Counting the Positives in Indian Healthcare

Predictable and stable policies that improve transparency for all stakeholders will result in sustainable growth for the healthcare sector, Aster India CEO tells Healthcare Executive.

One of India's most popular healthcare leaders describes himself as a "true-blue Indian". Dr.Harish Pillai, Chief Executive Officer – Aster India, was born in Kolkata, grew up in Dubai and had his education in multiple cities like Dubai, Trivandrum, Mangalore, Hyderabad and Frankfurt. He has worked in metros like Bengaluru, Kochi, Hyderabad, Dubai and Cairo. He believes that he is a global citizen, who is amongst a privileged few being paid for pursuing a hobby. "I live, breathe and sleep healthcare which is the core of my existence," Dr.Pillai explains.

Seen purely from the lens of scale, Indian healthcare has come a long way in the last few decades, from traditional medicine to modern hospitals set up by the colonial rules to treat army personnel; to dispensaries and private hospitals aspiring to meet the ever-increasing health requirements of the burgeoning middle class. Several healthcare brands today are still trying to solve the problem of offering quality healthcare services at affordable rates.

Healthcare Business is Tough

However, Dr.Pillai thinks there are numerous impediments for the industry in the new decade. "First, there are challenges like the inability to predict regulatory changes over the lifecycle of a project. There is also an adverse cost of regulations, like the roll-out of minimum wages in healthcare. Secondly, there are a lot of expectations from the sector. Healthcare is perceived to be a commercial service with resultant high expectations of wholly positive results and outcomes. There are a host of other problems also like growing violence against healthcare workers and establishments, vigilantism targeted against private healthcare, hostile media, especially social media as well as a rise in litigations," he explains.

Dr.Pillai also adds that the widening gaps in the healthcare delivery system are another significant challenge. "Accessibility is very poor in rural areas. Despite the roll-out of Ayushman Bharat, tertiary and quaternary care services remain unaffordable. There is a lack of rigorous implementation of assured quality of care."

It also doesn't help that there is a workforce shortage in healthcare." Availability of skilled human resources- Specialist consultants, nurses, paramedical staff; continuing brain drain to developed countries, increase in the cost of labour due to the demand-supply gap are realities of the Indian healthcare sector," he notes.

Money Matters

If that's not enough to deal with, there are financial hurdles too. "There are several roadblocks like cost of capital & IRR for new projects, return on capital employed, growing top-line consistently year after year for mature hospitals, management of working capital issues due to growing burden of receivables, cost of bank overdrafts and adverse Debt to EBITDA ratio, shrinking margins due to macro-environmental factors especially regulatory ones, ability to be at minimal debt level and generate free cash flows," explains Dr.Pillai.

The Optimist

Dr.Pillai joined the Aster DM Healthcare group as the CEO of Aster Medcity, Kochi in 2013 and is an optimist. He is happy to talk about what India must do to achieve its healthcare goals by 2030. "As initiated by the current government, we need to have a strategic road map to increase our budgetary allocations to GDP year after year to touch 5%. Based on the annual ranking of States for the healthcare delivery system; we need to target the laggard States to push up performance with special focus to all the aspirational districts across India. There should be an increased focus on improving nutrition for pregnant women and school-going children through targeted incentives. We should also sustain the focus on changing cultural habits to declare India as an open defecation free nation, by continuing the construction of toilets for each family; increase the provision of cooking gas for the rural and urban poor; provision of clean and potable water for every citizen. India should also have a large-scale campaign on a national mission mode to change causative factors for lifestyle diseases, whether it's Hypertension or Type 2 Diabetes. There should also be an emphasis on prevention and wellness-related activities and should to eliminate the scourge of tuberculosis and build the capacity to meet the newly emerging viral epidemics," he says.

National Surveys show that many Indians still experience healthcare-related impoverishment. Dr.Pillai notes that one critical answer is a combination of publicly funded insurance schemes such as Ayushman Bharat and an aggressive roll-out of low-cost private insurance products for the masses. "This is a difficult current issue due to cultural legacies that are based on the principle of fatalism that makes one believe in possessing eternal youth and health!” he adds.

Take a Leaf from Other Sectors

Before joining Aster, Dr.Harish Pillai was the CEO of Egypt's largest private tertiary care hospital - As-Salam International Hospital, Cairo. Does he think that technology can help Indian healthcare to overcome the hurdles? "We can borrow a leaf from the Indian Telecom Industry which had leapt ahead in technology from the earlier landlines to 3G/4G mobile networks, unlike some of the developed nations. We need to leverage the human capital and R&D abilities of the Indian IT sector and the vibrant start-up ecosystem to produce intelligent/smart HIS as well as EMR that is cloud-based and can reduce the data burden on care providers as well as accelerate accurate decision making on treatment pathways. We should also roll out of GPS/NAVIC enabled services for effective trauma care. Leveraging the power of wearables/teleconsultation to promote home-based care can reduce the burden of hospitals," he says.

The Pragmatist

Even as hospitals are trying to solve various variables, there are few solutions like AI. What's his take on AI?

"From the point of Artificial Intelligence, we are moving ahead with the concept of augmented intelligence in healthcare which will complement the stressed-out healthcare system by accelerating prognostication and diagnosis. It will cover up the deficit in skill gaps while improving accessibility & affordability. The big help for the Indian healthcare sector would be through standardization of care pathways and algorithms, reducing variability and consequently put a cap on cost inflation. The last and perhaps the most important aspect of Artificial Intelligence is to shift the current information asymmetry between care providers and consumers," adds Dr.Pillai.

While the general hope in healthcare is that there is room for growth, are there any trends that fresh entrepreneurs should look out for? "One needs to have a long-term perspective on emerging disease trends due to changes in demographics such as ageing of the population, the growing burden of lifestyle diseases, new age viral epidemics. There is a growing trend amongst millennials to access healthcare mostly through digital portals. Further, there is a growing demand for personalized and precision medicine. The overwhelming trend is to move away from sickness to wellness," he explains.

That is the hypothesis. But many entrepreneurs still find it hard to find their feet in the industry. What should they do? "The priority has to be based on an epidemiological survey of the catchment area to understand disease pattern & case-mix and have a healthy blend of digital health, home care, ambulatory care, inpatient care, rehabilitation and wellness in addition to the current programme mix," Dr.Pillai explains.

He also notes that good policies will buy time for entrepreneurs. "Predictable and stable policies that improve transparency for all stakeholders and based on 360-degree feedback from providers, regulators, consumers, payers and manufacturers will result in the sustainable growth of the sector," Dr.Pillai concludes.