As healthcare organisations embark their growth paths, they are likely to come across various opportunities and challenges that will demand different solutions. What worked a year ago might now be not the best approach today. Recognising and overcoming the common pitfalls associated with business expansion is essential in order to stay ahead. The panel discussion on overcoming obstacles in business expansion brought to light ways and means to maneuver healthcare organisations towards success despite roadblocks. The panel included Viren Shetty, Senior VP- Strategy and Planning, NH Hospitals; Dr Gaurav Thukral, EVP and COO; Health Care at Home, Sanjay Prasad, President & CEO, Mission of Mercy Hospital & Research Centre; Anant Kittur, Director of Projects, HCG Global; Dr Om Manchanda, CEO; Dr Lal PathLabs and Dr Harish Pillai, CEO, & Cluster Head – Kerala, Aster Medcity.
As moderator of the session, Shetty steered the discussion which focussed on four important aspects of expansion – financing strategies, dealing with government regulations, manpower management and perception management. The panel also addressed issues such as recruitment and retention of talent and opening up channels of communication to become a more transparent sector.
Wrong perceptions can become a fundamental barrier for business expansion, Shetty therefore asked Kittur to share his views on how hospitals can create a right perception. Kittur started off by talking about challenging economics in which the private healthcare sections functions in India. “Price has always been the topic of discussion when it comes to private healthcare but quality is seldom discussed. Cost comes with quality. What all of us have to do to is put our heads together to figure out how at a particular cost can we ensure quality and make the system more accountable.”
Citing an example, he pointed out how HCG has created a platform for their network hospitals to come together for a clinical audit followed by a conference where people present case studies and research papers. On similar lines, he urged the audience, the private sector and government to come together to build a similar platform for clinical audit.
Dr Pillai chipped in, “One of the concerns in the quality of debate is that nobody talks about the cost of care, whether is private or public. If I were a nextgen politician, I would ask all government hospitals to do a costing and also provide invoices to patients on that mention the services they have availed from the hospital and the subsidy they have received. For instance, if their lab services cost Rs 50,000 along with a subsidy of Rs 50,000 from the tax payers, then that makes the cost zero. In that case, my patient will feel happy about the fact that the government is offering them a subsidy of Rs 50,000 and the next time they visit a private hospital they go with a knowledge that the hospital is not ripping them off. So, this is the real point of the debate, healthcare financing, which is often not talked about”.
The other challenge for expansion is raising finance. Dr Manchanda shared his strategy to effectively raise funds for growth, expansion and liquidity. He spoke about the pros and cons of raising private equity and also suggested that before analysing the PE option, it is better to analyse debt options. “Equity is very expensive so you must think twice before you give it to someone. Secondly, always evaulate debt options better, and if you think that the risk-return ratio is more in PE or VC then you must go in for these options,” he recommended.
Key takeaways
- Cost v/s quality, an retrospection that the industry needs to do
- Create a Clinical audit forum for private and government
- Evaluate the pro and con of PE, VC and debt before fund raising
- Leadership, mentorship, managing relationships is extremely critical and key to success
- Ensure that your workforce gets a career path
“Raising money for growth is always good, because sometimes a lot of good assets fail due to lack of financing,” he added. Additionally, he also shared the pros and cons of listing your company. Amidst all the glory of being a public listed company, there are some compliance issues that at times become difficult to address.
Shetty then guided the discussion towards understanding the impact of policies on business expansion. He said, “A good healthcare policy can grow a sector. It can create a thriving environment where competitive factors can help keep healthcare costs down. On the other hand, a bad healthcare policy tries to fix things in place. It tries to impose rules on what can be done and what cannot be done. It tries to fix things such as wages, salaries, prices, implants and so on.” He then spoke about a study conducted in Seattle, US on the impact of minimum wage policy. He informed that the govenment thought that they had done a good job by fixing a minimum wage policy, however, it wasn’t the case.
Companies had reduced the number of manpower causing an adverse affect on the initiative. Likewise, he drew attention toward the recent minimum wage hike policy that the Kerala government has introduced and asked Dr Pillai to talk about the impact of this on the healthcare sector in his state.
Dr Pillai explained the minimum wage policy of the state and then spoke about how this issue is coupled with the nursing association’s strike that the state had witnessed. He also spoke on how cost inflation will impact the healthcare sector. He went on to say that earlier Kerala would offer a price which was much lesser than Tamil Nadu, however this will not be possible in future. Talking about the prerequisites for success in business expansion, Dr Prasad mentioned leadership, mentorship and managing relationships as crucial factors.
Dr Prasad went on to explain how the government and the private sector are working together to create a condusive environment within the state of West Bengal. “We are trying to find a meeting ground where the crisis situation can be turned into an opportunity. I think as a country as well, we need to define and bring forward our own solutions to create better business environment,” he added.
Getting the right manpower is another challenge for expansion. Dr Thukral addressed this issue. He elaborated on how he learnt from Ola’s strategy to build partners who would solve their problem of hiring drivers. He said that his orgnisation used this strategy to get appropriate workforce to join their organisation. Moreover, his organisation ensures that each healthcare worker gets a career path. “In our organisation we have ensured that our nursing staff get the opportunity to do premuim jobs. We have also tied-up with healthcare at home services abroad and we send our nursing staff there for training and work etc., so that get also are explored to opportunities to work abroad”, he informed.
This session concluded with all the panelists unanimously agreeing that right perception, right funding, favourable policies and right strategies to build a future ready workforce are key for the healthcare business to grow and expand.