Health, Care and Services

Consumerism, genomics and the Internet are probably three predominant trends impacting health care in recent years. All three are radically altering how health is defined and delivered. During my conversations with pharmaceutical executives, hospital administrators, doctors, paramedical personnel, service providers/vendors to the health care industry and patients, most thoughts congregate towards one macro point. They unanimously think, albeit with varying degrees of conviction that health systems will turn from reactive medicine to proactively understanding and supporting individuals in managing their own health.

The marketplace has been dramatically transformed into “people driven economy” which puts customers in control. Yet, health organizations remain inwardly focused on serving their own hierarchies and not necessarily on what is best for the patient. Customizing care for the individual patient takes most organizations out of their comfort zones.

What is happening to health care is no different from other industries—the power of the individual is increasingly influencing how health care is directed and delivered, enabled by the technological and the virtual world we live in. And this is by no means a western phenomenon. Engaging patients and customizing care to their needs is a need that is emerging rapidly. And this presents a vast business opportunity. The way I see it, individuals (patients or simply health conscious citizens) will seek a newly networked model of care, assistance and financing.

This unmet need disrupts existing models and calls for flexibility and agility to form radically different ones. Something that’s difficult for today’s behemoths to do. A Google will arise in health care too. This will be the rise of a hybrid organization. One that is the architect of newer and smarter health systems. A health care organization that will become an agile caretaker of interdependent networks. One that gets smarter as it gets to know and support each individual.

Is this wishful thinking? Far from it! Kaiser Permanente an integrated managed care consortium, based in Oakland, California, USA has 8.7 million patients, 167,000 employees, 12,000 physicians, 35 medical centers, and 431 medical offices. In its most recently reported year, the (hold your breath!) non-profit organization reported a combined $1.3 billion in net income on $42.1 billion in operating revenues. Imagine the scope that health care services offers!

This is how they explain what they do:

“We are one of the most wired health care organizations on earth, but that means more than having a big computer network. It means that we are a network of 179,000 people who communicate closely with each other. It means that our health plan administrators, physicians, researchers, facilities, planners, pharmacists, nurses, laboratory technicians, other caregivers, software developers, and receptionists are connected in thousands of ways, large and small. Our information technology makes it possible, but our deep interest in cooperation makes it real.”

Of course, this is not all hunky dory. There is a downside with lopsided service. There are few things more irritating than a phone call from an unknown number while you are in a meeting or during an afternoon siesta on a weekend – even a Sunday! We have a legion of businesses in India hell bent on offering ridiculously bad service. There is story upon story of horrible, ignorant, rude and boorish brand behavior, constant shirking of responsibility and blaming the customer. There is a dire need to improve the quality of service we offer.

Yet, the fact is that the health care industry faces a crisis in chronic care as life-expectancy increases and retirement age reduces. This growing trend places a tremendous economic burden on governments, private employers and individual consumers alike. It also puts strain on the capacity of skilled care professionals and nursing homes. An informed (internet savvy) consumer is just a beginning. To be effective, health information needs to flow both to consumers and from consumers to health care institutions.

India is a shining beacon of economic growth and has attracted international giants across industries. Billions upon billions have been invested in the economy and profits have been made on a colossal scale. Will budding entrepreneurs give health care services a shot?

2 thoughts on “Health, Care and Services

  1. Salil, I appreciate your efforts and putting your thoughts across. I think at this point of time, more than breakthrough & disruptive inventions, what we require is basic innovations & the entrepreneurial spirit and in my opinion, companies like Sun, Alkem, Lupin, Cipla and Mankind are doing exactly that, they are penetrating and by that improving the quality of life. Unfortunately, because of Billion+ population we always stand poor on all the indexes.
    The best examples of how health care services can be managed in given resources are – Arvind Eye Hospital & Narayana H Hospital. And I know quite a few people who have in recent past could push though Golden Handcuff and open their small pharma businesses and doing well.
    But more thought provoing articles like this & insights will really give strengths who are sitting on the fence? Are You?

    Regards,
    Manish Munot

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    1. Manish,
      Thanks for reading my post and for your comment. I differ slightly from your view that we need penetration more than innovation. I think both should happen simultaneously rather than sequentially. What the Indian cos that you mentioned are doing is not increasing penetration but making meds more affordable to the *same* population served by Indian cos. Which is why access to modern medicine continues to remain an issue/growth driver for the industry. At this point no one is addressing this issue and that is sad!

      The examples of Aravind Eye hospital and NH are perfect as innovations. These are quantum improvements in health care delivery and that is a lot in line with the point I am trying to make in the post above. With my limited experience in the industry, I have noticed that the services side is too often neglected and therefore offers opportunity. I have been more than convinced that because of the market clutter, products are commoditized and at best can add value incrementally. But for a quantum impact, a lot of $$ that are spent in “brand differentiation” could be better invested in created sustainable service systems (with lucrative ROI as shown by Kaiser) that can differentiate not just the brand but a company on the whole!

      Also, you guessed rightly that I am toying with entrepreneurship for a while but have not been able to muster both the guts and a good business plan. Maybe some day! Until then…

      Like

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