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Abstract: Healthcare is a vital service that daily touches the lives of millions of Indians at significant and vulnerable times; birth, illness and death. In the recent decades, technology, pharmaceuticals and know-how have substantially improved how care is delivered and the prospects for recovery. This paper aims at discussing the healthcare systems in India and role of the healthcare systems. The proper role of competition in healthcare markets has been debated. This paper addresses two basic questions. First, what are the current trends of healthcare delivery, and how can it be enhanced to increase consumer welfare? Second what are the drivers for healthcare innovation, how Public Private Partnership plays an important role in healthcare delivery. Key Words: Healthcare Delivery, Quality improvement, Public health, health technology JEL Classification: I18, O31 Introduction: World Health Organization (WHO) defined Health is a state of complete physical, mental, and social well being and not merely the absence of disease or infirmity. Health Services is a system of institutions, people, technologies, and resources designed to improve the health status of a population. Also the services provided to the population, e.g. curative, preventive, promotive, etc. A healthcaresystem comprises all the organizations, institutions and resources that are devoted to producing health actions and outcomes. Health systems are constituted, on the one hand, by a system of care with the aim is to correct health problems, prevent their appearance and conceal their consequences. On the other hand, they are formed by a system whose goal it is to promote the health of populations.

The quality of healthcare services may mean different things to different people. Administrators may focus on the structures, such as the availability of operating rooms or laboratory services. Clinicians may focus on the process, such as the technical competence of the practitioners. Patients may focus on different types of processes like the personal relationships and their personal satisfaction. External reviewers may focus on the outcome lives saved or diabilities prevented. The National Committee for Quality Assurance (NCQA) has developed a widely recognized framework to assist with the challenge. The following table outlines the framework. Characteristic Access and Service Qualifies providers Meaning Access to needed care and good customer service Personnel licensed and trained and patients satisfied with services Quality of services that help people maintain good health and avoid illness. Quality of services that help people recover from illness Quality of services that help people manage chronic illness How measured? Patients satisfaction surveys, Patient grievances and followup, interviews with staff. Presence of system for checking credentials Patient satisfaction surveys Review of independentlyverified clinical records Review of responses from patients Review of independentlyverified clinical records Interview with staff Review of independentlyverified clinical records Interview with staff

Staying healthy

Getting better Living with illness

Source: Data from NCQA health plan report care. Available at: http://www.ncpa.org/

Patients/clients and the general public often complain about the poor quality of care about health facilities. We often hear on the radio, television and even in the community about the poor quality of care that patients have received from us. We ourselves experience this poor quality in our health facilities when we are sick. Although we have few resources and may be short of staff, we can do something about the poor quality of healthcare. Indian Government has classified the Indian health infrastructure majorly into two categories 1) Public Healthcare Providers 2) Private Healthcare Providers.

Primary Health Care is a vital strategy that remains the backbone of health service delivery. India was one of the first countries to recognize the merits of Primary Health Care Approach (PHC). Community Development Program was launched in 1952 for the all-round development of rural areas, where 80% of the population lived. Community Development was defined as a process designed to create conditions of economic and social progress for the whole community with its active participation and the fullest possible reliance upon the communitys initiative. Ideally the presence of public health care should take care of both the ability to pay and ability to process information on the quality of health care. But it so happens that especially for those residing in the smaller and far off villages, many public services are out of reach geographically and often such consumers are left with their needs unmet. The private sector cannot emerge in such areas because of lack of adequate scales. In other words, more important than the price is the issue of geographical accessibility for many rural residents. Lack of physical infrastructure and staff both contribute to this problem of access. The private sector is filling the unmet need to an extent and this role is rapidly expanding. Today private sector healthcare provision in rural areas is greater than that by the public sector. The private sector is not only filling the gaps left by the public sector but is also emerging as the key player in terms of service provision. While the Indian Healthcare sector is on the edge for growth in the next decade, it is still weighed down by various issues and challenges: 1. Dual Disease Burden: Urban India is now on the threshold of becoming the disease capital of the world and facing an increased incidence of Lifestyle related diseases such as cardiovascular diseases, diabetes, cancer, COPD etc. At the same time, the Urban Poor and Rural India are struggling with Communicable Diseases such as tuberculosis, typhoid, dysentery etc. Rural India is also seeing a higher occurrence of Non-Communicable Life-style related diseases. This represents a serious challenge that the Indian Healthcare system would need to address 2. Lack of Infrastructure and Manpower: Accessibility to healthcare services is extremely limited to many rural areas of the country. In addition, existing healthcare infrastructure is unplanned and is irregularly distributed. Further, there is a severe lack of trained doctors and nurses to service the needs of the large Indian populous.

Review of Literature: Many researchers had done research on Service Quality in health care, and proposed different models theories. Some these were reviewed to understand Service quality dimensions and useful for measuring service quality in healthcare delivery. Emin Babakus and W. Glynn Mangold (1992) conducted a study to evaluate SERVQUAL instrument, and results indicate that the scales can be successfully used to assess the magnitude of the gap between patient perceptions and expectations. SERVQUAL, a standard instrument for measuring functional service quality, is reliable and valid in the hospital environment and in a variety of other service industries. SERVQUAL also provides hospital administrators with a tool for the measurement of functional quality in their own organizations. Rob Baltussen and Yozoume Ye (2006) extended the study using the SERVQUAL tool developed by Emin Babkus and W.Glynn. According the authors both users and non-users were favorable about health personnel practices and conduct, and about healthcare delivery. They were less favorable about adequacy of resources and services, and financial and physical accessibility of care. Both groups were very negative regarding the availability of drugs. The study in Burkina Faso, states that financial accessibility is a key determinant of patient initiation of uses of modern health services. And supplementary findings show that patient retention merely depends in people perception of other dimensions of quality. J. K. Sharma and Ritu Narang (2011) used the questionnaire tool developed by Rob Baltussen and Yozoume Ye (2006). Study found that the quality of primary healthcare services in rural areas of Uttar Pradesh, India, some interesting differences in user perception regarding service quality components that impacted their intention to repeat visit and how they varied between different healthcare centers and according to the demographic status of the patients. The study found that with improved income and education, the expectations of the respondents also increased. And it was surprising to observe that illiterates and those with less education did not consider financial and physical access to the centers important and were willing to travel great distances for the treatment.

Tomas Pantoja, Marcela Beltran and Gladys Moreno (2009) conducted a questionnaire validation study of patients perspective in Chilean primary care. They used a combination of text words and MeSh terms in PubMed related with primary care/general practice, patients perspective/satisfaction and instrument/questionnaire and prepared a Health Center Assessment Questionnaire (Cuestionario de Evaluacion de su Centro de Salud, CECS). The instrument includes several aspects that have been considered key in the assessment of patients satisfaction in different countries, such as infrastructure, continuity, communication with different health professionals, satisfaction and the way in which the center deals with the patients health issues. The results suggest that the CECS is valid and reliable. Hardeep Chahal (2008) conducted a study to find the relationship between patient loyalty and service quality. The patients in general develop loyalty towards providers based upon the significant interpersonal experiences they have with the doctors and nurses, and about the operational quality of the hospital. The patient loyalty measure UPAS, UPAD and RPO was asses by using eight significant predictors- overall satisfaction with the physicians and nurses, overall physician and nurses quality, overall cleanliness, overall administration, atmospheric environment and technical services. The results state that patients experiences have an impact on overall satisfaction, service quality and intentions to use the unit again and recommend it to others. And healthcare services need to take a fresh competitive look at their objectives and incorporate patient relationship management philosophies to improve their image, increase patient and employee satisfaction and loyalty as an ultimate step. Theories: Innovation in healthcare delivery systems (Vincent K.Omachonu, Norman G.Einspruch, 2010) a conceptual framework helps in understanding the dimensions of healthcare innovation, the process of healthcare innovation. Innovation in healthcare are related to product, process or structure (Varkey, et al, 2008). Healthcare innovations can be defined as the introduction of a new concept, idea, service, process, or product aimed at improving treatment, diagnosis, education, outreach, prevention and research, and with the long term goals of improving quality, safety, outcomes, efficiency and costs. Figure 1 shows purpose of the healthcare organization i.e., treatment, diagnosis, prevention, education, research and outreach.

Healthcare Innovation






Diagnosis The Patient How the patient is heard Prevention Education How the Patients needs are met Research Outreach

Figure 1: A Conceptual Framework for Innovation in Healthcare Source: Vincent K.Omachonu, Norman G.Einspruch (2010). Innovation in Healthcare Delivery Systems: A Conceptual Framework, The Innovation Journal: The Public Sector Innovation Journal, Volume 15(1), 2010, Article 2. While serving theses purposes healthcare organizations should effectively manage the quality they provide, cost effective, safety, efficiency and outcomes. The core items of healthcare innovation are the needs of patients, the healthcare practitioners and providers. Three main areas where the healthcare innovation has to focus are a) how the patient is seen, b) how the patient is heard, and c) how the patients needs are met. The Process of Healthcare Innovation: Figure 2 illustrates the process of healthcare innovation. And a managed care company may have confidence upon feedback from patients, physicians and staff, and both groups may have confidence on information regarding competitors in order to commence the search for improvement. In some cases, the limitations in the resources available to the healthcare organizations force them to partner with a healthcare innovation company to create a product that meets their needs.

Information Technology

Healthcare Practitioners and Providers

How the patient is seen


Government Agencies

Physicians/ Healthcare Professionals

Research & Development


Consumer Needs

Innovation Companies respond to Needs

Develop and Market New Innovation

Consumer Advocacy Groups

Healthcare Organizations

Internal Growth Innovation

Develop & Adopt

Figure 2: The Process of Healthcare Innovation Source: Vincent K.Omachonu, Norman G.Einspruch (2010). Innovation in Healthcare Delivery Systems: A Conceptual Framework, The Innovation Journal: The Public Sector Innovation Journal, Volume 15(1), 2010, Article 2. First, it creates a service that the market needs. Then it improves the service to meet what the market wants and demands. This is usually the stage where most services companies assume they have reached the goal. But some rare companies move beyond stage two, they innovate and devise services that would never even occur to a customer to ask for. They create the possible service. This kind of service cannot be created by asking the question what do my customers want? But rather what would they love? This underscores the idea that services innovation is not always driven by customer input. In order to obtain answers to the question what would they love? Healthcare organizations can examine the interactions between services and technology. Stage III innovation can be supported by applying a new technology to new service (quadrant 1), new technology to an existing service (quadrant 2), existing technology to existing service (quadrant 3), and existing technology to a new service (quadrant 4).

Source: Vincent K.Omachonu, Norman G.Einspruch (2010). Innovation in Healthcare Delivery Systems: A Conceptual Framework, The Innovation Journal: The Public Sector Innovation Journal, Volume 15(1), 2010, Article 2. The Dimensions of Innovation in Healthcare: There are two principal dimensions of healthcare innovation environmental and operational dimensions. These dimensions motivate or affect the introduction of innovation in healthcare organizations. The operational dimension includes the improvement of clinical outcomes, efficiency, effectiveness, aging population, nursing shortage, patient satisfaction, profitability, patient safety, improved quality and cost containment. The environmental dimension includes physician acceptance, organizational culture, regulatory acceptance, and partnerships and collaborations. Figure 4 below shows the factors. The dimensions of healthcare innovation can be divided into two bands the outer band which represents the environmental dimensions and the inner band which represents the operational dimensions. The Environmental Dimensions (ED) includes organizational leadership, organizational culture, regulatory acceptance, physician acceptance, complexity of innovation, and partnerships and collaboration. Similarly, the Operational Dimensions (OD) of healthcare

innovation include patient satisfaction, profitability, effectiveness, efficiency, patient safety, aging population, productivity, cost containment, labor shortage, clinical outcomes, and quality.

Figure 4: Environmental and Operational Dimensions of Healthcare Innovation Source: Vincent K.Omachonu, Norman G.Einspruch (2010). Innovation in Healthcare Delivery Systems: A Conceptual Framework, The Innovation Journal: The Public Sector Innovation Journal, Volume 15(1), 2010, Article 2. Discussion: Healthcare quality varies from country to country. For example, some health plans, doctors, hospitals etc., will play a major role in determining the healthcare quality. The institutions play a major role in delivering care. Hospitals, nursing homes, community health centers, physician practices and public health departments all are complex institutions that have evolved over the past century to meet various needs. The role of professionals in running the system is very important in delivering quality care. Many different types of professionals make the system

work, and each type has distinct roles. Physicians, nurses, administrators, researchers, technicians, of many types, and business leaders focused on technology and pharmaceuticals all play essential roles in health care delivery and healthcare innovation. Developments in medical technology, electronic communication and new drugs had increase changes in service delivery. New knowledge should be acquired, updated, managed and applied accordingly, in order to deliver the most appropriate care for patients based on the current best available evidence. Standardized medical technologies require health professionals, as knowledge workers, to have updated knowledge to apply these technologies for the benefit of the patients. Research and Development department play a vital role in innovation of new technology. In todays world private sector is more involved in innovation of new techniques and tools for delivering healthcare. Public sector and Private sector has engaged in delivering the healthcare to the public and healthcare innovation. The future of innovation in healthcare can be greatly improved through the delivery of high quality healthcare experiences which would complement any new technological advances. The private sector has evolved a multi-pronged approach to increase accessibility and penetration. It has tackled the issue of Lifestyle related diseases with the development of highend tertiary care facilities. Also new delivery models such as Day-care centers, single specialty hospitals, end-of-life care centers, etc. are on the horizon to service larger sections of the population and address specific needs. The Public Sector is keen to continue to encourage private investment in the healthcare sector and is now developing Public Private Partnerships i.e. PPP models to improve availability of healthcare services and provide healthcare financing. Both sectors have also undertaken initiatives to improve functional efficiencies in the form of Accreditations, Clinical research, outsourcing of non-core areas, increased penetration of healthcare insurance and third party payers.

Healthcare research is core focus within the healthcare sector. Clinical research in many specialties has led to improved disease management and patient care, reduced ALOS, better BTR (Bed Turn over Rates) making healthcare delivery more sustainable. This also significantly improves the DALY (Disease Adjusted Life Years). Research in better diagnostic care has been in both laboratory medicine moving to higher generation ELISAs, NAT (Nucleic Acid Testing), moving to molecular diagnostics, immunology and antigen testing, evolving disease markers and so on. On the radiology front too there have been substantial improvements from traditional methods to computerization, PACS (Picture Achieved Computerized System), better radiation dose control and so on. In India, many corporate hospitals and major public hospitals are actively involved in conducting clinical trials of various drugs. Private corporate hospitals such as Apollo Care, Narayana Hrudayalaya, Usha Cardiac Institute, Shankar Netralaya, Indraprastha, Breach Candy, and Bayer diagnostics as well as public hospitals such as All India Institute of Medical Sciences, Nizam Institute of Medical Sciences and many of the Medical colleges and teaching hospitals are actively involved in various stages of clinical trials. The TPAs (Third Party Administrators) have added to the changing scenario of health insurance in India. Their role is gradually changing from green field ventures to an established system. Their wide spread network with hospitals and other healthcare providers have certainly strengthened the health insurance structure in India. To bring in uniformity and smooth functioning of the process, the IRDA (Insurance regulatory and development authority) has directed the TPAs to formulate standard guidelines and formats for better communication and transparency in the system. Conclusion: The Indian healthcare sector can be viewed as a glass half empty or a glass half full. The challenges the sector faces are substantial, from the need to improve physical infrastructure to the necessity of providing health insurance and ensuring the availability of trained medical personnel. But the opportunities are equally compelling, from developing new infrastructure and providing medical equipment to delivering telemedicine solutions and conducting cost-effective

clinical trials. For companies that view the Indian healthcare sector as a glass half full, the potential is enormous. In the last decade, private participation in the healthcare sector has risen significantly on the back of increased interest by investors and rising Private Equity and Mergers and Acquisitions (M&A) activity. Further, the sector has evolved through increased investment in R&D and in the introduction of specialized delivery models. Healthcare is at an influx of paradigm shifts in terms of changing disease patterns, increasing dual disease burden for both rural and urban India. On the supply side there has been uneven distribution of healthcare infrastructure and resources posing various challenges to the sector. A multi-pronged approach from key stake holders is necessary to address the issue. Both the public and private sector need to work in tandem to make healthcare available, accessible and affordable. India would need various solutions towards this end. References: Business of Healthcare Innovation by Lawton Robert Burung. Introduction to Health Services 7th Edition by Stephen J Williams, Paul R Torrens Managing Sustainable innovation the driver for global growth by Ian E.Maxwell Public Health101 Healthy people- Healthy population by Richard Riegelmen xBerwick, D.M. 2003. Disseminating Innovations in Health Care, JAMA. 289: 1969-1975. Emin Babakus and W. Glynn Mangold. Adapting the SERVQUAL scale to Hospital Services: An empirical investigation, Health Services Research, January 17, 1991. Hardeep Chahal. Predicting patient loyalty and service quality relationship: a case study of civil hospital, Ahmedabad, India, Vision-the journal of Business perspective, Vol 12, No 4, OctoberDecember 2008. J K Sharma and Ritu Narang. Quality of Healthcare Services in Rural India: The User Perspective, Vikalpa, Vol 36, No 1, January-March 2011.

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