Analysis: Breaking The Habit

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11 April, 2015

It is not uncommon to find brands trying to create dreamy perception about their products and services. Products must deliver what they promise. Price sensitivity, high competition and unethical practices challenge both margins and growth for everyone, including the mighty global brands. Rising business complexities cause compromise of values so that ‘chalta-hai’ and ‘jugaad’ become the acceptable way of business. All this is evidently plaguing this case too. My observations are noted below in five parts with some suggestions for feasible fixes.

Same Page: More likely than not, forced marriages turn sour. Likewise, healthcare business must move from transactional to relationship mode.

At the core of the relationship must be the patient-first approach. Among other agendas, we cannot forget that healthcare is about the patient and for the patient. The broken link, in this case too, between Dr Tara Chaitanya and Company A is the lack of alignment on the patient-first approach; that is critical in generating the sense of urgency for remedial action to avoid adverse effects on quality and timeliness of care. Everyone in the healthcare value chain must maintain this larger sense of purpose. The escalation by Shiv to senior leaders of Company A, done after exhausting all options, was too little and too late. This must be done in the first place to achieve alignment and set the tone for interactions ahead — failing which it is advisable not to do business at all. Similar escalation with Company B and C also while inviting quotations would have opened better dialogue for evaluation of other options. Buying capital medical equipment is the start of a partnership that ensures sustained levels of care by combining the expertise of the care giver and the product/technology from the supplier. This alignment also minimises effects of tangential factors of man vs woman, small vs big provider, standalone vs multi-location-chain, or one staff vs another.

Hyper Influence: With the ease, convenience and reach of digital networks, availing their benefits is the need of the hour. In this case, before the purchase, a thorough reality check by Tara through independent reviews from peers would have raised more alarms well in time. Then, after the purchase, reviews would empower Tara’s voice to make suppliers like Company A more responsible and more responsive. Negative reviews can cost a supplier dearly as studies show that majority of buyers use reviews as the basis for their purchase decision. We observed that Shiv’s threat to expose Company A’s slack on social media was a trigger for them to act promptly and initiate remedial action. Unfortunately, though, Tara and Shiv did not learn from their own experience — more precautions should have been taken while upgrading.

Even the issue of beta version of the software could not go unnoticed had adequate checks been performed. I strongly urge physicians like Tara to shift their digital participation to a more active state to keep network leverages live round the year. It is a give and take, if you want to enjoy the leverage you need to contribute to the pool as well. It may be wiser to cultivate an exclusive online community for healthcare professionals only. Open social platforms are not designed for this purpose nor do they offer a reliable format for doctors to participate. While the comments may cast a lasting shadow, such platforms are good for progressive suppliers too. They exploit them for confidence building, knowledge transfer, speedy awareness, product promotion, extended reach and more.

Fire Drill: Standalone healthcare professionals like Tara need to adapt to changing times to deploy higher management expertise — which no longer equates with sheer common sense. With rising business complexities, the role of professional management is becoming increasingly critical in making informed decisions. Final choice must pass all fire tests — framework covering a host of ‘what if’ scenarios and all known ‘what can go wrongs’. With higher stakes, the risks are also higher. Investing almost a crore rupees is not a joke. It is imperative for Tara and Shiv to walk-through many clinical, operational, commercial and legal considerations supported by capable business minds. Robust risk management requires all these incorporated into detailed contracts, AMCs, buyback clauses, warranty terms, liquidation damages (separate for timely delivery and installation), followed by a performance guarantee with a payment retention clause for a defined period post-installation.

You need to become a devil’s advocate on after-sales support — with strict SLAs that may extend to demand uptime guarantee, back up/ full replacement and even damages for lost time/business. None of this would have been unreal had Tara smartly exercised her buying power. After all, we do not set up the fire station after the fire breaks out.

Team-Up: The fate of every business is increasingly linked to that of many other businesses, all of which must collaborate effectively in order for each to thrive. While standalone providers like Tara cannot match the buying power of large chains, beyond individual capabilities they need to come together to enable value through peer networks. It is already late for a conscious shift in orientation of doctors to collaborate.

With over 80 per cent of hospitals having less than 30 beds and over 95 per cent being family owned (mostly doctor owned), the clinical bandwidth for Tara and the likes is always stretched between patient-care, practice management, hospital/clinic administration and business management. Effective physician time deployed by the already poor per capita doctor ratio is further reduced due to the weak orientation and small scale to set up structures, robust business processes and advanced business automation. Professionals like her must open their minds to find and adopt better ways to judiciously deploy their clinical prowess and maximise time for patients.

One model is to join hands with peers to foster a shared services group; that will cut doctors’ administrative and management workload. The journey will start with teething troubles and transition may be painful, but once up and running it will create grounds for improved practices and operational excellence. This will introduce much-needed specialisation in the small healthcare set-ups.

Tara may extend its benefits to effective sourcing, group contracts, vendor management and enable extensive use of latest IT for better practice management, cost savings and improved focus on patient care. Beyond the traditional ways of secrecy and keeping business details behind opaque walls, the new normal requires doctors to draw their compe-
titive advantage from professionally run set-ups with better patient care.

One-Stop Info: Healthcare is highly information intensive. Hence, a mention about the need to create a multi-purpose central information station for professionals like Tara. It is rather sad that even the best care givers cannot list all available options of any medical product. I am perturbed by the quantum of a doctor’s time wasted in chasing information. Tara did not have a purchase department at her disposal to research and summarise the options for her — leave aside perform comparisons of specifications etc. Even with admin support, this activity is duplicated at thousands of places involving lakhs of doctor-hours across India.

To get to the evolved state, we must all pool structured information in a standardised manner to achieve desired time productivity for our doctors. While I suggested a shared services group in the previous point, we also need to make it cost-effective — constraining deployment of clinical expertise for every medical specialty. Instead, the sustainable solution lies in facilitated-but-direct-connect between providers and suppliers. Firsthand interface is important for technology transfer and ongoing clinical support.

Why standardised in one place? It is estimated that there are over 30 million items in the healthcare supply chain of which over 10 million undergo changes every year. We have to treat every specialist like Tara as the CEO of the integrated enterprise of Indian healthcare; for whom we ensure ease of access of relevant information (24x7 without the need to ask for it) to make it productive to refer, compare and apply. And also provision in-context messaging to the right person; without the need to maintain and search for contact details of the ever-transitioning staff.

Company A must provide to Tara, live, self-help information available on-demand with structured user support and service protocols. This will be a fix for the erratic attitudes of A’s staff, and delink variations in personal interpretation of issues. There should be one version of the truth right from A’s business leaders to users like Tara. We have to move away from situational inconsistencies to a process-based and accountable approach. So much more can be achieved with such collective information assets.

In conclusion, I urge Tara and Company A to seek mutual alignment that retains balance of power both before and after the purchase.

The writer is MD, INHX (Indian Healthcare Exchange). He is a keen analyst of the healthcare industry with primary focus on supply chain, medical devices and patient experience

(This story was published in BW | Businessworld Issue Dated 16-06-2014)