ISBInsight: The key idea with the Max Institute of Healthcare Management (MIHM) is to bring private sector thinking to optimise public sector practice. How does MIHM’s work help realise this vision?
Sarang Deo: A couple of years ago when we started strategising about where the Indian School of Business (ISB) could add value in the healthcare space, given that we are not a medical school or a public health school. One of the topics that we zeroed in on was the following: what are the basic management principles that private sector entities use to improve their performance? And a corollary was: how can these be applied in the public health space to further public health outcomes?
A good example can be the Accredited Social Health Activists or ’ASHA’ workers who work for incentives rather than salaries. Employees in the private sector also work for incentives. However, ASHA workers are not trained to maximise the incentives that they make. We are treating them as entrepreneurs, but we are not training them to be entrepreneurs. We are calling them social activists. There is a mismatch.
But if I take that lens of incentives and then say: can I train ASHA workers to better utilise their incentives, better structure their work, so that not only do they make more incentives, but it also improves health outcomes? A lot of the lessons that we may have learnt from the pharmaceutical and medical contexts could possibly be applied. All that we are looking for is a task list at the beginning of the day that is centrally designed, which is followed with dashboards based on how productive each ASHA worker is, every day and every week. So, that’s an example of what I mean when I talk about using private sector management thinking and applying it to a very different context of fundamentally improving public health outcomes. This can happen in the public space, as I described, but increasingly also at the interface of the public and private.
With the Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme, the Indian government has now come out and said that it wants to move from being a provider to a dominant payer. Now you have to be careful about how you are designing contracts between this payer and the provider. One part of that contract is the rate or the price that is reimbursed by the government to the private players for different procedures. We know a lot from the private sector about how to create markets and market mechanisms. Is auctioning the right way or is empanelment followed by the lowest bidder the right way? Again, because healthcare is a unique market, there are a whole host of things which need to be borrowed from the private to the public sector.
Copying and pasting from other private sectors into healthcare or borrowing from other healthcare markets, say the United States (US) or Europe, may not be relevant or possible, because the Indian healthcare market is structured very differently. The level of fragmentation that exists in the Indian provider space makes it difficult to monitor performance say, or mechanisms for reimbursement.
Let me give you an example of this fragmentation, from our engagement with the tuberculosis (TB) project in India. The National TB programme has been very proactive. It has set ambitious goals and achieved a fair bit. Yet recent studies have shown that more than half of TB patients in India are treated in the private sector. So, the government cannot be passive and say that they will provide good quality care when patients come. The government needs to go out where the patients are. It needs to check whether the private providers are equipped to give good quality diagnoses and treatment. And if they are not, the government needs to ask what combination of monetary and non-monetary engagement with these providers could improve their quality of diagnosis and treatment?
The TB patients in India are not going to the Max or Apollo hospital chains of the world. They are going as a first point of contact to the neighbourhood doctor, who may be MBBS, who may be an Ayush provider or maybe an informal provider. So now you have a management challenge. How does a government entity – the National TB Programme – engage with thousands of fragmented providers in a particular city, and improve their diagnostic practices? How it does record data on how many patients a day initiated treatment and how many of those completed treatment? There is scope for management innovation where you bring in an intermediary agency and then say the government will contract with the intermediate agency. The intermediary agency will essentially roll out an army of field officers or sales representatives. That is a series of studies that we have been conducting for the past four to five years based on pilots in two or three cities to examine how these intermediary agencies perform. What is the cost of this intermediary agency per TB case diagnosed and treated? How can they lower their cost by optimising? Which doctors do they engage where? How do they identify the informal network of doctors that exists? I should ideally tailor my engagement strategies based on the networks that already exist. And that then leads to data collection on the ground, working with policymakers, working with funders and complementing it with our strong research skills.
A long-standing dilemma is the huge conflict between public services and the profit orientation of the private sector. And in the example of the ASHA workers, there is some tension between the monetary incentives and the intrinsic motivation that the ASHA worker might bring to their work. So how do you see these tensions playing out at all levels from the ASHA worker to the broader role of government?
With ASHA workers, there is definitely a question about intrinsic versus extrinsic motivation. We are just beginning an exploratory study in Bihar to look at what motivates ASHA workers and what role incentives can play. But even before we start this study, when we went to the field in the context of other studies around vaccination and immunisation, we found that the ASHA workers had not always come into this sector due to some intrinsic motivation. Second, the intrinsic motivation did not necessarily relate to health. Other aspects of their intrinsic motivation were their status in society, self-image, etc.
So, the question arises: how can we be cognisant of these motivations, and design incentives that do not crowd out these intrinsic motivations but augment them? This is also a long-standing theoretical concern and question in the economics literature.
A very different example but very similar concept can be found in the many non-profit charitable hospitals in India. The Arvind Eye Hospital, the LV Prasad Eye hospital or the Tata Memorial Cancer Centre work at least partly on a principle of cross-subsidisation among patients through price discrimination. Now, in many of these cases, the actual delivery of care is through a common system that caters to both paying and non-paying patients. Or at least some aspects of the care delivery system are common because of their ethical principles. At least the doctor is common, and a lot of front technicians are common. Now why would some people want to pay more if they are being seen by the same doctors, being given the same treatment and being taken care of by the same nurses and technicians? At LV Prasad, they have created layers or statuses of ‘Sightsaver’, ‘Supporter’, etc. They say that we are going to give you faster care if you enrol as one of those. Even there they have to be cognisant of the fact that some people may want to be supporters or Sightsavers because of an intrinsic motivation that they are helping someone else, versus an extrinsic motivation that their waiting time would be low. If you are not cognisant of this, some of these schemes or approaches can backfire.
Let me go back to another eternal issue in the healthcare sector that economists worry about a lot– the question of information. The healthcare provider is invariably better informed than the patient. What kind of challenges and possible solutions do you see coming up in addressing this issue?
Let us look at the Indian context first. With India’s fragmented provider base come fragmented information systems, which make standardisation of information and data difficult. Fragmentation might not lead to duplication and over-provision of services, but it definitely creates an obstacle in rationalisation of services.
The government is talking about national health stack. There is a position paper that has come out which lays out what the standards should be or what the various layers of the stack are to help promote exchange of health information. I do think, as of now, that those efforts are running in parallel with the efforts of schemes such as the PMJAY. One would hope that, eventually, there will be congruence, in the sense that the payments would be based on the data that gets collected in a unified fashion.
For the modality of payment, hopefully we move from a volume-based payment to a value-based payment where that value is actually measured through the data systems and national health sites that you are talking about. A good example of that value may be outcomes so that payment is as per the hospital’s re-admission rate or the hospital acquired infection rate.
That has to be juxtaposed with the phenomenon of increasing mistrust between providers and patients in India. That mistrust is happening because of the mode of payment to most doctors and hospitals, which is volume-based. If you combine that with information asymmetry, it is only natural for the patients to think that doctors in hospitals are inducing demand and not actually providing value.
On top of that, the uptake of evidence-based medicine is very low. In most advanced economies, the notion of patient-centric care comes in as a contrast to evidence-based care, because evidence-based care says standardised treatment, standardised medication. Then the narrative has shifted to thinking in terms of patients. In India, from my perspective, patient-centric thinking and evidence-based care can go hand-in-hand, because this can actually improve the trust which currently is just fully lacking.
We are so far away from that situation right now. The very basic information that is needed in the health sector is how many doctors and how many hospitals does India have? And that information is not very easy to get. The Clinical Establishments Act, which says that a hospital or a healthcare entity or enterprise should be registered, has been implemented in less than half of the states in India. The vision is there. But to create a pathway to that vision, there are a set of pragmatic steps that need to be taken. And the evidence is mixed.
There is an accreditation mechanism in India called the National Accreditation Hospital Board (NABH). However, the reporting of outcomes even for NABH-accredited hospitals is not mandatory by regulation. And we know in the operations management literature that accreditation is not the same as quality. Accreditation is only a certification of the processes that you have, not of the outputs and outcomes. There are different layers of information that today do not exist in the Indian healthcare scene. And we should not only jump to outcome information because so many other things need to be put in place.
With all this talk of a patient-centred approach to healthcare, is the onus on the provider or on the consumer or patient to modify their health behaviours?
The notion of patient-centricity and patient engagement is relatively new in India and it is being espoused mostly by large, tertiary-care chains of hospitals. The basic approach is to say let us understand Western practices, which typically come out of the US. For instance, the Cleveland Clinic is known for its patient-centric care. A lot of business leaders from India would go and get exposed to the Cleveland method, learn patient-centricity and then apply it locally. What we are beginning to see through our interactions with the industry is that we desperately need an Indian model of patient-centric care.
For example, if I were to design hospitals that are patient-centric, one input I need is the volume of patients that the hospital sees, which is obviously very different in India and the US. But we also need to consider the volume of care-givers. The reason Indian hospitals are crowded is not because there are many patients that visit but because every patient is accompanied by at least three family members. If I now think about designing hospitals for patient-centricity, I must take this factor into account.
Similarly, the notion that patient-centric care is about physical comforts or experiential service is a good start but eventually we have to move from there to saying: how do I make sure that the core clinical provision of diagnoses and of treatment is also patient-centric? Now again, there is a unique challenge in India. A lot of patients and their family members may not be very aware and educated. It becomes easy for the clinicians and the hospitals to say they cannot apply patient-centric treatment here because they would probably need a cadre of staff, who are not as expensive and qualified as doctors but are able to make patients aware and elicit their preferences. A slow movement is happening in that direction. I see some start-ups that have started to educate patients and their caregivers on how to participate more in their own care or healing process.
Let us come to the whole question of behaviour transformation which you are exploring through a funded project.
Let us talk about digital technologies and come back to the Clinton Foundation funded project. The threads that we have discussed so far in the Indian context are: a large fragmented base of doctors, who may not be practising evidence-based medicine, which has an impact on outcomes, and the government needing to engage with this base of providers to improve outcomes. Now, what is a cost-effective way in which I can reach out to these thousands of providers and improve their capabilities? That was the basic premise behind the Digital Intervention to Generate Insights on Behaviour Transformation (DIGIT) project, which consists of a digital platform where doctors came on board. Then that platform was used to deliver content. It was centred around TB, because that was the larger umbrella under which the project was conducted.
The Max Institute came in to evaluate the effectiveness of this model and understand the engagement patterns of these providers. We explored what kind of content they like or do not like and what leads to more engagement and interaction. Based on data analytic methods, we found four styles of doctor engagement. Some doctors like content generated by their peers, and which is visual in nature; some others like content which is created by experts, and maybe is textual in nature and several other combinations. And so that led to the insight that rather than thinking of providers as providers in Tier 1, Tier 2 or Tier 3 cities, or as specialists and generalists, we should think about their style of engagement. Then we can customise the content to improve the engagement.
Healthcare is witnessing incredible business model innovations and a lot of work around apps, particularly. Would these perhaps be accessible to a particular class of patients? Beyond the start-ups that are in the news, what do you think is the most exciting business model innovation?
What makes a lot of the exciting innovations interesting is that they might not be technology first. They might identify a particular challenge or a particular problem in the healthcare set-up in India and then say: where can I use technology and in which way?
We recently held a Healthcare Summit on the ISB Mohali campus. One of the start-ups featured there was trying to do patient education. They are trying to give material to hospitalised patients and their families so that they can take care of themselves better post-hospitalisation. They started with this premise because of their field experiences and primary observations etc. Once they figured out this issue, they said, what kind of technology can I use to address this problem? It may not be very fancy technology, it could just be an SMS-based technology, it could be an interactive voice response system (IVRS), it could be a combination of that and some simple apps where patients have to tap on to something and then enter some basic information. But I think that is secondary. What is most important in that set-up of post hospitalisation care is: first that the family members have information; second that they input the current status of the patient on a regular basis and third, that there is an escalation mechanism based on this input.
What we see so often in the healthcare set-up in India is that technology does not always remove the need for human intervention. It helps identify priority areas where human intervention is needed as an escalation. And maybe in some cases, it creates a new cadre of human resources which acts on the technology inputs.
A very similar example, going back to the TB context, is medication adherence for tuberculosis. This idea applies to other medication adherence for chronic conditions and non-communicable diseases. A classic approach is: send the patient to a Directly Observed Treatment, Short Course (DOTS) provider. The patient is supposed to take the pill in front of the DOTS provider to ensure that the adherence is 100%. Nobody ever does that in practice. So, the system breaks down very quickly and adherence is low. So, a couple of years ago, a start-up came up with this idea that at the back of the blister pack, when you open and take the pill, there will be a number, and all the patient has to do, even if they don’t have a smartphone is just to dial that number. That is the missed call which gets recorded. Based on the series of number on which that missed call is made, the algorithm recognises which patient it is, and creates a history of administration. Now, based on this pattern of adherence, I can then again unleash an army of frontline workers who prioritise high-risk patients. That frontline worker can be an ASHA worker or a private field officer, but they now have a tool by which they know which households to go to on which day so as to maximise the health impact on the population. Those are, for me, very exciting and interesting business models where technology is serving a purpose, a goal which has been identified because one understands the healthcare context very well.
If the new goal that the state sees for itself is being primarily a payer rather than a provider, how does this shift impact the patients?
When you put various streams together– government as a payer, value-based healthcare and the growing world of non-communicable diseases– you need an intervention where you can screen and diagnose patients who have these non-communicable diseases such as diabetes and hypertension before the problem manifests in terms of a stroke or a kidney failure, etc. Again traditionally, the government is not good at going out into the community, going to the informal providers where the patients go first to seek care, and so what we are beginning to see are interesting business models in that domain.
We recently conducted a study on one such start-up in Ahmedabad that does community-based screening and management of diabetes. We found that this intervention has a significant impact on health outcomes of patients and their blood sugar or blood pressure is controlled. However, an out-of-pocket expenditure model, where this start-up charges patients about Rs 800 for a monthly subscription does not work. Although patients are improving their health, they are not able to see value. And that is where we need to address market failure.
What does that mean to the government as a payer? They need to expand their offerings from paying only for tertiary care and come up with new models and products to pay for primary care or preventive care. It is challenging because the possibility of fraud, which is a major concern, anywhere where it comes to government paying, is likely to be more at the primary and community level. It is likely to be more when there is out-patient care because it is much easier to produce prescriptions and lab tests than to produce a hospitalisation. But that is where, I think, some more creativity is needed if you wanted to bring down the burden on the patients.
About the Interviewer:
Ashima Sood is Fellow at the Centre for Learning and Management Practice, ISB, and Editor, ISBInsight.