

Vision: An understanding of both how the market is changing and where you need to be positioned in the near future to be successful in that environment. Balance: Equilibrium between physician autonomy and organisational effectiveness. Leadership: Physicians who are willing to help shape the vision, passionate about achieving it, effective at communicating it to other physicians and able to motivate others to participate.

Market Sensitivity. Research-based definition of customer expectations and requirements and competitive conditions.

Differentiation: Set apart from competitors in terms of clinical quality, service, convenience and efficiency.

Strategy: A well-defined plan of action to achieve the vision based on an evaluation of options.

Measurement: Clear and measurable objectives that are monitored and reported regularly to leadership.

Continuous improvement: Regular adjustments to strategy and enhancement to differentiation.

This process for creating the organisation would include the following steps:

Identify core group of physicians interested in the OPA concept.

• Define the vision and purpose for the organisation.

• Delineate potential features and characteristics of the business through a series of expert lead, information based brainstorming sessions.

• Delineate the business model and value proposition. Invite additional primary and specialty physicians to join.

• Devise a strategy and detailed business plan. Structure the organisation. Implement the plan.

There are tremendous opportunities for physicians as healthcare in India continues to evolve, but there are also risks associated with it. Those physicians who capitalise on the lessons from other markets and adapt them to the unique environment in India will not only advance their own practice, but also improve the quality of care in their community.

Organised physician groups enable physicians to maintain the autonomy of their own practice while capitalising on the advantages of a large group.