The promoter of a hospital project generally has a basic idea of what type of hospital he wants to build. He may also have some idea of the clinical services he wishes to offer. The question is the viability of this plan. This is where the Hospital Consultant comes in. he will advise the client on whether the available space / ground area can accommodate such a hospital keeping the area / bed in mind; adhering to certain rules with regard to critical care and operation theatre planning norms; support services, etc. The healthcare regulators are now demanding certain standards irrespective of the size of a hospital and these requirements will need to be met for even the basic fire, nursing home, etc. licenses.
A Hospital Consultant will also advise on acquisition of movable and immovable assets (land, building, medical and non-medical equipment, hospital management software, etc.); project’s financial viability; staffing, tariff structure; hospitals policies and departmental SOPs (based on NABH norms); marketing and business development strategies, etc. Whilst many think the engagement of a Hospital Consultant as a `cost’, the reality is that this entity helps in making the right decisions and thus saves time and cost for the client which eventually far exceeds his cost.
All in all a Hospital Consultant will guide and advise the client at every stage and activity for setting up a hospital so that the client can complete the project in the least possible time and within a reasonable / planned budget.
A good and experienced Hospital Consultant will do the `Medical Planning’ for the architect to incorporate in the plans. This medical planning will address the requirements of all clinical services of the hospital, the processes, the medical equipment requirements; the patient footfalls, the OPD and inpatient requirements, the water capacity, air-conditioning requirements, and other parameters that need to be considered when developing the architectural plans. The Hospital Consultant will thus hand hold with the architect till the final plans are developed.
To be able to understand the viability of a project is of extreme importance prior to committing one’s financial resources to it. A detailed project report will give an accurate picture of the market conditions, inclusive of the health profile of a region, demography, competition and gaps, as well as financial feasibility for any given project. Investing a very small percentage of the total investment value of the project in a project report allows one to take an informed decision – to go ahead with the project or not.
A project report typically contains two parts: market assessment and financial feasibility.
The market assessment report evaluates the appropriateness of the location, drainage area and target segment, supply and demand of healthcare, gap analysis to validate the type of services to be offered, competitor analysis, measures for growth, among other factors. The financial feasibility study covers capital expenditure, key operating expenditure components, key revenue figures, financial statements and future projections.
While the report is indicative, the experience and knowledge of a hospital consultant ensures that there is a minimal variation between the financial projections and the final outcome.
A detailed and logically sound financial report is essential in obtaining financing of any type. The healthcare / hospital experience and knowledge of the consultant preparing the report is critical. A report meeting these criteria is good for getting loans form banks.
A CA who is not involved with establishing a hospital from concept to commissioning is unlikely to understand the entire healthcare delivery model. He may not know healthcare demographics and the gap between demand and supply of healthcare in any particular geography (area/region). He does not understand facility planning and hospital processes,
medical and allied equipment, clinical and non-clinical services, etc. Hence just understand a balance sheet is not enough. To do a large series of estimation, calculations of clinical and non-clinical bearing that finally produces a balance sheet is very important. Hence it is best left to a Hopsital Consultant, with his own internal finance team, to prepare a project report.
Facility Design and Planning
The size of a hospital depends upon multiple factors viz. zone in which the land falls in, plot size, available FSI/FAR, building height restrictions (if any), applicable set-backs, etc. The type of services to be offered is also important as some of these services require additional space based on their processes.
Such an exercise is most essential as it clearly lists all patient related services (direct and supportive). Specific areas for each of these, their proximity to related services, floor plate sizes, floor wise stacking program, spaces required for medical devices, etc. are determined in the area program to give clarity to the design team on planning.
There are instances where promoters of hospitals are either not aware of these factors or are not properly educated by the planner/designer of the hospital. This can lead to expenses and hardships if the concerned authorities do not either give the hospital licence to operate or then ask them to make physical changes in a running hospital. The latter not only means more expenses but also disturbs the working of a running hospital. It is therefore very important to study all the applicable norms and then only start the planning/designing and construction activities.
Planning and designing a hospital is totally different from any other facility. It requires an in depth understanding of patient care needs, medical technology, hospital processes and flow patterns, special utility and support service requirements that a regular architect is not conversant with. Building a hospital is a one time affair and hence investment in a hospital consultant and a hospital architect is of paramount importance when setting up a new hospital or retrofitting an existing one. One word of advise here is that the promoter of the project would be better off engaging hospital consultant who would then guide the hospital architect on the size and type of hospital to be planned, the medical and allied equipment/systems to be installed, the hospital policies and processes, the staff pattern, etc. This is very important as the architect cannot possibly know this and the promoter of the project may not know what hospital related parameters he needs to share with the architect and how to guide him through the design development process.
Project Management Consultant
The term PMC primarily refers to the infrastructure construction management. A PMC essentially is an architect or a structural engineer who engages mid level to junior electrical, plumbing engineers. The scope of the PMC team is to continuously, on-site monitor the construction of a hospital building and its interiors. He has specific experience in managing building material and tracking its quality, correct utilisation and prices. Hence a PMC is different from a Hospital Consultant although the latter will visit the site at predetermined intervals to see the progress of the project in keeping with the preset time lines.
Yes, there are a number of licences required for a hospital. These are separate/distinct for the infrastructure including those from the municipal corporation for the architectural plans, built-up area, height of the building, space left around the building for vehicular and fire tender movement, licence from the fire dept., certificate for the elevators, etc. Then there will be a separate set of licences for the operational side as well as facilities provided such as nursing home licence, pharmacy licence, blood bank licence, AERB certificate, etc.
Whilst for the infrastructure related licences, the architect and structural engineers can assist, for the operational side the client will have to apply himself. In case a hospital consultant is advising the project, he could also assist in making the requisite applications.
Medical Equipment Planning
Purchase of medical equipment for a hospital is dependent on factors such as:
- Type of clinical services provided
- Number of beds and their distribution
- Location of the hospital
- Hospital tariff and paying capacity of patients, etc.
Level of technology and quantity of each type of equipment will also depend on the above.
Equipment such as nebulizers, pulse oximeters, etc. are used extensively and are likely to breakdown more often. Critical care equipment such as defibrillators, ventilators, anesthesia machines fall under high-risk category. A certain level of redundancy needs to be built in for both these categories of equipment to avoid undue medical emergencies/ loss of life.
Every hospital/user needs to follow the principles of `appropriate technology’. There are reasonably good equipment at each technology level of medical devices. A hospital needs to select the best amongst the applicable level of technology so as to justify the cost of services to the patient, level and type of staff operating and maintaining the equipment, etc.
Refurbished equipment can be purchased if the hospital wishes to offer a service owing to a certain demand but cannot afford high costs of current technology; or if the hospital is introducing a service whose demand cannot be accurately estimated. Refurbished equipment are also purchased if the end result from the equipment are for internal use only and if the clinician is able to provide sufficient diagnostics and therapy based on the refurbished equipment output.
HR / Staffing
Staff categories are broadly divided into
- Support staff
The number and type of staff in each of these categories is based on the services offered, number and classification of beds, no. of OTs, type of diagnostic services, etc. There are also certain norms set by national, international and accreditation bodies .
Staff contracts are essential as they clearly define the hospital policies with regard to the position of the employees as well as other terms and conditions of engagement. Attaching a clear job description facilitates clarity in the role that the staff plays. It also mentions multi-tasking roles (if any), the line of reporting and co-operation with other staff.
Both healthcare delivery / management and medical device technology are evolving at a rapid pace. Techniques and processes that are being followed today could become obsolete tomorrow. Hence to keep abreast with these innovations and new techniques and standards, it is very essential to train and retrain staff at regular intervals.
The other are of training is ‘soft skills’. A staff member may be very good at his or her work but their ‘people skills’ could be lacking. They may not be able to communicate with the patients, their relatives or even their colleagues appropriately. This can spoil the image of the hospital.
Hence training is a very essential part of HR. It is often useful to engage with an external person/s or company to conduct some of the training so that the staff get a totally fresh outlook and hence outputs.
Project Funding – Mergers & Acquisitions
Today several hospital projects require external funding. The reasons are many. One could be that the promoter of the project has limited funds at his disposal and yet wants to set up a hospital as he sees great potential in its success. The other reason could be that the promoter wants a partner with funds to distribute the risks involved. In either cases the answer is `yes funds are available’. The question however, is on what basis and terms.
First of all the promoter of a hospital project himself has to normally invest the seed capital, which can range from 20% to 25% of the project cost. This could vary depending on multiple factors. The promoter has to furnish the funding body a bankable project report prepared by an entity that can defend his projections before the funder. Land will be available as most of the times funding agencies prefer not the fund this asset class. The borrower has to have a valid reason for seeking funds and should be able to project every possibility of the project succeeding.
Investors are also putting in their moneys into running hospitals/hospital chains keeping the growth of valuation in view. If they invest Rs. 100 today they want to exit the hospital/s after 5 to 7 years when the value of their investing has gone up 7 to 10 times or more.
These are just a few points to be kept in view whilst seeking borrowing / seeking investments.
This is an activity that one keeps seeing in multiple sectors. It is now surfacing in the healthcare (hospitals) sector too. Hospital groups are acquiring stake in well running hospital/s to increase their presence in the healthcare sector within a country or even outside. For them it makes more sense to acquire hospitals that have a good track record and assured growth rather than building new hospitals where the gestation period is large.
Then there is the angle of mergers where two different hospital/s groups decide to merge under one banner thereby increasing their presence in the healthcare market space.
For either of the above it is essential to know your partners well, their intent for M&A, whether their philosophy, culture and plans match yours, etc. It is like a marriage. Once wedded it may be difficult to adjust or worse still break the bond.
Quality Accreditation for hospitals
The Quality Council of India (QCI) has constituted the National Accreditation Board for Hospitals & Healthcare Providers (NABH) with the objective to establish and operate quality accreditation programmes for healthcare organizations. NABH is a Board member of International Society for Quality in Health Care (lSQua) and is the apex national healthcare accreditation and quality improvement body for India.
NABH offers quality accreditation, known as full accreditation, for hospitals and Small Healthcare Organizations (bed strength up-to 50). Full accreditation, as the name suggests, is a comprehensive set of guidelines and quality indicators to be implemented by hospitals. With an objective to create awareness and encourage quality in healthcare, NABH has also developed Pre Accreditation Entry Level Certification standards for hospitals and SHCO’s. Entry level certification is the first step towards capacity building and focuses on basics of quality and safety in hospitals. Full accreditation is three-four times more detailed than entry level.
Full accreditation is best-suited for hospitals where the management and staff are sensitized and inclined towards safety and quality; efficient processes and SOPs are documented and practiced; the staff is trained on delivering quality and safe care; monitoring of quality indicators and continuous quality improvement is accomplished. Entry-level certification acts as the first step towards creating awareness about quality and safety in healthcare delivery in a hospital. It is a launch platform for hospitals to establish and implement basic quality and safety processes and protocols. A stepping stone towards capacity building, entry-level certification, is ideal for hospitals that are not yet ready to take the giant leap towards full accreditation. Moreover, it is also suitable for hospitals facing infrastructure and staffing challenges.
NABH accreditation/certification is recognition of quality and safe healthcare delivery. This recognition helps hospitals seek and engage their internal and external stake-holders viz. staff and patients respectively. With today’s well-informed and quality-conscious patient and the competition in healthcare, accreditation is a huge USP (Unique Selling Point) for hospitals. Furthermore, quality accreditation helps hospitals to be in a better negotiating position with insurance companies, Third Party Administrators, Corporate clients, and Government bodies with regard to the hospital tariff.
Quality accreditation is a long-drawn and time-consuming process and requires support from multiple individuals/departments of the hospital. A consultant, well-versed and experienced with quality guidelines, will not only serve as an advisor for the entire process, guide on building the required documentation and help conduct staff training, but will also bind the team together and ensure timely completion. NABH, as opposed to formulating uniform processes for hospitals, encourages them to implement policies and processes customized for their own hospital keeping in view their nature of service delivery and competency of staff. A quality consultant is updated with best-practices in healthcare and guides the hospital towards formulating and implementing these policies to the best of their ability.