Among the list of booming Indian industries, healthcare is just a step ahead of IT — but that’s only because it’s arranged alphabetically. The sector has been growing at an incredible pace especially because of an affluent Indian middle class that will not compromise on quality. A relatively recent entrant to the domain, Fortis has already created a niche for itself in cardiac care and orthopedics, ‘healing the world, one heart at a time.’As the head of strategy in one of the country’s fastest growing healthcare companies, Daljit Singh has realized that if Fortis has to lead from the front, it needs a dose or two of technology. Fortis plans to answer the country’s vast requirement for quality healthcare and IT forms an important part of that strategy.
How do you plan for growth especially when the economic environment and competitive landscape is changing so rapidly?
Daljit Singh: To put things in perspective, we have been focusing on domestic markets. In the process of setting up facilities in the last six years, we have seen that there is an enormous demand for quality healthcare in our country. The quantum of share that anybody can have in the Indian healthcare market is miniscule. It is an extremely unorganized sector. Let me give you an example. There are about 50,000 hospitals in our country; of these, over 85 percent have an average of less than 30 beds. Only about 1 percent has more than 200 beds. What it really means is that this is a very fragmented sector and this is only the private part. There is still a huge shortage of tertiary care in our country. India has the capacity to absorb as much as already exists. Over the next five years we could double that investment and it would still be absorbed.
There is ample opportunity for growth and therefore the healthcare sector is ripe for investment. We have to find the best means to make that happen. That could mean anything in the region of (US)$30 million to $80 million. These are the figures from two independent studies, one by Mackenzie with CII and the another by Ernst and Young with FICCI. It’s a massive figure and the government, we believe, is not in a position to invest anything more then maybe about 10 percent of this amount.
So the investment has to come in through private players, or FDI, so the sector is actually looking for investment and business opportunity. Growth is something which is real, given our need for quality healthcare.
India is pretty much at the bottom of the list when it comes to statistics pertaining to the growth of healthcare maturity of a country. If you look at the evolution in healthcare, the number of beds per thousand people, if you study the number of nurses or doctors per thousand people — India is at the bottom of the list, way below the world average. We can’t even begin to compare ourselves to the developed nations.
So, there’s a lot waiting to be done. The bulk of our population, which is about 70 percent in the rural areas, does not have access to quality health care, unlike urban areas. Around 95 percent of specialists are concentrated in urban areas; the rural sector is left with only about 4 percent. That’s a major issue; we’ve got to find mechanisms of delivering care to a much broader population.
Fortis is growing at over 80 percent annually. How do you handle or plan for this kind of growth?
This doesn’t necessarily mean doubling hospitals, what it means is that our revenues are reflecting that kind of growth. Its not just new facilities, it’s a combination of new facilities and the revenue growth in our existing facilities. I think our brand has to ramp up very fast as we have about 13 hospitals and we expect to run about 35 to 40, in the country, by 2011. We would be covering B class cities, and we also need to look at this growth in terms of contract perspective. It will allow us not to invest too much in sites and construction.
How do you ensure that you do not spread your resources too thin?
It’s always a challenge if your aspirations are to grow very fast. Contracts is one way but that requires management and people. We have some programs for developing internal capability. We do not get professionals, for all our operations — front office or sales. We need to train people to be able to cater to the requirements of patients and to the standards of the hospital.
We have a program called FIELDS (Fortis Institute of Enhanced Leadership Development), which provides internal training. We cannot get people with common standards readymade, so we are looking at creating this capability ourselves. We are working with some management institutes, like Symbiosis, and are looking at programs in finance, sales excellence, general management and managerial finance.
But this growth can both make or break an organization. Do you use IT to evaluate risk?
I recently heard something very interesting. ‘Risk is a cusp of opportunity and failure.’ Risk is inherent to any business operation. The role of management is to recognize the risk and do whatever is necessary to take it towards a field of opportunity rather than failure. Growth cannot be mindless. While we add facilities at one end and hone skills in areas like project management or integrating hospitals, we also need a very strong platform of operational excellence. We seek to do that by putting into place this operating system — a hospital management system and a capability development system for our people. This is to ensure that we have an organization which has a capability to leverage our strength at every stage.
How does Fortis use technology to scale up?
That in my mind is a big challenge from a number of perspectives. Obviously, the first part is: where do you get the funds from. Second, how do you get a good project management team to manage each facility — including doctors or paramedical staff to run the facility.
The third and the most important, you will need to have standardized processes and systems which ensure standardized delivery or care, no matter what. I think these are the areas we are focusing on. We are working very closely with some leading consultants in the field to develop our operating systems. When it comes to our patient processes, there are a few questions that beg for an answer: are we able to ensure a uniformly good experience at the end of every process? Can we ensure that every time we have an opportunity, we have a positive result? We just completed this exercise at one of our hospitals, and are in the process of extending it to all the others.
How does Fortis use IT to ensure common patient experience across all its hospitals?
When the Fortis operating system is fully rolled out it will ensure a uniformly-standard experience. It also depends on how you work and handle people. What are the work flows that you put in place to ensure that certain metrics are met? For example, ensuring that patients don’t wait beyond a certain number of minutes or that they are discharged within a defined period? It is also important to ensure that our ambulances leave our hospitals within six minutes of a call.
For our IT system, we have implemented an Australian software called Trak in three of our hospitals. It is a hospital information system which integrates all clinical and administrative functions. We think that technology is a significant lever to drive standardization or productivity.
Our ability to look deep into business areas becomes enhanced and therefore opportunities will be better fleshed out. It will assure greater transparency in our cost structure.
We need to have the latest medical equipment to be able to deliver value to our patients. For example, the MRI machine that is being used at our hospitals should be of the most modern quality. We may not need cutting-edge or innovative technology; we don’t need to be trail blazers, but we do need to be sufficiently modern and contemporary.
In this risk-reward tango, are you an early adopter of technology or do you choose tried-and-tested technology?
Well, I would say healthcare is not an area which actually dabbles too much in technology. If you were to look at us in relation to the rest of the healthcare sector, I think we must be one of the most technology-intensive hospitals in the country today. We are clearly one of the leaders. I have not seen any hospital in the country yet with our level of IT. There are other prominent players like Apollo and Wockhardt.
Regardless of all the planning, things go wrong. When is the right time to pull back or bite the bullet?,I think the right time to pull back is when you have a very strong sense that something is not going to work. It is a sense based on market information. We get all kinds of inputs from the market and from our colleagues. When you have come to that sort of view one must pull back.
What drives innovation, is it strategy or the availability of a specific technology?
I think innovation is just any activity that adds commercial value to an enterprise at minimal cost. So it could be technology, which is the means to deliver something — it is just a means. Wherever you employ technology, you must be aware of its utility. Innovation is the ability to leverage technology, or any other process improvements. This will ultimately add value to the process, either through better patient experience or to add to revenues.
What role do you see your CIO playing in driving your growth agenda?
In my opinion, CIOs play a very critical role. They are the eyes and ears of the business. They are the ones who regulate the use of information technology and the tools available to us to utilize our best applications to remain in business.
All said and done, most people don’t have the time or knowledge to delve into the latest in technology. I think the CIO provides a strategy and drives productivity. He is the one who decides what role technology can play in improving his business functions. That is the role I see for the CIO.