The most fundamental structural change affecting the Indian healthcare sector is the altering demographic and socio-economic profile of the country. As India has been demographically late expanding, the proportion of the country's population in the 15-54 and the 54 years and above age groups is increasing. The increase in the proportion of the working age group (15-54) is being accompanied by an unprecedented rise in per capita income, which is ushering in lifestyle and consumption patterns markedly different from that observed, say, even five years ago. And with lifestyle patterns changing, the country's disease profile has been changing too. For instance, the incidence of lifestyle diseases such as diabetes and cardio-vascular diseases is on the rise.
The increase in the population share of the elderly is also causing a change in the pattern of demand for healthcare services. Such change is opening up both preventive and curative care opportunities, which the existing and new players are exploiting. For instance, inpatient capacity in cardiac care is close to the point of reaching excess supply in certain cities.
ICRA observes that existing hospitals are adding capacity in specialities where demand is emerging, and often promoting the added capacity as a separate, branded unit, to emphasise the speciality aspect.
Emergence of Corporate Hospitals
The emergence of corporate hospitals on a larger scale is another important development, although not for reasons most often associated with it. While corporate entry into healthcare is important for the bed-supply deficit to be bridged, it is even more important for the professionalisation of hospital management.
Till recently, modern management systems had not penetrated most healthcare institutions, with some notable exceptions. Most hospitals would organise their resources and manpower within structures that had evolved rather than been designed. The processes would be structured to ensure multiple points of control rather than patient convenience. Information capture would be rudimentary and information rarely integrated beyond that required for reporting purposes, because of which any data-based quality control would not be possible.
With corporate entities entering the healthcare sector, they are introducing managerial practices and tools, which they had been using for long, in the hospitals that they are promoting. Moreover, these entities are showing a marked preference for professionals, even for non-clinical and clinical support functions. This, in turn, is leading to the expansion of the hospital management education industry.
The benefits of professionalism are obvious. In most cases, ICRA has noticed significant differences between professionally managed hospitals and those managed otherwise. Usually, professionally managed hospitals have better systems and control procedures, which provide for better support to the delivery of quality care. However, ICRA has also come across corporate hospitals where a lack of appreciation of healthcare as a service has been evident from the non-availability of life saving equipment and support infrastructure; presumably, these were sacrificed to lower project cost or save on operating expenses.
The entry of corporate entities into the healthcare sector is also having another, but not so obvious, impact on certain institutions: the not-for-profit hospitals. These hospitals, which subsidise the delivery of care for the poor by charging those who can afford to pay on a cost-plus basis (usually referred to as private patients), are finding it increasingly difficult to attract private patients. A continuous decline in occupancy levels in the private wards of such hospitals has been observed -a trend that these institutions are trying to arrest by offering comfort levels (in private wards) matching those available in corporate hospitals.
Private Health Insurance and Institutional Customers
The emergence of private health insurance, although with potentially far-reaching consequences, is yet to exert any significant pressure on the way hospitals compete or operate in India. However, institutional customers (employees of government entities or companies reimbursing the cost of medical care to staff) have emerged as an important source of regular and lucrative business for the private health insurers. Most hospitals are benefiting from the emergence of private health insurance companies and have set up administrative systems to service the set of customers enrolled with them.
Continuing Shortage of Nursing Staff
The shortage of qualified and trained nursing staff is a factor that is affecting hospitals across the country. Many hospitals have been responding to this constraint by operating at below-norm nurse to patient ratios, stretching nursing staff working hours, and even recruiting partly skilled nursing personnel. As nursing care is an indispensable part of patient care, any inadequacy against this parameter severely constrains the hospital's grading in most cases. However, credit should be given to institutions that have taken steps to surmount the constraint by enhancing training for recruits, developing protocols for various nursing activities, and creating a culture that emphasises adherence to protocols.
Increasing Popularity of Day Care Services
The popularity of day care services (discharging the patient the same day a surgical or other procedure is conduced) is on the rise. However, not many hospitals have systems to support the tight planning, skill and backups required to execute day care.
Use of Information Technology
An important and positive development taking place in the Indian healthcare sector is the use of information technology for purposes such as computerisation of medical records, networking of various departments in a hospital, and providing of telemedicine services. Computerization helps in the obtaining of real-time information on hospital management indices and the handling of medical records, especially in high-volume settings where manual record-keeping may be inefficient. For instance, online reporting of laboratory and radio-diagnostic results over a local area network (LAN) has significantly reduced reporting lag and patient movement at Christian Medical College & Hospital, Vellore (Tamil Nadu).
Trend of Outsourcing Services
Outsourcing also happens to be the current trend in hospitals, especially in non-clinical (such as laundry) and clinical support (blood bank, diagnostic services) areas. The drivers of outsourcing include the need to focus on core business (micro management of patient care following the increase in the number of super specialties), lack of space, rising cost of administration, and eagerness to avoid potential industrial relation problems.
The reliance of healthcare institutions on visiting consultants continues to be strong, ICRA observes. This trend may be attributed to the general shortage of medical professionals practising modern medicine, and the increasing patient demand for specialised care even for minor ailments. These factors, among others, have also led to an increase in the charges for specialist care. As a result, many hospitals are unable to afford specialists as full timers and access them only on visiting consultant basis. The practice of visiting consultants is more prevalent in certain cities where the same group of specialists visits multiple hospitals. From a grading perspective, the use of the visiting consultants model throws up an important question: how does the hospital achieve consistency in the adherence to protocols and promote institutionalisation? Only a few hospitals (especially in the tertiary care category) have evolved systems to support delivery of consistent and quality care, while adopting the visiting consultants model.
- (Source: ICRA)