Healthcare Sector in India

Overview
Indias healthcare landscape is an interesting one. There are a wider array of diseases and more
number of people affected by the diseases than any other part of the country. World Health
Organization ranks India 112 out of 190 countries. This means that though the current situation
seems bleak, the opportunities for growth are immense. India is the third largest exporter of
Pharmaceuticals in the world which primarily consist of low-cost generic products, enough
competency to help assuage the situation.
There is a huge divide between the urban and rural when it comes to access to healthcare services.
Promoters tend to set up labs, hospitals etc. in the urban cities as these turn out to be hugely profit
making. In many cases a city has excess of 10-15 large hospitals including speciality hospitals. On
the other hand, rural population, which constitutes around 70% of the population of the country, has
to travel very far to access a single doctor. Most of the facilities provided are by the state hospitals or
doctors. Though these hospitals are highly understaffed, the doctors here also have their own clinics
which they give a priority to.
The payment mechanism used all over the country too is cumbersome. Almost all procedures require
physical cash outflow and only hospitalization with medicine expenses are covered by the insurance
agencies. Though this is not a big problem in the urban areas, the rural population finds it very hard
to part with such kind of cash which also includes the travelling and opportunity cost of that time
taken to visit the nearest medical facility. This leads to substandard treatment, delayed diagnosis,
inability to cure the disease at all.
It seems an irony that Medical tourism is picking up very quickly in a country which cannot treat its
own people. Medical tourism is when a person of non-Indian nationality travels to India just for
medical procedures. This is because the treatment costs, including travelling, surgeries, medicines
etc. are cheaper here than in their own country. New Delhi, Chennai, Goa, Mumbai, Ahmedabad are
upcoming medical tourist spots primarily because of proximity to International airports and high
concentration of large Indian hospitals and other International ones too.
Entities of Healthcare sector
Healthcare cant function just by Healthcare providers and therefore is a mesh of Hospitals,
Pharmaceuticals companies, Insurance companies, Government - both state and central, R&D
Laboratories, Accreditation agencies, Diagnostic clinics, home healthcare workers, Healthcare IT
service providers etc.
Efforts by the government
The government now is focussing on the healthcare needs of the rural population. The government
has launched the Rashtriya Swasth Bima Yojna (RSBY) which insures any Aadhaar carrier with Rs.
50,000 per year including Hospitalization and the corresponding medicines. This scheme will
reimburse the patient for travelling to the hospital too. The government has also launched schemes
for pregnant women and the primary care of the new-born child. Primary care has been a weakness
for the country with around 7% of children in ages 0-5 years die as compared to 0.8% in the United
States. 4 Human Resource Management in Healthcare
Overview of Hospital Sector in India
The hospital sector is hugely capital-intensive and is then accompanied by large operating expenses
too which primarily includes salaries and commissions to doctors, nurses, rent, electricity,
miscellaneous charges etc. Labour intensity increases as less and less procedures can be
automated.
Crisil classifies hospitals on the following three parameters [Source: Crisil Research]
Classification of healthcare services based on complexity of ailment

Classification based on ownership

Hospitals can also be classified based on ownership patterns:
Government-owned and managed: Brihanmumbai Municipal Corporation hospitals, KEM Hospital
and the Cooper Hospital (Mumbai), etc.
Privately-owned and managed: Asian Heart Institute, Apollo Hospitals, Fortis, etc
Trust-owned and managed: Lilavati, Hinduja, etc
Trust-owned but managed by a private party: Apollo Hospitals in Ahmedabad is owned by a trust
but managed by the Apollo Group, etc.
Owned by a private player and managed by another private player: East Coast Hospital,
Puducherry is managed by Fortis Healthcare, etc.
5 Human Resource Management in Healthcare
Classification of hospitals by services rendered and facilities
Below is the summary on classification of hospitals by primary, secondary and tertiary care services.
HR related problems in Healthcare
Healthcare providers, Hospitals in this report face an acute shortage of Human resources. The
Hospital sector is very different from any other service sector because high levels of training and
certifications are needed and the cost of a wrong service can lead to serious complications and even
death. India has 7 less nurses than global median and 14 less doctors per 10,000 people than the
global median which is a serious problem. The number of beds per population too is very less (7 per
10,000) and would need another 2.6 Million to meet the global average. The average spending is
3.8% of GDP for healthcare while USA spends close to 17% of its GDP for healthcare. The two
different models followed by hospitals, Model-I (all the doctors are on the 6 Human Resource
Management in Healthcare
hospital payroll) and model-II (doctors come and go and follow revenue sharing) work for different
kind of hospitals with the large ones following Model-II. A major differentiating factor is the kind of
doctors and the repute they carry that a hospital has. This alleviates the perceived quality of the
hospital and helps differentiate it from others in the city. For the rural part of the country, there is low
motivation to go and serve when the person has gone through 5-6 years of education and would
have a considerable debt because of it.
Evolution of Healthcare Sector in India
The healthcare industry will be major part of economy in coming years. Even during, 1990s it grew
at a compound annual rate of 16%. By 2020, at an average CAGR of 12%, it is projected to become
around $280 billion industry. Private sector will be driver of this growth, providing about 40% of
healthcare in India by 2016. The public sectors share will shrink below 20% in near future.
The growing dominance of the private sector in Indian healthcare services can be traced back to the
evolution of Indian healthcare since the 1950s. This time period can be split into three phases:
1. 1947 to the mid-1970s: During this period government focused on initiatives like in public health
services to manage the high prevalence of communicable diseases in India. It started with Bhore
committee report which recommended investing 12% of Indias GNP in healthcare sector.

It focused on providing facilities with the help of secondary and tertiary facilities. Primary care is
received at the level of the general physician and the first clinic/hospital providing basic care;
secondary healthcare providers are clinics and small- or mid-sized hospitals that provide specialized
services such as dental, gynaecological and surgical; tertiary care refers to multidisciplinary large
hospitals that provide advanced medical treatment, and these are staffed by highly skilled surgeons
and experts and often require heavy investment in equipment and infrastructure.
2. Late 1970s to late 1980s: The investment in primary healthcare services turned out to be less
than that the Bhore committee recommended, as much of the funding was used for secondary and
tertiary care. As a result, the central institutions of Indian government reviewed the underfunding
and the resulting structural inequalities, and recommended an increase in investments and a
renewed emphasis on addressing health problems in rural areas. However, the oil shock of the
1980s and the resulting economic constraints on the government caused continuing neglect in
funding public health, thus further stunting the growth of public health services. In addition, as the
middle and upper classes drifted toward private healthcare services, the gap in facilities and
personnel grew larger between the private and public sectors.

3. From the 1990s to the present: In liberalization phase, most significant investments occurred in
the private sector and an increased shift to private healthcare services delivery. The private sector
grew eightfold.

The private sector has been the dominant provider of healthcare services during all three phases,
but the pattern of private participation has changed considerably. In the first phase, private
participation mostly comprised practitioners providing primary and secondary care through individual
clinics. The second phase was marked by the rise of small hospitals, owned and managed by doctor
entrepreneurs, providing secondary care, mainly in urban and affluent rural areas. The last decade
has seen private capital flowing 7 Human Resource Management in Healthcare
more into establishing large tertiary care hospitals (more than 100 beds) and corporate hospital
chains.
Evolution of Nursing in India
Establishment of Indian Nursing Council
The INC was constituted to establish a uniform standard of education for nurses, midwives, health
visitors and auxiliary nurse midwives. The INC act was passed following an ordinance on December
31st 1947. The council was constituted in 1949.
Source of talent in Nursing
Trends in nursing education changes from basic general nursing service to doctorate education in
nursing.
1. Non University Program
Basic ANM-GNM (General Nursing And Midwifery Course)
Advance-Post-Certificate diploma
2. University Program
Basic- BSc (N)
Post-Basic BSc(Regular)
Post-Basic BSc(N).IGNOU
Advance: MSc (Nursing)
M. Phil
Ph.D.

Future Considerations:
By 2020 the GNM program to be phased out
Curriculum of BSc nursing to be modified
Staffing norm should be as per INC
There should be deliberate plan for preparation of teachers MSc/MPhil and PhD degrees.
Improvement in functioning of INC

Evolution of Doctor
Current educational structure for medical studies:
Undergraduate Courses
Postgraduate Courses
Super Specialty Courses

In 1980, there were 112 medical schools in India, whereas in 199495 there were 152, admitting
12,249 students.
Number of Doctors produced each year Total MBBS seats is 49530.
Doctors ratio in Hospitals:
The number of registered doctors in India has increased from 61,800 in 1951 to about 645,825 in
2005 which is 0.60 doctors for 1,000 people.
Problems faced by Doctors:
Self diagnosis and treatment by patients
Conflicting treatment plans with self educated patients
Long working hours
Evolution of the power dynamics among doctors and administrators
8 Human Resource Management in Healthcare
 With corporatization and the increased size and scale of hospitals, the role of doctors has clearly
morphed from the traditional owner professional (in small self-owned hospitals) to professional-
employee-manage
Continuous active duty for resident doctors normally exceed 12 hours per day
The junior Residents should ordinarily work for more than 48 hours per week and sometimes
more than 12 hours at a stretch.

The five key HRM themes that have emerged:

1. Talent shortage
2. Absence of HR professionals with experience in healthcare
3. Organizational systems and policies for emerging organizational forms
4. Emergence of new positions and services in the sector
5. Adapting existing workforce to the changed context

It is also evident that many organizations are adopting innovative HR practices to meet these HR
challenges. Such innovations will be critical in the future, but organizations must take a long-term
view of their HR challenges. For example, while recruiting from other industries, such as insurance
personnel from other domains like life insurance or general insurance enables organizations to
mitigate their risks in the short term, it requires them to invest heavily in the training and
development of their HR. This is not a sustainable solution in a high growth environment.
The future will also call for new ways to create flexibility. For example, one of the large hospitals
designed and implemented a work force differentiation strategy, discriminating between care and
cure employees, which enabled them to adopt different HR practices for two sets of employees. The
selection process for nursing staff was changed to recruit graduates from college without prior
experience. On the other hand, specialists were recruited based on referrals from existing
employees. The use of differentiated policies for different set of employees have thus provided
greater flexibility to help this organization deal with its unique challenges at each level of staffing.
Various HR practices in Hospital Sector
Let us consider the manpower in India according to 2001 census. According to the census there
were at least 2.16 million workers. In health care a more recent mix of data corresponding to 2008
is as below.32 % nurses, 34 % nurses and nurse midwives, 16 % pharmacists and 18 % health
workers. The estimated work force in India for listed professional occupations is around 3,365,797.
This is not exhaustive list of workers in health care.
Majority of health care workers are employed in private sector (70%), Percentages are higher for
allopathic physicians. Ratio of workers working in urban compared to rural is 3 to 1.This is almost
opposite to the population distribution i.e. 30 to 70. Rural population heavily rely on RMPS almost for
60 % of them they are the first point of contact.
Manpower shortages:
In spite of huge population India faces severe manpower issues in health care sector. To consider a
few numbers, According to OECD India has 0.7 physicians per 1000 people, ranking 132 in world.
The short fall of physicians is evident not only from the low number of physicians per capita but also
from the short fall of PHCs, the low number of medical specialties and the high vacancy rate of the
sanctioned posts. Absenteeism is another problem which exists in this 9 Human Resource
Management in Healthcare
case. These suggest that problem of corruption and waste of human resources, compound the
problem that already exist in attracting labour to rural sites.
The situation in nurses is also not good (0.9 for 1000), compared to OECD average of 8.4. Also, the
shortfall of nurses (18 % vacancy) and pharmacists (16 % vacancy) is quite high. To add to that India
has lower ratio of nurses to physicians (1.4:1) versus OECD average of (2.4:1).
Causes of Manpower shortage:
A paradox exists in India relating to this issue. There are a large number of medical colleges in India
(334 recognized by end of 2011). Huge producer of medical graduates (35,000). There are about
490 + undergraduate colleges with capacity over 30,000. Moreover there are over 280 colleges
offering bachelor dental courses, 140 colleges offering master dental courses, with strength of over
24,000. There are also over 2,300 institutes for general nurse midwives, over 930 for ANMs, having
capacity of around 80,000. So the question now comes how is this shortage justified?
Student enrolment have historically been low, which is increasing in recent times during the
period 1991 to 2008
Many colleges suffer from insufficient faculty, inadequate facilities , which result in poor training
Medical colleges are unevenly distributed geographically. Five of the southern states have around
58% of all medical colleges.
India has been the largest supplier of International medical graduates to US and UK. Indian
trained physicians constitute 4.9% in US and as high as 10.9 in UK. The so called brain drain has
resulted in an annual loss of more than 170 million $. The people left concentrate more on urban
areas. These factors worsen the situation of rural areas.

Nevertheless, there has been a reverse brain drain where in foreign trained physicians are returning
to India. This has been spurred by the improvement of private sector delivery system.
One more issue is the substantial vacancy rates in health professions in India, both generalists
and specialists in government and rural hospitals.

Solutions to the Issue

Compared to 2001 of 403 ISM colleges now we have more than 500 ISM colleges producing over
30,000 students annually. This growth of supply can help us solve to some extent
Central government has taken much bigger steps, as a part of 12th five year plan. They are
increasing the supply of AYUSH practitioners that are being absorbed by Indian health care system at
a steady rate.
Government also expressed its interest in revamping AYUSH education with special focus on
efficacy, safety and quality.
One way to address the physician shortage is to train registered AYUSH practitioners by providing
instructions in allopathic medicines. This will help in addressing some of the gaps in their medical
college training.

Various functions in HRM

HRM in health care has various functions. These include
Ethical and legal issues of the treatment
Safety and health of both the employees and patients
Career In Health industry
10 Human Resource Management in Healthcare
 Labor union relations
Job design
Recruitment
Training
Motivation
Termination

Out of all the above major functions of the HR team include recruitment, training, manpower
management and general administration
Recruitment: This includes collecting and sorting resumes as per the advertisement given online
or in print media. Later interview which is conducted by HR manager and Nursing superintendent.
Training: Later training is imparted on various issues such as health hygiene, safety, biomedical
disposal, hand washing etc. Emergency related codes are imparted to all the people undertaking
training which include Fire management, patient dealing including politeness and courtesy,
cleanliness etc. Training is generally imparted to train employees as well as regular staff.
Man power management: The function includes maintaining the service records which include
leave and other benefits etc. Travel related issues are also discussed.
General administration: They include protocol, issues related to attendance security, safety etc.
They also deal with labour, government regulations involving labour.

Major Factors affecting HR system in Hospital Sector

The below mentioned are some of the major factors affecting HR in Hospital sector.
Shortage of workforce
The main challenge in HR is identifying, recruiting and retention of required work force. As we have
already seen in this reading that the work force in this sector is not up to the mark. There is a lot of
gap in the required level and the available level of work force. In addition there is a huge challenge in
the number of beds. They are inadequate number of beds which makes the issue even more serious.
According to a survey conducted by Tecknopak, by 2020, we need 2.5 million hospitals, 1 million
doctors, 2 million nurses and 10 million paramedics, with the opportunity of growth in health care
business of about $280 billion. One issue for this is brain drain where skilled professionals are
leaving the country. Lack of growth, skill development not so good working conditions further
degrade the situation.
Training and retention of employees
Retention is another major issue in hospital sector. Due to technological advancement training is
utmost needed in this sector. Constant training and aligning the skill sets to the organization
requirement is utmost important in this sector. Once training is imparted retaining them is equally
difficult. Due to heavy demand for professional trained employees in this sector it becomes difficult
for hospitals to retain them.
Developing multi-tasking workforce
Cost of maintaining a hospital is increasing day by day and one needs to constantly work to keep it in
control. Furthermore cost of retaining employees is going up. So hospital should work on decreasing
the cost for them. Once way is to have a multi-tasking employee base who can work on basis of
contingency. This enables hospitals to retain the man power and pay them well and also getting their
work done effectively.
Developing second line staff 11 Human Resource Management in Healthcare
Migration of work force especially the nurses is one factor which sometimes becomes uncontrollable.
So management should be ready for this contingency and develop a second line staff in case of
emergency.
Managing younger workforce
Our population is skewed with youth making substantial portion of our population. Their attitudes are
different from the older employees and they need to be handled well so that they fit in well with the
organization.
Accountability of workforce
Care for patients is a team work and not an individual one. Mix is hybrid with educated lot, semi-
skilled and uneducated people. In such a situation it is very important to fix the accountability for
each individual so as to ensure smooth flow of service delivery.
Industry overview:
The structure of healthcare deliver has changed over the last few decades after independence it
was dominated by public funded healthcare systems whereas 70% expenditure of healthcare is
through private sectors.
Healthcare has become one of India's largest sectors both in terms of revenue and employment. The
industry is growing at a tremendous pace owing to its strengthening coverage, services and
increasing expenditure by public as well private players. During 2008-20, the market is expected to
record a CAGR of 17% whereas the total industry size is expected to touch USD160 billion by 2017
and USD280 billion by 2020. Hospitals account for major share (71%) of total healthcare revenues
in India. 12 Human Resource Management in Healthcare
 Reasons for expected
growth in Indian Healthcare Sector are as follows.

Current Scenario: Shortfall India World Average

in Beds, Physicians and
Nurses: Criteria (per
thousand population)
Number of Beds 0.7 2.9
Number of Physicians 1.3 2.7
Number of Nurses 0.9-1.3 2.8