Why should standalone Hospitals in India focus on IT enabled productivity by Tirupathi Karthik, @TirupathiKarthi CEO at @NapierHealthit



Fresh out of HIMSS India’s inaugural Digital Healthcare Summit, (2015) in Gurgaon, I lamented over the state of healthcare IT in the country. At the time, we were showcasing our hospital information system and launching our telehealth and patient referral management solutions. I should have been proud to be a part of the innovation on display at the event, and understandably so. But what struck me harder than pride at the event and left me with a lingering sense of disappointment was something else. And that was just how far some parts of India lagged behind the rest of the developed world in terms of healthcare delivery and quality.



Napier Healthcare is a global company headquartered in Singapore, where it manages the development of technologies to world-class standards. My other point of reference is the US. So whenever I consider the industry in India, I am invariably piqued by its difference from the industry in Singapore and the US. Especially the US, since it is a democracy like India and has similar health problems on a large scale.
In the time that has passed since HIMSS India, I have thought through some options that the Indian healthcare should seriously consider moving forward. 
EMR Enforced By Law
The most obvious difference I see between India and the US is in their standards and certification environments. We do business in the US and have to be certain that our solutions meet that market’s most stringent regulatory and certification requirements. They include HIPAA and a few others, but more significantly in the case of hospital information systems, the Meaningful Use Stage 2 (MU2) compliance certification. These certifications create significant entry barriers for non-serious players, and make certain that healthcare IT (HIT) quality is maintained in the market.
The policy framework in the US sees to it that EHRs (Electronic Health Records) are sold with certain features that ensure nearly zero medical errors, well-supported transitions of care and ultimately higher quality care delivery.
India has been working on a national EHR standard since 2013, when the Ministry of Health & Family Welfare (MoH&FW) announced its first set of requirements. The MoH&FW has subsequently made continual enhancements of this set of standards. Translating policy intent into effective outcomes still remains a distant goal in most states as software vendors have an option, not a mandate, to comply with this EHR standard.
I must admit, though, that for a large country such as India, executing that would take quite a few years. Even then it would most likely reach only those under some form of formal insurance, and that too only in the metros and some larger cities. As a result, the majority of the population in the semi-urban and rural sector would be excluded from this. 
Automation to Level the Playing Field
The World Bank tells us that private hospitals account for 67 percent of total healthcare expenditure in India. World Bank numbers also tell us that in 2014, citizens paid for 89.2 percent of their healthcare expenses out of their own pockets[1]. These figures have been rising constantly since 1995, and they clearly show two major trends.
One is that private healthcare is enjoying explosive growth in India, with larger private healthcare providers, such as Fortis and Apollo, gaining the lion’s share of the market, and smaller private hospitals being edged out of reckoning slowly but surely. The other is that healthcare is becoming an increasingly heavier burden on Indian citizens. And on poorer households in India, that only drives them deeper into poverty.
My recommendation is for < 100 bedded hospitals to focus on quality rather than volume, and to leverage HIT and automation in their efforts. Automation helps  improve patient-care coordination and ensure the consistency of patient care across facilities, and foster patients’ (and their families’) engagement in their own care. This all adds up to better care and lower costs of delivery for hospitals, and better health outcomes for patients. Today most healthcare providers think of Billing and Inventory as the key areas for automation to the exclusion of everything else. This myopic vision leaves a lot of value gaps that goes un-leveraged and un-monetised.
From the industry standpoint, smaller private healthcare providers who leverage HIT effectively ensure their survival and success, help bring about a more competitive provider market, and ultimately offer better quality care at lower costs.
Get Over Short Termism
Short-term thinking is holding back progress in the healthcare industry and preventing innovation among HIT vendors. Our studies have shown that hospitals  seldom spend more than 0.5 percent of their revenue on IT. Mostly they tend to source customized software solutions from small time players and the mindset seems to be—“cheap is good but free is better.”
Clearly, they do not see IT as a competitive differentiator that can help reduce cost and improve productivity. Small time IT players seldom invest in R&D and rarely provide yearly updates and upgrades. This means that hospitals need to re-implement every time they need to do a technology upgrade. But instead of seeing the potential loss of patient relationships and revenue opportunities that comes with every implementation, many hospitals stay fixated on just how cheap it is to get a new solution every time.

Compared to a global average of 2-2.5 percent of investments by hospitals, or 6-15 percent by other sectors in India itself,  hospitals are far behind their global peers in recognizing the value of good software. The impulse is always to invest for the quick ROI. For example, instead of investment in IT, many CEOs traditionally have wanted to invest in CT Scan or other equipment, which can generate revenue from the following morning itself.
By extension, this approach of managing the affairs of the hospital stifles innovation among IT vendors and limits their ability to invest in R&D for creating innovative IT solutions.
I strongly urge the healthcare leaders to change their mindset and start looking at generating productivity gains by setting up lean and mean operations. The skilled work force is increasingly hard to come by. Hospitals need such critical resources like Doctors and Nurses in abundance to support the opening of newer facilities and not having them will limit growth, like one of our customers in India is realizing very quickly. With abundant money supply Hospitals can easily raise capital today but not having good physicians and nurses will limit their growth for sure.
The only way to achieve sustainable growth is to focus on enhancing productivity rather than just adding to the labor force alone. And quite simply the most effective approach to enhancing productivity at any organization incorporates the innovative use of good technology.
So my key message here goes directly to senior executives of healthcare facilities:   is to view IT as a competitive differentiator rather than as a cost management tool. And recognize that the right software and other tools are essential to making those gains and sustaining your business growth. Continually benchmark your practices to hospitals globally and not just with peers locally.

Finally, Insurance is coming


Increasingly top hospitals are becoming aware that the Insurance reimbursements are a significant portion of their revenue and rising every year. DRG classifications and reporting are going to become commonplace as Insurer’s seek to reduce their cost by paying for “packages” rather than individual services. This means that Hospitals that won’t or can’t respond to the Insurer’s will be left to address private-pay market that will shrink slowly but surely. If one studies the evolution of the US system you will find a strong parallel to the trends in the Indian healthcare system. This will be an existential question for providers.
Like they say “the best way to predict the future is to invent it”. 

Conclusion
  • Healthcare providers need to implement software and other tools with a view to generate productivity gains - not just to generate bills
  • View IT as a competitive differentiator rather than as a cost management tool
The author is the CEO of Napier Healthcare, a Singapore based software provider of technologies such as HIS, EMR, Portals and revenue generating solutions such a Referral management and CRM. He has personally witnessed smaller Singapore healthcare providers with ~100 beds overcome manpower crunch by using technology.

The Article was first published on Mr. Tirupathi Karthik's LinkedIn Pulse blog, here, and has been republished with the author's permission.
Author
Tirupathi Karthik
A leader in the Healthcare IT space, Tirupathi Karthik has extensive business leadership experience across Asia, the Middle East and USA, particularly in the enterprise software space. He is a passionate advocate for the innovative use of technology that turns IT investments into competitive differentiators for their stakeholders rather than using IT as a pure cost containment initiative.

In various hospital implementations, he has been championing the use of Mobility as a pervasive information delivery channel. His vision led to the use of themFirst approach with the infusion of HTML5 and Apple’s mobility products across the Napier platform. Napier’s leadership in the global marketplace continues to gather momentum on the back of one of the most modern implementations of such a technology stack.

As an Eldercare thought leader, he has been driving productivity agendas for aged care models globally and seen to the expansion of Napier’s product vision to include elderly care services delivery. Applying technology-enabled solutions for senior care providers offering nursing home, home care and activity-centre services, Napier today enables productivity and improved quality of care.

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