The Big Healthcare Challenges in FY 19

As the present financial year draws to a close, I am left reflecting on the challenges the private healthcare services organizations in the country face in the coming year. The present year has been a pretty tumultuous one. The regulatory environment threw up several challenges. The NPPA orders on price controls of devices such as stents and joints impacted the profitability of most private healthcare companies adversely. The DPCO’s orders on price controls on key drugs too are also likely to dent the bottom line of private hospitals. The media brouhaha triggered by two cases one at Fortis Hospital Gurgaon and one at Max Hospital, Shalimar Bagh, New Delhi created consumer distrust of an unprecedented nature. The private sector hospitals were called names and their doctors were addressed in the vilest of terms leading to all around despondency. Private hospitals are now limping back from this assault. The government of Delhi also announced a half-baked scheme for its citizens, which allows them access to private hospitals if the government-owned hospitals put them on a wait-list of more than a month. Finally, in the budget, the union government announced the path-breaking ”Ayushman Bharat”, which is supposed to provide a cover of INR 500000 to a million families across the country.

All these are expected to lead to some fresh challenges for the private healthcare providers in the next financial year.

Regaining Patient’s Trust 

If there is one thing, which ranks higher than any financial matrix of revenue, costs, and profits it has to be the effort to regain the patient trust. The reasons for the loss of trust are many, some genuine and some purely trumped-up, however, most private hospitals see the urgent need to regain the customer trust. Significant investments will have to be made to improve transparency, patient communication, and organizational culture, which will lead to patients trusting their hospitals. This too is a difficult task and will involve a lot of senior management time and effort.

Profitability

The government and the media have quite successively sold a narrative to ordinary citizens of the country that the private sector hospitals are profiteering and that they are out to cheat patients by over-prescribing, over-billing or worse. Thus, they have ascribed themselves the role of the guardians of the ordinary citizens against the rapacious, profit-hungry hospitals. The truth is far more prosaic and indeed worrying for the private sector hospitals. Most of them have seen a shrinkage in their profits, which to begin with were meager. The biggest challenge that private sector hospitals face in the coming year is clearly of ensuring reasonable returns for their shareholders. In an environment, driven by complete distrust between patients and the hospitals, with power-hungry politicians seemingly baying for their blood in what might be an election year, most private sector hospitals are staring at a bleak year ahead. The EBITDA margins are likely to contract. The hospitals will have to thus figure out a way of reining in costs, without compromising on patient care, safety, and outcomes. This is obviously easier said than done and will probably consume most of the bandwidth of the top management of the hospitals.

Managing the Changing Regulatory Environment

Healthcare is finally getting some attention from the government, which in itself is not a bad thing at all.  However, the controls being put on pricing and the schemes like the Ayushman Bharat and similar programs are not at all well thought through. The private sector, however, has no choice but to adapt to the changing situation. The National Health Protection Scheme (NHPS), will be rolled out this year. One is hopeful that it will be backed by suitable technology, which allows private hospitals to handle patients covered under NHPS. The hospitals will need to usher in change to be able to accommodate the large number of NHPS beneficiaries, which may flow into private hospitals. These changes may include modifying the bed configurations in the existing hospital, tweaking systems and processes and creating special areas to handle NHPS patients and create low-cost models, which allows the private hospitals to manage the NHPS patients in high volumes. Other regulatory changes in drug price controls, devices pricing controls and guidelines on re-usage will all lead to significant tweaks in hospital processes.

Managing Media and Consumer Activism

Consumer and media activism is here to stay. An unexpected outcome, a perfectly explainable error of judgment and sometimes a perceived lack of attention can trigger a media avalanche. Much as the hospitals may crib about being unfairly targeted, they will have to learn to live and cope with it. However, this does not mean that hospitals will not take a stand or push-back particularly when they are in the clear. They will have to learn to work with a partisan media and try their best to put out their side of the story. Speed will be of the essence and the communication teams of the hospitals will have to be beefed-up. Social Media too will throw up new challenges and the hospitals will have to learn to respond quickly and have a ready base of loyal supporters who will help defend them against motivated tirades.

These are all unique and new challenges. I am sure something good and lasting will emerge from these as well.

The views expressed are personal

 

 

 

 

 

 

 

 

 

 

 

 

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