Sustainable Strategies for a Healthy : Imperatives for Consolidating the Healthcare Management Ecosystem

For private circulation only June 2013 www.deloitte.com/in Contents

Health in India 1 Emerging trends and imperatives 3 Collaborate to Innovate 6 Creating and facilitating a collaborative environment 13 References 14 Contacts 16

2 – Status and successes

India rightly brands itself as incredible. in-patient treatment, possibly making The country’s remarkable political, quality healthcare and private sector economic and cultural transformation facilities accessible to the poor. over the past few decades has made it a geopolitical force. Healthcare is However, these exciting opportunities one of the industries that marks this often mask certain urgent predicaments. strengthened global presence. The healthcare sector in As per industry reports, healthcare is currently at a cusp. Issues of access, poised to grow at an estimated annual affordability, quality of care and rate of 19 per cent to reach USD efficiency remain significant. A number 280 billion by 20201 with India being of reports have been published about recognized as a destination for world the poor health status of India, class healthcare. During the last decade compared to its Low and Middle the private sector grew to become the Income Country (LMIC) peers. In terms major provider of healthcare services. of vital statistics like infant mortality Its share of beds increased from 49 (IMR) and maternal mortality, India has per cent in 2002 to 63 per cent in lagged behind significantly. Even life 20102. As per NSSO 2008, the private expectancy, at 62 years, is three years sector accounted for 60 percent of all below the LMIC average. According in-patient admissions and 78 percent to the Global Burden of 2010 of out-patient consultations3. Private study, total Disability Adjusted Life Years diagnostics market is growing at 20 per (DALYs) lost are 518,879,000 years for cent and the pharmaceuticals market at the Indian population4. The economic around 15 per cent per annum. cost of these illnesses to the country is a staggering 600 billion dollars The Indian government has also (approximately). introduced several reforms. The 11th and 12th Five Year Plans and India is also facing an unprecedented international focus on the Millennium pressure due to the poor reach of Development Goals have led to quality healthcare to millions of its 1 Indian Healthcare : successes, especially in the primary citizens due to issues of access and The Growth Story health area – maternal and child health, affordability. The Indian healthcare 2 Central Bureau and infectious diseases. The National sector has faced shortages of workforce of Health Rural Health Mission has achieved and . There were 1.65 Intelligence, Health efficiency and health system reforms, trained allopathic doctors and nurses Infrastructure 2005 and 2010 while the Rashtriya Swasthya Bima per 1000 population, compared to 3 NSSO 2008 Yojana (RSBY) - a national social health the World Health Organization (WHO) 4 Global Burden of insurance scheme - has aimed to cover recommended guideline of 2.5 per 1000 Diseases 2010

Sustainable Strategies for a Healthy India 1 5 population . Total hospital bed density 100% in the country (0.9 per 1000 population) 37% 40% 22% 20% was well below the global average (3.0) and the WHO guideline of 3.56. Total healthcare expenditure in India was only 3.9 per cent of GDP, compared 50% to 8.9 per cent for Brazil, 6.2 per cent 63% 60% 78% 80% for Russia and 5.2 per cent for China7. Out of this amount, out-of-pocket expenditure was 61 per cent8, and only 0% 26 per cent of Indians are covered by Beds Inpatients Outpatients Doctors with share of private being only 3-5 per cent9. Private Sector Public Sector

However, this is not to imply that Given this complexity of the sector and 5 WHO World Health progress has not been made in the last the unique situation of the country Statistics 2012 decade – a significant contributor to in healthcare, it is evident that a 6 Ibid 7 Global which has been the private healthcare single stakeholder cannot offer all the Health Expenditure sector. solutions and address all the challenges. Database 2011 Collaboration, thus, becomes a 8 WHO World Health Inequity in access, affordability and pre-requisite for success. Statistics 2012 9 Employees quality of healthcare are the major State Insurance concerns that the country is grappling Corporation; RSBY with on one hand; and on the other website hand it needs a strategic approach to leverage the growth trajectory of healthcare to its advantage.

2 Emerging trends and imperatives

The healthcare system consists of It increasingly seems that the tool to multiple stakeholders including address the inequities of poverty is the government, providers, payers, choice and not charity. A number of pharmaceutical and medical devices innovations have taken this approach. firms. Each plays a vital role in the providers have tried to health care system in India. However, increase access and quality of care for interactions between various the poor. stakeholders have remained limited. Telemedicine and m-health initiatives has assumed a more have led to better reach and quality dynamic form over the last few years in health management while being – offering exciting opportunities for highly cost-effective. Various m-health new reforms and improving stagnant initiatives across the world have led to indicators addressing concerns of improvements in patient access through access, affordability and quality across cost effective solutions – education different population groups. and awareness, chronic management and treatment support, An ecosystem of innovations for world- remote monitoring, diagnostics support, class healthcare delivery, driven by and disease surveillance. private providers, is developing in India. The country is establishing new global To leverage the healthcare growth standards for cost, quality and delivery, story, the industry is now reshaping through its breakthrough innovations and redefining the very concept of in healthcare. The other end of the “healthcare”. It has moved far beyond spectrum is witnessing a number of curative clinical practice (focused on innovations to increase access and episodic care), to embrace prevention, improve quality of health services for wellness and the concept of the “holistic the poor and unreached at affordable care” through the pervasive health costs. The last couple of years have continuum. seen a rapid increase of private equity and venture capital funds available for entrepreneurs in healthcare, which has enabled scale up of some of these new interesting models of providing healthcare.

Sustainable Strategies for a Healthy India 3 Given the demographic and Main Demographic and Epidemiological Transitions epidemiological transitions in India, this concept is of immense value. • By 2020, an estimated 97 million Indians will be aged Prevention can help maintain a healthier 60 or older, up from about 64 million in 2010. population, thus reducing healthcare • The number of diabetes cases expected to increase costs for cure, easing pressure on from nearly 60 million in 2011 to 100 million by 2030. limited healthcare resources in India, • India’s share of NCDs is expected to increase to 76% by and having a healthier, more productive 2030. population. A number of hospital chains • Source: WHO World Development Report; National and wellness centers are taking this Commission on Population, CIA World Factbook. approach.

The new age health systems thus, need not only skilled medical doctors, but also skilled managers. Government

Again, the broadening of the concept Medical of health means that the healthcare Equipment/ Providers industry also expands to include a Pharma cos range of stakeholders like information technology, financers/insurers, research- Stakeholders development, policy-makers etc.

Health As we have observed from the Community/ Employers Insurers examples, there are countless new developments cropping up regularly. Emerging trends and innovations in the Academia sector have the potential to change the healthcare landscape significantly. But these developments are often small innovations. They need to leverage the incomparable scale that India offers. In other words, the healthcare ecosystem needs excellent management and collaborations that are strategic, cutting- edge and forward-looking. While interactions between and amongst these stakeholders are taking place at a smaller scale in a case-by-case basis, these relationships and inter-linkages

4 need to be developed and sustained. The diffusion of innovation still remains an issue in the Indian scenario. Majority of innovations do not percolate down and remain limited to urban affluent areas. Eventually, process innovation will have to leapfrog product and business model innovation and provide affordable healthcare, with efficiency and quality. These need to be the mainstream and not exceptions.

The main imperatives of the healthcare system are increasing access and reach to its consumers, increasing efficiency in service delivery to maximize profits, and improving quality to match global standards. Collaborations between different stakeholders are a pre-requisite to achieve the three aims. A facilitative ecosystem and conducive environment need to be created for such collaborations to flourish.

Sustainable Strategies for a Healthy India 5 Collaborate to Innovate

The context of Indian healthcare in healthcare financing and making the current times, as sketched above, healthcare accessible. indicates a key lever – collaboration for innovation. More often than not, stakeholders come up with an innovation on their own As discussed, the challenges faced without much collaboration with the by India are unique and diverse other players across the value chain. and tackling the entire problem of This works in scenarios where most of access, quality and efficiency in such the cogs in the wheel are functioning a challenging environment by a single properly. However, for India, where stakeholder using existing solutions, is there is large room for improvement not feasible. Stakeholders need to come at almost all stages, such a process together to develop and implement can lead to inefficiency and unwanted cost effective and scalable models of delays in reaching the potential delivering healthcare. consumers. The multiple stakeholders in the healthcare value chain need to Effective collaboration across the value collaborate and identify innovations that chain is essential for new technology/ would span across their domains and drug introduction, lowering costs, add value for everyone, as the output increasing awareness and acceptance from each stage would serve as inputs of preventive measures, strengthening for the next stage.

Key lever for access, efficiency and quality in healthcare

Collaboration Innovation

Need for stakeholders to use Need for product and process each other’s strengths to innovations to provide leverage the existing affordable and cost-effective infrastructure and resources solutions

Collaborate to Innovate Stakeholders need to synergize to bring about innovative models in service delivery and technology

6 Collaborations between different collaborate. Experiences from different providers across the healthcare models, like the Colston Health Centre continuum in Birmingham for mental illness, show Different providers across the healthcare that employee motivation at the primary continuum – preventive, primary, level and employee efficiency at the secondary, tertiary and rehabilitators secondary level go up significantly with all need to collaborate in order to form minimal investments in integration. a seamless and efficient chain. Both vertical and horizontal integration can Besides this, collaborations between be implemented in streamlining business diagnostic chains, facilities processes, reaching right clients and and hospitals can be leveraged to maximizing effectiveness. achieve these benefits.

Given the increasing competitive To better manage primary care for patients with intensity, rising real estate costs and a mental health problems, the Colston Health Centre tough operating environment, large in Birmingham, UK, developed a model of interaction numbers of healthcare providers are between primary and secondary care. A consultation- exploring new and innovative business liaison model was undertaken with the consultant models to tap larger number of psychiatrist visiting the health centre – who would support patient segments, lesser penetrated and give advice to the General Practitioners (GP) on how geographies, and enhance service to manage patients with mental health issues and on offering levels. Various unconventional potential referrals to specialist mental health care. The formats are being tried out by some collaboration was taken further by using mobile phones of the new entrants which have also for quick consultations, liaisons for undergraduate and increased willingness of existing players postgraduate trainings. At a later stage, mental health to collaborate. professionals became attached to the Colston Health Centre to work along with the GPs to provide primary care Investments in collaboration between and integrated therapies to patients. primary and curative care not only contribute to prevention of complications in chronic diseases, but Metropolis Health Services (a diagnostic chain) has tied also reduce secondary and tertiary up with the social franchising model of MerryGold Health overcrowding by managing simpler Network in to provide quality diagnostic health problems at the primary level, facilities to patients. Patient samples are sent directly to thereby allowing them to focus on the Metropolis Health Services laboratories and patients high-end treatments and in turn can collect reports from the MerryGold hospital. improve processes and cost efficiencies. Referral processes also become more efficient, timely and effective when primary and curative providers

Sustainable Strategies for a Healthy India 7 Collaborations between providers Increasing access to reach the and technology unreached, while controlling costs, is Collaborations with technology made possible through the induction of companies can change the way technology in healthcare. Telemedicine providers deliver healthcare across is being used to connect remote rural the country. Technology can not only populations to medical advice from substantially improve efficiency in specialists, which were until now, healthcare delivery processes, but can unavailable to them. The telemedicine also make healthcare more pervasive based social franchising and social and integrate it seamlessly to our marketing by World Health Partners everyday lives. Technology, for instance connect rural patients and providers to in diagnostics, genomics and invasive high skilled urban doctors that provide procedures, has revolutionized clinical holistic care. practice. Medical devices and health technology players, like Biosense has Besides this, telemedicine technology launched its ToucHb (a non-invasive, also allows physicians easier access instant, portable anemia scanner) to their colleagues and patients in through select provider in India multiple locations (both domestic and for screening anemia, especially for internationally) across health facilities, antenatal care of pregnant women. thus offering the possibility of creating These cost effective point-of-care a network of health service providers. diagnostic solutions, often used by Patients, now, do not need to be large scale providers (like the public restricted by what is the best option health system) improve accessibility and available in India, but the best available affordability for a large section of the in the world. population. Philips’ award-winning tele-monitoring solutions enable While product innovations have been healthcare providers to monitor chronic disease patients exponential in the last decade, and are while the patient stays at home. These telehealth only going to grow, process innovations programs allow for early intervention in patient care, more through technologies in healthcare informed decision making in patient management, greater are a recent emerging trend – making patient self-care, and reduced risk of repeated hospital management of healthcare more admissions and visits. efficient, cost effective and accessible. Innovations in delivering what services are available, and delivering them better is going to be the focus of collaborative innovations in the coming years.

8 Another area where technology is used increasingly is in healthcare and hospital • Private providers like Max Super Specialty Hospital, management to improve efficiency. Apollo Hospitals, Medanta and Escorts are collaborating Healthcare technology companies, with public payers/insurers like the Central Government such as GE, are offering a wide range Health Scheme (CGHS). of clinical and financial information • AstraZeneca (a pharmaceuticals company) has partnered technology solutions that enable with insurance and health benefits provider WellPoint better decisions and outcomes for in the United States to gain more insight into patients. both businesses and patients, improve Once equipped with the medical history of patients revenue cycle, drive quality outcomes and their families, insurers can make better-informed and accelerate image management and decisions on the coverage they provide. workflow. wellness. With greater awareness Collaborations between providers among consumers and patients, health and payers/insurers seeking behaviour increases and The coming decade is going to there is willingness and acceptance of mark rising demands on and costs healthcare directed towards preventing of healthcare provision, changing illness and promoting good health. demographics with an increasing aging Wellness players involved in the population, and an epidemiological collaboration can contribute in this transition towards non-communicable entire process, especially in areas of diseases. Due to this, healthcare is better nutrition, stress management, moving towards a preventive and lifestyle diseases and mental health. wellness approach. Addressing Insurance companies can incentivize these demands of chronic disease wellness programmes through management and of prevention innovative products that have reduced and wellness promotion requires insurance premiums for clients who collaborations amongst providers, maintain certain health standards, and insurers, other payers (like employers) cover out-patient treatment and annual and wellness players. health check-ups.

Investment in preventive care by The Finance Bill 2012 in India has insurers is cost-effective and yields high extended tax deduction under section returns by preventing critical illness 80D for expenditure on health insurance episodes among the insured population, premiums for preventive health. and thereby, reducing pay-outs. These regulations by the government Insurers and payers can also undertake go a long way in boosting focus on awareness generating initiatives about prevention, rather than curative care, prevention, disease management and as well as towards creating a facilitative

Sustainable Strategies for a Healthy India 9 environment for insurers to collaborate with preventive/primary care providers. Health Stream provides learning products customized for healthcare organizations to meet a broad range of Collaborations for nurturing and their training, certification, and development needs. It retaining talent offers a variety of specialty courses for retail customers In a resource constrained setting including CME, CNE apart from several healthcare like India, the challenge is not just compliance trainings. It has a total customer base of over talent management and retention, 2,500 healthcare organizations (50% of all US Hospitals) but also fundamental training and throughout all 50 U.S. states, and has contracted capacity development. As we have approximately 2.45 million healthcare professionals from seen in the first section of this report, different healthcare organizations. there is a huge shortage of qualified healthcare personnel in this country. Health Stream has partnered with Harvard Business Medical and nursing colleges need Publishing, to offer ‘Harvard ManageMentor’- to to strengthen, improve and increase enhance leadership and management skills in healthcare training infrastructure to bridge the organizations. shortage of skilled human resource. This requires support from the government while containing costs and increasing to form facilitative norms, accreditation access and profitability, has brought criteria and grants and possible entry of about a shift focus from just medical investors to encourage private players in expertise to principles of business delivering quality medical education. and management. Apart from clinical specialization, corporate hospitals are Besides medical and paramedical focusing on internal business functions education, modern healthcare needs such as inventory, asset, financial and management training. Rising costs, human resource management as well expanding demand, and increasing sales and marketing and customer customer expectations characterize relationship management (CRM). It is healthcare today and are redefining the expected that this trend will continue roles of patients, providers and payers. and create a demand for a specialized This is especially true as health facilities resource base of healthcare managers. across the chain (primary, secondary, tertiary) are increasingly being run Collaboration of educational institutions by corporates and funded through with providers, especially hospital private equity – which demands chains and other modern modes of better management practices and delivery are needed for continuing accountability mechanisms. The need medical education so that healthcare for efficiently managed health systems, professionals keep themselves updated

10 with the latest developments in this constantly changing sector. Besides this, Apps like Bant, developed by the University Health updating teaching methods and syllabi Network in Toronto, allow Type 1 diabetes patients to be relevant to the current sectorial monitor their blood sugar levels to help manage their developments is essential. condition.

Collaborations for an empowered “Sleep as Android” is an app for insomnia patients to track patient their sleep cycle and analyze insomnia conditions to help Increasing use of technology is also improve sleep patterns. resulting in evolution of interactive patient care by educating and UChek by Biosense is a urine analyzer that uses the empowering patients to be active iOS platform and iPhone camera to automatically read participants in their care management. commercially available urine dipsticks to diagnose upto 25 Models such as interactive technology medical conditions. platform, online patient self-help groups, and increased involvement of continuum, and the government have patients in care pathways – right from also been undertaken. before admission to post discharge, mobile health, social media platforms The involvement of the government and patient remote monitoring among in a cross-sectorial convergence others are increasingly being accepted. cannot be emphasized enough. These models play a dual role – provide Although India has experimented in patients with multitude benefits limited scale with multi-stakeholder including convenience and choosing collaborations for healthcare, other a healthcare delivery model/ provider countries like , Mexico, based on informed access, and help and Bangladesh have had successful healthcare providers increase service experiences. Facilitative regulations by levels and at the same time reduce costs the government (such as the preventive owing to higher efficiencies. healthcare in the Finance Bill 2012 in India mentioned above), allocation of Multi-stakeholder collaborations adequate resources (such as allocations While there are models of two or three and preferences for Public-Private- categories of stakeholders coming Partnerships in the 12th Five Year Plan), together for specific goals of healthcare empowering key stakeholder groups (as seen in the above sections), multi- for policy action, and political will are stakeholder collaborations involving crucial for creating and managing large players across the value chain and care scale collaborations.

Sustainable Strategies for a Healthy India 11 Collaborations between the government, healthcare technology firms and implementers have helped strengthen community-based efforts to improve maternal and child health. Dimagi and D-Tree International are leading CommCare- a mobile based case management solution for community health workers in 25 countries.

In India, ASHA (government workers) have been trained on using the CommCare application to monitor danger signs, use as a job aide and to capture patient data. The application is also used to monitor the activities of the ASHAs and for health surveillance. The use of the application has improved quality and consistency of care and has helped in engaging and educating the population. In Zambia, CommCare has led to standardized interventions in clinical care and community health by linking patient data entry systems at health facilities with community health workers using CommCare on their phones. This helps outcomes to be handled in a timely manner and the referrals made by the community health workers can be tracked at the clinic by using the mobile application.

12 Creating and facilitating a collaborative environment

Stakeholders Technology

Government

Equitable Increased Talent Access Coverage Provider y t i l i

b Healthy a n i India a

Payer/Insurance t s u S Affordable Improved Financing Care health Pharmaceuticals outcomes

Medical Devices Innovation

Enablers for driving sustainable strategies

The striking feature of the sector is like the ones listed in the previous that it has the potential to grow at section need a conducive environment. an exponential rate in the foreseeable The ecosystem has to be facilitative future and to present new opportunities of such partnerships. All stakeholders, within itself, which will emerge as including industry, government, and growth drivers. In order to realize the investors need to step up to make immense potential for each to invest coordinated and concerted efforts in and grow with the sector, there is a towards creating such an environment. need for a cohesive and collaborative approach, where all stakeholders Some of the key questions that need to work synergistically and leverage the be resolved to achieve these desirable opportunities to create a lasting impact. collaborations are: • What role can the government play Collaborative innovations not only and what are the policy action points increase value for all players, it also needed to create such collaborations? reduces cost for the end user and • While collaborations between improves health outcomes. But government and industry is sustained and meaningful collaborations common through public-private

Sustainable Strategies for a Healthy India 13 partnerships, how can they be made • What specific action points can truly collaborative rather than just private players enact upon in the “outsourcing and insourcing”? coming years to facilitate and sustain • How can regulation be made collaborations? meaningful - without restricting talent and innovations - to counter The All India Management Association malpractice, unethical measures and (AIMA)’s seminar on “Sustainable patient-rights violations? Strategies for a Healthy India: • How can technology and patient data Imperatives for Consolidating the bases be used for improving patient Healthcare Management Ecosystem” experiences/outcomes, improving aims to facilitate a discussion revenue cycles and broadening/ among key stakeholders from the deepening reach of healthcare, health management continuum without being misused for denying towards developing a facilitative and insurance or for irrational care? sustainable environment for meaningful • What can investors do to promote collaborations. collaborations and a progressive and innovative development of the healthcare sector?

14 References

1. Indian Healthcare: The Growth Story 2. Indian Health: The Path from Crisis to Progress, Richard Horton and Pam Das, Lancet 2011 3. Cardiovascular Diseases in India: Challenges and Way Ahead; Deloitte Paper, 2011 4. India’s Health Care Hurdles, ISB Insight, Vol 9, Issue 2 5. Guest Editorial Introduction to the Special Section on Pervasive Healthcare, Ilkka Korhonen and Jakob Bardram; IEEE Transactions on Information Technology in Biomedicine, Vol. 8, No. 3; September 2004 6. Welcome to Welness, Sonal Vij, Express Healthcare, September 2009 7. Five Health Information Technology Trends for 2012, Physicians Practice 8. India Pre-Visited: New Frontiers in Healthcare Innovation, Indo-Swedish Health Week 2010, Information package for the Leading Health Care Program

Sustainable Strategies for a Healthy India 15 Contacts

Charu Sehgal Senior Director & Lead Life Sciences and Healthcare Consulting [email protected]

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