Medicine as a Corporate Enterprise: A Welcome Step

Medical profession and corporate culture - are the two concepts mutually exclusive? From the era of the humble family physician who was the end point of all of a patient's needs, we have progressed to the era of the five-star corporate hospitals with hi-tech facilities but inadequate patient satisfaction. Let us not forget that medical science is about healing people. People involved directly in this enterprise are doctors and paramedical staff; and those indirectly are the pharmaceutical industry, services staff, medical equipment industry and medical institutions. Each spoke in the wheel of health care has its designated function, is indispensable and has an equivalent role to play in optimal health-care delivery.At the center of the wheel is the doctor. A humane approach by the treating physician not only ensures proper treatment but also elevates the doctor to the status of a demigod. Why is it that there are big tertiary care hospitals with such a reputation that patients flock to them from far and wide while some others are simply five-star hospitals catering to the rich and the insured?The culture present in successful business enterprises therefore needs to be implemented to make medicine a successful business. If health care were deemed a business, then the tools that help fix other businesses will fix it too (Waldman, 1996).Can big corporate hospitals do this? Why not? It would be all too easy if everyone involved at every level remembers that the hospital exists because patients have to be treated. Starting from the receptionist at the entrance to the administrative staff to finally the medical and paramedical personnel, everyone should treat the patient as a revered guest. Pharmaceutical companies, medical equipment manufacturers, philanthropic bodies, insurance companies and finally the government should work in tandem with doctors to ensure quality care and to subsidize poor patients.A corporate hospital may have all the trappings of a five-star luxury hotel, but a good number of such hospitals are found to be abysmal in terms of competency and adequacy of treatment. This is reflected in the increasing incidence of litigation against doctors and hospitals. Let us not forget that the patient is not a fool and is not to be taken for granted. A patient may be brought to the hospital on his deathbed and may not be saved despite the doctor's best efforts; but if there has been sufficient communication and a humanitarian approach shown to the family, very few disputes would arise as far as settling the bill is concerned. Not only doctors but also paramedical and administrative staff should be trained to handle such situations.Low Payoffs to Physicians and Patient - The Final RecipientAchievement of value and profitability through emphasis on efficiency, productivity and high quality is not necessarily seen as a feature of health-care delivery setups (Faria, 1998a). Despite inflated costs, the for-profit hospitals are often shown to provide inferior quality of care (Geyman, 2003). The term "medical-industrial complex" to describe these interrelationships is not a new concept, the term having been introduced in 1980 (Relman, 1998; IJME, 2001). It implies a new industry that supplies health services for profit (Relman, 1980).The evolution of the corporate hospital came from increasingly low payoffs to physicians from Medicare (Relman, 1980; Kereiakes, 2004). Physicians sought comfort and safety in numbers by resorting to group practice in the face of increasing litigation and practice costs. Although the corporate hospital gave a space for practice, it increasingly encroached on the physician's autonomy and forced him to compromise to curtail costs (Kereiakes, 2004; Faria, 1998b). This tendency to compromise is what ails the health-care system (Waldman, 1996). Even if health care is more a public service than a business, management principles and solutions can apply. A bridge must be built between the two cultures.It is often assumed that "hospitals function like other businesses, meaning high costs equal inefficiency" (Relman, 1980). This needn't apply to the health-care or hospital setting. A common example often cited is that of joint replacements. The cost of joint replacement is escalating with the cost of implants; however, the payments from care providers have remained almost static. This means that the bulk of the package goes towards implant costs, decreasing profits and physician payouts. To offset this, if a cheaper implant were to be used, the longevity and safety of the joint would be compromised, which is hardly the correct solution to curtail costs. This type of cost curtailing measure is often used to provide joint replacement solutions to uninsured and poor sections of society, in public health setups and in some private hospitals. Short-term gains are always attractive; but what does one say of long-term losses, of the higher incidence of revisions to be expected out of such irrational use of surgical procedures? A more rational solution is to include joint replacement in the ambit of general insurance more widely and also to ensure good local implant quality by implementing certification and continuous-monitoring procedures. The payouts in packages by the insurers must make provision for increasing costs.As a means to achieve efficiency, corporate strategies of TQM (total quality management) and CQI (continuous quality improvement) may be applied in the health-care setting. However, these strategies have not found equivalent success (Waldman, 1996).Every aspect of health-care delivery and ancillary services is inextricably linked to its final recipient, the patient. This equation changes the very perspective with which we view the so-called "enterprise." Our clients are human beings in physical and mental distress, and disease takes a heavy toll on emotions and well-being of everyone in the vicinity of the sick person. Profit-making, therefore, has to be weighed well against the comfort and care provided to the patient and his near and dear ones. Under no given circumstance can patients' concerns be allowed to be pushed aside in favour of curtailing costs and achieving profits.Corporate Trust HospitalsThere have been accusations of corporate hospitals run by trusts not fulfilling their obligations of providing free treatment to a certain percentage of patients as specified by law, while claiming all exemptions that can be claimed on tax and equipment. It needs to be noted that none of these so-called trust and research centers do any research. It would be enlightening to know their quantum of research output, besides that measured in rupees, and their research setups before permitting further sanctions.None of these trust hospitals are cheap either. Most of them are as expensive as the hospital next door. The only doctor who treats "cheap" in the private sector is still the nearby "small nursing home." The only thing in which the charitable and trust tag comes up is in the physician payout, which is miserable, to say the least. It is also quite educating to see the small proportion of the total package that constitutes the doctor's charges. Charity is practiced by the doctor, not the hospital, and the hospital practices charity in the name of the doctor.Corporate Culture in Health CareHealth-care organizations are social groups comprised of people who pursue a common purpose, share values and beliefs and therefore possess a common culture (Waldman, 1996).Corporate culture is fundamental for accomplishing any sustainable change in care delivery. The term implies that the altruistic call of healing has a business side too (Waldman 1996); and by culture, we mean values, attitudes and behavioral attributes.Waldman (1996) feels that there is a threefold reason for the problems in corporate health care:
If the corporate culture in health care is seriously dysfunctional, it could be the root cause of its problems.
The human resource development issues in health care are of concern because of high turnover rates and professional withdrawal.
Corporate culture tends to resist change. In medicine change is homeostatic and essential for functioning and doesn't always translate into costs.Sometimes, management principles such as optimization, which otherwise works well in other cultures, may have exactly an opposite effect in health care. The apparent cost cutting by cutbacks in staff and diagnostics, as per corporate management strategy, may actually lead to delays and increased costs as compared to savings which were expected.

Large Hospital Chains - Apollo, Max, Fortis, WockhardtThere has been a huge interest in the health-care segment in India in recent times. Large hospital chains have spread all over the country. The basic health-care setup was the small nursing home or the trust hospital in the past. This has now given way to a number of hospital chains like the Apollo, Max, Fortis and Wockhardt hospitals. These have not only penetrated big cities but they also cater to smaller towns and districts by way of satellite clinics or smaller outreach programs.Take the example of Apollo, which holds about 19 hospitals and has a foot in the pharmacy business too. It caters to primary-, secondary- and tertiary-care units, with the primary- and secondary-care units acting as feeders for the tertiary- and specialty-care centers. Bed strength is in the range of about 3,500 beds. It is the leader in tertiary care, and its Chennai and Kolkata facilities have a significant market share. It is now establishing a global presence - with units in Bangladesh and Colombo, staffed by a significant number of Indian consultants. There is a preference, noted by market analysts, to focus on tertiary care (as it is more paying) and to appoint doctors as full-time employees, as it is a major determinant in limiting costs and increasing turnovers. Historically, a revenue-sharing agreement was the norm. It has been shown by market analysts that as much as 28% of costs are employment costs.The Fortis group has established 10 hospitals and 12 heart centers in 5 years, bed strength of close to 1,600 and a stake in the Escorts Heart Institute. Wockhardt has also entered the hospital business with as many as 5 hospitals. Max is a subsidiary of the Max Group and has 4 functioning hospitals.It is to be noted that all these are run by major players in the pharmaceutical and health-care segment. For the doctor, this has created a never-before opportunity to practice in plush environments and offer world-class care. He has access to the best equipment, excellent trained medical staff and public relation and marketing support, without having to bother about any personal investment. Costs are still prohibitive and yet are offset by an increasing number of employers opting for these hospitals as preferred health-care destinations for their employees and paying for costs through group insurance policies. This not only makes health care more accessible but also generates a regular income for the hospital. Cashless insurance policies are also a major determinant in choosing these hospitals for care.The focus has therefore shifted away from the small nursing home. For the patient who has no access to insurance and who has no employer paying for him, the choice is still difficult and expensive; and probably the small nursing home may provide answers for his basic health needs. For the rest, the bigger corporate hospitals offer an attractive advantage.