Transcript Slide 1

The Institute of Management Consultants of India
Healthcare Challenges & Opportunities
March 2006
Tilak Shankar
Management Solutions
Healthcare Industry
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Largest in the world with revenues over $3 trillion
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Indian healthcare industry is worth about Rs.100,000
crores, accounting 5% of GDP
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Fastest growing industry in India with CAGR of about
30%
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Employs about 80 lakh people directly and indirectly –
(IT industry employs only about 5 lakh)
Total Turnover Rs. 100,000 Cr. p.a.
Others
7%
Labs &
Diagnostics
12%
Hospitals & NH
Pharma & Supplies
20%
40%
Allopathic Doctors
22%
Two thirds of beds in Govt. & local authorities
(Total 630,000 beds)
HEALTHCARE – VARIOUS SEGMENTS
STATE/ GOI
MEDICAL
SOFTWARE
INDUSTRY
PHARMA
MEDICAL
TOURISM
NUTRITION
INDUSTRY
HOSPITALS,
NURSING
HOMES,
CLINICS, LABS
TPA
MEDICAL
EQUIPMENT
TRANSPORT
MEDICAL/
HEALTH
INSURANCE
MEDICAL,
NURSING,
DENTAL, PHARMA
COLLEGES
POPULATION
GERAITRIC ,
PAEDIATRIC
Hospitals
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Govt, Corporate, not-for-profit, others
Not-for-profit – Sec 80G, Sec. 35AC,
Sec. 35(1)(2) of Income Tax Act,
Section 25 Company
Hospital Management
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Marketing
Strategic Planning
Finance & Administration
IT
HR
Materials
Quality
New Project planning & execution (India & Overseas)
Emerging trends In Healthcare
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Secondary & Tertiary Care requires large investment,
viable bed size, technological obsolescence
Increasing corporatization
Venture capital funding
Slow, but emerging private health insurance/TPA
Global alliances
Listing of companies
Felt need for professional management
“Sick” hospitals
“Marketing” of services
M&A, Brand buying, Brand extension, franchising
Emerging Trends (Contd.)
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Rating of hospitals (CRISIL, ICRA)
Accreditation by TPAs
Recertification of Doctors (in future)
Spiraling hospitalization costs
Epidemiology:
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500,000 cancer patients added p.a.
40 million diabetics
60 million patients
70-80 million senior citizens
Obesity, psychiatric patients.
IRDA, Private Insurance
Tele-medicine
Emerging Trends (Contd.)
Quality standards:
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Medical audit, accreditation & other standards
Waste disposal (State Government)
ISO
JCAHO (USA Standard)
NABL
Blood Banking (GOI standards)
Licensing & inspection (under consideration)
Protocols for clinical trials
Consumer protection act (private hospitals)
India - an Epidemiological Transition
Geriatric (7 – 8 % of
population)
Cataract, prostate, depression,
cardio-vascular, arthritis, adult
on-set diabetes
Life style
Obesity, hypertension, stress,
tooth decay, cardiovascular
Environmental
Allergic asthma, water-borne
diseases (typhoid, jaundice,
Leptospirosis)
Elective
Cosmetic surgery, tooth
correction, infertility treatment
Tertiary Hospital
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Capital Intensive
Long gestation period
Doctor-oriented
Frequent up-gradation of technology
Service organization
• Patient focus
• Employee focus
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Location is key
Also needs:
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Teaching (Post-grad.)
Research & publication
Community/epidemiology work
Global alliances
Medical Tourism
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Emerging opportunity
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Hospitals
Travel agents
Airlines
Hotels
Rs. 1500 Cr. Revenue in 2004
McKinsey projection – Rs. 5000 to
10,000 cr. In 5 years
Major Corporates
Tatas
Max
Piramol
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Fortis
Wockhardt
Apollo gearing up
Coordinated program : Airline tie up, pick-up,
visa etc. subsequently general tourismpp
Pharmaceutical Industry
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Bulk drugs, drug intermediates, formulations, generic &
branded, OTC
Bio-technology, Bio-informatics, neutraceuticals
Annual turnover – Rs. 23,000 cr. (5-6% growth p.a.)
Employment – Direct
- 50 lakhs
Indirect
- 25 lakhs
20,000 units (300 in the organized sector)
No. of hospitals – 16,000
Retail chemists – 6 lakhs
4th in the world (volume)
12th in the world (value)
Significant exports from India
Pharma - Key challenges
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Many drugs off patent ($30-40 billion in the next 5 yrs)
strategic marketing alliances
Good manufacturing practices – quality
Industry – research collaboration
Ayurvedic drugs
Bio-technology
Only a small number of items under DPCO (40 or so)
Spurious drugs in India
Global R&D – 18 year patent
Upto 15 years from molecule to marketing
Medical equipment suppliers
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Expensive capital expenditure
• CT Scan, MRI, Cath lab, Laser, Theatre equipment,
X-ray
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Siemens, Philips, Hitachi etc.
New hospitals, modernization (technological
obsolescence)
Each new bed – total capex Rs. 20-100 lakhs
Equipment sales, AMC, Spare parts, training
Rs. 8,000 to 9,000 crores p.a.
Health Insurance & TPA
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Public Sector
• General insurance of India &
4 subsidiaries
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Private Sector
• Royal Sundaram, ICICI-Lombard, Bajaj Alliance etc.
• TPA - TTK, Heritage, Family Health Plan
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Estimated premium income
• About Rs. 5000 crores
• Potential – 25,000 cr in 5-7 years
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Present coverage – only about 3-4% of the
population
Govt. likely to allow separate health insurance
co (Rs. 25 crores equity)
Insurance by NGOs/Community based
health insurance
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Members pre-pay a set amount (flat rate)
Voluntary health insurance (VHS-Chennai)
Co-operative, SEWA, Foundations
Narayana Hrudayala
Universal Health plan of the four
insurance companies
About 50 million covered
In addition:
• ESI
• CGHS (Retired employees)
• Mediclaim
IT Industry
Healthcare Vertical
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TCS, Wipro, Infosys, Cognizant, iSoft, Covansys etc.
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US, Europe, Australia clients, Govts. and private hospitals
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Global healthcare spend $5 trillion, US 1.7 trillion (15% of GDP)
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USA – IT spend $25-30 billion
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Europe 800 billion
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Healthcare spend 12% to 15% of GDP (India – about 5-6%)
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iSoft – Healthcare 260 million, 4000 employees (950 application specialists)
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Cognizant :
• $600 million
• Of the above, 22% from healthcare and life sciences
• 3000 domain & technology experts
IT in Healthcare
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Medical
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Picture Archival & Communication System (PACS)
DICOM (Digital Imaging & Communications in Medicine)
Telemedicine
Electronic Medical Records
Clinical Decision Support Systems
HL7 protocol
Epidemic prevention software
Non-medical
• Integrated hospital information system
• Web-enabled Appointment Scheduling
• Web-enabled applications for relatives to obtain conditions of the
critical patients
• Multi-media applications for patient education
• Medical equipment management software
• Web-enabled CRM applications
IT (Healthcare) Projects
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Mainframe, client-server based, web-based
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End to end product linking with provider, payer, patient
HIPAA compliance
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Data warehousing and decision support systems
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Electronic Medical Records
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Healthcare CRM
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Maintenance of systems
BPO
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Areas:
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Medical Transcription
Claims processing
Billing by Doctors (on insurance companies)
Clinical documentation
Clinical trials
Advantages of Indian Companies:
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English language
Cost arbitrage
Time difference
High quality (e.g. >99.5%)
Multi-disciplinary teams
Clinical Research Organization
(CRO)
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Clinical Trials
Revenue Rs. 300-400 crores
CII Projection :
Rs. Cr.
2007
800
2010
4000
Large population
Medical, Lab manpower
Healthcare Consulting
Major areas:
 Hospital feasibility studies
 Funding of new projects
 Efficiency improvement
 Market survey & marketing of services
 Organization review
 Strategic planning
 Insurance products
 IT – ERP, EMR, system integration
Healthcare Consulting
Clients:
 GOI, State Governments.
 UNICEF, World Bank, ADB, DANIDA
 Corporate & not-for-profit hospitals
 Insurance Company
 Strategic investors
 IT Companies
Challenges Ahead…
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Structure and financing of healthcare is changing rapidly
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Future managers in healthcare sector to be prepared to deal with
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evolving integrated healthcare delivery systems
technological innovations
an increasingly complex regulatory environment
restructuring of work
increased focus on preventive care
improving efficiency in healthcare facilities and the quality of the
healthcare provided
managing finances including modernization, expansion plans and brand
extensions
optimizing efficiency of a variety of interrelated services (e.g. those
ranging from inpatient care to outpatient follow-up care)
managing the growing aspirations of doctors (compensation, revenue
sharing, high-end equipment, specialized courses etc.)
High turnover of para medical staff including nurses
Social ‘Marketing’
To sum up
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Wide ranging career opportunities in India
and elsewhere
Domain expertise healthcare management
essential
Growing sector
Job satisfaction
Socially relevant jobs