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A project report on
Management practices at Hospitals
Kunal Bharat Mehta
Roll no 21
University of Mumbai
Bachelor of Management Studies
Ramniranjan Jhunjhunwala College
I Kunal Bharat Mehta of Ramniranjan Jhunjhunwala College of
TYBMS hereby declare that I have completed my project on
“Management practices at hospitals” in the academic year of 2005-06.
I also declare that the information given in this project is true and
original and to best of my knowledge.
------------------------Signature of student
I, the Principal of Ramniranjan Jhunjhunwala hereby certify that Kunal
Bharat Mehta, student of Third year Bachelor of Management studies
has completed his project on “Management practices at hospitals” in the
academic year 2005-2006. The information submitted is true and original
to best of my knowledge
I would like to express my gratitude to those who have helped me to turn
this project into reality. Firstly I would thank Prof. J. C. Saboo who
supported me in each and every aspect related to the project.
I would also thank Wockhardt Hospital, Mulund for giving me summer
placement and opportunity to get close to Hospital management. I also
thank Mr. Mallikarjun (Executive officer) at Wockhardt Hospitals,
Mulund, The administrative staff at Bombay Hospital, Marine Lines and
at ESIC Hospital, Mulund
The job of medical care, today, is no more a one man show.
organization involves heterogeneous
specialized personnel. It is teamwork and successful operation of any
hospital organization depends on the services of a large number of
personnel specialized in different areas of medical science and
Thus this calls for an effective and perfect management of
hospitals. There is no room for a single mistake in case of hospitals as it
can cause a death of the patient and a challenge for existence of the
This project deals with different aspects of management practices
followed at hospitals. Firstly the project deals with the hospitals statistics
and the importance of hospitals in India. Today Indian hospitals are
thriving to provide world class facilities to Indian residents as well as
foreigners at best quality standards and prices.
Next the project consists of classification of hospitals and the
activities at hospitals. This helps the management to form out efficient
strategies to make the administration flow smoothly. For this the
information was collected from each type of hospitals one is private, one
government and one trust run hospital.
Details regarding the sources of the information in the project
Summer placement at Wockhardt Hospital, Mulund
Personal visits to ESIC and Bombay Hospital
Magazines and bulletins
The project also covers some informative inserts from Dr. Agarwal, Dr.
Kamle, it also has interview of Mr. Vishal Bali, President (OperationsWockhardt).
Management practices at Hospitals
1. Business Of Caring
a. Hospitals- The Concept…………………………………. 10
b. Statistics Of Hospital Industry…………………………... 12
c. Indian stand……………………………………………… 14
2. Classification of Hospitals
a. On basis of objectives…………………………………… 16
b. On basis of ownership…………………………………… 17
c. On basis of medicine…………………………………….. 18
d. On basis of size………………………………………….. 18
3. Identification Of Activities At Hospitals
• Medical services…………………………………………. 19
• Customer care Department………………………………. 20
• Nursing Services………………………………………….21
• Central sterile supply Department……………………….. 22
• Dietics Department………………………………………. 22
• Pharmacy………………………………………………… 22
• Radio imaging…………………………………………….23
• House keeping services………………………………….. 24
• Out patients Department………………………………….25
• Engineering ………………………………………………25
• Ward services……………………………………………..26
• Fire, security and safety…………………………………..26
4. Visit To Hospitals
a. Private (Wockhardt Healthcare Centre, Mulund)………. 27
i. Achievements and features……………………….. 28
ii. Wockhardt – Harvard medical alliance……………30
iii. Technology and key expertise……………………..32
iv. Quality management……………………………… 36
b. Government (E.S.I.C Hospital, Mulund)……………….. 37
i. Introduction ………………………………………. 38
ii. Statistics…………………………………………... 40
iii. Model hospitals………………………………….... 42
c. Trust Run Hospital (Bombay Hospital, Marine lines)….45
i. Introduction……………………………………….. 46
ii. Services…………………………………………… 48
iii. Specialties and supportive services………………..49
5. Next Big Business
a. Interview of Vishal Bali…………………………………. 51
b. Right investment decisions……………………………….53
c. Future Prospective……………………………………….. 57
d. Eight steps in building a world class facility hospital…… 59
6. Conclusion……………………………………………………... 63
7. Bibliography…………………………………………………… 64
Hospital – The Concept
Caring for the sick and infirm and nursing them back to health is not
something that one likes to associate with making money. That someone
could be profiting from another person’s ill health does indeed, sound
rather insensitive. But, then, do emotions really have a place in the world
of business? Not quite. The fact is that healthcare is, today, the world’s
largest industry. And this industry, comprising pharmaceuticals,
hospitals, nursing homes, laboratories, day care centers and others, is
slated to become one of the most promising businesses for India riding on
the wave of a growing middle class and changing disease patterns.
With the passage of time, it is natural that a change in perception is
visible. Yesterday, the hospitals were considered as almshouses. They
were set up as a charity institution to take care of the sick and poor.
Today, it is a place for the diagnosis and treatment of human ills, for the
education, training and research, promoting health care activities and to
some extent a center helping bio-social research.
The document of World Health Organization (WHO) makes a
clear-cut exposition of the conceptual aspect. It is stated in the document
that the hospital is an integral part of a social and medical organization,
the function of which is to provide for the population complete health
care both curative and preventive and whose out-patient services reach
out to the family in its home environment; the hospital is also a center for
the training of the health workers and for bio-social research.
The viewpoints expressed in the WHO document have enlarged the
functional areas of modern hospitals. It is against this background that the
hospitals rekindle new hopes and aspirations to the people of the society.
The WHO documents further consider hospital a complex organization. It
is complex in the sense that multi-faceted developments in the society
have made the people of the society more conscious of their rights.
Today, they demand modern and the best possible means of
medical care and health education. They want everything not only within
the 4 walls of the hospital but also at their doorstep or in the vicinity of
living places. This has made a hospital a complex organization.
Of late, a hospital is also considered a major social institution for
delivering of health care, offering considerable advantages to both patient
and society. It is considered to be the place for the diagnosis and
treatment of human ills and restoration of health and well being of those
temporarily deprived of.
Dose of Healthcare Statistics
Healthcare is one of the most essential services in any growing society.
Propelled by an affluent and health conscious growing middleclass, the
healthcare industry in India grew by more than 13 per cent per annum
in the last decade.
India’s healthcare industry is estimated at Rs 1,500 billion or USD 34
billion. This works out to USD 34 per capita which is 6 per cent of GDP.
Of this 15 per cent is publicly financed, four per cent is from social
insurance, one per cent private insurance and the remaining 80 per cent
being out of pocket as user fees (80 per cent of which goes to the private
sector). Two thirds of the users are purely out-of pocket users and 90 per
cent of them are from the poorest section.
India has 5,03,900 doctors, 7,37,000 nurses, 162 medical colleges, 143
pharmacy colleges and 3,50,000 chemists. There are 15,097 hospitals
accounting for 8,70,161 hospital beds in India. There is an extensive
three-tiered government healthcare infrastructure comprising 23,000
Primary Health Centers (PHC) and 1,37,000 sub-centers serving the
semi-urban and rural areas and 3000 (CHC) Community Health Centers
A Healthy Business
Traditionally healthcare has been one of the crucial sectors for any
economy. For most of the developed countries, healthcare spending
accounts for more than seven percent of GDP. Today, healthcare is the
largest industry in the world with revenues of$2.8 trillion. In the US,
healthcare is a $1.4 trillion industry, accounting for 13.7 percent of GDP
and is estimated to expand to a size of $2.2 trillion by 2008.
In India, the industry is worth about Rs.100, 000 crore and
accounts for nearly five percent of GDP. Amit Bagaria, CEO of Asian
Health Services says, “Not many people realize that it is close to Rs
100,000 crore industry and employs 60 lakh people directly and 20 lakh
indirectly. Compare this with the Information technology, which is Rs
40,000 crore and employs only three lakh people. Another important
finding is that in the development cycle of an economy, for the last 25
years before a nation reaches developed status, healthcare is the fastest
growing industry.” The industry is expected to register a 17 per cent
growth and reach a size of more than Rs 2,25,000 crore by 2005-06”
Healthcare industry growth
(‘000 Rs crores)
India’s health expenditure is 5.6 per cent of GDP, whereas most
established market economies spend 7-10 per cent of GDP on
health. USA spends over 14 per cent.
US has 2,340 doctors as compared to India’s 143 doctors for very
On an average, 80 out of every 1,000 children die. This figure is
just 9 in the US and 30 for every 1,000 in Thailand.
Life Expectancy in India is amongst the lowest at 55.5 years
compared to US at 75.5 years and 66.5 years for Thailand.
Compared to Brazil’s 4300 beds, India has only 1,600 beds.
The potential of health services sector is immense in India as there are
more than 140 million upper and middle class, growing at over four per
cent per annum with combined annual income of over Rs 820,000 crore.
These people have confidence in healthcare products and services offered
by private hospitals. The quality of healthcare has improved considerably
with the availability of world class high-tech medical equipment and
information technology. However, the low penetration of health insurance
is limiting the growth of these world-class services.
Privatization of insurance sector has led to spurt in health care services.
Less than 10 per cent of the Indian population is covered by some form of
health insurance. Insurance is expected to be the main driver for raising
quality consciousness and increased demand for better standards, hospital
accreditation and Patient / Management Information Systems.
The voluntary health insurance market estimated at Rs 4 billion is
expected to be Rs 130 billion by 2005.The healthcare business for IT
services comprises of players like government, insurance companies,
consumer and corporate hospitals is about Rs 500 crore which is a
pittance compared to the contribution of healthcare industry to national
GDP which is growing at a rate of about 10-15 percent annually.
The MBPO (medical business process outsourcing) will be the next boom
the Indian knowledge economy will witness as it has massive potential
for outsourcing within the US healthcare industry. This time outsourcing
won’t be the once fashionable and now dead medical transcription, but
would be more for processes like medical billing, claim processing,
disease coding and forms processing which easily gives returns of USD
16-18 per person per hour, much higher than the billing rates in other
According to a Frost and Sullivan Study, the Indian medical hardware
market (equipment and devices) is estimated at Rs 65.32 billion in 2001,
growing at 12 per cent per annum, which is almost double the market size
With India becoming a healthcare destination, Health Tourism Industry,
stands at Rs 1200-1500 crores, and growing at a rate of 30 per cent
annually is bound to grow at a faster rate.
Lower production costs and skilled workforce has attracted multinationals
to set up R & D and production centres in India. In the long run these
R&D centres will help develop low-cost medicines for the Indian market.
Hospital – The Classification
There are different types of hospitals serving the multi-faceted
needs of the society. There is distinction in their structure, function and
performance. This variation is due to their distinct nature and form.
Classification of hospitals help the management to manage in a better
manner as there are many specialties of each type of hospital.
CLASSIFICATION ON THE BASIS OF OBJECTIVES
The first criterion for the classification is objective. Here the main
objective of establishing a hospital is taken into consideration. Some
hospitals are set up with the motto of imparting medical education,
training and research facilities whereas in some other hospitals, the prime
attention is on health care.
1. Teaching-cum-Research Hospitals
These hospitals are teaching based. They are found engaged in
advancing knowledge, promoting the research activities and
training the medicos. As for example, All-India Medical Institute,
New Delhi, Post-Graduate Medical Education and Research
Institute, Chandigarh, etc…
2. General Hospitals
The general hospitals also offer teaching and research facilities but
these objectives are secondary. The main objective in the general
hospitals is to provide medical care. As for example, different
medical colleges and district and sub divisional hospitals.
3. Special Hospitals
The main objective of special hospital is to provide specialized
medical services. These hospitals concentrate on a particular organ
of the body or a particular disease. These are multispeciality /
superspeciality / criticare type of hospitals.
CLASSIFICATION ON THE BASIS OF OWNERSHIP
1. Government hospital
The government hospitals are owned, managed and controlled by
the government whereas the semi-government hospitals are found
acting as an autonomous body.
2. Private hospital
These types of hospitals are owned privately and have no
government interference. They provide quality service to there
customers. These hospitals are internally managed.
3. Trust run hospitals
These types of hospitals are under control of the trust and all the
decisions related hospitals are taken by trustees of the hospital
CLASSIFICATION ON THE BASIS OF MEDICINE
CLASSIFICATION ON THE BASIS OF SIZE
On this basis, there are variations in the size of the hospitals. As
such, the teaching hospitals generally have 500 beds, which can be
increased according to the number of students. The district hospitals
generally have 200 beds, which can be raised to 300 depending on
population. The teshil / taluka / sub-divisional hospitals generally have 50
beds that can be raised to 100 depending on population. The primary
health centers generally have 6 beds that can be raised to 10 beds.
While designing the organisation structure, management must
identify the various activities to be performed in order to achieve the
organizational objectives. The major objective of hospital organisation is
“care of sick” for which it requires some basic activities on its medical as
well as no medical (managerial) side.
On medical side it requires clinical activities, general surgical and
specialized surgical activities, anaesthesiological activities, maternity
activity, nursing activity, pathology and other laboratory activities,
radiology activities, pharmaceutical, dental, dietary and house keeping
Medical care is the major function of hospital organisation. Some of
the major medical activities are:
The medical staff doctors are the
back bone of hospital organisation.
Doctors may be classified under three
Highly professional - specialized
doctors, Honorary specialized doctors
and General Doctors) with some / no experience and no specialization
in any branch of medical science).
• Highly professional, well trained and experienced doctors are the real
asset of hospital organisation general duties of doctors include
diagnosis of illness or state of illness, instruction to patients,
instruction to nurses or the matron about the patients needs by way of
medicines and other facilities, consulting the medical record of
patients, consulting the other doctor or doctors regarding the patients
and all the activities which are deemed to be an element of medical
• The head of the institutions is also a doctor having specialization in
one of the medical areas. But a man may be a first class surgeon or
physician, but that does not necessarily make him a first class
administrator. His duties as doctor itself are very hard and tiring both,
physically and mentally.
• A apart from this, the head of the institution has to look after so many
other things such as supervision and control over personal, purchasing,
storekeeping, kitchen, laundry, toilet, maintenance of equipment and
instrument etc,. Hospital abroad now has a cadre of hospital
administrators who combine some knowledge of medical system with
sound management principles.
CUSTOMER CARE DEPARTMENT
This is the department which
customers either physically or over
the phone. This department acts as a
single source for a customer in the
hospital and is the basic entry and
exit point for anybody who visits the
hospital for any service. The customer care department functions as a
centralized information, registration and billing area. Thus patients and
relatives know that they have to visit just one place for all their queries
for any of the services available in the hospital.
The core functions of the department are:
Providing information on the hospital, the services offered, doctors,
package charges, etc. to the patient and relatives
Telephone operating, organizing OPD appointments for all in-house
and visiting doctors, handling admissions, cath labs, report dispatch
Nursing services form an integral
part of any hospital. Nursing is
both art and science and it’s a
profession that calls for commitment,
maturity (emotional) and an ability to access and
synthesize information quickly and correctly. The nursing staff acts
as abridge between doctor and patient.
Nursing department works through nursing staff that is competent
and humane in its functioning. The staff provides assistance to doctors to
carry out treatments efficiently. The nursing staff works in operation
theatre, intensive care unit, surgical intensive care unit, intensive cardiac
care unit and out patient wards and rooms.
Normally nurse patient ratio is maintained at 1:1 in ICU, ICCU and
SICU while in other clinical wards it is headed with one head nurse with
CENTRAL STERILE SUPPLY DEPARTMENT (C.S.S.D.)
Infection control is the major activity in the hospitals. CSSD works
towards infection control by ensuring medical or surgical supplies and
equipment that are cleaned, sterilized, stored and issued for patient care.
CSSD uses auto clave machines for steam sterilization, E.T.O (ethylene
oxide) sterilizer for cleaning and disinfecting.
CSSD provides sterile instruments, linen and dressing materials for the
various invasive and non invasive procedures to be carried out during
treatment of patients.
The meal for a patient has an important role in treatment plan. The
dietetics department prescribes and provides well planned meals to
patient in accordance with there therapeutic needs. Dietetics department
also does counseling of patients to adapt and incorporate dietary
modification in their daily routine to promote better health status.
Dietetics department acts as a link between the dietary prescriptions given
by the doctors and the likes and dislikes of the patients. It monitors and
executes the therapeutic diet orders through Foods and Beverages
It is the area of increasing
importance. This department is often
combined with central sterilization and
stores. The staff has to be well trained and has to be looked after properly
at all levels by the pharmacists.
The role of hospital pharmacy in ensuring proper care in
preparation, labeling, storage and distribution of drugs and sterilized
material is of prime significance. Avoidance of any kind of error is the
most important here. A hospital in modern era cannot do without good
and qualified a pharmacist, who has to supervise, guide and control the
performance of its subordinates.
Quality control is and important need in this area and hospital structure
should encourage and provide all the facilities to the pharmacists in
The pathology department provides valuable services in the
diagnostic areas through various tests.
The department has various sections such as Biochemistry, Hematology,
Serology and Microbiology.
The pathology department conducts following tests:
Routine and special tests in Hemet
Routine and special tests in biochemistry
Infection Serology markers
DEPARTMENT OF RADIO-IMAGING
Radio imaging department plays a vital role in diagnostic work-up
of every patient. The department has all advanced modalities/machines
available to perform the Radio imaging for diagnostic purposes.
The modalities which should be available with the department are as
HOUSE KEEPING DEPARTMENT
Their major focus is house keeping i.e. to maintain high level of
cleanliness and hygiene conditions in such a way only essential things are
kept and its easiest and fastest accessibility is ensured. It is a systematic
for better work place. It assigns a place for everything and ensures
everything in its place it is a starting point for every improvement
The benefits received by house keeping: • Person feels happy while working in clean place
• Searching of matter is not required
• Less rework in the work is resulted
• More productive space available
• Anything abnormal is seen immediately
• Productivity improvement takes place
• Avoids accident prone environment
Out patients services constitute
one of the important functions which
most hospitals under in their areas
patients who may not require use of a
bed. Generally hospital beds are not available in sufficient numbers, nor
are they indicated for all those who need diagnostic services. Beds are
costly to build and maintain, and it is often economic waste to utilize
inpatients cure when out patients services would serve the purpose.
The emergency clinic is major unit of the out patient department. Here
the attention to the patients needs must be available around the clock,
every day of the year.
A hospital is described by some administrators as a ship at high
seas. Almost all kinds of emergencies that arise in a ship are required to
be attended to in a hospital. Sudden failure in some of the installations in
operation theatre I.C.C.U, Kidney units etc. can seriously jeopardize the
life of patients. Here some hospitals administrative have advised
experience marine engineers in hospitals. These engineers possess the
know-how to deal with sudden situations that arise and have to be dealt
with without outside help.
Ward is the heart of the hospital where the patients are kept. The
major objective of the hospital is to take care of the sick and injured.
Other purposes are research in medical field, training and teaching of
medical nursing and many other personnel. All these functions are carried
out mostly in ward or depend on those personnel who spent most of their
time in wards.
FIREFIGHTING, SECURITY AND SAFETY
Hospital can be victim of fires, theft and accidents. While the first
can be dreadful situation for the sick and other relatives, the second and
third would result in indiscipline, dissatisfaction and poor and bad image
of the hospital. In order to solve these problems it is advised to have a
separate section for this as the training, duties and requirements of the
staff in emergencies are quite different from other personnel. They are
like the ‘armed forces’ having special and important role to play.
24th largest wealth creator
Ranked amongst the 50 most valuable companies in India
Rated among the Top 10 emerging Corporate in India (Economic
Wockhardt employs 2700 people of which more than 1300 constitute
the field force covering 1, 50,000 Doctors
35% of total sales come from International Business
Listed on Bombay Stock Exchange, National Stock Exchange and on
Luxembourg Stock Exchange
R&D programme rated among the top 3 in the country with R&D
spend of 7% of sales - one of the highest in the country.
Managed by the "Best" Board of Directors in the pharmaceutical
industry (Source: Business Today, May, 1997 survey.)
"Pursuit of growth with excellence in the field of pharmaceuticals and
healthcare" Profitability through:
Quality of products and services
Increasing investment in R & D
Competent scientific and managerial manpower
• A very spacious hospital with carpet area per bed of around 1100 sq.ft.
• A 222 bedded hospital, which includes 100 Intensive Care beds, with
all its services.
• Highest Nurse: Patient Ratio of 1:5 due to which they are better
equipped to handle patient's complex health conditions. This is one of
the highest nurse patient ratios in India.
• The management comprises of highly qualified professionals, who
have brought with them rich experience which enables the hospital to
be run on truly professional lines.
• Central Music System.
• Central Paging System.
• Central Fire Detection with interlined Central Sprinkler System.
• Well controlled & safe climate with soothing ambience are special
features of the hospital.
• 100% standby power backup for the hospital with critical areas like
Operation theatres and ICU further backed up with UPS.
• Linen and Laundry Services
• A high class Cafeteria on Level 3
• A well setup Chemist Shop.
• Ambulance services.
• Fully computerized system with high end Application Servers &
Wockhardt-Harvard Medical Alliance
In pursuance of its vision to establish state of the art medical facilities in
India with high degree of clinical excellence Wockhardt Hospitals has
entered into an alliance with Harvard Medical International (HMI).
Harvard Medical International is a self-supporting subsidiary of Harvard
Medical School, which is developing a Wockhardt Healthcare System
that sets its own unique standards in patient care in this part of the world.
Harvard Medical International (HMI) “a non-profit organization” was
established to extend Harvard Medical School’s tradition of improving
the quality of health care through excellence in clinical medicine, medical
education and biomedical research. Adhering to the standards that have
made Harvard one of the most respected academic medical institutions in
the world, HMI utilizes the talents of the Faculty of Medicine, its
affiliated institutions and selected strategic partners. It has an extensive
knowledge base in clinical and biomedical research.
Drawing upon the resources of Harvard Medical School and its affiliated
institutions, HMI is creating unique programs for Wockhardt hospitals
committed to high quality healthcare. The guiding principles used by
HMI in this relationship are to maintain medical integrity, objectivity and
Harvard Medical International will associate with Wockhardt Hospitals in
improving patient-centered quality care particularly in the areas of:
Clinical education and clinical investigator training
Adapting to managed care environment
Organizational strategic planning and development
IT strategies and provider network development
Faculty development and leadership programs
Quality management and accreditation of systems
Research program development
Joint National symposia on topical issues
Another significant endorsement for Wockhardt Hospitals is its tie up
with many global health insurance giants. Wockhardt Hospital is the first
recognized hospital in South Asia on the worldwide panel of Blue Cross
Blue Shield, the largest provider of health insurance in USA. The list of
tie ups includes:
Blue Cross Blue Shield Association, USA
AEA International Inc., Singapore
Global Emergency Services Inc., USA
Medex Inc., USA
Global Medical Management Inc.,USA
Assist America Inc, USA
Gesa Assistance, Singapore
The Wockhardt Hospital provides you with the new generation cutting
edge medical technology and the world-class quality treatment with
care. We possess advanced state-of-the-art
facilities and infrastructure benchmarked with
Cutting edge technologies include:
• New generation Cardiac Cathlabs with Electrophysiology Labs
• Operation Theaters designed to global standards
• Sensation 10 CT Scanner
• Functional MRI with Spectroscopy
• OPMI MultiVision, a new generation microscope used for Neuro
• Suite of Endoscopes for Minimal Access Surgery and Arthroscopy
• Modern Kidney Transplant Units
• Intravascular Ultrasound
• High Technology Dialysis Units
Wockhardt Hospitals has conceptualized unique facilities and services,
some of which are pioneering global achievements in hospital services:
1. Virtual Family Visit
2. Life Link
3. Health Angel
4. Monitor Your Patients Live
5. Wockhardt Cardiac Line
6. Touch - Screen - Kiosks
8. Laboratory and Imaging services
9. Intra-ocular lens implant and phaco-surgery for Cataracts
10.A state-of-the-art Dental Department
11.Annual and pre-employment check-ups
Wockhardt hospitals prospective employee should have
exposure in different facets of HR, viz
Competency based recruitment and selection
Competency based training and development
Competencies and performance management system
Creating a culture of competence
IT & HR integration
Being a service sector there is no particular product but for them their
service is the product for marketing. They strive to create a culture that
satisfaction. There is no such thing as a quality problem but it has
opportunities to improve.
For the quality improvement they have some measures such as customer
feedback forms (taken from patients) on which they work upon for
Some principles followed by Wockhardt Hospital for betterment of total
quality management: • Customer is the ultimate determinant of quality. Services and
programs are designed with the need of the customer in mind.
• Quality is build into the process from the beginning, and not
simply derived from customer complaints. All level of an
organization is involved in producing the quality product and not
just tries to modify it before delivery.
• When customers are assessing quality, they are not simply
comparing us to our performance last year, but to every other
organization that is serving their needs.
• Since improved quality comes from improvement during the
processes leading up to the delivery of the service, all levels and
divisions of the organization is involved in developing quality.
Customer focused organization: - It depends on their customers, and
therefore need to identify and understand their present and future
needs in order to be able to meet requirements of customers and strive
to exceed them.
Leadership: - Management is not an administration activity; leadership
is needed to provide unity of purpose and direction, and to create
environment in which people in an organization become fully
involved in achieving the organization’s objectives.
Documentation and Record Keeping: - Important papers related to the
service are maintained with care and their records are kept
Involvement of People: - People’s co-operation and involvement
allows their abilities to be fully and effectively used towards benefit of
Systematic approach to management: - Identifying, understanding and
managing a system of interrelated processes for achieving objectives
contribute to effectiveness and efficiency of an organization.
Improvement as a regular practice: - It is a permanent objective of an
Factual Approach to Decision Making: - Effective decision is based
on the logical and intuitive analysis of data and qualitative
Supplier Relationship: - Relationship between the organization and its
suppliers has to be mutually beneficial that will enhance the ability of
both organizations to add value.
Employees' State Insurance Corporation (ESIC) of India is one of the
largest social security organizations providing medical insurance cover and
delivering of medical care to 35 million beneficiaries through 140 hospitals
and 1500 dispensaries. The objectives of this study are to understand the
costing of medical care at ESI hospitals and suggest systems for egovernance to facilitate the coordination between ESIC, ESIS and the
beneficiaries. Towards this, selected a large ESI hospital, namely, the ESI
General Hospital at Bapunagar, Ahmedabad and gained very useful
insights about the systems currently in practice for offering medical
benefits to the insured persons and their beneficiaries. This working paper
brings out our detailed analysis of the working of ESI hospital, Bapunagar
in delivering medical care under the ESI scheme.
On papers, the ESI Corporation appears gigantic with 140 hospitals
spread all over the country; boasting a capacity of 26,000 beds and
employing 14,000 doctors and 45,000 paramedics. More than 3.5 crore
people are covered under the ESI scheme with annual revenue of a
whopping Rs 1,510 crore. Despite this, the scheme has been largely
unable to provide quality healthcare services due to poor infrastructure,
cumbersome procedures and lack of professionalism.
Though a massive premium is collected under the scheme, hardly 16-18
per cent (around Rs 244 crore) of the revenue is spent on the
beneficiaries. Three TPAs Chennai-based Apollo Hospitals, Mumbaibased Sedgwick Parekh Health Management Services and Pune-based
ICAN Medicare Pvt. Ltd have made a bid for the scheme, it is learnt.
Each TPA is said to have presented a different model which the
Corporation is looking into. ‘‘It is definitely a positive sign that at least
our proposals are being considered,’’ says George Mathew M, managing
director, ICAN Medicare.
The Labour Ministry has directed the Employees State Insurance
Corporation, ESIC to set up a model Hospital with modern computerized
facilities and services in each state. He said that ESIC is going to make
ten of its hospitals totally computerized in the near future. The
Corporation would also establish two to three hospital of specialized
nature for treating Cancer, Kidney and Coronary diseases. Shri Yadav
said that he would have no objection to open 50% of occupancy of such
hospitals to general public on payment basis in order to run these
hospitals efficiently. The Labour Minister also disclosed that his Ministry
is making a proposal to take back such ESIC hospitals which are not
reportedly run by the State Governments properly. ESIC is at present
managing 9 of 140 hospitals directly. Shri Yadav said that the coverage
of the ESIC is not enough and should be extended to bring in more
workers within its ambit.
Expressing concern over the lack of social security to a majority of
workers in the unorganized sector, Shri Yadav said that we will have to
look for necessary umbrella security cover to them. He said "the umbrella
legislation will aim at providing protection to agricultural workers,
construction workers, home-based workers, beedi workers, self
employed, artisans and craftsmen. Shri Yadav said that 92% of the 40
crore workers are in the unorganized sector and the Labour Ministry has a
tremendous responsibility in looking after the interest of the workers who
constitute 40% of the country’s population
ESIC India 2004-2005
Number of state covered
No of implemented center
Regional/ Sub Regional offices
Insurance Medical Officers
Insurance Medical Practicener
Out patient attendance
Income for 2003-04
Expenditure for 2003-2004
To ensure that there are proper secondary care facilities for the
beneficiaries, the E.S.I.C has decided to set up one Model Hospital in
each State. The proposed Model Hospitals are being identified out of the
existing Hospitals to provide all modern infrastructure facilities, staff and
equipments as per E.S.I. norms and to act as referral hospitals for the
entire State to provide state of art secondary care services.
The Model Hospital will have all general specialties along with support
services of Radiology, Laboratory, Store and Pharmacy, Operation
Engineering services, Ambulance services, Telephone, house keeping,
horticultural development works, waste management systems, facility for
accommodation, cafeteria, parking areas, recreation facilities etc., shall
also be provided. To start with, staff to manage these hospitals will be
made available on deputation from the State Government for an initial
period of 3 years. The details of the Model Hospitals have been circulated
to all the State Governments for accord of consent for specific hospitals
to be developed as Model Hospital based on accessibility for
beneficiaries and availability of staff. The State Governments of A.P.,
Bihar, Orissa, Tamil Nadu, U.P., H.P., Punjab, Kerala, Rajasthan and
Gujarat have sent their consent. To ensure proper functioning, quality
assurance programme will be instituted to monitor the functioning of
various activities of the Model Hospitals.
Recruitment and selection
Recruitment and selection were as per the guidelines for Central
Health Services. Being an autonomous body, the process of
recruitment and selection was conducted by the organization, and not
through the Union Public Service Commission.
recruitment cycle for the recruitment of medical officers took one and
a half to two years to complete with no certainty of the successful
candidates joining the organization. The respondents (doctors) felt
that this could be shortened by adhering strictly to the established
protocols for speeding up the process.
The performance appraisal was done on the basis of annual
confidential reports (ACRs).
Nearly half of Insurance Medical
Officers (IMOs) and specialists felt that the reporting and the
reviewing officers usually did a “generalized/subjective” reporting
than a “customized/objective” appraisal and reporting in the absence
of output indicators. The role of the reviewing officer was unclear,
since he/she was too far away and not really associated with the
manner of working of the individual being reported upon. It was felt
that this mechanism sometimes results to identical appraisal between a
non-optimal and an optimally performing worker. This was a major
concern for the respondents. Also identified gaps were practically not
followed up for remedial action. These perceptions have the risk of
transforming as demoralizing and de-motivating factors for an
Training process at ESIC hospitals
Induction training– The Regional Office of the ESI Corporation
communicated by headquarter.
Promotional training– No formal promotional training was
conducted for doctors. The respondents felt that unlike the
induction training program where a reasonably accurate figure was
not available regarding the training load, for promotional training,
the same could be calculated on a yearly basis and an appropriate
calendar for formal training could be drawn up.
Orientation training– Requests for such trainings were processed
as per the guidelines of the existing training ‘policy’ document.
Regarding other trainings deemed appropriate by the authorities,
information regarding the personnel to be sent, the timing of the
training was communicated to the individual through his/her
immediate superior for compliance.
- an institution in itself
Mumbai, the centre for quality medical care not only across India,
but also the South Asia. A city that has a rich medical history. Situated in
South Mumbai is the Bombay Hospital and Medical Research Centre, the
medical hub of India's biggest metropolis.
Established over five decades ago, in 1952, The Bombay Hospital
was the result of the enormous philanthropy displayed by Shri
Rameshwardas Birla, Founder Chairman of the Bombay Hospital Trust. It
began as a 440 bed hospital whose objective was, in its founder’s words,
“to render the same level of service to the poor that the rich would get in
a good hospital.”
Today, the hospital has grown to house over 830 beds, some of the
country’s most advanced diagnostic & surgical equipment, and offers a
comprehensive range of specialized medical services. The objective
however, remains unchanged. This is why 33% of the patients treated are
in the general ward and pay only for their medicines and consumables.
The free OPD at the hospital successfully treats in excess of 1,00,000
Ever since it was established in 1952, the Bombay Hospital has
instilled in its patients a sense of genuine trust. Trust that has been built
by combining superior medical treatment with a caringly humane attitude.
Which is why, in excess of two lakh people confidently walk through its
hallowed doors every year, year after year.
It is on this sound foundation that the hospital has based its pursuit of
excellence in every field of medical specialization. This has seen fruition
in the form of the Medical Research Centre now known as the M P Birla
The Bombay Hospital presently ranks among the finest multispecialty tertiary level medical centers in the country. The internationally
renowned panels of doctors and consultants in every field of
specialization have, at their disposal, cutting-edge equipment. Supported
by a highly trained and professional nursing staff. Little wonder then, that
the Bombay Hospital attracts patients from every strata of society. Be it a
factory worker from rural India, a high-flying executive from a multinational company or the likes of former Prime Minister and Governor of
The Bombay Hospital has 830 beds, of which 300 beds are free
and another 200 beds are heavily subsidized. About 60% of the
operations performed by our surgeons are free or against very nominal
On this bedrock of charity relentlessly building the bedrock of
excellence in the Hospital by continuously refurbishing its spaces,
professionalism and dedication in management team, so that world class
doctors can discharge their duties and responsibilities in an academically
stimulating and hassle-free environment.
A patient being treated in one of the many
Deluxe Rooms of the hospital
A quick glance at Bombay Hospital and Medical Research Centre
• 4 buildings with 5,00,000 sq. ft.built up area
• Total number of beds: 830
• Critical care and recovery area: 110 beds
• 22 operation theatres
• 3200 full-time employees
• 240 eminent consultants
• 200 skilled resident doctors
R D Birla International Cardiac Centre
• The country's latest Coronary Artery Bypass Grafting Complex
• 35 recovery rooms
• 4 dedicated operation theatres
• Two cath labs & angiographies
• 1800 surgeries and 4000 angioplasties & angiographies conducted
Department of Neurosurgery and Neurology
• Capable of treating all types of brain tumors and spinal surgeries
• 4 dedicated operation theatres
• 18 post-operative beds in the recovery room
• Equipped with operating microscopes, CUSA
Department of Orthopedics
• Complete hip/knee/shoulder/elbow replacements done
• 5 dedicated operation theatres
• Spinal corrective surgeries performed
• Trauma care centre
Department of Cancer
• Surgical treatment
• Radiation therapy
• Comprehensive cancer care
Other areas of specialization
• Plastic Surgery
• Medical oncology
• Dental Care
• General Medicine
• M P Birla Library
• S P Jain Auditorium
• Birla Matushree Sabhaghar
• Nurses Training Institute
• Executive Health Scheme
Vishal Bali (Vice President-Operations Wockhardt Hospitals)
How do you assess the impact of corporate hospitals on healthcare
There has been a sea change in accountability and today’s managers
realize that it is equally important for their institutions to excel both in
clinical arena as well as delivering consistently on patient service
How different is running a corporate hospital from a trust hospital?
The style of management will always be different primarily because the
methodology for both is different. While the decision making in a trust
hospital takes into interest the divergent opinions of various trustees, the
corporate hospital will have a faster decision making process for it gives
higher accountability to the operating team.
How different is Indian pattern of hospital administration as
compared to the west?
The administration systems of corporate hospitals in India compare
favorably to those of the hospitals abroad primarily because the hospitals
here have adopted a leaning system from the West and have a constant
exposure to those facilities.
We need to basically improve and make a differentiation that
administration is not the same as managing the hospital. Our systems
need more and more managers rather than administrators.
How has hospital administration in the corporate sector changed?
There has been a sea change in the accountability and today’s managers
realize that it is equally important for their institutions to excel in the
clinical arena and delivering consistently on patient service expectations.
As enterprise expands what will become critical is that the healthcare
system speaks a common language irrespective of the specialties.
What is the pattern of administration for Wockhardt?
All our hospitals are professionally managed by group of professionals
who are both by education and by experience experts in the field of
Wockhardt is associated with Harvard Medical International (HMI).
Do you in some ways follow the administrative pattern of HMI?
Wockhardt’s association with HMI has benefited us immensely in setting
systems in the clinical and administration which conforms to the standard
followed by Harvard Medical School. What has emerged is a focus on
training and education on an ongoing basis within our healthcare system.
How to make THE RIGHT INVESTMENT DECISIONS while
Making right investment decisions while planning a hospital project is
crucial to its long-term sustainability. This is because; project costs
directly influence the pricing strategy of services. There have been
numerous instances of budgeting going haywire leaving the poor patients
(who often have no choice) to foot the bill, say consultants. To steer clear
of a negative balance sheet, budgeting time and money right at the
conceptual stage of building a hospital is essential, feel experts.
Hospitals are in red because their investment plans are not based on
budgetary allocations for different infrastructural areas, says Dr C P
Kamle, an international associate of American Institute of Medicine
and Hans Finne International. A botched hospital project may have
several reasons for failure.
Broadly, project costs can be split in the ratio of 60:40 for construction of
the building and capital expenditure towards equipments respectively.
Alternatively, it could be 40 per cent for building; 40 per cent towards
equipments; 10 per cent towards operational expenses; and the rest for
human resources. This later model was followed in the case of Apollo
Indraprastha hospital in Delhi.
Dr Kamle says 3-4 percent of the total budget should be allocated for preproject analysis. “It is necessary to spend on preparing a good technofeasibility report, which will also have competitor’s structure, disease
pattern, and SWOT analysis of hospital”. Experts say a sound project
analysis can facilitate acquisition of finances on softer terms. “I have
come across cases where promoters have copied reports from other
hospitals. The result is that banker is reluctant to fund as there is a
question mark on project feasibility. This delays the project further and
also increases the costs,” explains Dr Kamle. Concurs Dr Kothari,
“Financial feasibility report must work like a bible and project finances
must be tied up accordingly. Project management is all about completing
with quality and containing cost.” What is also essential is frequent
project assessment, he adds.
Dr B V Venkatesh, administrator, HOSMAT hospital, Bangalore says the
process of budget allocation for hospital infrastructure is two fold. A
hospital has to allocate 70 per cent of its budget for good quality
maintenance cost in the long run.
According to Dr Kamle, land should not be bought anywhere simply
because it is cheap. Water availability, soil, air direction, natural sunlight,
etc, have to be taken into consideration, he says. “For example, if ample
sunlight is not available, one has to go for artificial illumination, which in
turn increases initial plus recurring costs, not to mention that natural light
aids speedy recuperation.” Land cost should come within the five per cent
limit of the total investment, says Dr Praneet Kumar, head, strategic
planning, Fortis Heart Institute. “In Mohali, Fortis spent eight to nine per
cent of the investment (Rs 13.5 crore) on land acquisition. This high price
would also affect the pricing of services.
Allocation for medical equipment generally accounts for 30-40 per cent
of the total cost. Experts say it is very important to stick to the allocated
figure. However, this is hardly the case. “Not more than 10 per cent of
people think of budgetary allocation while shopping for equipments.
Most buy them because it is a fad to install sophisticated equipments.
This is also true for implementing process management tools,” says Dr
Kamle. Having said that it is important to realize that at these competitive
times, it always pays to acquire cutting-edge technologies. Apollo Delhi
ploughs back 80 per cent of its revenue every year in to technology up
gradation, according to managing director Dr Yogi Mehrotra. Similarly,
Wockhardt Hospitals, Bangalore spends around Rs 1.5 crore every year.
Says Dr M E Yeolekar, dean, Lokmanya Tilak Municipal General
Hospital, “In up gradation of equipments, departments like cardiology,
orthopedics, obstetrics, gynecology, radiology and diagnostic are given
priority since there is a high turnover of patients here. Hospitals tend to
discourage purchase of expensive equipment with limited utility.
Equipments for rare disorders always take a backseat. Funds are
canalized in buying equipments, which serve multiple departments and
for diverse ailments. For instance, a C-Arm serves the departments of
surgery, orthopedics and different other sub-specialties.”
Human resources form a most important link in hospital management.
This function accounts for 12-18 per cent of the project cost. Here again,
hospital adopt different strategies. The popular one is to lure specialists
from other competing hospitals. This, feel experts, could be detrimental
in the long run since the sense of ownership is lost in financial
bargaining. Dr Kamle feels that hospitals should employ full-time
specialists and encouraging them by providing remuneration along with
perks and foreign trips proportionate to the work generated for the
hospital. This, say others, will instill a sense of ownership in their minds
resulting in overall growth in business prospects.
While running a hospital, methodological calculation of economics must
be the norm. “Profit centre mechanics demands that each department be
converted into a profit centre. Profit does not mean commercialism. The
money has to be ploughed back in so many ways like salaries, up
gradation, maintenance etc. Even a front office or house keeping gives
profits, though intangible,” explains Dr Kamle. “For instance, in case of a
department like radiology, depending on investment, costing is done,
revenues are calculated and budget is allocated on the basis of this
projected revenue. The head of department must be then entrusted with
the budget and is responsible to run it profitably,” he elucidates.
Lokmanya Tilak Municipal General Hospital, with 1400-odd beds spends
around Rs 3.5 to 4 crore annually on its infrastructure maintenance.
Dr C P Kamle,
In order to capitalize on all these opportunities, we have to create a
conducive environment by:
Granting infrastructure status to the healthcare sector.
Create fiscal policies, like providing low interest rate loans,
introducing tax holidays for investment in low per capita income
states, reducing import/excise duty for medical equipment, et
cetera, to promote investment in healthcare services.
Facilitating various clearances and certification like medical
registration number, building number, anti-pollution certificate etc.
Changing the legislation
Mandating the employers to buy group or individual medical
insurance for their employees to ensure a certain minimum
Mandating the private sector units, that takes advantage of
improved fiscal policies, to commit resources to remote rural/under
Create an autonomous body to standardize on medical messaging,
codes and vocabulary, content and format, identification standards
Mandate the healthcare service providers to transmit selected
patient data to the government for analysis. This data will be
analyzed to identify trends and evolve policies.
Create a national database of health care providers, their facilities
and services. This will create awareness among the population
towards quality health care.
Streamline the process of handling patient grievances.
Create a nation-wide agency to deal with patient requests like
ambulance hotline, emergency/first-aid consultation, trauma helpline etc.
Sharing of patient information between providers, with patient and
Security and privacy services.
Need for standards for messaging, codes and vocabulary (CPT,
ICD), content and format standards (MR, lab report)
To witness a successful revolution in healthcare, we need to bring these
arrays of activities together. If this works for India over the next decade,
the vast population living in rural and urban areas will bear the fruit of
Eight steps towards building a world class facility
Hospital management is totally different from managing any other
property. Be it hotels or corporate buildings the plan and purpose of their
infrastructure is totally different from that of a hospital. The following are
some of the tips that hospitals must keep in mind to erect a hospital with
an effective infrastructure.
Building a hospital is not an easy job. If there is one thing that the
industry agrees on, it is the fact that clients or ‘patients’ who come to the
hospital are not there out of choice. They visit a hospital because they are
forced to do so. In this scenario the first thing that I would look at before
setting up an infrastructure is the location of the hospital. The property
must be accessible to people from all walks of life. Unlike certain
industries that cater to the rich who can afford their own mode of
transportation, hospitals must be accessible to everyone. This location
should be one that can be permanent since people associate a hospital
with a location.
The second thing that I would look at is the space for vehicle parking.
Though most of our hospitals are in the main road we try to set up our
property where we are also connected to a small lane wherein people can
park their vehicle. Setting up our properties in L-roads reduces the trouble
for the patients to search for vehicle parking.
Building is another major area that one needs to look at carefully before
setting up a hospital. The facility for outpatients must be different from
those of the in-patients. Outpatients might bring in infections with them,
which might spread to the inpatient that has undergone an operation.
Hence an inpatient area must be accessible only to the inpatients.
Construct the hospital in a way that the two need not any time have to use
the same area.
Gone are the days when loved ones of the patients waited outside eagerly
to know how an operation went on. All our operation theatres have an
observation gallery from where attendants can watch and see how the
operation proceeds. This way they would know exactly what was
happening in the room, which increases the awareness of operations
amongst the general public. At present this is being implemented in a few
hospitals but as awareness increases patients would look for a hospital
that is transparent. So while building a new hospital it is best to build it
according to the latest standards and guidelines though you might spend a
little more. Another facility that could be included is to be able to talk to
those in the observation gallery right from the operation theatre. This
further reduces their fear and assuring that the doctor is in touch with
Remember that a hospital is not a five star hotel. We need 5-star doctors
with good surgical skills. People do not come to the hospital for its
ambience. They come because of the efficient staff and the equipment
handled by them. While it is very important that your hospital is hygienic,
clean and comfortable it would be foolish to make it look like a 5-star
hotel and hike the prices.
Monitor every activity that happens at the hospital. In our hospital we
have cameras in the operation theatres and I an able to see what happens
in all the four operating theatres. A television is kept in the outpatient
area where they can also get a feel of what happens at the hospital. This
kind of a transparent atmosphere eases any fear.
Train your staff
The patient comes to the hospital as a last resort. When he comes in he
does not want to feel dejected further by the attitude of the staff. Hence
the staff needs to be trained to be courteous to people. Have a counselor
at the hospital that would be there for the patient both during pre and post
operation period. Our post operation counselor at the hospital dials all the
patients who have undergone the operation that particular day to ask them
how they feel etc.
Building a hospital is not over with developing infrastructure and starting
operations. The success of the property depends on constantly
housekeeping department that can constantly maintain the hospital.
Appoint microbiologists to test the sterilization levels. Manage your
waste effectively. Don’t just burn them or dispose them, as they would
only pollute the surrounding areas.
The Indian healthcare industry is keeping up or even moving ahead of the
developed world. With a steady increase in population India needs more
hospitals. With increase in awareness amongst people these hospitals
need to be of world class standards to survive in the industry. What better
way to do it than to start efficiently and keep up the standards year in and
Dr Amar Agarwal
The success of hospital is usually attributed to the skills of its
doctors and nurses, but there is a club of behind the scene personnel, who
are always on toes to keep the wheels of any healthcare facility smoothly
turning. Hospital administration is all about weaving the different units of
a hospital together into a cohesive whole. Management tools play
important role in the day to day functioning of a hospital.
A few hospitals have training programmes for their staff and use
incentives to ensure that their employees function in a competent and
professional manner. There must be coordination and understanding
between various departments and this can only be achieved if the
administrative and the medical staff have tolerance and respect for each
Nowadays hospitals have to be hi-tech to be efficient in their
operations. Using HIPePS (Hospital information resource planning
system) makes the hospital keep all the patient records and all
government related information under password system. Wockhardt
Hospital uses Wipro’s HIPePS. This project work has made me
understand the management of hospitals from in depth.
Before selecting this topic as my final year project I was just
having the basic idea and I wanted to get more information on this topic.
The ECONOMIC TIMES has stated the hospitals to be the next big
business and good forex earner for the country so let us wait and see the
dream and statistics come true.
• Healthcare issue 2003-04 (Economic Times Group)
• Modern healthcare magazine
• Wockhardt induction guide
• Human resource development in a government health
organization: views of doctors Vivek Handa, A.K. Sood &
• Annual Report of ESIC New Delhi (1995-96 & 2002-2003)
Dr. Agarwal (Dr.Agarwal’s eye hospital)
Dr. C.P. Kamle (An international associate of American
Institute of Medicine and Hans Finne International.)