Hospital Administration: Principles and Practice Libert Anil Gomes, Yashpal Sharma, RK Sarma
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Hospital Administration as a Specialty1

  • Development of Hospital Administration as a Specialty
  • Hospital and Primary Health Care
  • Technological Revolution and Hospitals
  • Medical Profession and Consumer Protection Act
  • Rising Costs and Hospitals
  • Quality of Care in Hospitals
  • Privatization of Health Care and Rise of Corporate Hospitals
  • Market Approach in Health
  • Job Opportunities for Hospital Managers
As we step into the new century, the population of India is set to surpass 1000 million mark. Half of the population is likely to be below 20 years of age and approximately one-fourth will be above 60 years. Resurgence of some old dreaded epidemics like TB, plague and mounting threat from newer ones like AIDS, SARS, cancer and stress-related diseases and conditions arising out of man-made disasters have necessitated hospital services of today to be more responsive to social and economic needs at shortest possible time, both qualitatively and quantitatively. Added to this, the disintegration of old traditional system of joint family and increasing number of working couple has led to the demand of more hospital beds for therapeutic and nursing care for the old and sick, particularly for the terminal care. Further, institutional deliveries in nursing homes or hospitals rather than in home in the family environment and so on has changed the expectations of people.
Experience has shown that the workload in an Indian hospital doubles every 8 to 10 years particularly in terms of OPD attendance, emergency case load, indoor admissions, surgeries and diagnostic investigations. However, while analyzing the growth of hospital facilities in major metropolitan cities, there has been only a marginal increase in the number of beds vis-á;-vis population during the last few decades. As per statistics available we have one hospital bed per 1412 population. The goal of bed population ratio in our country of one bed per thousand population by the year 2000 as projected in the National Health Plan, seems to be still a distant dream. The overcrowding and overstretching of services therefore has increasingly resulted in the poor patient care outcome, particularly in government sector hospitals.
Out of total 13692 odd hospitals in the country, about one-third hospitals are in the rural areas and two-third are located in the urban areas. The government owns about two third of all such hospitals comprising around 35 percent of country's total bed component. Although, private sector owns only one-third of hospitals but the number of beds in private sector constitute just above 60 percent of total hospital beds available in the country.2
Hospitals all over the world account for a significant proportion of health care expenditure regardless of health status of the population or income level of the country. The largest share (60–80%) of health resources goes to hospitals. So many of the efforts to control health resources in the developed world are normally focussed on hospitals.
The review of health sector in our country particularly the government sector suggest that the significant expenditures on hospitals involve a great waste of resources because of the technical and managerial inefficiency within the hospital system. Hospitals independent of its profit or nonprofit status, is in principle subject to the same economic rules which are valid for any industrial set-up. The rule of effectiveness, efficiency and quality, form the framework for industry and health care sector alike. So, the hospital administration needs to be radically strengthened to respond to two different issues of hospital management, cost containment on one hand and patient satisfaction and improving patient care on the other hand. The concept of professionalization, development of specialized skills and leadership in Hospital Administration have to be reemphasized so as to rationalize the resources utilization and maximize outcome in health sector.
In our country, particularly in Government Sector, most of the hospitals are managed by doctors who have attained the position by virtue of the service seniority or a specialist from a most demanding clinical discipline. On the other hand, a trained (professional) administrator with multidisciplinary training and knowledge base has shown that he can ensure the economic use of resources, standardize hospital and equipment design, prevent and control overuse of expensive drugs and collect the data for evaluation of performances in a similar line to that of a corporate production or service unit.
The coordination and management of hospital activities has increasingly called for specialized skill for which the profession of hospital administration has emerged. This is in recognition of the fact that to direct and manage a hospital, it is necessary to have special knowledge, develop specific skills and establish certain time tested strategies.
The emergence of hospital administration as a medical subspecialty and the genesis of the professional hospital administrator can be traced back to the days when management science from business and industry made inroads into the social sector and service industry. Pioneering work in this area was done by Rockeller Foundation and Dr. Michael David in the early 1920s and 1930s. The Health Survey and Planning Committee in India popularly known as Bhore Committee had also the foresight of visualizing hospital administration as a specialty, and the subsequent health committees constituted by Govt. of India have reiterated the need of hospitals being administered by professionally qualified hospital administrators.
Taking a clue from these, the All India Institute of Medical Sciences pioneered a Post- Graduate(PG) course in hospital administration in year 1966, as a part of its commitment to patient care, research and development of medical education. The PG course leading to Masters in hospital administration is the first of its kind in the field and has been adopted in many more medical and professional institutes in the country. Such medical postgraduate course has since been recognized by Medical Council of India as a special stream of medical specialty. The National Board of Examination in addition to other various medical specialties also conducts examination and awards the degree of Diplomate in Health and Hospital Administration. Subsequent to this, a number of other nonmedical professional institutions have also started similar program to meet the market demand of such trained manpower. However, there is no uniformity in the training curriculum and no formal system of coordination amongst such institutions except the Medical Council of India recognized medical institutions.
In order to equip the practicing hospital administrators with the knowledge and skill in hospital administration, a large number of inservice training programs for senior and middle level managers are frequently organized by public sector undertakings, training division of Department of Personnel, Govt. of India, Director General of Health Services and various State Governments. Such 3programs are sponsored by International Hospital Federation, World Health Organization, World Bank, Indian Hospital Association, Academy of Hospital Administration and other professional bodies.
Globalization of the Indian economy has resulted in sweeping changes in the health scenario, particularly the emergence of tertiary care corporate hospital, resulting in a greater challenge to the hospital administrators of the twenty-first century. This has envisaged a need for reassessment of all such educational programs in the field of hospital administration so as to identify thrust areas of development and make the training program more meaningful, need based and market oriented. A National workshop on Curriculum Development was held in the year 1997 at Manipal, India, and also in Nizam's Institute of Medical Sciences, Hyderabad during June 99, has recommended some changes in the existing syllabus of the postgraduate course of Hospital Administration which focuses on topics like Capital Financing, Marketing Techniques, Management Information System, Business Laws and Regulations, Companies Act, Import procedures, Custom Duty Exemption Procedures and so on. In the workshop, it was also stressed that, in order to make such training programs community health oriented, emphasis should be laid on public health-related issues like AIDS, Cancer and Diabetics control program, Alternative System of Medicine; Quality and Legal Aspects of Hospitals, topics on risk management, organization and administration of superspecialty services were also suggested to be incorporated in the syllabus.
It was recommended that in order to develop adequate skill to meet the real life situations in hospital management an apprenticeship program needs to be organized and the trainees be put on rotation in the lines of internship program in medical curriculum. Such an approach would go a long way in sensitizing the students undergoing the course to face the major challenges in hospital administration today. While evaluating the outcome of such training programs in hospital administration, it has been felt that even the postgraduate residents in various other medical streams required to be trained on communication skills and marketing of hospital services and areas of hospital financial management. In the absence of a regulatory authority for the postgraduate programs as in nonmedical streams of hospital administration programs, like ACTE or any other professional body like Medical Council of India has resulted in absence of any standards and lack of uniformity in curriculum of hospital administration. So in order to give credential to all such courses as well as to maintain standards, concrete steps are needed to be taken by the concerned human resource development authorities. The number of seats offered to such courses in various institutions are also found to a pittance, compared to the number of jobs available in the market (both public and private sector); it is strongly felt that the course curriculum should be tailored according to existing problem areas and more such courses should be started for middle and senior level administrators of the hospitals in our country.
This paradigm shift in the training of hospital administration, the challenge in the disease profile of the community, their expectation from the hospitals; large scale of imported medical technology due to the liberal economic policies of government has brought the corporate hospitals to the fore-front in providing secondary and tertiary level medical care to the community. The following managerial issues have emerged, which needs urgent attention while planning and training in hospital management programs.
Today, it has been established beyond doubt that the goal of health for all by 2000 AD has become a distant dream with the present health care strategy. So, it is imperative to collaborate hospital services with the primary health care program and it is inseparable. The array of programs under the ambit of primary health care programs will need the support of hospitals for health promotion, preventive action, as well as for treatment and rehabilitation. It has to take charge of those patients who need specialized care and refer back those who do not need this to the periphery, i.e it has to act as a referral system which should function both ways. Without adequate technical and financial inputs from the hospitals—Primary health care as a strategy cannot succeed.4
Hospitals and Primary Health Centers (PHCs) are complimentary to each other and PHC cannot exist in absence of referral support of hospitals. Hospital managers of tomorrow will have to be aware of socio-economic conditions and health problems of the community.
The present century has witnessed a technological revolution and the hospitals of all sizes and dimensions have been involved and influenced tremendously in terms of cost and manpower requirement. The present day hospitals are technologically intensive organizations. Some of the salient technological innovations are being advances in telemedicine, sharing of patient information database, use of laparoscopic methods of surgery, stereotactic surgical methods using Gamma-Knife and X knife, advance in Molecular Biology and Genetic engineering, diagnostics like CAT Scan, MRI and PET, use of newer generation of antibiotics, so much so that the computer software magnate. Bill Gates has also stated emphatically that if the present century belonged to computer technology, the next century will belong to health care technology and sky will be the limit.
Hospital managers of tomorrow will have to be well-versed with these technologies—Various brands and options available in the diagnostic and therapeutic equipment, their selection, procurement, utilizations, maintenance, cost benefit and cost effectiveness analysis and so on.
In India, with the recent judgement of the Hon'ble Supreme Court, the Govt. and private hospitals, which charge for their services have came within the ambit of the Consumer Protection Act. This has increased the accountability of the hospitals. The awareness and literacy amongst consumers has made them demand more from the hospitals and the hospitals in turn, need to be more responsive. The negative side of this, of course being the doctors practising defensive medicine, which is bound to increase the cost of medical care for the community. Hospital managers, therefore, have added responsibility of protecting their clients from the malpractices of health care functionaries.
As a consequence of the above factors, due to inflation and overall price rise there has been a tremendous increase in the cost of health care. The establishment of a hospital has become an affair not only in terms of maintenance, but also in the form of cost of patient care which has increased manifolds. The time is fast approaching when the Govt. alone cannot afford the medical bills of all its citizens. Hence the Insurance companies and Third Party payment systems have been recognized to be the savior and such multinational insurance companies are knocking at ourdoors. In fact, in this era of funding limits and resource crunch, the government has given go-ahead to proposals which allow charging from patients especially in superspecialty and tertiary care government centers. Hospital Managers of tomorrow will have to take part in the process of cost containment on one hand and resource mobilization on the other hand.
With the modern world obsessed with quality, the hospitals have not been left behind. Ever since then, the hospitals are striving to provide quality services in order to carve out a niche for themselves in the market driven world. Some of the private hospitals have already started quality control departments/units to monitor the quality of services. ISO certification of hospital and hospital services are some of the new phenomena being witnessed presently. The recently introduced Citizens Charters in some hospitals is a pointer in the same direction. Increase in super and subspecialization results in team approach, thus necessitating co-ordination amongst a group of professionals. Setting up of accreditation schemes is the call of the day. Hospital managers will have to be trained in quality assurance techniques, organising quality circles, 5medical audit and may be reengineering of hospital management in the professional line.
While reviewing the proceedings of the Central Council of Health Ministers, meeting held in 1996, the minister of health gave a clear call for the private and voluntary sector to step in and assume responsibility for the tertiary level of health care in hospitals. Going hand in hand with the resource crunch and the rising costs, there has been a rise of corporate hospitals so much so that the (World Development Report) WDR-93 mentions that in our country about 6 percent of GNP is being spent on health, of which the private sector alone spends 4.7 percent. These corporate hospitals with their five star rates and sound marketing strategies have created a considerable number of devoted clients and have usurped the pre-eminent position of government run hospitals. The rise in the corporate hospitals is also predominantly due to opportunities provided to them by virtue of huge demand supply, gap in terms of quality services as perceived by the consumer of health care. The objectives of the private hospitals are not the same as that of the government hospitals. Unlike government hospitals, making a profit is one of their prime objectives. The hospital managers of tomorrow will therefore, require training in organizing and managing such private hospitals also, in fulfilling their objectives, in understanding the relationship with the owners, trustees and also with the consultants and the medical professionals.
It has been established beyond doubt that the present day's need is the revamping of older system of free medical care for all towards a new approach and it should match the needs and demands of the users. In other words there has to be a shift from “sellers” market to “buyers” market approach in order to meet the present challenge. It has to be self-sustaining through its own funds and should be capable of updating and adapting itself continuously to the realities. The hospital managers will have to be well-versed with the modern marketing techniques in order to sustain the organization in the competitive market.
In the words of Werner G. Fack the hospital managers of tomorrow needs a qualified academic education at different levels (for example, a bachelor, Master or Doctorate degree). The necessary professional knowledge of a junior hospital manager includes all kinds of economic sciences, applicable to hospitals, such as Statistics and Economics; Management Methods and Techniques of Organization; Personal Management and Development; Finance Management; Controlling; Clinical Information System, Marketing, Product Diversification, Quality Management; Risk Management; Health Care Policy; Health Care Economics and Planning, Communication, Information and Conflict Management, Administrative Systems; Cost Containment in Health Care System; Management of Health Care and Hospital Care; Environment Conservation; Sociology, Health Law, Social Insurance, Low Costing and Pricing of Health Care and Hospitals; Logistics Emergency Management, Human Relations, Human Resource Technology; Cooperation and Fusion of Health Care and Hospital Care; Technical Management and so on.
Each hospital manager of tomorrow needs continuous work related education, with sufficient qualification and expertise. Manager with thorough knowledge of medicine, nursing, general and medical techniques, i.e. interdisciplinary qualified manager will be the winner. Hospital administration as a specialty has therefore, established its own position with the established body of knowledge and job specific skill in the modern scientific society.
With the growth of corporate style of health care system and services there is a significantly expanded market and demand for health services managers, administrators and executors. As per James N. Heuerman, Vice President of an executive placement firm in San Francisco, the real action for health managers in 90's will be in Outpatient Services, Insurance Firms, Consulting Firms and 6Association and ambulatory care facilities, etc. Similarly, Michael D. Cover, Managing partner of an international executive search firm in Chicago expects 500–1000 percent increase in opportunities in non-traditional setting by the year 2000 along with a contraction in management jobs at traditional acute care hospitals because of sizing down and consolidations. Accordingly hospital managers of tomorrow will have to be trained to visualize the future possibilities and to act accordingly.
The salaries of top health managers in the developed country are competitive with those of industrial and financial executives and there is growing need for people with specialities in areas such as finance, marketing, operations, quality assurance and research.
The above is equally true in our country also, although in India and other developing countries, the situation is yet to establish such scope in a firm footing but nevertheless, it has tremendous scope if hospital managers are trained according to the needs of the day. The following chapters will deal with few basics for the operational efficiency of a hospital and are described as procedural guidelines.