Healthcare and information technology

Notes 25 Pages

Savitribai Phule Pune University

Bachelor of Business Administration

AYK

Contributed by

Alpa Yash Khare

UNIT 5
Chitra.V
Lecturer commerce and management
MESIOM Rajajinagar, Bangalore

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EVOLUTION OF HOSPITAL OR HEALTHCARE
INDUSTRY
The hospital industry is evolving int a heterogeneous, distributed and outsourced environment model. There
is a regulatory push for more interoperability, auditing and automation, leading healthcare-related
companies to modify and integrate their existing environments to interact with a variety of business partners.
Healthcare medical providers are expanding their services from the local and regional level to the national
level. To support this growth, many are utilizing 3
rd
party software products to support their business
additionally, some national healthcare countries, such as Great Britain, are taking an international approach
to standardizing data format and protocols used in the processing of patient records and healthcare visits.
Healthcare has become one of India’s largest sectors – both in terms of revenue and employment. The
industry comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism,
health insurance and medical equipment. The Indian healthcare industry is growing at a tremendous pace
due to its strengthening coverage, services and increasing expenditure by public as well private players.

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The Indian healthcare delivery system is categorized into 2 major components – public and private.
The government, i.e. public healthcare system comprises limited secondary and tertiary care
institutions in key cities and focuses on providing basic healthcare facilities in the form of primary
healthcare centers (PHCs) in rural areas. The private sector provides majority of secondary, tertiary
and quaternary care institutions with a major concentration in metros, tier I and tier II cities.
India’s primary competitive advantage lies in its large pool of well-trained medical professionals. Also,
India’s cost advantage compared to peers in Asia and Western countries is significant- cost of
surgery in India is one-tenth of that in the US or western Europe.
According to estimates, the overall Indian health care market today is US$65 billion, of which the
hospital supplies and health care equipment segment is believed to be only around US$4.5 – 5
million. Health care delivery, which includes hospitals, nursing homes and diagnostics centres, and
pharmaceuticals, constitutes 65% of the overall market.
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India requires 600000 to 700000 additional beds over the next five to six years, which potentially
throws an opportunity of more than US$ 25–30 billion. While the existing hospitals would look at
expanding their capabilities, a lot of new properties would also come up.
Overall the number of transactions in the healthcare space is going to grow as companies are
seeking growth capital. The average investment size by private equity funds in healthcare chains has
increased to US$ 20-30 million which was around US$ 5-15 million, said Mr. Abhishek P Singh,
Associate Director for Health care, PWC.
The Indian medical tourism industry is pegged at US$ 1 billion per annum, growing at around 18 per
cent and is expected to touch US$ 2 billion by 2015.
There is a significant scope for enhancing health care services considering that there spending as a
percentage of GDP is raising. Rural India, which accounts for over 70% of the population, is set to
emerge as a potential demand source. Only 3% of specialist cater to rural demand.

The hospital and diagnostic centres attracted FDI worth US$ 2793.72 million between April 2000 and
January 2015, according to data released by Department of Industrial Policy and Promotion (DIPP).

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SOME OF THE MAJOR INVESTMENTS IN INDIAN
HEALTHCARE INDUSTRY ARE AS FOLLOWS:
1. Mylan Inc has signed a deal to acquire the female healthcare businesses of Famy
Care Ltd, a specialty women’s healthcare company, for US$ 750 million in cash
and additional contingent payments of up to US$ 50 million.
2. Sanofi-Synthelabo (India) Ltd had invested Rs. 90 crore (US$ 14.47 million) in
Apollo Sagar Clinic Ltd (ASCL), a unit of its subsidiary Apollo Health and Lifestyle
Ltd.
3. Apollo Hospitals Enterprise (AHEL) plans to add another 2000 beds over the next
two financial years, at any cost of around Rs.1500 crore (US$241.24 million), as
per Mr.Prathap C Reddy, Founder and Executive Chairman, Apollo Hospitals.
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4. Temasek Holdings Pvt Ltd has acquired the entire 17.74% stake of
Punj Lloyd Ltd, in Global Health Pvt Ltd, which owns and operates the
Medanta super specialty hospital in Gurgaon, Haryana.
5. CDC, the UK’s development finance institution, has invested US$ 48
million in Narayana Hrudayalaya hospitals, a multi-speciality healthcare
provider. With this investment, Narayana Health will expand affordable
treatment in eastern, central and western India.
6. Apollo Health and Lifestyle Ltd (AHLL), wholly–owned subsidiary of
Apollo Hospitals Enterprise, has acquired Nova Speciality Hospitals at
an estimated cost of Rs.135-145 crore.
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NATURE OF HEALTHCARE SERVICE
Healthcare is conventionally regarded as an important determinant in promoting the general physical
and mental health and well-being of people around the world. Healthcare services include diagnosis,
treatment and prevention of disease, illness, injury and other physical and mental impairments in
human beings. Healthcare is delivered by practitioners in allied health, dentistry, midwifery, medicine,
nursing, optometry, pharmacy, psychology and other health professions. It refers to the work done in
providing primary care, secondary care and tertiary care as well as in public health.
The delivery of modern healthcare depends on groups of trained professionals and paraprofessionals
coming together as interdisciplinary teams. This includes professionals in medicine, psychology,
physiotherapy, nursing, dentistry, midwifery and allied health, plus many others such as public health
practitioners, community health workers and assistive personnel, who systematically provide personal
and population-based preventive, curative and rehabilitative care services.

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CONT’D
Primary healthcare involves the widest scope of healthcare, including all ages
of patients, patients of all socioeconomic and geographic origins, patients
seeking to maintain optimal health, and patients with all manner of acute and
chronic physical, mental and socio health issues, including multiple chronic
diseases. Consequently, a primary care practitioner must posses a wide
breadth of knowledge in many areas. Secondary care is the health care
services provided by medical specialists and other health professionals who
generally do not have first contact with patients, for example, cardiologists,
urologists and dermatologists.
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RISK INVOLVED IN HEALTHCARE SERVICES
1. Patient Safety Risks: Patients lives and health are put at risk when diseases are misdiagnosed,
wrong treatments are prescribed or accidents occur in the operating room. All it takes is a
moment of laxity, ignorance or distraction to cause immense harm to patients and their families.
Law suits are inevitable and reputational damage is long-lasting.
2. Fraudulent Claims Risks: Fraudulent claims be it in the form of billing services not rendered,
administering unnecessary tests and treatments, or unbundling lab services can exhaust health
benefits and drain the economy.
3. Documentation Risks: Data entry errors, while unavoidable, can often be costly and sometimes
fatal. For instance, wrongly documented medicine dosages or allergies to a particular drug could
adversely affect a patients health. Billing or calculation errors could result in overpayments or
underpayments which would invite questioning from auditors and cause a loss of credibility.
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CONT’D
4. IT Risks: Over the last few years, path-breaking developments in technology have taken healthcare to
the next level. However, the increasing use of technology has also introduced new levels of complexity and
threats such as:
Security Breaches: Hacking and other kinds of security breaches can cause confidential information to fall
into the wrong hands. This, in turn, could expose millions of patients to hazards such as illegal altering of
information, public exposure of confidential data, stolen identities and blackmail.
Malicious Attacks: The increasing sophistication of IT viruses, worms and other malicious attacks poses a
significant threat to the security, confidentially and integrity of valuable health information. If firewalls are not
strong enough, the information may not be retrievable or traceable.
Internal IT Fraud: Healthcare organizations take great pains to safeguard themselves against external
security threats. But some of the most dangerous threats lie within the organization. Insiders have broad
access to sensitive data, and know which system it lies in, where the system it is, and how it works. This
makes it easier for them to steal valuable information, and illegally use it for financial gain.
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Healthcare and information technology

Healthcare and information technology

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