Corporatisation of hospitals has not only transformed the healthcare culture in India, but it has also dramatically changed the perception of this service industry. The term ‘hospital administration’ is fading into oblivion, as the word ‘management’ gains credence and professional managers pick up the reins of hospitals. Doctors, who had to double up as administrators at hospitals traditionally, can now concentrate on their core strengths of consultation and treatment, leaving management in the hands of skilled professionals, as in any other business.
Initially, management graduates from common disciplines like marketing and finance were recruited to manage corporate hospitals. The rapidly evolved discipline of healthcare specialisation at management schools has now enabled the industry to completely adopt a culture of professional management. Unlike other sectors, campus recruitment by hospitals is also becoming a trend.
Needless to say, Indian business schools have not let go of the opportunity that the fast growing and private sector driven healthcare services industry presents. Several professional educational institutions, including the Indian Institutes of Managements (IIMs), have evolved professional management programmes that are tailor-made for the fast growing healthcare industry. The move, say industry experts, was much needed for the health care sector’s journey towards professionalism.
The private investment that is flowing into the hitherto neglected Indian healthcare market, has paved the way for this transformation. The growth of private sector players in the expanding healthcare delivery market in India has been rapid across the last six years. Before that, the public healthcare system was being predominantly catered for by the government and individual-run clinics and nursing homes. Overall economic progress in India, particularly over the last decade, has increased the demand for better healthcare, which the private sector has swiftly capitalised on.
The outcome was a corporate rush for a sector that had largely been the preserve of the government and charitable institutions. The private service providers who jumped into the fray predictably chose to cater for the high-revenue earning specialty care market in affluent locations. To cope with the fierce competition in the market investors resorted to professional management of healthcare services.
India’s healthcare market is expected to register an annual growth of around 23 per cent between 2015 and 2020, to touch at least $280 billion. The key factors driving the growth are rising levels of income, greater awareness of the need for healthcare, increase in lifestyle diseases and improved access to insurance. The vibrant private sector accounts for almost 74 per cent of India’s total healthcare expenditure and has acquired international repute. The country has consequently seen a sudden surge in private sector investments in healthcare services and solutions by both home-grown and foreign players. Till the early part of 2000, the healthcare sector had only a handful of corporate hospital groups, including Apollo Hospitals, Fortis Healthcare, Wockhardt and the Manipal Group. A substantial number of large and medium hospital chains focussed on both single and multiple specialities, have entered the market over the last decade.
A similar surge in investments has occurred in diagnostics and other healthcare services, such as tele-medicine and home care. Major hospital groups and healthcare institutions, both in the public and private sector, including AIIMS, Apollo and Narayana Hrudayalaya, have adopted tele-medicine services and have expanded the business through a number of public-private partnerships. The tele-medicine market is valued at $7.5 million in India currently and is expected to grow at an annual rate of more than 20 per cent, to reach about $18.7 million by 2020.
The concept of medical tourism is also gaining ground here. The presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for patients from outside India looking for better and affordable treatment. Recent policy reforms, including reduced excise and customs duty and exemption in service tax, have also substantially aided the growth of the healthcare sector in India.
“India offers a huge potential for private healthcare providers, as modern healthcare penetration is still too insignificant... and the government cannot be the sole provider to address existing and future demand,” Muralidharan Nair, partner, Healthcare and Practices, Ernst & Young India, said. Healthcare has become the new buzzword in India’s business schools. At least a dozen management schools have introduced specialised programmes to tap the growing demand for professional managers in the booming healthcare delivery sector. Specialised healthcare management programmes in the country was pioneered by the Indian Institute of Health Management Research (IIHMR) University, headquartered in Jaipur.
Top ranking B-schools, including IIM-C, IIM-A and IIM-B, have recently jumped onto the bandwagon. Graduate programmes designed for healthcare delivery at several other private business schools, such as the Indian School of Business in Hyderabad, Symbiosis Institute of Management in Pune and Tata Institute of Social Sciences in Mumbai, are also gaining traction.
The Indian Institute of Management in Calcutta and IIM, Ahmedabad commenced healthcare management programmes early last year. The IIM-C’s specialised management programme in association with the US-based hospital, CHI St. Luke’s Health and local hospital chain Glocal Healthcare, is a year-long MBA programme that began in February 2015. According to the school, the programme began with 31 students all of whom were working doctors on study break. The programme is designed to provide management learning with built-in, hands-on elements. The other premium B-school to start a similar course in 2015 was IIM-Ahmedabad. Although the first batch at both the IIMs began with an all-doctors class, the schools said that it was not essential to be a doctor to pursue this MBA programme and that any graduate with three years of experience in the healthcare sector, could take classes. The course curriculum at these management schools mainly comprise training on how to solve hospital-specific issues. Each student has to go through real-life situations, crises and logjams that arise in hospitals. Students who pursue these programmes also go through the grind of financial and operation management. The programmes also include classes on environment and clean energy. The healthcare management programme at IIM-C includes six months’ of field exposure, split into a five-month internship at one of Glocal’s hospitals across India and a month’s externship at CHI St. Luke’s Health.
“This high-growth sector, which involves a lot of critically important segments such as healthcare delivery, technology, research, pharmaceuticals, insurance and even social development, badly needs the same professional management set up as that which exists in any other industries,” says Vishal Bali, co-founder and chairman of Medwell Ventures and a veteran healthcare management professional in India. Bali, who has led two of India’s large hospital chains, Wockhardt and Fortis as CEO, said that the healthcare management programmes introduced in these institutions, especially early birds like IIHMR, have immensely helped corporate hospitals in the country to hire the best talents through campus recruitment.
The Managerial Excellence in Healthcare Management programme at IIM-A is designed for middle and senior level managers, who are responsible for managing healthcare institutions and programmes. The programme includes training on management of large hospitals, clinics, and public health systems. Classes on critical issues relating to people management, quality management, finance and costing and information system, are also part of the curriculum.
Recently, IIM-Bangalore too started a general management programme for healthcare executives. It is a part-time certificate course aimed at high-performing individuals in the healthcare domain, who are looking to transition from a functional role to a managerial role. The programme, which follows the model of the highly successful Executive General Management Programme (EGMP) offered as part of IIM-B’s executive education programmes, has been designed and developed in partnership with Apollo MedSkills, the management-skill-development arm of Apollo Hospitals.
While the academic content of the programme is delivered by the IIM-B faculty, there are frequent interactions with clinicians. The administrators are from leading hospitals and the practitioners are from allied disciplines, such as pharmaceuticals and insurance, which play an important role in determining the success of healthcare delivery models.
According to S. D. Gupta, chairman, IIHMR, the institution works as a WHO collaborating centre for district health systems. It has been designated an Institute of Excellence by the Union Ministry of Health and Family Welfare, which played a major role in promoting and conducting health policy and programme management research over the last 30 years. “The institute has been instrumental in causing a paradigm shift in the management of healthcare and hospitals in India. It has produced a substantially large base of professionally trained health and hospital managers in South East Asia,” says Gupta.
unni@businessworld.in
BW Reporters
Unnikrishnan is currently Senior Associate Editor with BW Businessworld at its Mumbai Bureau. During his two decades long journalistic career, he has received several media awards and recognitions. His articles on healthcare, life sciences and intellectual property rights (IPR) have been republished by several international blogs and journals.
