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India in Transition

Focused Health Care Factories: An Answer to India’s Patient-Rich and Resource-Poor Health Care Ecosystem

Swaminathan Subramaniam
February 17, 2020

All countries struggle to deliver affordable, high-quality health care to their citizens. If a resource-constrained nation like India has to achieve the twin goals of affordable and quality health care for all, it will require drastic re-engineering of the health care delivery model. India faces two main realities: a large population and low per capita GDP, leaving little room for the substantial investments necessary to build health care infrastructure. An acute shortage of doctors outside major metropolitan areas further compounds the problem. The rapid growth in prevalence of chronic non-communicable diseases threatens to transform a critical issue to one of apocalyptic dimensions. Successive governments have attempted to bridge the gap between supply and demand by applying band-aid fixes, for example, by opening more super-specialty hospitals. This is neither affordable when done at the required scale nor an appropriate response to the supply-demand gap in health care.

While primary healthcare has to be the backbone on which any healthcare system is built, we should not be blindsided to the needs of vast numbers of Indians awaiting hospital-based tertiary care for illnesses like heart disease and cancer. Cardiac surgeon Devi Shetty (Narayana Health) has stated that a country of India’s size requires 2.5 million heart surgeries to be performed each year. About 100,000 are performed on wealthy patients who can afford expensive private hospitals. The rest wait endlessly for their turn at overstretched government hospitals and most die before they get the care they need. A recent article in the medical journal The Lancet estimates that close to 2.4 million Indians die each year due to lack of access to healthcare or poor quality healthcare.  

Problems with the General Hospital (GH) Model of Tertiary Health Care
The classic tertiary (hospital-based) health care facility is a General Hospital (GH)—a multispecialty facility that treats everyone and handles everything, from the most complex multimodal treatments to more straightforward procedures in specialties like dentistry, ophthalmology, and ENT. A majority of patients fall into the latter category, requiring the services of a single specialty using procedures that can be standardized. A multi-purpose GH, by trying to optimize resources and processes across multiple specialties, ends up being sub-optimal for all.

The GH model brings under one roof the treatment of both complex and straightforward cases, conflating business models with incompatible metrics of output, value, and payment. This results in a needless increase in cost and impairment of quality.

The GH model is also highly capital intensive. Given the need to cater to multiple specialties, these hospitals become bloated bureaucracies. They are doctor-centric and not patient-centric in their business processes. Furthermore, high fixed costs inflate the cost of treatment. Co-locating different specialties that have different needs makes it impossible to allocate costs of staffing and space accurately. The complex organization of the GH and the inability to tightly link input costs to output value leads to undisciplined billing practices and ballooning hospital bills.

Focused Healthcare Factories
The optimization problem GHs face is similar to the optimization problem faced by the large unspecialized manufacturing organizations set up in the US in the 1960s and 1970s. Focused factories that specialize in a limited set of products were mooted as a response. In the 1990s, Harvard professor Regina Herzlinger put forward the idea of focused factories as a solution for the problems plaguing health care in the US. 

Focused Healthcare Factories (FHF) specialize in a limited set of specialties and clinical processes. The Georgia Sickle Cell Center in Atlanta is an example of an FHF that arose as a response to the poor outcomes achieved in sickle cell patients at non-specialized centers. In eight years, this one-stop-shop halved hospital admissions and cut emergency admissions by 80 percent. The Shouldice Hernia Hospital in Ontario specializes in hernia surgery. The cost of a hernia repair at Shouldice is 30 percent lower than the reimbursement rate in the US. This lower cost is achieved with better outcomes—a complication rate of 0.5 percent versus 5-10 percent outside. Similarly, the Coxa Hospital for Joint replacement in Finland has a complication rate of 0.1 percent vs. a rate of 10-12 percent at a GH performing the same procedure.  

FHF work since they permit standardization of care using an algorithmic approach to clinical processes. Embedding repeatable and controllable processes along the whole sequence of patient care, from admission to discharge, allows such facilities to deliver predictable high-quality outcomes. The standardization enables tasks to be shifted down the clinical hierarchy to junior doctors and even nurses, thus lowering costs without compromising quality. FHF also enable steeper learning curves for staff due to the high volumes. The experience of the staff and the structured learning environment creates conditions that are congenial for innovation and continuous improvement.

For FHF to impact health care in a significant way, the concept of the FHF has to be scaled up nationally. The for-profit sector may not be best suited to orchestrate this. The government must play its role and seed the creation of FHF in partnership with health care NGOs and physician cooperatives. Since this will take time, the government could, as an intermediate step, carve out embedded FHF within large government hospitals. Such units must be independently resourced and have sufficient autonomy in operation. Individual FHF can become nodes in a nationally interconnected grid. Such a grid will enable smaller and remotely-located FHF to access the knowledge footprint of the virtual network. For example, standardized care protocols can be distributed from a central node and purchasing cost efficiencies can be maximized by consolidating the requirements of the network when negotiating with vendors. The FHF model has already taken root in two specialties: eye care and obstetrics. The National Cancer Grid is an example of how such a model can be deployed to serve the vast numbers of cancer patients across the country. The task now is to repurpose this experience in other specialties.

India faces unique challenges in delivering high quality, affordable health care to the masses. The FHF leverages India’s enormous patient numbers to create a model that delivers scalable, high-quality care at lower cost. If India can marry its skills in executing large-scale mission-oriented projects with its information technology capabilities, there is no reason why it cannot be a global epicenter for high-quality health care. Such capabilities will also be attractive to patients from other countries that do not have the critical mass required to build similar large-scale, high-volume care networks.

Swaminathan Subramaniam has worked in the biopharmaceutical industry for over two decades and is now an independent health care industry consultant. His doctoral studies were in the Department of Pharmacology, University of Pennsylvania School of Medicine. This article is adapted from his book Healing Hands (December 2019).

India in Transition (IiT) is published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania. All viewpoints, positions, and conclusions expressed in IiT are solely those of the author(s) and not specifically those of CASI.

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