The executive management of RANCHO Hospital organized an EGM (Extraordinary General Meeting) quite in haste. The RANCHO GROUP has a chain of 25 hospitals all over India. This one in East Delhi hurriedly organized the meeting. In any hospital, the focus of the hospital administration and management is to assure that facilities run efficiently and in compliance within the realm of hospital policies and state regulations. That encompasses policy development, finance, human resources, clinical performance, and marketing strategies. But this meeting in RANCHO GROUP was scheduled 4 months prior to the annual shareholders’ meet. Something was stirring up inside the squad of high profile executives.
Executives know that sustained superior performance can’t be built on one-shot improvements like restructurings, massive cost reductions, or reorganizations. On occasions, their priority dwindles. This time they are trying to focus on a few key issues and framework that constitute the foundations like—shaping the work environment, setting strategy, allocating resources, and overseeing operations. If you take an example of a microscope, one can move the eyepiece up and down by turning a wheel —this gives fine control or “fine-tuning” of the focus. In the end, you look down on a magnified image of the object. Similarly, executives were trying to “fine tune” their focus on key issues of the organization before the annual general shareholders and investors meet. It seems some leakages need to be repaired before the final show.
The meeting room was decorated to greet the occasion with writing pads, laptops, and drinking water. A deadly silence erupted in between the cacophony of members. The meeting was called by the Zonal head in the corporate office to look into some key affairs. The Zonal head took some time to reach the venue. The meeting involved unit– HR head (Mr. Rakesh), Finance head (Mr. Anupam), Operations head (Ms. Geeta), Marketing head (Mr. Nitin), Medical Director (Dr. Neha), Nursing head (Ms. Jose), and IT head (Mr. Shiva Rao) with their respective assistants. The Chief Executive Officer (CEO) oversees the Zonal teams and is responsible for the overall operation of the facilities.
Before the zonal heads’ arrival, everyone seemed in a rehearsal mood. The discussion started among members after an initial compulsory salutation. HR head Mr. Rakesh took the charge and spewed, “Every organization has its own particular work environment, culture, its legacy from the past that dictates to a considerable degree how its managers respond to problems and opportunities. But whatever the environment a general manager inherits from the past, shaping—or reshaping—it is a critically important job. It’s truly tough. Furthermore, three years of JCI tenure (Joint Commission International) accreditation is coming to an end and meeting all its current requirements is causing a headache.”
Ms. Geeta, a young energetic Operations Head, interrupted Mr. Rakesh. She spoke firmly, “Hi Rakesh, you are right but sorry for the interruption. We aren’t going to be able to grow our way out of the margin pressures that we are facing right now. The decline in median operating cash flow margin came amid accelerating expenses and reduced revenue growth, as in the start of FY18 outpacing revenue growth for the second year in a row.” She was about to say something then suddenly the room door opened with a thud.
The discussion was aborted by the dashing entry of Zonal head Mr. Mehta. Mr.Sanjay Mehta, 50+ gentlemen with white hairs and sharp features, seemed perfect for the job. Every white hair confesses a story of his experience. It’s rightly said that marginal performers don’t stay long in the pivotal jobs and Mr. Mehta is a fine example of hard labor. “Sorry for the delay! Should we start?” a half-hearted smile further dulled everyone. It was envisioned that the meeting will take a course of a frenzied river. “Yes, I want the operations team to start first. Where are we standing today and what needs to be done?”
Ms. Geeta operations head, a thin built but determined lady stood up with a smile and went near the presenter screen with a pointer in her hand. She bravely tried to explain her front. “This is the status for bed availability/occupancy, LOS, and other details as shown in the dashboard. Infections are down and this time we have opted for Watson Analytics tool to predict and give insights on infection management- 10 percent fewer postoperative complications and 12 percent fewer hospital-acquired infections (HAL) than previous statistics. Among those steps to control costs, most were undertaken for ‘supply chain initiatives (68 percent), ’employee cost/productivity’ (66 percent), and ‘revenue cycle enhancement’ (60 percent). The decline in median operating cash flow margin came amid accelerating expenses and reduced revenue growth, as in the start of FY18 outpacing revenue growth for the second year in a row is surely a problem. Revenue is down due to lower patient volume, lower insurance reimbursements, new mediclaim rules by government and costs are high due to technology investments, staffing, and operating expenses” taking a few sips of water in between her presentation.
Mr. Mehta looked worried. “It’s fine Ms. Geeta. But if cost control measures are down or not showing results – anything will not move down the gullet. I will need updates on that modern medical office software that includes automatic checking of patient eligibility via the internet over secure channels, using dedicated software. Whether it has sped up the work involved in verifying a patient entitled to a particular benefit? I will need you to sit with me along with Anupam and Shiva to discuss further. Rakesh start from your end,” directing Mr. Rakesh.
A fair round-faced contrast features middle-aged guy, Mr. Rakesh (HR head) looked pale while speaking, “Sir, I must say the attrition rate is higher this time. Our team is working hard to get the attention of qualified applicants. Struggling to retain the excellent staff members we already have. With so many jobs open to medical professionals, it’s all too easy for staff to leave if they’re unhappy or dissatisfied. These high turnover rates are costing hospitals a lot. Even replacing a bedside nurse, training her, retaining her and then losing her to competitors is becoming a costly affair. My team has managed grievances well with lower conflicts among employees despite underlying polarity issues. My team is managing inefficiencies in care delivery during weekends to reduce “weekend effect.” But we are finding it tough to chalk out employee engagement and retention strategies. We are trying to collaborate with external consultants on this matter.”
Mr. Mehta gave a spy look and spoke,” Rakesh you mean to say you are ineffective in handling millennial’s? Common on…work on some new engagement idea.”
Mr. Rakesh pacified his trembling voice and focused on his words, “First, as members of the baby boomer generation continue to age, their massive numbers create a considerable workload for medical professionals. It’s affecting the problem from the inside as well, as nurses from that generation are beginning to retire and leave the workforce in droves. Add to that the limited capacities of nursing programs, and there’s just not enough supply to meet the growing demand. This shortage has stacked the deck in favor of the nurses, so employers are now fighting to differentiate themselves and attract prospective employees. Similarly, for trained physicians and surgeons who look for better deals.”
Mr. Mehta crossed again, “I understand Rakesh. But ours is a service prime industry. That too related to health and well being of people. Employees are our core resources in this industry and they form a major cost structure as well and any lapses to lose them again and again will cost us dearly. Consult and let me know engagement programs before the annual meet.” The baton was passed to the marketing head, Mr.Nitin.
Mr. Nitin, 6 feet tall marketing head with robust built, took the end of the discussion from here and started to pour his heart out, “The attrition issue is only exacerbated by the shift toward a millennial workforce, whose priorities are very different from their predecessors. Unlike baby boomers and Gen Xers who primarily sought competitive compensation, millennials value benefits, and advancement opportunities far more than their predecessors. This means that employers looking to hire the next batch of medical professionals need to make changes now to appeal to their young prospects. An ad to attract the right mind eats away a lot of budgets. Plus, Hospitals are recognized as an authoritative source of medical information. People are far more inclined to watch an informative video than to tackle a text explanation. Further, a video is easily—and popularly—viewed on smartphones and other mobile devices. They are elevating online marketing budgets. Our teams are working on modern tools of predictive analytics to target population. The advance of Internet technology has, in effect, placed a computer in the pocket of everyone, everywhere. Consequently, marketing and advertising now have the ability to address one person with exactly the right message at exactly the right time. Marketing sophistication can now determine when an individual is in a particular geographic area, such as being within a hospital service area. We are exploring advanced methods as ‘Geofencing’ that defines a target area where specific ad information is appropriate to present. Conversely, if the individual is close to a competitor’s location, ‘Geo-conquesting’ can alternatively point consumers to the advertiser’s recommended service or service area. But marketing budget restricts quite many things. The histograms here show the cost involved in each promo and increase in OPD/ IPD rate. We are also working on how to chart out better patient care and satisfaction surveys,” pointing towards the different sized pillars of the histogram on the screen.
Mr. Mehta took a deep breath and replied, “Yes Nitin, I understand that no amount of budget can fulfill a marketing team’s appetite. But before the shareholders meet we have to devise better promotions. Stress on WOM publicity effectively. Chalk out better surveys to get patient issues. Neha and Ms. Jose please give a collective presentation.”
Both Ms. Jose (head nursing) and Dr. Neha (Medical Superintendent) were waiting for their turn —finger crossed. Dr. Neha, thin lady with expressive eyes took the stride and adjusted her presentation slides. She was eager to share her work, “Starting with operations part—Duty rooster was maintained despite hiccups from the attrition dilemma. But there were instances of offsetting conflicts among nursing staff related to work overload. In fact, for every 10% of nurses who reported job dissatisfaction, patient satisfaction scores decreased by 2% for willingness to refer others to the healthcare facility through our survey. Setting the working hours for the facility’s staff, developing and following institutional policies and working procedures, and establishing prices for various healthcare services were duly done. The purchase of medical supplies and inventory was periodically done and inspections of buildings to ensure they meet safety standards were followed. Our team focused to upgrade primary care system that is a very critical aspect of healthcare foundation and source of revenue as well.” She paused and started with a deep breath again, “We achieved better results in pharmacovigilance this time, with 10% reduction in drug delivery errors than the previous quarter and this graph highlights it. Our DMAIC and Six-Sigma measures helped to reduce surgical errors by 5%. Our team managed faster means of surgeries, rapid access and no waiting times while reducing defects that meant less complication. We continuously monitored professional education of health care professionals and health care workers. The 24×7 Basic Emergency Obstetric and Newborn Care (BEmONC) and Comprehensive Emergency Obstetric and Newborn Care (CEmONC) services improved by a few parameters. Even Blood Bank safety regulations were stringently followed. Deceased organ donor programme is quite robust; coordinating with National Organ Transplant Program (NOTP), different SOPs, including for selection and safety of donors; allocation policies, IEC, national registries are updated keeping in mind JCI and NABH accreditation process. EMR data are maintained and scrutinized for further improvements. Waste management protocols were followed. We co-ordinated with the physicians in the protocol development and operations design because they know where the waste is and how to make the system more efficient. My team conducted periodic drills and rehearsals to test the response capabilities to emergencies in real time and these are the figures,” raising her pointer towards the screen.
Mr. Mehta looked elated but remarked with a bit of stress, “Dr.Neha these parameters seems Ok to me right now but you need to explain me bed occupancy rate and ALOS thing in more details. We will have some more discussions on it.” Taking a few sips from his jumbo coffee mug, Mr. Mehta directed his look towards IT head, Mr.Shiva. Taking suo moto cognizance, Mr. Shiva left his seat towards the presentation screen.
Mr. Shiva Rao, a guy with spectacles, round tanned face, curly hairs bright eyes spoke diligently, “When the whole world is after the e-thing then my work becomes all the more important. It’s no wonder that Security, Analytics, Compliance, and Mobility top the areas of my concern. As the latest news say—the government is working with organizations, both government and private, to provide intuitive and interactive modes of communication, treatment, data transmission, and retrieval to doctors/hospitals and patients using mobile apps and websites. Technologies help to collect, store and share critical patient data. By adding an analytics layer to this, we are trying to provide a much better analysis of the condition and recommendations to the patient. AI is assisting physicians in the early detection of diseases based on certain triggers. One of our teams is cooperating with expert consultants on augmented reality (AR) and virtual reality (VR), in addition to holograms and paving the way for precise surgeries with the help of 3D models of the patient which can be analyzed in detail by surgeons prior to performing the actual complex surgery. Another expert team is working on the possibility of using the Internet of Medical Things (IoMT) that refers to the worldwide network of interconnected medical devices and applications. IoMT is being used to monitor a patient’s vitals (temperature, blood oxygen saturation, blood pressure, respiration, ECG/EEG/EMG, etc.) and raise timely alarms. It is also being used for continuous monitoring of vitals and assisting physicians with intuitive dashboards instead of them manually operating ICU devices/ patient monitors to check for recent spikes in vitals or relying on information noted manually by nurses at regular intervals. But it is still a costly affair and in the doldrums. Though, we are trying to look upon the future value addition thing. Added to this, my concern about data security always remains high. Waiting to meet soon— Healthcare Data Privacy and Security Act (HDPSA), this is being drafted by the Union Health Ministry. Also, we are looking into possibilities wherein the emergence of non-profit organizations like Ramesh Nimmagadda Cancer Foundation (RNCF)* has created a software platform called OncoCollect which is being used by organizations spread across India. OncoCollect can be used to collect, collaborate (AWS cloud-based) and analyze patient data. Cloud-based products are proven to enhance resource acquisition, boost infrastructure reliability, and help consolidate operations. Apart from this, our teams are constantly after Blockchain technology to make our data safer and fraud-free. I have prepared a slide showing the relevance of data in every nook and corner of the process.” while pointing towards a screen.
Mr. Mehta looked in deep meditation. He was carefully listening to each word and noting things in between. “Ok Shiva, I will mail you if any data is required.” Mr. Shiva passed his baton to Finance head, Mr. Anupam. Mr. Mehta spoke smilingly, “Anupam you hold the sustainability of the organization on your shoulders,” making the atmosphere light.
As a finance in charge, Anupam has crucial responsibility on his shoulders. Mr. Anupam with a prominent belly tyre, vanished hairs something that one guess as a byproduct of a pressure job, started to share his quota of information, “We focused on costs and expense reduction, efficiencies of scale, supply chain initiatives, and sourcing. We need to focus on doing what it takes to move high-quality care delivery towards a lower cost base sustainable model. We need to predict what government can do with the current mediclaim rates, making a sustainable business model out of treating the hundreds of new registrants for mediclaim that would take more like 30% off the cost structure. The ability to predict actuarially is becoming a required skill. My team is accessing risk contracting and delivery costs, and we have much less margin for error in these analyses. But too much data flow like spaghetti and demand for irrelevant reports sometimes causes disruptions. I am trying to coordinate with my analysts’ team to a single source of truth that will pay dividends in terms of standardization and consistency. We identified under-reimbursed claims and improved coding accuracy to ensure revenue is not left on the table. This is a report of claims churning rate which shows improvement by 5%, billing mistakes down by 8%, insurance collection and third-party reimbursements improved marginally. Drug reimbursement is one area where my team examined for underpayments due to the complexity of drug purchasing and billing processes. We were able to monetize our outpatient dialysis service line and in essence got a value of 10% increase in revenue. I stress that innovative solutions and new business models are needed to generate revenue growth. It is’ becoming difficult to align incentives with the physician networks in an era of huge uncertainty.”
Source- Author created excel output
Mr. Mehta heard every minute detail. He asked the MoM to be carefully drafted. He ended the meeting with the following words,
“Our mission remains improving on emerging technologies across the three pillars – care delivery, customer experience, and operational excellence. The ‘Happy Marriage’ of hospital finance and frontline Operations– that provides the groundwork by which claims can be billed and collected in the most efficient and effective manner possible at the first touchpoint have to be improved. Of all, performance standards are the single most important element because, broadly speaking, they determine the quality of effort the organization puts in. One of the biggest changes in the healthcare industry is the shift from fee-based payment models to value-based, performance payment models. We have to constantly strategize. It should be our priority to give due returns to the investors and shareholders. We have to work to make these investments contribute to the operating income. The need of the hour is driving towards patient-centric services keeping in mind dynamic cost structures. It’s crucial for tomorrow’s healthcare to go both financially deep and operationally wide to help lead health systems toward a successful, sustainable future. Thanks all, we will meet again with improved statistics.”
Disclaimer (All names and characters are fictitious in nature and any resemblance to living or dead is purely coincidental. Whenever any information and facts are taken from other sources, due reference is given. (*) is stated below in the reference. The EGM scene is created by the author.)
Title image source- https://wallpaperplay.com/board/medical-doctor-wallpapers