Established less than 10 years ago, Fortis Healthcare has become India’s largest private healthcare provider. Managing director Shivinder Mohan Singh explains to Gay Sutton how the company is providing world-class medical care while using economies of scale and improving efficiency to bring costs down.
One of the greatest global success stories of the last two decades is the rise of India as an industrialised, business-driven nation, and its emergence as a global economic force. Think of the steel industry, software and call centres—the list is continuously growing.
Despite the Indian government’s intentions to create a national health service, healthcare still lags behind in this race for the top, however. Although some 70 per cent of the nation’s health infrastructure is owned by the government, only 20 per cent of the money spent is publicly financed. A massive 80 per cent, amounting to four per cent of India’s GDP, is funded by the private healthcare sector and therefore paid directly through insurance or out of the patient’s pocket.
That same private sector, however, has inherited a dubious reputation. Largely unregulated and unlicensed, it consists of a loose congregation of over 50,000 hospitals, 84 per cent of which provide fewer than 30 beds while only one per cent exceeds 200 beds. Lacking in transparency, it is often accused of overcharging, and blatantly making money out of ill health.
The last decade has, however, seen a breath of fresh air blow through this stagnant marketplace. Launched in 2001, Fortis Healthcare began with the construction of a large high-tech hospital at Mohali in Punjab. It was the first of many. Ten years on, the company manages a nation-wide footprint of some 54 hospitals, roughly one third of which are large purpose-built institutions located in state capitals. One third came to Fortis through acquisition, and the final third are managed and run by Fortis on behalf of private or state owners. Today, the company is India’s largest private healthcare provider and has achieved a reputation for transparency and clinical excellence.
“Our vision,” says managing director Shivinder Mohan Singh, who has guided the company through this period of dynamic growth, “is to provide world-class quality healthcare to anyone who needs it in our country. We fundamentally believe we’re in the business to deliver top quality care. Therefore, our financial viability is a by-product and not the end game in our organisation. And that affects everything we do.”
The company’s operational model is to deliver end-to-end healthcare with a full range of services, and to provide centres of excellence at each of its hospitals in six specialist areas: cardiac, orthopaedics, neurosciences, renal diseases, cancer and mother & child. From the very earliest days, considerable attention has been paid to achieving transparency throughout the organisation, and to refute the industry’s profit-oriented image.
To begin with, the company publishes a price list for all outpatient tests and procedures, and ensures those prices are rigorously adhered to; however, it is with the costing for inpatient care that Fortis has been truly innovative. Where possible, clinical investigations and tests are done prior to admission. Meanwhile, a comprehensive range of packages has been developed for the different conditions and diseases, and this is used as an estimate for the final inpatient bill.
“We then very closely monitor the estimate to bill ratio. Any final bill that comes to five per cent more than the estimate is examined by the head of the hospital to see if anything has gone wrong. Was the estimate right, for example, or were there too many diagnostics or procedures performed, was the billing correct, and so on,” Singh explains. “In India as a whole, it’s not uncommon for patients to be charged 250 per cent more than the original estimate. I am very happy to say that on average 92 per cent of our bills are within the five per cent of the estimate.”
This same rigorous standardisation and verification has been applied to a wide range of operational processes over the last five years, resulting in increased efficiency and a higher patient satisfaction level. At present, 171 patient touching processes have been standardised across all the hospitals, and are monitored and managed on a daily, weekly and monthly basis through the Fortis Operating System (FOS). Enabled through a company-wide IT system, FOS enables the management team to ensure that activities ranging from waiting times for admission and turnaround for tests and investigations, through to ambulance response time and time to discharge, are all performed to the required standard and efficiency.
Having achieved significant benefits from FOS, the company has applied the same concepts to the development of an equivalent Medical Operating System (MOS). This monitors a whole host of parameters that measure the quality of clinical performance and medical outcomes, and is being used to improve medical excellence both at hospital level and across the group.
Both FOS and MOS are playing a key role in continuous improvement at Fortis, helping it to achieve world-class performance and far greater efficiency. But they are also being mobilised to help reduce costs as part of the company’s bid to make healthcare more affordable for the local population. “We won’t compromise on our world-class medical standards, on our talent or on technology. Therefore, to provide quality healthcare at prices that are affordable in India, we need to leverage process efficiency and economies of scale,” Singh says. Everything from consumables and equipment through to technology, IT and the services of consultants and experts, are much more cost effective for the larger organisation. “And this is one reason why we’ve grown at the rate we have.”
Fortis has faced many challenges during its 10 years in operation, and one of the biggest has been sourcing skilled staff. The company opened the first Fortis School of Nursing in 2001 at Mohali, Chandigarh, and since then, has opened four more, each providing full nurse training. “We are always adding to the training courses we provide, and always updating our staff,” Singh says. “For example, we run specialist ICU and critical care nursing programmes. We provide dialysis and paramedic training, and teach a wide range of technical disciplines such as radiology and pathology. We also provide a 17-day induction programme for every new nurse who joins the company.”
Looking to the future, Fortis plans to continue developing its clinical excellence, and to cut costs across the organisation. “We are also developing different models whereby we can systematise, package and modularise our healthcare expertise, and take it out to the 70 per cent of the population living in semi-urban and rural areas,” Singh comments. “As part of this, we are committed to opening a dozen more hospitals in non-metropolitan areas over the next two years.”
Fortis has undoubtedly established its place as the leading private healthcare provider in India. “But what we have done is only a drop in the ocean,” Singh continues. “There are 50,000 hospitals in India of which we have just over 0.1 per cent. Of the two million hospital beds in India, we provide just over 8,500, which is 0.425 per cent. So whichever way you slice it, we’re making a miniscule impact on the country’s healthcare. And the scale of that challenge is what really haunts us. We want to be clinically comparable to the international institutions and to do it at Indian prices—affordable for all. So we have a long way to go,” he concludes.
If the company’s track record is anything to go by—expanding from one hospital to 54 in nine years and building a reliable and repeatable service based on medical excellence, care, quality and efficiency—then Fortis has what it takes to achieve this ambitious goal.
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