Rahul’s Dilemma – A Case Study

for blogRahul Jain warily walked up the stairs to the office of the Facility Director. He anticipated much of the discussion and was not sure if he had the energy to sit through another long session on how he needed to get more revenues for the hospitals. They have been having these discussions pretty much the whole of the last week and it was apparent to him that something needed to be done. Trying small quick fixes was not going to take them too far. The only question in his mind was whether he had the courage to bite the bullet. He had been dithering for a while now, but he knew that he had to bite the bullet now.

Rahul has been the sales head of the hospital for the last 6 months. He has worked his way up from the ranks and now headed the sales team. His team comprised of 10 sales people, 4 were designated as Asst. Managers and others were front line sales executives. Two of the AM’s were recent hires, hand-picked by him and the other two were older colleagues. The sales executives were mostly people who had worked at other hospitals and two were with large pharmaceutical companies. To his mind, he had a crack team. He had been trying hard to understand, why they were than under-performing as a team.

Rahul worked at a mid-size multi-speciality Hospital in Delhi. The hospital is a part of the large Fortis Group, which is widely regarded as one of the leading healthcare enterprise in the country.

Rahul walked into the office of Dr. Sudhir Sharma the Facility Director. Dr. Sharma has been the director of the hospital for just over a year. Rahul liked him for his straightforward approach. With Dr. Sharma, he knew there was never any mincing of words or sugarcoating of the pill. As Dr. Sharma waved him down in the chair opposite him, Rahul opened his laptop and sat facing Dr. Sharma.

‘Rahul, how are things?

‘Sir, things are improving. It is just that we need more time to reach to our full potential’.

‘Rahul, I know, but look at the numbers. The cash sales is tracking below par, the TPA channel is also below par, while the PSU and the government piece is ahead of the budget, which I am not sure is a good thing. We must drive our cash sales higher.’

Rahul too peered at the numbers, which in any case he now knew by heart.

Budget July 2014 (In Cr) Actual July 2014 (In Cr.) Budget YTD (in Cr.) Actual YTD (in Cr.)
Cash Sales 6.8 4.7 23.6 19.8
TPA/Pvt. Corp 3.2 2.4 12.8 10.4
PSU/Govt. 2.6 3.5 10.1 12.5
CGHS 1.2 1.5 5.5 6.4
International Sales 2.2 1.9 8.5 8.1
Total 16.00 14.00 60.5 57.2

‘Rahul, at about 95% overall achievement in the first four months, we have been barely able to keep our heads above water, but these numbers are hiding a big problem. The Cash and TPA sales are just above 80%, which is pulling down everything and the EBITDA numbers are in a very sorry state. We can perhaps prop up the EBITDA temporarily by reducing and deferring cost, but to reach an EBITDA of 22%, I need the sales channels to fire. To make matters worse, the CGHS and the other low priced business is ahead of the budget. Rahul, we must set this right and we have no time to lose’

Rahul also looked at the speciality wise distribution of the sales numbers. He felt that in these numbers were hidden some of the answers that he was seeking.

Budget July 2014 (In Cr) Actual July 2014 (In Cr.) Budget YTD (in Cr.) Actual YTD (in Cr.)
Cardiology 2.6 2.7 9.5 10.4
Cardiac Surgery 1.6 1.7 6.5 6.9
Orthopaedics 2.8 2.1 11.1 7.9
Neuro and Spine Surgery 1.3 .85 5.8 4.6
Urology and KTP 2.3 1.8 8.5 7.9
MAS and GI Surgery 1.8 2.0 6.5 8.1
Int. Medicine 2.6 1.65 10.2 8.9
Others 1 1.2 2.4 2.5
Total 16 14.00 60.5 57.2

‘Sir, if you look at the speciality wise data, we are clearly struggling with Orthopaedics. You know the team is new and we are trying our best to get the new doctors to connect with the referring physicians, it is taking time. Our other big problem is Neuro and Spine Surgery, where we just don’t seem to be getting the traction. And our bread and butter Internal Medicine is falling off the radar because of the internal team issues. While I am hopeful, that the dengue season, which is round the corner will help improve the volumes and revenues next month, we must have a longer term solution’.

‘Leave the Internal Medicine piece to me, Rahul. You know we are working on this and should get this sorted out in a couple of weeks, tell me how are you going to ramp up ‘Orthopaedics and Neuro Surgery pieces, what do we do there. You must look at the Urology piece as well; we are struggling there as well’.

Rahul took a deep breath and started narrating the outline of a plan that had been forming in his mind.

‘Sir, we have to attack these problems from multiple angles. To do that we must understand the levers that drives various parts of the business. We must have a comprehensive plan for Orthopaedics, Neuro and Spine Surgery and Urology. Let us identify these as our core specialities that we will drive across channels’.

‘Yes, Rahul but, where is the plan and when are we starting’. Rahul realized that Dr. Sharma was really running out of patience. He soldiered on.

‘Sir, as far as Orthopaedics is concerned, let us push the doctors both in the b to c space as well as b to b space. We need to re-launch the department. The Marketing folks must come up with a plan for the b to c piece. I shall speak with Manika in Marketing today itself. They need to pay us some serious attention. On the b to b front, I am working hard with the team to increase our coverage. Currently, we are meeting 300 doctors regularly; we need to push this up to 600. The A category doctors out of this lot must be regularly met every week’.

‘Rahul, I know but do tell me what you guys tell these doctors in your meetings. Do you have a plan for each meeting?’

Rahul winced; he knew he was on slippery territory here.

‘Sir, we have very little to engage with the doctors. We need more material, engaging stuff you know, interesting case stories, technically challenging cases, some nice giveaways…we have nothing’.

‘Rahul, please get what you need, the stories must come from the hospital itself. Get Jobi, to regularly source these from the doctors. Let me know, if you get stuck.

‘Right Sir, we will similarly develop detailed plans for Neuro and Spine Surgery as well Urology and come back to you.’

‘Rahul on the channel front too, my sense is that we are drifting. Please identify the top 10-15 clients in each channel and focus there. Can you come up with a Corporate Engagement Program, which allows us to connect with the corporates in a sustainable manner?’

‘Also Rahul, look at conversions, we have 500 OPD walk-ins every-day, I would like to know how many are recommended admissions and how many actually get admitted. Can we develop a system for tracking and improving conversions?’

Dr. Sharma in the flow and Rahul did not cut him short. In his mind he was also evaluating possibilities of introducing new clinics and new branded services, developing a robust plan for community activities in the neighbourhood and working out some local promotions to drive revenues in the short term.

‘Sir, allow me to put together a clear plan and come back to you in the next couple of days’. Rahul felt excited, even happy after his interactions with Dr. Sharma. He admired the man for his drive and ability to motivate. He secretly nursed a hope of becoming the facility director one day.

‘Thanks Rahul let us see the plan and let us get this beast moving quickly’.

Rahul walked out of the room, and called for a team meeting.

This is a fictitious case study written by me for a sales training session. Happy to share it here.