Healthcare major, Manipal Hospital has invested heavily in state-of-the-art technologies that are not only critical for patient care, but also to streamline and integrate its complex functions, including administration and finance. The 650-bed hospital with 30 specialties has total equipment assets, worth more than Rs 100 crore, uses advanced equipment like Magnetic Resonance Imaging, digital cardio-vascular systems called Innova-2000 and many more made by GE Medical Systems. These technologies for radiology, neurology and cardiology minimise exposure to minimal radio opaque dye, generate high quality images for diagnosis, catherisation procedures and bring down cost of treatment by half.

Considerable investments have also been made in the Neo-natal Intensive care unit and Critical Care Units. "A large percentage of Manipal Hospital beds are critical care beds and the investments in these areas, are critical in saving lives," S Ramnath, Vice President, Quality and Information Systems, Manipal Education and Medical Group India told Pharmabiz.com.

Supporting the high technology therapies are technologies for improving and managing the productive process of healthcare. Typically a hospital uses a Hospital Information System (HIS) with 200-300 terminals, which are Oracle or SQL-based. This is basically an Enterprise Resource Management System for the Hospital that integrates performance of the hospital and provides appropriate financial reports for management of the facility. Currently, about 70-80 per cent of the system installation in Manipal Hospital is complete, informed Ramnath. "The trend in the future will be to adopt USA''s integrated equipment images and data to make the entire hospital system relatively paperless with electronic signatures," he added.

The main benefit of advanced technology is the speed and efficiency in cost and treatment. "An HIS system could cost upwards of Rs 1 crore, but the information it provides on bed utilisation, revenue profiles, inventory reports etc enables appropriate and accurate utilization of resources which results in considerable savings. The improvement in the process flow itself results in no delays, improves the transparency and reduces internal costs. The archives of patient records allows better identification of trends in patient diseases, assists in the epidemiology and planning for future healthcare services," he informed.

On the returns for a hospital with technology investments, Ramnath said that it has to earn at least 25-30 per cent of the cost of the equipment every year to breakeven. It is becoming increasingly difficult to break even due to the high cost of equipment and the paying capacity of the patients is not high. In some areas like radiology and pathology, the returns are good, he said.

According to Ramnath, the factors that determine the purchase of equipment is based on a hospital''s buying power and on whether it gives recognition to the vendor. There are no standard pricing policies. Quality in the case of all major vendors is more or less the same, with no major appreciable differences. However a major differentiator is the after-sales service provided by the vendor and the stocks of spares that he maintains, given the fact that the infrastructure is not the best in India.

At Manipal, most of the high-end medical equipment are imported and sourced through local distributors who market and perform the after sales services of the equipment.

One main problem with equipment suppliers today is the acquisition and mergers of big companies overseas as the after-sales-service is affected. "We do not have built in redundancies in the system to take care of such problems, as most of the equipment are one-of-a-kind. This results in a loss of investment and professional reputation. Another hassle is the high interest rates in India and a foreign exchange risk in purchase of the equipment," he explained.

Typical depreciation for medical equipment in the industry is 7- 10 years, for capital-intensive equipment of Rs one crore. However, for smaller equipment and frequently used dialysis machines, could be replaced every 3 - 5 years depending on their utilisation. Dialysis machines are used in 2/3 shifts, and hence their attrition rate is higher.

The equipment purchase at Manipal Hospital is financed as project expenditure by various financial institutions.

Vendors are proposing reagent contracts, that will enable the hospital to get the equipment free and pay for it by buying reagents from the vendors. This makes paying for equipment a variable cost and not fixed investments, which is preferred by hospital administrators. In the case of purchasing hospital materials in surgery, labs, radiology, is based on pricing and terms of payment.