Its boom time for hospital consultancy firms

Rita Dutta - Mumbai

Emphasis on professional management and entry of corporates, have propelled the growth of hospital consultancy firms. With in the last few years, around a dozen consultancy firms have mushroomed, all of which is growing by leaps and bounds. Whether it is a new hospital, sick hospital, expansion of hospitals or a particular department or facility which needs an expert’s advice, the consultancy firms have panacea for all. From architecture, turn-key services, patient management, department management, IT solutions, waste management, financial management, et al , hospital consultancies have comprehensive packages for all, from anything ranging between Rs 2 lakh to Rs 30 lakh.

Analysts say that unlike other industries, hospital being both labour and capital intensive, needs assistance of experts, who understands business as well as the technical complexities. Says Dr K C Ojha, M D, HOSPIC consultancy firm, handling 96-odd clients, “Hospital set-up has many permutation and combination which need to be customized as per the need of the community. A decent hospital requires anywhere from Rs 30 to Rs 120 crore to set up. Given the stakes, consultants are in demand.” The sudden importance accorded to external auditing is also a reason for these firms to be in demand. According to Dr Vivek Desai, MD, HOSMAC consultancy firm who started with only himself and now has 32 consultants working under him, and credited with giving consultancy from the recently commissioned Asian Heart Institute and Research Centre to the upcoming Dr Hiranandani Hospital, “Gone are the days when hospitals used to conduct audits to assess their financial position. Today there is an emphasis on having an outsider assess the management and suggest ways to improve it.” Few feel that the realisation amongst the medical community that “doctors are not good managers’ has given an impetus to the need of a hospital consultancy firm. Though these firms survive on giving consultation on various facets of hospital administration, a substantial part comes from the newer projects. Most of these firms command something between six to nine per cent of the cost of the new projects as their fees.

Handing over pathological lab of hospitals for management is also not rare. Like the pathological lab of Malar hospital is being handled by Metropolis Laboratory. Says Dr Sushil Shah, MD, Metropolis, “Because of improper management, very often reports do not arrive when the doctor needs it. So we send our men for collection of samples four times a day and send the reports back on time.”

In the rush for consultation, IT solution firms offering Hospital Management System are also prospering. Global Life Sciences and Healthcare Services(GLSHS) of Tata Consultancy Services (TCS) has grown by 50 per cent in the last three years. Says J Rajagopal, director, GLSHS, TCS, “The market is opening up very fast with increased awareness to computerise the systems.” With in the last three years TCs had served 30 clients and is trying to penetrate the international market.

Cashing in on the boom, even smaller firms with smaller projects have entered the market. These are mostly run doctors who are have their consultation business along with their practice. For instance Dr Pramod Jog, a full-time paeditrician in Pune has opened a hospital consultancy firm with seven more consultants. “Doctors having their own hospitals and nursing homes approach us for consultation as to how they can improve their services. I give them tips on how to market themselves, and be pleasant to patients,” says Dr Jog. He has given consultation to at least 35 nursing homes in Pune and its surrounding areas.

Though experts say that the market would grow by 30 per cent annually, larger firms are afraid of the small firms spoiling the market, with low fee structures. Experts predict that the small firms would fold up and vanish for their incompetency. A few firms down south have already folded up not being able to survive the competition. “It is the major players with high fee structure would lead the show with top quality out-put,” prophesies Dr C P Dr Kamle, a Hyderabad based consultation firm, which has expanded by 200 per cent and is handling more than 500 hospital project.