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We want to dispel the myth that corporate hospitals are focused on profits: Ajay Bakshi

Q&A with Max Hospital managing director and chief executive officer

Sushmi Dey New Delhi
A neurosurgeon and stem cell scientist-turned-global management consultant at McKinsey, Ajay Bakshi, intends to apply management principles to institutionalise clinical governance. During an interview with Sushmi Dey, the 44-year-old Max Hospital managing director and chief executive officer, who these days is perfecting violin notes, brushes aside allegations that corporate culture in hospitals only means making profit. Edited excerpts:
 
What is the current growth strategy at Max Hospital?

We launched four new hospitals 18 months ago — in Shalimar Bagh in Delhi and one each in Mohali, Bathinda and Dehradun. All four are doing very well and are ramping up faster than what we had expected. For instance, in 16 months, the Mohali hospital, which has a capacity of 200 beds, already has a 100-plus patient occupancy, Similarly, Shalimar Bagh has upwards of 80-90 patients every night. These are all wave-two hospitals. Our wave-one hospitals (those opened till 2011) — the two largest among them at Saket (500 beds) and Patparganj (400 beds) — are now also running at peak capacity, with occupancy being upwards of 80% every night.
 

All this means doing well financially. We had a 40% increase in revenue during financial year 2012-13, as compared to the previous year and a 500%-plus increase in profitability.

What is your outlook for the current financial year, given that you now have wave-two hospitals picking up in terms of occupancy?

We are projecting similar yearly growth rates in revenues of 30%, much faster than the industry’s 15-16%.

Lately, there has been huge attrition of doctors at Max Hospital. What is the current status? Have you recruited more doctors?

We hired 976 doctors in the last financial year (2012-13). It is a big accomplishment because it has taken a lot of effort, as well as change of culture. Admittedly, a lot of these doctors are in new hospitals, which is why these kind of occupancies. Now, for instance, we have very strong cardiac and orthopaedic programmes at Mohali, strong cardiac and neuro-programmes at Shalimar Bagh, etc.

What is the change in culture now?

The main theme is we have made our hospitals more doctor-centric. We have innovated with a new system called Hospital Medical Advisory Council. There are eight to 10 senior doctors from each hospital who are appointed to this council, they meet every two weeks and discuss issues related to doctors. For instance, now that patients have multiple diseases, doctors would discuss how to take care of patients through cross-specialities. Managers typically are not best able to sort such things.

Similarly, they discuss quality, conferences, OT (operation theatre) shifting. In the past, these decisions were taken by general managers. Now, we have decentralised a lot of these to doctors themselves. So, it makes them feel empowered. We have given them guidelines but within that, they solve most of their problems themselves. This creates a positive environment for doctors because they are professionals and do not encourage any interference from managers.

So, to summarise, the two fundamental shifts include more power to the doctor and less focus on revenue and profit. We are telling them you do not worry about the revenue, just do a good job and be ethical.

Was it not like this earlier?

It was a bit less systematic earlier. Now, there is institutionalisation of the idea that doctors should be self-governed and focused on ethical practice.

It was always Analjit Singh’s passion from the start of Max Healthcare that we must be ethical and do the right thing but it was left to the system to decide how to do it. What we are doing is professionalise and institutionalise the whole thing.

We tell our doctors we need three ‘Cs’ from you — competence, communication and collaboration. We believe if you do this, then you will automatically be successful and generate good revenues.

What other changes have you brought to the hospital?

We want to dispel the myth that corporate hospitals are focused on profits. We believe good revenue and profits are the result of doing the right thing rather than somehow cutting corners and getting that extra test done.

This is the common perception that private hospitals ask doctors to do unnecessary tests, procedures, etc. Therefore, I have constituted a Family Test. Every doctor, nurse, manager should do something they would be comfortable doing with their own mother, father, sister, daughter. If you are not comfortable doing that, then do not do it (to others). This creates a very positive atmosphere for doctors who do not understand budgets.

A lot of clinicians, who left Max Hospital after you took charge in late 2011, complained of an emerging corporate culture in the institution. How would you react to that?

What is a corporate culture? If a corporate culture means that no matter what, you have to make revenue — then it is bad. That is the default interpretation of corporate culture in the medical fraternity today and that is what I am protesting against. I say no, the corporate culture is to bring in these technologies and ethics to do good work. It is a tool you can either use in a good or a bad way. To institutionalise clinical governance is also corporate culture because you cannot have that in a nursing home.

Do you think this is the way forward for the healthcare sector in India?

Not only in India, but the whole world. Process improvements have happened in hotels, airlines and in many other. Only healthcare has lagged because people are scared to apply management principles to it. I am, in that sense a very unusual person, who has been a neuro surgeon and a McKinsey consultant. So, I understand the nuances of tertiary care as well as the need or the science of management which can systematise it. I am now trying to bring in that scientific management principles to medicines to reduce variability and errors and to improve quality.

Are your doctors comfortable with such changes?

Numbers speak for themselves. More than 900 have come voluntarily and joined Max.

What are the new technologies recently adopted by Max Hospital?

We have invested in electronic health records (EHR). We are the only hospital which has a network-wide EHR system in India. This is now yielding results in terms of improving quality of care for patients. It is having all patient records, including prescriptions, on the computer system. We have invested upwards of ~30-40 crore in building this across the network. It also allows us to review things like how have we done in the last 100 heart attack patients, do we have 100% success, do we have complications, etc. Then we can rate and compare. So, there is a systematic way to evaluate it.

Does Max share this computerised information with other hospitals if a patient wants to go for a second opinion?

This is called a personal health record. We have a programme by which in 6-12 months we will be able to give a patient, at the time of discharge, a user name and password. The data is on a cloud and the patient can access it from wherever — at Fortis or even in the US. This is not done currently anywhere in India and I think we are ahead of others in India in digitising the entire clinical care.

Service excellence and application of management principle come with a cost. What are you doing to minimise that impact on patients?

Yes, there is a cost for everything but the magic of modern management is that an efficient system is faster, cheaper and better. So, a home grown system of managing might seem to be cheaper but if you have good technology like EHR or computerised systems, then it becomes faster, cheaper and better. I do not agree that quality is generally expensive.

Besides, India offers one of the cheapest health care systems in the world. It is thought to be expensive but if you look at any other such as hotels and entertainment, people do not mind paying there but people mind paying for a good medical consultation. There is need for a social change there.

Do we have enough infrastructure?

We are short of it ,obviously. The top five hospital chains account for less than 0.8% of all hospital beds in the country. It is a very fragmented industry, with 60,000 nursing homes. So, there is a need for investment in the sector. But the real crunch is of talent, of good doctors. We do not have enough doctors and nurses.

So, how are you meeting the challenge of getting doctors and nurses?

The cultural change at Max has helped. Doctors are willing to work with us. We have also created a robust database of doctors around the country with their specialisations and expertise. We proactively go after some doctors, who we know, are good and want to invite to work in Max. We have also started campus recruitments, which is not common in healthcare space.

What are your plans for expansion?

Right now, we are sharply focusing on the new four hospitals.

What about Max Hopitals’ plans for IPO?

It will happen when it will happen.
 

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First Published: Jul 08 2013 | 12:29 PM IST

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