The Economics of Medical Tourism by HEALTHCARE MANAGEMENT REVIEW

Healthcare Management Review

The Magazine of Rova College of Healthcare Executives March - April 2014

THE ECONOMICS OF

MEDICAL

TOURISM Promoting medical tourism in Nigeria 2

Dr. D. Shettyâ&#x20AC;&#x2122;s Model of operational efficiency Traveling for value Strategy inflection point The Financial balance sheet of making babies Hospital management issues and concerns

GOOD NEWS Pregnant Women, Family and Community members ! Register now for antenatal care at the nearest SURE P Health Care facility to you!

AT SURE-P MCH FACILITY WE PROVIDE: · Fully functional and well equipped Health facilities · Free Antenatal and postnatal care services

Free mama kit containing delivery items such as : Sanitary pads Bathing Soap Liquid antiseptic

· Free pregnancy drugs Baby wrap · 24hrs Maternal and Child Health services (by skilled personnel)

Linen

· Free immunization

Cord clamp

· Health Education on safe motherhood and key household practices

Hand gloves

· Free Caesarean Section in designated referral general hospitals (in case of complication)

Laundry Soap Mucus extractor

We work well with referring physicians and keep them up to date with their patientâ&#x20AC;&#x2122;s progress.

OUR FACILITIES & SERVICES INCLUDE BUT NOT LIMITED TO the following minimal access / non invasive procedures and routine

Endoscopic Urology Gastrointestinal Endoscopy Extracorporeal Shockwave Lithotripsy - ESWL Endocorporeal Pneumatic Lithotripsy Laser Lithotripsy Percutaneous Lithotripsy Ultrasound Lithotripsy

Urodynamics Assessment Ultrasonography (Ultrasound) Flouroscopy Electrocardiography (ECG) Inpatient Admission Theatre Services

No. 68 Abijan Street, Off Herbert Macaulay Way, Wuse Zone 3, FCT Abuja. Tel: 09- 4815336, 0802 319 4660 www.chivarclinicsandurologycentre.com

March-April 2014

: THE ECONOMICS OF MEDICAL TOURISM The Financial Balance Sheet of Making Babies

Strategic Inflection Point

Traveling For Value

Hospital Management Issues & Concerns

Shetty's Model of Operational Efficiency

Promoting Medical Tourism In Nigeria

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 09

HMR SOCIAL issuu.com/hmrecopy www.hmreviewer.blogspot.com路 @hmreviewer www.facebook.com/hmrpublishing

EDITOR IN CHIEF Emmanuel C. Abolo MANAGING EDITOR Ezekwesili E. Nnam SENIOR EDITORS Godwin Odemijie Moji Makanjuola INSTITUTIONAL COLUMNISTS Dr Adam D. Daudu Dr Kabiru Mustapha Dr Jim Rice INTERNATIONAL AFFAIRS BUREAU CHIEF Vicky Akai Dare DIRECTOR - EDITORIAL OFFICE Nkechi D. Abolo Marketing Manager Zubby Onwumere STAFF GRAPHIC DESIGNER Ojeniweh O. Charles SCRIPT EDITORS Therie Essien Nwokeji Daniel Obinna RCHE Faculty Advisors Prof. Rowland Ndoma-Egba Prof. Femi Adebanjo Prof. Okey Mbonu Dr. Ibrahim Wada Dr. Sani Gwarzo DR. J.T. Osunwa Barr. Charles Okei Mr Fidel Anyanna Mr. R. Mannason

CREDITS

Andrew S. Grove Debora L. Spar J. O. Owen Geoffery A. Moore Trica J. Johnson Thoas C. Royer Andrew N. Garman Ezart Digital Arts

14B, Thaba Tseka Street, Off Adetokunbo Ademola Crescent, Wuse 2, Abuja, Nigeria. Tel: 08136335182, 08053621816, 08068086164 E-mail: rova@rovacollegeofhealth.org, rova_healthmgt@yahoo.com Website: www.rovacollegeofhealth.org

medical tourism ...the sunrise industry.

lobal and medical tourism is a sunrise industry, it is not going to disappear, if anything, its phenomenon will prove itself to be a spectacular growth industry. Taking advantage of opportunities to redirect your course now is likely to be easier than trying to play catch-up later. Most medical tourism providers took various steps including: obtaining internationally recognized accreditation and developing 'door to door' concierge operations, to remove perceived uncertainties related to international travel. From the economic perspective, hospital and healthcare providers have to offer developed economy treatment at developing economy price. Medical tourism is driven by costs, the absence of local services, excessive wait time for procedures and quality. A leading edge medical care at low rates only happens when the volume of business is high, the provider's experience is vast and the procedures are monitored effectively.

Emmanuel C. Abolo | EDITOR -in -CHIEF

As more medical tourism facilities enter the industry, each offering something new or different, world wide transparency is inevitable. As transparency and care measures prevail on a global scale, anyone, anywhere, can accurately find qualitative and relevant healthcare comparison information. A new breed of innovative and aggressive vendors are facilitating regional medical tourism to the benefit of employers and domestic hospitals. Global medical tourism is a silent revolution sweeping the healthcare landscape. The future belongs to hospitals and healthcare executives who engage in bold, innovative and creative thinking, as creativity and ingenuity - new healthcare business models, arrangements and relationships - offer potential solutions to hyper intense global competition. The progressive institutions will thrive, the merely excellent will survive and the ordinary will perish. It's all about value innovation, its all about value agenda.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 13

...it's time to recognize the huge market being created by reproductive technologies.

- Professor Debora L. Spar.

“ It is difficult to conceive of a child as commerce” .

Adoption is the flip side of reproductive technology. Both have become ways for acquiring children through what were essentially market means.

n fact, baby selling is prohibited across the world.

But each day, infants and children are sold via

fertility clinics, sperm banks, women selling their

eggs, surrogates, and adoption services.

We don't couch these transactions as profit-making businesses. Orphans are not sold, they are “matched” to adoption parents.

Yet “advances in reproductive

medicine have indeed created a market for babies, a market in which parents choose traits, clinics woo clients, and specialized providers earn millions. In this market, moreover, commerce often runs without many rules.” HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 16

THE FINANCIAL BALANCE SHEET OF MAKING BABIES Surrogates. Fertility Clinics. Egg donors. Adoption. “This market” basically breaks down into a series of discrete industries. First, there is in-vitro fertilization, probably the most obvious piece. This is a service industry, like medicine in general which caters for infertile couples. Then there are the component industries, which provide the missing “pieces”, in some cases of infertility: eggs, sperm and wombs.

We need to understand the balance sheet of this radical technology for human reproduction and the vibrant commercial activity.

Sometimes, these components are sold along with IVF treatment. When a couple purchases eggs, for example, they are subsequently used for an IVF procedure, but they are often provided by individual brokers. Then, there are the pharmaceutical firms that provide fertility drugs, a key and very expensive piece of the market. And then, there is adoption, which basically exists completely separately from the world of high technology baby making. Each of these market segments has also spawned a small cottage industry of consultants, brokers and advisors. Because no one likes to think of children as existing in a market, we have been very wary of discussing cost. But it costs money to acquire a child through non-traditional means. So we need to be very up front in discussing what these costs are. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 17

COMMENTS FROM PROF. DEBORA L. SPAR

1. Demands for babies by infertile couples and other would be parents are huge and little is discussed. “We're not talking about demand for potato chips”, this is the kind of demands that becomes an obsession. Price is less an issue than it is in other markets. 2. We prefer to think of babies as cuddly bundles of joy, but they are also products at the centre of a multibillion dollar market in adoptions and scientific conception, a market few people acknowledge. 3. Morality surrounds this market to such an extent that some observers suggest it can't become a commercial business. This is wrong, the demands of the parents will outweigh political and moral opposition. However, those who want to succeed in the market need to fight to shape proprietary, privacy, and contract laws. 4. This is a business that many people wish not to see. “We have a business that doesn't feel like a business. Nobody wants to acknowledge the extent of money that is spent on fertility treatments. Procedures such as egg and sperm donation, in-vitro fertilization (IVF), surrogacy and adoption. 5. There are both low and high tech supplies of children. With millions of orphans, the vast number of children available for adoption is the most obvious “low tech” solution to satisfy demand. High tech measures include IVF, artificial insemination, surrogacy, gamete inter fallopian transfer (GIFT) in which the sperm is injected directly into the fallopian tube, preimplantation genetic testing (PGD), in which fertilized eggs are tested for defects before being implanted in the uterus, and on the extreme end, cloning.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 18

6. Prices are excessive: we have a product that 90 percent of the population get for free, the other 10 - 15 percent, have to pay lots of money to get it. It is a kind of inequity. 7. The key determinant of success in this market is the ability to sell and deliver on hope. â&#x20AC;&#x153;Providers are selling the promise of a child, the dream of a family, but at some point they have to come through. 8. Privacy is a key factor in this market. â&#x20AC;&#x153;This is an intimately personal transaction, yet in many instance, people don't want to be involved with the ultimate suppliers. It's a market suited to intermediaries such as brokers, lawyers and agents. 9. The emphasis in donor profiles, on intelligence and physical attributes also raises the specter of eugenics, the science of creating a superior race through selective genetics. In order to succeed, providers will have to walk a fine line between making the customer happy and avoiding controversy. 10. Despite the classic components of supply, demand, advertising and differentiation, this market does not function normally.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 19

THE EVOLUTION OF THE

â&#x20AC;&#x153;BABY BUSINESSâ&#x20AC;?

t its core, traditional surrogate is a low tech operation. All it entails is a woman willing (or coerced) to have sex with another woman's husband and then willing (or coerced) to let this woman raise the resulting child.

A I, also made surrogacy more feasible, allowing infertile couples to procure both sperm and eggs from outside, unrelated sources. In economic terms, then, the emergence of commercial AI enhanced both the demand for and the supply of surrogate mothers. And once demand and supply were in place, the market followed readily.

In purely practical terms, the only problem stems from the lack of willingness in the absence of coercion. Given that pregnancy and child birth impose significant costs and sometimes even physical danger, why would any woman undertake the risks of conception without the benefits of a child? In medieval times, the incentive was coercion: Bilhah was Rachael's maid, after all, and presumably had no choice. In other cases, altruism may provide sufficient reward, with friends or sisters producing offspring for those who cannot. But generally, we should expect markets to fail in the area of surrogacy. For without incentive or coercion, the supply of surrogate mothers are unlikely to equal their demand. Theoretically, at least the missing piece of this puzzle is money. If a woman could be paid to serve as surrogate, then financial compensation could presumably replace coercion as a workable incentive. Market failures could be surmounted by using the basic lever of commerce, money to increase the supply of potential surrogates. And surrogacy could become a fee for domestic arrangement, much like infant care and house cleaning.

In the late twentieth century, though, surrogacy underwent a significant revival, part of the impetus for this resurrection came from technology; part from commercial enterprise; and part from shifting moral norms. Together they created a vibrant, albeit controversial market for mother hood. The first piece of the market was artificial insemination (AI).That was perfected and brought to market in the 1980s'. Commercially, A1 was a very big deal for all forms of assisted reproduction. The sperm banks were the first blatantly for profit entities in the world of infertility (aside from the elixirs and vibrating beds); they were the first to cross the boundaries of marriage in pursuit of a child and to offer components that came from a stranger. For surrogacy, however, the implication of A1 were particularly profound in the past, the only way for surrogate mothers to produce children was to engage in sexual relationships with the prospective father. A messy business under any circumstance and one that held little appeal for the wives of the husbands involved. With A1, however, conception was removed from sex, making it possible for a man to impregnate a surrogate without even necessarily meeting her. This physical distancing made surrogacy a considerably more attractive option. Credit: Manda Salls

What kind of business models will bring stem cell technologies out of the laboratory and into the market? HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 21

SURE-P MCH STRATEGY STRENGTHENING THE HEALTH WORKFORCE AT PHC LEVEL

art of the constraint in the effort to reduce maternal and infant morbidity and mortality in the country includes lack of adequate and skilled manpower at primary health care (PHC) level. To address this, the project supply side has remained on course in providing strong human resource workforce improvements (midwives, community health extension workers (CHEWs) and village health workers (VHWs) at PHC level and building the capacities of same for different cadres. The project has recruited, trained and deployed qualified midwives to live and work in PHCs located in the rural communities where the need for services are apparently higher. These midwives are constantly trained and retrained on appropriate topics for enhanced quality in service delivery. Though occasionally some midwives leave the programme, immediate steps are usually taken to replace them to avoid any vacuum in service delivery. In the same vein, CHEWs were also recruited, trained and deployed to PHCs to assist the midwives in carrying out community outreach services. VHWs were introduced to further bridge the gap between community members and access to the primary health centers. The VHWs are recruited amongst the female community members aged 25years and above. To strengthen the referral system between communities and the PHCs, these VHWs complement the efforts of the CHEWs by serving as a link between the PHC facility and the communities. They are supported and mentored by the CHEWs. About 3000 VHWs have been recruited and trained in the selected communities across the country to mobilize pregnant women for ANA services and skilled birth attendance in the facilities, as well as provide information on key household practices to families in the community. The VHWs also play an active role on the demand side of this project through their mobilization activities. Required work kits have also been provided to all cadres of the health work force to enable them carry out their duties optimally.

IMPROVING ACCESS TO DRUGS AND CONSUMABLES

IMPROVING ACCESS TO HEALTH FACILITIES

Many PHCs do not function optimally in their primary

Maintaining regular supply of maternal, neonatal and child

responsibility of providing quality healthcare services to their

health (MNCH) drugs and medical consumables has

communities due to dilapidated health facility structures and

remained a big challenge for states and LGAs. The lack of

obsolete equipment. The state of these facilities discourages

these routine drugs for pregnant women and infants

community members from accessing the health centre and

continuously leads to the eventual collection of a user fee

serves as a deterrent to seeking health care at the PHC centre.

by health workers, which negatively affects patronage at

SURE-P MCH therefore, has made huge investment in the

health facilities. The project has consistently supplied

physical upgrade and rehabilitation of health centers across

MNCH drugs (which include all the UN recommended

the country to help improve access to functional and adequate

life-saving commodities) and medical consumables to all

health facilities in targeted areas. Also, the right medical

SURE-P supported facilities. We are ensuring that no

equipment has been supplied to the SURE-P supported health

programme beneficiary is required to pay any user fee

facilities for quality antenatal, delivery and post natal services

when accessing any SURE-P supported PHC across the

to all programme beneficiaries. We believe these upgrades

country.

will improve access to the selected facilities and in turn lead to the much desired service uptake and utilization.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 22

FOSTERING BEHAVIOR CHANGE

EMPOWERING COMMUNITIES TO PLAN THEIR OWN HEALTH

THROUGH EFFECTIVE COMMUNICATION

The SURE-P MCH project acknowledges that communities

SURE-P MCH has continued to create heightened demand for

are the pivot of its successful project implementation in the

maternal and child health services, using different behavioral

selected locations. That is why a detailed, comprehensive

change communication strategies. The key strategies used by

programme was designed to empower and engage the

the project are advocacy, communication and social

communities actively throughout the implementation of the

mobilization. The project has carried out several evidence-

project. The project has used the participatory, learning and

based advocacy visits ranging from high-level to grass-roots.

action (PLA) tool to empower the benefitting communities to

Notable amongst the advocacy visits made in the recent past

become drivers of their own health. This is achieved through

was a visit to the Northern Governors' Wives Forum.

re-activation and re-orientation of ward development

Sensitizing these governors' wives on the activities of the

committees (WDCs) within the communities of the first 500

project is believed to be a major tool in connecting with the

SURE-P supported health facilities. The WDCs serve as a link

states for effective implementation of the project. The project

between the community and the health facility. The PLA

has produced and aired several radio and TV jingles using the

exercise was concluded for selected communities in the states

mass media platform to reach out to the public on project

within North East and North West geopolitical zones of the

activities. Social mobilization activities are also ongoing across

country. This exercise has since been concluded for all the

all SURE-P supported communities

geopolitical zones of the country which include North Central, South South, South East, and South West.

USING THE CONDITIONAL CASH TRANSFER (CCT) PROGRAMME TO CREATE SUSTAINED DEMAND

BUILDING PARTNERSHIPS AND COLLABORATION

The CCT pilot programme was officially launched in the FCT

The project recognizes the importance of partnerships and

on 13 May 2013 by the former Honorable Minister of State for

collaboration in developmental programmes and that is why it

Health Dr. Muhammed Ali Pate. Already, the pilot activities

has continued to engage the states and implementing partners

have commenced in all nine selected pilot states with states

using a participatory and consultative approach. This is achieved

such as Bayelsa, Ebonyi, Anambra, and Bauchi States

through coordination meetings with state commissioners of

launching their pilot CCT programes this October/November.

health and relevant partners to plan for smooth project implementation.

MONITORING FOR ACTION The project has been building the capacities of data managers and officers at the states and LGAs to be able to generate and process quality and reliable data across the states. A comprehensive SURE-P data collectors' training manual has been produced and the project carries out cluster monitoring for routine facility-based data collection. A routine data quality assessment exercise was also initiated and all these steps are taken to ensure evidence-based programming. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 23

...“how many patients did you see today”? Dr Kayode Badmus The Primary Healthcare Doctor

R. Kayode Badmus,

doctors who can spare the time to support

practices as a primary

them and care for those who cannot.

healthcare doctor at a

Why is the system sensitive to the quantity and not the quality?

comprehensive primary healthcare centre in

Preventive medicine takes a lot of time,

Cross River State of Nigeria, with a fifty

especially when a patient does not speak

percent non-english speaking patient load.

your language. Health promotion is a

He has two major conflicts: He wants to be

lengthy effort. To work with a patient

extremely sensitive, to take his time with his

behaviorally takes time, and Dr Kayode is

patients and give emotional support. He

given 10 minutes to see a patient, on top of

wants to integrate behavioral science into

which he has to fill out a form which

medicine, health promotion, disease

sometimes takes 5 minutes.

prevention and geriatric medicine. Why is the system sensitive to quantity and He feels that preventive and primary care

not quality? Spending 10 minutes on every

medicine will save the cost of unnecessary

patient... What will Dr Kayode focus on?

hospitalizations. The second conflict is with

Especially if at the end of the examination

his zonal medical director supervising his

the patient suddenly tells him of his family

hospital. The supervising medical director

problems. Non of them fit into 10 minutes.

wants him to see more patients in shorter

But that is what the zonal medical director

period of time more efficiently. It is all on

wants and will use as performance indicator.

volume.“ How many patients did you see today”? For good or bad, there are two levels of care.

Unless we change how we view primary health, quality will continue to elude us.

Care for those who can afford to find those HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 24

Ublic Health is a discipline that we should all salute and support as global citizens. Whenever humanity is threatened by emerging or established diseases, it is the public health experts, alongside their clinical colleagues and scientists who face up to the challenge. Adetokunbo Lucas is prime example of a public health expert who took up the challenge of addressing the needs of populations in developing countries who for many generations had been affected by a host of infectious diseases without any systematic support for their situation.

Adetokunbo Oluwole Lucas, OFR MD, DSc, FRCP, FFPH, FRCOG, (1931- ) of Ibadan in the Federal Republic of Nigeria and the Harvard School of Public Health in Boston, is a global health leader for Africa and a recipient of both the annual Prince Mahidol Award in 1999 for his support of strategic research on the tropical diseases, such as malaria, schistosomiasis, the filariases, leishmaniasis, Chagas disease, African trypanosomiasis, and leprosy, and the 2013 Jimmy and Rosalynn Carter Humanitarian Award from the National Foundation for Infectious Diseases (NFID). Often known simply as Ade Lucas, he has also served for ten years as the Director of Special Programmes for Research and Training in Tropical Diseases b a s e d a t t h e Wo r l d H e a l t h Organization in Geneva, Switzerland. He is currently Adjunct Professor of International Health Department of Global Health and Population of the Harvard School of Public Health. He works largely in his home nation of Nigeria and travels frequently to the United Kingdom and to the Harvard School of Public Health in the United States.

Adetokunbo Oluwole

Lucas

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 25

ospital

Management Issues & Concerns ‘Healthcare is on a collision course with patient’s needs and economic reality’

What are the challenges to productive efficiency in healthcare delivery?

What are the critical factors in improving quality outcomes in your Hospital ?

ith today’s world of healthcare delivery so resources constrained and the environment ever changing, we must assure that the hospital leadership have the skills and tools needed to exercise visionary leadership and to adapt innovation to all aspects of healthcare professional life.

The concept of quality is

There is increase demand for hospitals to improve cost and quality as its core strategy for long run success. The strategy will include continuous improvement of clinical performance. In adopting this strategy we need to understand ‘How Hospitals Think’ and follow the quality compass in making continuous improvement in quality and cost.

associated with efficient utilization of resources.

Hospital Management is about relationship architecture designed to improve outcomes.

Today, the strategic organizational structures and operating practices of many healthcare providers are misaligned with value. The problem is more on how care delivery is structured and managed. Without significant changes the scale of the problem will only get worse There is need to rethink the most basic assumptions about healthcare financing, marketing, leadership style, costs, quality, accessibility, and chart a bold path to reconstructing strategic boundaries and creating blue oceans beyond the traditional boundaries.

DEVELOPING STRATEGIC ANCHORS FOR IMPROVING HOSPITAL MANAGEMENT

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The healthcare system is facing great challenges, and there is an urgent need to generate knowledge to strengthen and support them ...Today’s hospitals need leaders who can adapt to change and win back the trust of their communities.

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A successful healthcare manager must adeptly serve and represent both clinical and managerial interest. New healthcare managers are often challenged to move beyond their traditional clinical training, to navigate very different models of managerial decision making, problem solving, communication and negotiation. Rova College of Healthcare Executives will provide you with the knowledge for effectively mastering this delicate cultural role. Tel: 08053621816 HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 26

PRACTICING GOOD MEDICINE ALSO MEANS PRACTICING GOOD BUSINESS HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 27

How Hospitals Think

Training & Workshop

Advance Hospital Management & Leadership Training Program Module One -12th - 14th August, 2014, National Hospital, Abuja. Module Two -20th - 22nd August, 2014, PSSDC, Behind CMD, Magodo, Lagos.

. Practicing good medicine also means practicing good business.

This is a program for up- and- coming Hospital Managers and supervisors to help them face increasing complex and competitive management and leadership challenges they encounter each day. It will help to advance high quality, safe and reliable care while exercising sound business judgement to sustain â&#x20AC;&#x2DC;the missionâ&#x20AC;&#x2122;. It offers the skills and knowledge to manage the business side of health so you can take an active role in structuring complex health system.

Program Content Three days immersion into the business of Hospital Management, led by some of the best minds in healthcare.

Leadership - People - Performance Strengthening governance & leadership in the Hospital ...Healthcare use management strategies to develop superior care competencies

Business intelligence tools for Hospital and Medical Operations Patient Experience

Participants This program is appropriate for hospital managers who aim to drive change and innovation in their organization. Managers and supervising officers who are involved in or will be involved in day to day running of the hospital. High impact individuals whose leadership responsibilities have steadily increased.

Customer focus must be the strategic anchor of our interactions.

Improving Quality & Economy of Patient Care

N55,000

Program Fees: per participant Includes: Lecture, Lecture Materials, Tea break and Lunch.

Emotional Intelligence & Workplace Performance Effective performance in workplace

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System improvement, Operational flow & Resource maximization

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R O V A

C O L L E G E OF

HEALTHCARE EXECUTIVES Executive Education

For Registration and Further Information contact: Program Director - 08053621816, 08033247431 rova_healthmgt@yahoo.com, rova@rovacollegeofhealth.org www.rovacollegeofhealth.org

14b, Thaba Tseka Street, Off Adetokunbo Ademola Crescent, Wuse II, Abuja, Nigeria.

Who cares for the Patient?

Doctors ...But the family does, ...The community does, ...The patient too.

Nurses

To what extent have we as healthcare professionals integrated and engaged them in the caring model?

STRATEGIC

INFLECTION POINT A time in the life of a business or economy, when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 30

trategic inflection points can be caused by technological change, but they are more than technological changes. They can be caused by competitors, but are more than just competitors. They are full scale change in the way business is conducted, so that simply adopting new technology or fighting the competition as you used to may be insufficient.

They build up force so insidiously that you may have a hard time even putting a finger on what has changed, yet you know that something has. A strategic inflection can be deadly to your organization and your career when not attended to. Organizations that begin a decline as a result of its changes rarely recover their previous greatness. But strategic inflection points do not always lead to disaster. When the way business is being conducted changes, it creates opportunities for players who are adept at operating in the new way. This can apply to new comers and incumbents for whom a strategic inflection point may mean an opportunity for a new period of growth.

The fact that an automated teller machine could be built has changed the banking system. If an interconnected in expensive computer can be used in medical diagnosis and consulting, it may change medical care. Strategic inflection points are about fundamental change in any business, technological or not. We live in an age in which the pace of technological change is pulsating ever faster, causing waves that spread out ward toward all industries. This increased rate of change will have an impact on you, no matter what you do for a living. It will bring about new competition from new ways of doing things, from corners that you don't expect. It does not matter where you live. Long distance use to be a moat that both insulated and isolated people from workers on the other side of the world. But every day, technology narrows that moat inch-by-inch. Every person in the world is on the verge of becoming both coworker and a competitor to every one of us, much the same as our colleagues in the same unit or department.

Technological change is going to reach out and sooner or later change something fundamental in your business world. Such developments are both constructive and destructive forces. They are inevitable, we can't stop these changes, we can't hide from them, instead, we must focus on getting ready for them. If you are running a healthcare organization, you must recognize that no amount of formal planning can anticipate such changes. Does that mean we should not plan? Not at all, you need to plan the way a fire department plans. It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event. Understanding the nature of strategic inflection points and what to do about them will help you safe guard your organization's well being. It is your responsibility to guide your organization out of harm's way and to place it in a position where it can prosper in the new order. Nobody else can do this but you. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 31

As businesses are created on new foundations or are restructured to operate in new environments, careers are broken or accelerated.

Until very recently, if you want to work at an established organization, you can assume that your job would last the rest of your work life. But when organizations no longer have life long careers themselves, how can they provide one for their employees. As these organizations struggle to adapt, the methods of doing business that worked very well for them for decades are becoming history. Organizations that have had generations of employees growing up under a no-layoff policy, are now dumping thousands of people onto the street at a crack. The sad news is, nobody owes you a career. Your career is literally your business, you own it as a sole proprietor. You have one employee: yourself. You are in competition with millions of similar business: millions of other employees all over the world. You need to accept ownership of your career, your skills and the timing of your moves. It is your responsibility to protect this personal business of yours from harm and to position it to benefit from changes in the environment. Nobody else can do that for you.

The introduction of GSM in Nigeria is a strategic inflection point, it changed the landscape and fundamentals of most industries.

he introduction of GSM in Nigeria is a strategic inflection point, it changed the landscape and fundamentals of most industries. Strategic inflection point is a time to wake up and listen. Most of the time, the recognition takes place in stages. Firstly, there is a trouble sense that something is different. Things don't work the way they used to. Patients and clients attitude towards you are different. Competitors that you write off or hardly knew existed are stealing your business from you. Secondly, there is a growing dissonance between what your organization thinks it is doing and what is actually happening inside the bowels of the organization. Such misalignment between cooperate statements and operational actions hints more than the normal chaos you have learned to live with.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 32

WALKING YOUR WAY THROUGH STRATEGIC INFLECTION POINTS

alking your way through strategic inflection point is like venturing into the valley of death, the perilous transition between the old and

the new ways of doing business.

You march in, knowing fully well that some of your colleagues will not make it across to the other side. Yet the CEO's task is to force that march to a vaguely perceived goal in spite of the casualties, and the middle managers responsibility is to support that decision. There is no other choice. Ideas about the right direction will split people on the same team. After a while, everyone will understand that the stakes are enormously high. There will be growing ferocity, determination and seriousness surrounding the views the various participants held, people will dig in. These divergent views will be held equally strongly, almost like religious tenets. In a work place that used to function collegially and constructively, holy wars will erupt, putting coworkers against coworkers, long term friends against long term friends. Every senior management is supposed to define direction, set strategy, encourage team work and motivate employees, all these things become harder, almost impossible.

Given the amorphous nature of an inflection point, how do you know the right moment to take appropriate actions, to make the changes that will save your organization or your career? Unfortunately you don't. But you can't wait until you do know. Timing is everything. If you undertake these changes while your organization is still healthy, while your ongoing business forms a protective bubble in which you can experiment with the new ways of doing business, you can save much more of your organization's strength, your employees and your strategic position.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 33

CRITICAL THINKING

truck was jammed underneath a highway, overpass along Ikorodu road, in Lagos. Federal Road

Safety Commission and LASMA brought their tow-truck attempting to pull the vehicle. But despite

their earnest efforts, the truck remained stubbornly lodged.

A motorist, annoyed by the delay, approached the FRSC chief and asked what the problem was. “The bridge is not high enough” the chief explained impatiently, “so the truck is wedged and we are having trouble getting it out”. The gentleman responded, “It seems like the problem is that the truck is not low enough to get through”, the FRSC officer laughed, “Yes I guess that is another way to say it”. The motorist persisted, “what I mean is, why don't you make the truck lower by letting the air out of the tires”. Ten minutes later, the truck was freed from the tunnel and traffic was moving again. ...This is critical thinking: Using the available information as a guide to thought and action. This type of thinking permeates every aspect of managerial work.

The Currency of Medical Tourism

Quality Cost Access

NEGOTIATING ON VALUE MEDICAL TOURISM

TRICIA J. JOHNSON THOAS C. ROYER ANDREW N. GARMAN HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 36

The availability of information on healthcare value is supporting the increase in medical travel. To define value, we first need to review some key economic concepts: Costs, efficiency, effectiveness, comparative effectiveness and cost effectiveness. From a value perspective, cost includes not only direct (accounting) costs, but also opportunity costs. Opportunity cost is what you give up by making a decision, or your best alternative. When we measure value in healthcare, we need to include direct medical care and non medical care costs, as well as opportunity costs, in our cost calculations.

Efficiency can refer to economic efficiency, which is

If we use more inputs than necessary to achieve a given level of health improvement, it will result in waste and

attained when the treatment we choose is the least expensive among all possible treatments for the same condition. It can also refer to technological efficiency, which is achieved when maximum possible improvement is attained from the set of inputs needed to produce the treatment. If we use more inputs than necessary to achieve a given level of health improvement, we are producing waste and technologically inefficient. Effectiveness is the extent to which a treatment does what it was designed to do.

technological inefficiency. Effectiveness is the extent to which a treatment does what it was designed to do.

Comparative effectiveness and cost effectiveness are related terms used to compare one treatment to another. Comparative effectiveness is an evaluation of the effectiveness of a treatment relative to one or more alternative treatments. It is defined as â&#x20AC;&#x153;the benefits and harms of different interventions and strategies to prevent, diagnose, treat and monitor health conditions in â&#x20AC;&#x153;real world settingsâ&#x20AC;?. Cost effectiveness is the link between efficiency and effectiveness and is determined by comparing the costs of alternative treatments. There is a huge gap between the treatments used to address health conditions and the evidence we have of their value. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 35

Dr. Devi Prasad

Shetty

The Wall Street Journal has given him the title of Henry Ford of heart surgery. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 36

is hospitals have reduced costs by taking advantage of the economics of scale, this allows them to complete heart surgeries for a tenth of the cost in the United States. The Wall Street Journal has given him the title of Henry Ford of heart surgery. In 2014 six new hospitals will be opened on the Narayana Hrudayalaya model, across India which will provide high quality treatment at low cost. In the next seven years, there are plans to expand to 30,000 beds with hospitals in India, Africa and other countries in Asia

Devi Prasad Shetty (born May 8, 1953) is an Indian philanthropist and

cardiac

leveraged

surgeon.

economics

He scale

has to

provide affordable healthcare. He was awarded the Padma Bhushan, third highest civilian award in India for his contribution to the field of affordable

No doctor in this world has the presence of mind, round the clock, to calculate drug

healthcare. He performed the first neonatal heart surgery in the country on a 9day-old baby named "Ronnie" in 1992 - a successful operation in medical

history.

Kolkata,

interaction accurately

operated on Mother Teresa after she

every single time.

had a heart attack and subsequently served as her personal physician.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 37

Indiaâ&#x20AC;&#x2122;s Assembly-Line

SHETTY'S MODEL OF

Applying the economics of scale to provide affordable healthcare

n Bangalore, India, Narayana Hrudayalaya Health City uses economics of scale to drive down cost of health care. The Wall street journal dubbed founder Devi Shetty the Henry Ford of heart surgery for his transformational factory model of healthcare (Anand 2009). The health city offers leading-edge medical care at a fraction of the costs found elsewhere in the world. The flagship hospital, Narayana Hrudaya Heart Hospital, charges an average of $2000 for an open heart surgery, compared to $20,000 to $100,000 in United State hospitals. The simple driving force behind this low cost of care is volume. Just as Toyota revolutionized manufacturing, Shetty has systemized medical procedures, even as intricate, sophisticated, and potentially hazardous as heart surgery. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 38

Surgery

OPERATIONAL EFFICIENCY Reconcile quality, affordability & scale

Narayana Hrudayalaya Health city offers some lessons: as you specialize, your performance and efficiency improve. Correct management can decrease the cost per procedures.

The heart hospital is a 1,000 bed facility where surgeons safely operate at an unheard of pace. 42 cardiac surgeons completing 3,174 cardiac bypass surgeries in 2008, more than double Cleveland Clinics 1,367 surgeries that year. The hospital achieves economics of scale by employing equipment three to four more times per day than the typical United State hospitals does. Surgeons perform two or three procedures a day, six days a week, working a total of 60 to 70 hours per week. United State surgeons work fewer than 60 hours and perform one or two surgeries a day, five days a week. To prevent fatigue, Shetty's surgeons take breaks after three to four hours in surgery.

Some question whether Shetty's model poses a risk to quality. However, success rates are comparable to other hospitals abroad. Shetty's business group makes a larger than average profit; 7.7 % after taxes, slightly greater than United States hospitals' 6.9% average (AHA 2008). Expansion plans are in the works and Dr. Shetty hopes to increase the number of system wide hospital beds to 30,000. This expansion would make it the largest private pay hospital group in India. At the size, the group could purchase directly from suppliers, bypassing traditional medical equipment sales channels.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 39

THE USE OF IT TO IMPROVE PROCESS

You have always been an advocate of low-cost healthcare. Where does IT figure in the scheme of things? How has IT helped in the impressive expansion plans of Narayana Hrudayalaya?

ou have always been an advocate of account on a daily basis is a diagnostic tool; you can low-cost healthcare. Where does IT take remedial measures. With doctors, you can’t figure in the scheme of things? change their behaviour by preaching. You produce the data. You tell them exactly how many days the Dr. Devi Shetty: patient stayed there before the operation, how many One cannot reduce the cost of healthcare without days in the ICU, how many days post-op, and what the use of IT. Actually, no service industry can the cost of material used for the operation was. All reduce costs without the help of IT. IT is the matrix this information cannot be generated without the that holds the entire delivery system. IT cannot help of IT. Narayana Hrudayalaya has invested cure, but it can make healthcare safer for the patient. heavily in IT, and we are now reaping the benefits. For example, in the U.S., every year, close to 10,000 people die due to prescription errors. Hospitals must have a policy that prescriptions should be made only using specialized software that can make prescriptions safer. This is already available. No doctor in this world has the presence of mind, round the clock, to calculate drug interaction accurately every single time. We need the power of IT to reduce the cost of operations. Our IT initiatives give us a profit and loss account on a daily basis. Every day at 12 noon, our senior doctors/administrators get an SMS on their mobile with the previous day’s revenue, expenses, and profit/loss margin.

How has IT helped in the impressive expansion plans of Narayana Hrudayalaya? Dr. Devi Shetty: First of all, I cannot think of the healthcare industry without IT. We have 17 hospitals spread across the country. I haven’t even visited some of these after the inauguration. But I have a clue of their day-today proceedings. We have a complaint management system (CMS) that keeps track of all the problems a particular hospital faces in a day. We don’t discourage complaints. We instead celebrate them. So, it helps me in calling out the bluff of the COO of a particular hospital if he says things are fine, while in reality, I know that there were 184 complaints registered that day.

As doctors, we know exactly what is happening with our organization. For us, looking at the P&L When we started the CMS, we registered 200-300 account at the end of the month is like reading a complaints a day, but now, it is down to about 60 to post-mortem report. You can’t really do anything 80 complaints. This is the power of information. about whatever losses you have. But looking at the

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 40

he doctors who are at the helm of affairs in the healthcare industry and influence the policy/decision-making process belong to my generation. We grew up in a time when there were no computers. So, when we don’t understand something, we are scared of it. Basically, since we are not comfortable, we don’t want to make a fool of ourselves. Also, there is a hidden fear that it may reduce our importance. ...Dr. Devi Shetty:

How does IT help tackle these challenges?

Dr. Devi Shetty:

Firstly, at Narayana Hrudayalaya, we want to create a robust IT platform to control the finance department and quality of services. Post that, we want to get into patient care and outcomes.

IT helps in reducing the costs of various operations in every service industry. Take a look at the number of financial transactions happening at NASDAQ within a few minutes, billions of dollars exchange hands. The cost of transaction is virtually nothing. Another good example is supermarkets. Goods are bought, sold and maintained in huge numbers, and still there is hardly any transaction cost. This is possible only because entire services are run on efficient IT platforms. All over the world, in healthcare, penetration of IT is extremely poor. I am not talking about using IT as a glorified typewriter for producing discharge/admission summary, data collection, and claim processes but ‘patient care’. Does IT bring in innovation in patient care at Narayana Hrudayalaya?

We are perhaps one of the few hospitals in the world where a balance sheet is created on a daily basis. A sophisticated ERP system on a cloud solution houses all the financial details about all the group hospitals. You’ve been a poster boy for IT in the healthcare industry. Why do you think your peers don’t use IT as much as you do? Dr. Devi Shetty: The doctors who are at the helm of affairs in the healthcare industry and influence the policy/decision-making process belong to my generation. We grew up in a time when there were no computers. So, when we don’t understand something, we are scared of it. Basically, since we are not comfortable, we don’t want to make a fool of ourselves. Also, there is a hidden fear that it may reduce our importance.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 41

TRAVELING

FOR VALUE Credit - ANDREW N. GARMAN

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 42

Value is a measure of the relationship between the cost and quality of healthcare, the higher the quality relative to cost, the higher the value. Higher value healthcare can refer to care that is:1. Lower costs, for the same quality for the level. 2. Higher quality for the same cost or 3. Both higher quality and lower cost.

s more rigorous and systematic comparisons of health outcomes, risks, benefits, and clinical effectiveness of different medical treatments become available, consumers will have the tools they need to make better value based decisions about the treatment alternatives.

At the same time, consumers need rigorous comparative quality and performance data on clinicians and hospitals so they can make decisions not only about treatment options but also about the providers that will provide the treatment. These two developments, taken together, will significantly improve the consumer's ability to accurately assess quality. As better quality data continue to be developed and competition from international providers continues to grow, Nigerian providers will need to improve their price transparency.

he concept of value driven healthcare is not new, but the idea of traveling for value driven healthcare has gained attention only recently, with international medical travel. Traveling for value is predicated on the consumer's ability to compare both quality and costs; comparisons of only one of these two factors provide an incomplete picture of value. To find high value care, consumers must be able to compare local options against other alternatives. They need access to reliable information on quality, health outcomes, and price. Without data on all these components, consumers will be unable to find the value they seek. QUALITY COMPARISONS: For consumers who are seeking the highest quality providers and willing to travel for care, data are scant and often difficult to interpret. Web based data sources are improving consumers' access to health data. However, more work needs to be done to develop quality reporting mechanisms on which consumers can rely when making value based healthcare decisions. COST COMPARISONS: Although quality data are limited, they are far more abundant than price data. Often, providers are unable to quote an inclusive cost for a particular treatment.

However, some international providers are able to quote an all inclusive package price (similar to those offered by the travel industry) that includes all fees for the hospital, surgery, lab, medication and room - an apples to apples comparison of healthcare costs associated with travel. Travel to and from destination and hospital, lodging costs before and after hospitalization, (if the patient will be unable to travel immediately following discharge) lodging costs for a companion during hospitalization, food and other incidental costs and the cost of special travel accommodations (e.g. an economy plus or business class seat during air travel if the patient needs extra leg room). The opportunity costs associated with medical travel, the value of the patient's and travel companions time during travel and hospitalization are also likely to be higher for a number of reasons. The patient and the companion must spend additional time traveling. Hospital length of stay can be longer for international patients. The patient may need to stay near the hospital once discharged for followup care, which would also require the companion to extend his stay. These costs would need to be factored into a comprehensive comparison of the costs of care at different destinations.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 43

Outbound medical tourism in Nigeria

ccording to Business Day Nigeria, 47 percent of Nigerians visiting India in the year 2012 did so to get medical attention, while the remaining 53 percent did so for other reasons.

The 47 percent of Nigerians who visited India for medical purposes amounted to 18,000 persons and they expended N41.6 billion ($260 million) in scarce foreign exchange in the process. These figures were primarily released by the Indian High Commission.'Medical tourism' is originally a term used to qualify a patient's movement from highly developed nations to other areas of the world to get medical treatment, usually at a lower cost. More recently, however, the term is being generally used to mean every form of travel from one country to another in search of medical help, which can also simply be called 'medical travel'. It also includes traveling to countries where treatments for particular conditions are better understood. Sunrise River Press, 2008, reports that over 50 countries have identified medical tourism as a national industry. It is a major sector boosting the economy of many developing countries, such as Malaysia, Singapore and India.

Unfortunately, though, countries at the receiving end of medical tourism only experience its adverse effect, especially on their economy. Billions of dollars that should help their ailing economies are being pumped by their citizens into the economy of the tourist countries. Very few African countries enjoy the benefits of medical tourism. South Africa emerged the first medical tourism location in Africa.Nigeria is undoubtedly one of the biggest sufferers of medical tourism in the world. Factors like inadequate medical equipments and personnel, and also inadequate infrastructures have greatly contributed to the abysmal state of Nigeria's healthcare sector, and this has in turn made the people lose confidence in this sector. This lack of confidence in the healthcare sector has further led to the increase of top public officers and other wealthy Nigerians with life threatening ailments traveling abroad in search of better medical care. Others who participate in outbound medical tourism, especially those who cannot afford the costs, are sponsored by organizations and goodhearted philanthropists. Credit: Yomi - Alliyu Oludami HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 44

Outbound Medical Tourism. A Consequence of Nigeria’s Poor Healthcare Outcomes

he Director-General of Standards Organisation of Nigeria, Dr. Joseph Odumodu, in his lecture entitled, “The 21st Century Pharmacy Professional in Healthcare and National Development,” stated that the changing social, technological and economic environments have contributed to the creation of a burden on effective delivery of quality healthcare. He added that the results of these factors are substantial but preventable; infectious disease profiles, very high mortality at a young age, negative impact on average life expectancy, staggering health inequalities and disparities among different groups as well as high mortality rate from treatable and avoidable ailments found among poor people.

India is currently the choice destination for medical care by many Nigerians. Beyond the deteriorated state of the Nigerian healthcare sector, affordable and accessible medical treatment in India influences the decision to consider the country as a medical tourism destination. According to a Business World report, a heart bypass operation costs approximately US $144,000 in the U.S., US $25,000 in Costa Rica, US $24,000 in Thailand, US $20,000 in Mexico, US $13,500 in Singapore, but only US $8,500 in India where there is a similar quality of healthcare. Although the actual cost of treatment in India may be low, the additional costs of travel, accommodation, feeding and other charges, make the overall cost high. Usually patients need to travel with a companion, which increases the cost. However, Nigerian medical tourists are in general less concerned about the total cost incurred if they are assured of receiving worldclass quality treatment and care for their illnesses. It is therefore not surprising that in recent times, due to the ruined state of the nation’s healthcare sector, resulting from lack of medical equipment, epileptic power supply, and inadequate medical personnel, the people have generally lost confidence in this sector. Such lack of confidence has, furthermore, led to the increased frequency of top government officials and wealthy Nigerians with life threatening ailments, travelling abroad in a last minute attempt to save their lives. Others who participate in outbound medical tourism for life saving treatments are sponsored by organisations and philanthropists. Studies reveal that the most frequently visited countries by Nigerian medical tourists are the USA, UK, Germany, Switzerland, and more recently, India. Nigerians form a large proportion of medical tourists to India, Europe, and the US. The most frequent treatments sought by Nigerians in these countries are alternative medicine, corrective, and transformative surgeries.

Dr. Joseph Odumodu

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 45

The Economic implications of Outbound Medical Tourism on Nigeria’s Healthcare Sector

n recent times, a new trend in the healthcare sector known as “medical tourism”- a term used to describe the practice of people travelling to another country in order to receive medical attention, be it heart surgery, hip replacement, or dental work- has gained popularity among highly industrialized countries like the United States, Germany, France, as well as developing nations like Nigeria, South Africa, Egypt, India, Saudi Arabia, etc. Current survey indicates significant growth in the medical tourism industry currently valued at $150 billion, and was projected to have reached $250 billion by 2016. While exact statistics for medical tourism may seem difficult to confirm, these estimations indicate a strong potential for medical tourism not only at the moment but in the future. With the nation's dearth in infrastructures like medical equipment, stable power supply (thereby making health institutions to rely on generating sets), adequate medical personnel,

THE ECONOMICS OF Dr Ngozi Okonjo-Iweala

n 2011, Dr Ngozi Okonjo-Iweala, the Minister of Finance, while explaining the national economic plan, stated that $200 million, a substantial sum compared to the national budget could be saved annually if Nigerians who travel abroad for medical services could be treated locally.

In the document titled “Creating Jobs: A Short to Medium-Term Agenda,” the Minister equally emphasized the contribution of good healthcare to economic growth when she stated that poor health reduces the efficiency and output of workers. She further stressed that the healthcare sector has a huge potential in job creation, adding that 10 of the 20 fastest growing occupations in the US were healthcare related. If the money expended annually on medical treatment abroad by government officials and other wealthy Nigerians were retained in the country, it would add to the resources needed to restore the inadequate infrastructure in the sector. The funds could also be re-invested to initiate the building of state-of-the-art hospitals, purchase and distribute critical health saving equipments to all teaching and federal hospitals and promote other critical areas in Nigeria’s healthcare sector. Beyond the monetary effect of outbound medical tourism to individuals and the country, there are other risks for unwary Nigerian medical tourists in going to other countries. Doctors have repeatedly drawn the attention of the general public and the government to the problems that medical tourists encounter from the long distance travelled for medical treatment and the lack of post-operative follow-up. Some of these risks include complications from travelling long distances after a lifesaving procedure and degenerative conditions arising from poor post-operative check-ups especially for cancer cases. It is rare to find anyone willing to talk publicly about the negative aspects of their experience as medical tourists to another country, in consequence, many Nigerians still travel to other countries for unsupervised medical care that could very well be provided locally. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 46

delivering the needed healthcare to people that besiege such hospitals otherwise known as “centre of excellence” has been a daunting challenge. This has led to a situation whereby Nigerians with life-threatening ailments are left with an option of travelling abroad to seek medical attention.

flight from Nigeria through medical tourism by the elite. This may be the first case of a country specifically decrying outbound medical tourism as an economic threat to its own health industry and scarce foreign exchange.

In the health sector for instance, while India makes millions of dollars annually through medical tourism, it is sad to say that Nigeria, with some of the brightest and best in the medical profession is losing her professionals to countries that have infrastructure in place for them to work with.

Though Nigeria has a lot in common with India: comparable climate, pool of expert physicians, and an impoverished citizenry, limited infrastructures etc, India with at least four times the population size of Nigeria, and lacking the much-coveted black gold (Crude oil) has been able to harness and develop its technology base in the health sector, therefore becoming the destination for many individuals seeking healthcare. Nigeria can replicate this and become the hub for medical tourism in the African continent with adequate health sector financing and the willingness of Nigerian specialist doctors to return home and contribute their quota vis-a-vis their expertise.

The trend of oversea treatment for medicare which was observed by members of the House of Representatives recently represents a drain on the nation's scarce resources and a disincentive to the improvement of healthcare services. The House, however, called on the Federal Government to improve the quality of services available in health institutions and discourage the habit of encouraging capital

MEDICAL

TOURISM

Babatunde Osotimehin

abatunde Osotimehin, former minister of Health and executive director, United Nation's Population's Fund (UNFPA), stated recently that due to a lack of confidence in the nation's healthcare delivery system, Nigeria is losing well over $200 million from Nigerians who travel overseas for medical attention. The confidence in our system is gone. People don't think they can get service with us. They go for all manners of treatment that could be confidently treated and handled in Nigeria. We need to build our system like in the UK for people to have confidence. In Nigeria, it is only the better off people who travel overseas for medical attention. The country has to make concerted efforts to upgrade health care facilities to the standard that would attract patronage from patients outside Nigeria, or stop Nigerians travelling overseas.”

Credit: CIUCI Consulting HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 47

YOU MAY HAVE REGIONAL MEDICAL TOURISTS ALREADY Do you have systems that track where patients are coming from? Every procedure you offer is subject to intense competition. ...... Now is the time to consider new ideas.

Despite entrenched bureaucracy, over regulation, and fixed costs, opportunities abound. Be willing to look with new eyes.

Challenge existing norms,

procedures, and organizational cultures. Changing will be difficult, and you will face disagreement along the way, but the alternatives of reduced volume and loss of high margin procedures are more problematic than the pain of changing. To find a trustworthy provider in the complex medical tourism world, consumers look for accredited organizations.

THE EVOLUTION OF MEDICAL TOURISM FROM LONG HAUL TO SHORT HAUL DESTINATION AND DOMESTIC TRAVEL.

ost medical tourism providers are located in 'long haul' destinations. (reference Nigeria). Destinations that take seven hours or more to reach via nonstop flight. Even without medical treatment, long haul travel can be exhausting, requiring up to 24 hours or more travel time. For this reason and the additional cost, long haul destinations, such as India, Thailand and Singapore have both comfort and economic barriers. More recently, providers in major tourism destinations are locating their services closer to take off destinations that require a quarter of the time needed to travel to long haul destinations.

While cost of medical care at the short haul destinations might be higher than the costs of care at farther destinations, lower travel and opportunity costs could offset the higher medical costs. The latest evolution of medical travel is domestic medical travel. Hospitals in long haul destinations now have satellite hospitals in most take off destinations, providing high quality and reducing cost and inconvenience of travels. With greater price transparency and competition among providers within Nigeria, a shift toward all inclusive pricing for treatments may facilitate and encourage more domestic medical travel.

Evotution of Medical Travel This domestic medical tourism will eliminate the barriers that currently prevent travelling for care, shrinking the distance people need to travel and fully integrate their services into the local mainstream health plan.

Long - Haul travel -Singapore -Thailand -India

Short - Haul travel -Regional Hospital

Domestic travel -National and State

What would this arrangement look like? What is the implication for existing 'local' healthcare providers? Think this question through as we hit the prospects of domestic medical tourism. A potential disruptive force. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 49

PROMOTING MEDICAL TOURISM IN NIGERIA INDIA, JORDAN, MALAYSIA, SINGAPORE, TURKEY, THAILAND, NIGERIA?

The medical tourism industry is destined to be among the world's major growth industries. What can you do to remain competitive?

HOW DO YOU ATTRACT FOREIGN PATIENTS? -

High quality Specialized care Low cost Reduce waiting time Improve access International accreditation.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 50

WHO HAS A STAKE IN GLOBAL MEDICAL TOURISM? Insurance administrators and agents, airlines, employers, top domestic and international hospitals, hotel chains, departments of tourism and software companies, public and private hospitals, health and medical resorts and spas, travel agencies, health consulting companies, health medical associations, medical travel agencies, property developers, international insurance companies, technology solutions providers, and perhaps most important, the patients.

Health & Hospitality Mix

edical tourism (also called medical travel or health tourism) is a term initially coined by travel agencies and mass media to describe the rapidly growing practice of traveling to another country to obtain healthcare. More recently,

the phrase â&#x20AC;&#x153;Global healthcareâ&#x20AC;? has emerged and may replace the earlier terms. The main driver for patients to visit medical tourist countries is cost of the treatment as well as the long waiting period, as long as one year. There are also quality considerations. Major players in medical tourism are private hospitals which have upgraded their interiors to resemble five star hotels. The hotels are also tied up with travel agents/tourists so as to facilitate a comfortable and hassle free travel for the inbound patients. The government of major medical tourist destinations make conscious effort to aggressively promote this new healthcare landscape. Other players that have to be integrated into the medical tourism sector include; tour operators, hotels, hospitals and or integrated hospitals cum hotels. For medical tourism to succeed, a consortium of tour operators, hospitals and hotels (if an integrated set up is not available) is a must. The purpose of tour operators/agents is to liaise with the insurance companies and the private/public medical practitioners in overseas markets so as to ensure steady stream of patients. In addition, tour operators also help in explaining the problem that the patients may face when they visit. While the hospitals sell the medical services, the hotels sell the country as a tourist destination using the ploy of selling Exotica. Price is a major selling point. (The price of an open heart surgery could be around $150,000 USD in the USA or $70,000 USD in UK, while the cost of the treatment in India could be as low as $3000 USD. The big question is given the same standard of quality, why the large disparity in price? This can be linked to: Business model that leads to value innovations.

The big question is ...given the same standard of quality, why the large disparity in price? This can be linked to a healthcare business model that leads to value innovations.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 51

The medical tourism industry is destined to be among the world's major growth industries. What can you do to remain competitive?

As transparency prevails globally and core measures become requisite, anyone can quickly find highly accurate, relevant comparison information.

Consider becoming an actively involved MTA member.

How does the transparency movement make you view your facility and your product/service mix differently?

Compare risk-adjusted results of your facility and clinicians with those of the best hospitals located anywhere on the globe. Consumer s can make the same comparisons. Do you stand out favorably?

What does your hospital need to do now to adapt to global competition?

What needs to change for your facility to stay competitive?

Are you willing to brainstorm about new possibilities that were out of the question in years past?

Will you contemplate partnerships, affiliations, and joint strategies?

Can you abandon sacred cows in favor of cash cows?

Seek relationships with international, national, and regional hospitals to learn what it takes to meet the highest standards of value.

As competition for customers grow, expand your options.

The progressive institutions will thrive, the merely excellent will survive, and the ordinary will perish. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 52

Is your website all it could be?

Does your website offer comprehensive and current information about your facilities, doctors, and procedures?

Does the site provide patient testimonials and memoirs?

Does your hospital attract prospective customers, particularly those with a need for high-ticket surgical procedures, using narratives that appeal to their emotions? ?

Is your message too matter-of-fact? Keep in mind that prospective patients may be unsure and frightened of their medical future.

Have you collected and posted case histories?

Have you reviewed your online and print literature for its emotional appeal?

Do you have inspirational pictures and personal histories online?

Do you talk about the success of previous patients?

Do you offer encouragement, hope, and inspiration?

You may have the facts and the figures, but do you have the empathy?

arketing communication plays a very major role: word of mouth communication, tie-ups with leading medical insurance companies, and tie-ups with foreign universities where internship is offered. In the prospective tourist destination, these hospitals help to secure medical tourist to that healthcare institution and its country. From the medical tourist perspective,(the customer), the key drivers which motivate inbound patients are: ? Availability of hospitals with international accreditations like “GOLD SEAL” ? Treatment provided is comparable to any other destination in developed countries. ? Connectivity is good. ? Possibility of on-line diagnosis especially post care and future consultations. ? Large pool of clinicians and clinical support group. ? Highly skilled experts in with good communication skills. ? Strong Pharma sector. ? The easy availability of major tourist destinations, this serves as additional incentives.

The group is tied up with hospitals in Mauritius, Tanzania, Bangladesh, Yemen, and Sri Lanka. From the hospitals point of view, medical tourism is an area where greater profits can be made. This profit can be utilized for making their service affordable to the lower segments of the society or otherwise. For the hospital, profits are to be made in two areas: ? In the treatment offered to the medical tourist. ? In the areas outside the treatment e.g. the room offered, the food offered, the laundry services offered etc. The key issue in medical tourism is differentiation in the services offered to medical tourist from domestic tourist. From the hospital perspective, medical tourist need to be provided a more than deluxe service, an area where customer centricity is a must. Such “more than deluxe service” can be offered at a premium price with marginal costs to the hospital.

The medical tourist is normally accompanied by two or three relatives, who need housing quite close to the hospital or better still within the hospital premises itself. This is an area where In India, Apollo hospital has been a forerunner in attracting profit can be made. The pre and post operative care is another medical tourism in India. On an average it attracts around important area profits center. 95,000 tourists a year, many of whom are of the Indian origin. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 53

Have you identified opportunities to recast the narrative of your service? It's worth a department-by-department, top-down and back-again review. ? Do you provide Q&A-style articles? ?

Do you offer frequently asked questions, special reports, and fact sheets? Does your literature put people at ease about using your service?

What can patients expect?

What clinical outcomes are likely?

How will patients feel in your care?

More medical tourism facilitators enter the industry all the time, each offering something new or different. Worldwide transparency is inevitable. The progressive institutions will thrive, the merely excellent will survive, and the ordinary will perish. ? Have you explored opportunities to affiliate around the globe? ?

Where can you establish brand recognition, gain revenue, and influence students to intern at your hospital?

Are you completely transparent and competitive in price and quality? Can you adapt your cost structures and mix of services to the new marketplace?

AFFILIATION AND PARTNERSHIP Have you explored opportunities to affiliate around the globe? Where can you establish brand recognition, gain revenue, and influence students to intern at your hospital? Are you completely transparent and competitive in price and quality? Can you adapt your cost structures and mix of services to the new market place?

If you can't fight global competitors, join or affiliate with them.

leveland Clinic's global expansion The 30 bed licensed oncology facility is accredited by the joint commission and is part strategy is a prime example of a of the International Research Collaboration United States provider going global. Cancer Therapeutics Research Group. Cleveland Clinic has forged partnership in The Harvard Medical School Dubai Centre Austria, Egypt, and the United Arab Emirates Institute for post graduate education and and has considered expanding to China and research was launched in 2004, through a joint other markets. The Clinic manages and effort by partners Harvard Medical operates Sheikh Khalifa Medical city, a International and Dubai Health city. The facility is part of the Dubai government's network of facilities in Abu Dhabi. mission to develop Dubai Healthcare city into a centre of excellence for healthcare delivery, Johns Hopkins began its global venture in 2000 medical education and research. In return for in Singapore with what is now called Johns lending its knowledge and the brand, Harvard Hopkins Singapore International Medical earns revenue, increases its brand globally, and Centre. influences the next generation of medical students.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 54

It's hard to know just how many consumers engage in regional medical tourism. As opposed to global medical tourism, which generally involves a facilitator, regional medical tourists are more likely to research and plan on their own.

Opportunities to attract patients by upgrading your facilities may be well within your grasp. ?

Can you purchase local facilities and convert them into guest houses or hotels? If you can't make a purchase, can you form an alliance or affiliation?

Are there facilities on your own premises that might serve well to house medical tourists?

What else in your immediate area can heighten the notion that your hospital is a valid and worthy medical destination?

You may have regional tourists already. Do you have a system that tracks where patients are coming from?

INTERNATIONAL HEALTHCARE ACCREDITATION â&#x20AC;&#x153;This is essential for providers to confirm the quality of their services and radiate confidence. It also serves as marketing documents.â&#x20AC;? International healthcare accreditation certifies the level of quality for healthcare providers and programs across multiple countries. International healthcare accreditation organizations certify a wide range of healthcare programs such as hospitals, primary care centres, medical transport and ambulatory care services.

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THE USE OF THE INTERNET IN HEALTH DECISION MAKING

Growth of the internet has made it easier to learn about medical tourism and the search for value.

ost consumers look online for health information. The number is growing by the day. Majority of consumers turn primarily to health professionals, friends and family members for health advice; however, more than 40% of these online health consumers reported reading user generated health information commentaries posted online in reviews, Blogs, forums and message boards. Consumers turning to the internet for health information face an over whelming number of available sites. Sifting through online information is challenging, to say the least and the site that receive the most traffic will be those with the most marketing savvy, not necessarily the most reliable data. For example, a study by the market research firm comscore found that in the three months after the HINI outbreak, more than four times as many web searchers click through to Wikipedia than to other centers for disease control and prevention and one of the top five sites in this search wasn't even medical news site. It was Clorox's. Even the savviest consumers can easily get lost looking for reliable objective information on health care quality. To address the need for quality information about providers, advocacy sites such as consumer reports and business sites such as Angie's list have developed substantial on line programs. It is anticipated that this trend will continue and accelerate to the point where all major online search and advertising companies offer competitive service.

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Price Transparency: In an era of consumer driven healthcare, consumers are encouraged to participate more actively in their healthcare decisions. To do so, they need access to information they can understand and use to directly compare their options. Most of the hospitals in Medical Tourism destinations advertise average price for different treatments and will provide from quotes if requested.

Quality and Accreditation: Hospital quality and accreditation has begun to converge internationally. Consumers are looking for international accreditation certificate to make informed decisions. Joint Commission International (JCI) accreditation is widely viewed as the “gold standard” of quality for hospitals that cater for international patients. JCI accreditation is voluntary, but the number of JCI accredited hospitals worldwide has grown more than twenty fold since 2002. Hospitals that serve international patients use their JCI accreditation as marketing tool to attract patients, other hospitals have quickly followed suit.

Transparency of care quality: There is a clear trend toward greater availability of 'outcomes' data, as well as toward payers use of these data to reward providers for quality of care.

The outcomes of interest differs among stakeholders. For the consumers, they might be quality of life, restoration of health or simply feeling better. For a clinician, they were post procedures complications, whether the patient left the hospital alive, or whether the patient survived 30 days post hospitalization. These varying definition of outcomes make it difficult to report them in ways that will be most meaningful to the different consumers involved. The trend towards using these data to guide decision making is here to stay and seems poised to continue growing As consumers of healthcare in Nigeria and most other countries begin to systematically and objectively assess the effectiveness and value of alternative treatments, we will undoubtedly realize that we don't know as much as we thought we did about the effectiveness and value of care that is routinely provided inside this country. We will likely discover that the evidence is weak for most treatments that have been adapted as the “standard of care”. With access to an objective body of evidence, consumers, and providers can make more informed decisions. With access to evidence about value and effectiveness, consumers can examine their own values and weigh the trade offs involved in these decisions.

GLOBALIZING HEALTHCARE SERVICES

ust as the invention of the telephone changed communication forever, the internet is setting the stage for global and regional medical tourism. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 57

THE ROLE OF HEALTH TECHNOLOGY ASSESSMENT IN MEDICAL TOURISM. What does new technology mean for healthcare providers, consumers and the system in general?

he introduction of new technologies are not restricted by values, relative to existing technologies. A typical consumer believes that newer technologies are superior to existing technologies and more expensive treatments are better. In reality, some new technologies improve quality outcomes or decrease costs, while others neither improve quality nor outcomes, or decrease costs relative to existing technologies.

The growth of medical technology has stimulated demands ...new medical technologies, procedures, drugs, equipments, devices and processes used to provide medical care are another important factor stimulating demand..

Te c h n o l o g i e s t a rg e t i n g p r e v i o u s l y untreatable conditions increase the demand for medical care by increasing the number of people who seek treatment. Technologies can also have a 'substitution effect' shifting demand away from existing treatment. For example, minimal invasive hip replacement has shifted demand away from traditional hip replacement procedures. To the extent that substitutive technologies improve the process, value or outcomes of care, they can also generate new demand. For example, minimally invasive procedures has created new demand by people who would otherwise forgo treatment due to concerns about recovery time. To fully implement evidence based medicine and provide the highest quality of care possible, new technologies will need to deliver improvements in values, while comparison of effectiveness is a crucial step in identifying high value care. The next logical step is to systematically examine the cost effectiveness of alternative treatment.

The term health technology assessment refers to the processes used to evaluate a broad range of new technologies including procedures, drugs, and medical devices. An assessment is a synthesis of existing scientific and non scientific evidence, including information about safety, efficacy, effectiveness and cost effectiveness. Assessment focus on addressing four questions: Effectiveness: H o w w e l l d o e s t h e technology treat the condition? Scope: For what kind of patients does the technology work? Costs: How much does it cost to use the technology? Relation to existing technology: Does the technology perform better than, the same as, or worse than existing technology?

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 58

the

OPPORTUNITY medical tourism is big business and Nigeria can exploit the opportunities it presents A report by the Economist Intelligence Unit

report by the Economist Intelligence Unit, entitled, “Travelling for Health: The Potential for Medical Tourism,” suggests that many countries are well placed to develop medical tourism that would create the much-needed healthcare jobs and expertise, as well as generate revenue. It, however, advises that to make the most of this opportunity, government and the private sector need to work together to ensure that the benefits from medical tourism filter down to the wider population. A framework for continuous assessment of hospital standards of practice needs to be developed to ensure patients’ confidence in the healthcare system. Due to Nigeria’s large population and the level of the healthcare needs of its citizens, the country constitutes a big market for investors in healthcare products and services. However, in the absence of local alternatives to quality healthcare that is accessible abroad, prohibiting civil servants from travelling abroad for medical treatment is neither the solution to the increasing incidence of outbound medical tourism nor to the poor healthcare system. To successfully discourage outbound medical tourism and achieve the goal of providing quality healthcare, there has to be a massive improvement in the country’s healthcare sector. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 60

… The first need is to improve the quality of healthcare outcomes in the country In improving the quality of healthcare outcomes in Nigeria, key activities focused on two critical areas within the sector need to be accomplished across public and private hospitals in Nigeria.

• Development of a Standard Operating System (SOP) To ensure strict and continuous adherence to set standard operating procedures and infrastructural requirements, regularly auditing and reaccreditation of both private and public hospitals should be carried out.

1. Infrastructural Development

• Development of a Public/Private Partnership (PPP) Strategy An effective PPP strategy should be developed and implemented to augment the government’s effort in improving the quality of healthcare in the country.

For Nigeria to experience real transformation in the healthcare delivery sector, urgent attention needs to be paid to medical infrastructural development within the sector. Appropriate healthcare technology, policies and initiatives capable of turning healthcare delivery around in the country should be put in place. Some of these initiatives include: • Increased Budgetary Allocation for Healthcare This will equip public hospitals and tertiary health institutions with the monetary capacity to operate optimally, by purchasing needed equipment and facilities, hiring competent personnel, etc. Regular maintenance organization and standardization codes for equipment should, however, be developed to ensure durability and proper use of the equipment. • Provision of Turnkey Medical Equipment in major public hospitals within the country This medical equipment would be used in important areas of medical specialty such as non-operative medicine (cardiology, oncology, critical care medicine etc.) and surgery (general surgery, plastic surgery, transplant surgery etc.). • Review of Regulatory Mechanisms and Professional Codes of Conduct in the healthcare sector The standard operating procedures should be comprehensive to capture all stages and aspects of healthcare procedures, from triage, to clinical and surgical operations, to error detection, prevention and documentation. There should be regular audit and reaccreditation of both private and public hospitals. The National Health Insurance Scheme (NHIS) should also be revised and implemented to ensure accessibility of healthcare for all citizens.

2. Human Resource Optimization In addition to infrastructural inadequacies in the healthcare sector, there is also the problem of incompetent medical personnel. There is a need to raise the minimum competence requirement for all healthcare institutions. All healthcare institutions should be mandated to consistently train and retrain healthcare professionals. The training should focus on improving clinical effectiveness, ensuring patient safety and patient care. • Improving Clinical Effectiveness A robust performance management system should be developed to constantly evaluate performance of staff at all levels and across all functions. Strategies to improve medical processes should also be implemented, such as effective ways to reduce waiting time from when a patient arrives to when they receive medical attention. • Ensuring Patient Safety and Care Staff should be educated on patient safety protocols, types of errors that could occur in clinical settings as well as prevention of these errors. Training should also include error reporting mechanisms and specific protocols. By embracing these recommendations, among others, Nigeria can radically improve accessibility and quality of health care and ensure the local provision of essential services and facilities at affordable prices to all patients. To ensure the accomplishment of world-class quality health outcomes in Nigeria, concerted effort of all stakeholders is required. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 61

RICARDIAN MODEL OF INTERNATIONAL TRADE FOR HEALTHCARE INDUSTRIES MEDICAL TOURISM

he concept of comparative advantage and gain is one of the oldest ideas in economics.

This concept was introduced by David Ricardo in his 1817 book on the principle of

political economy and taxation. Ricardo used a simple model to show that nations

maximize their material welfare by specializing in goods and services that they have the lowest relative costs of production.

The traditional Ricardian model of international trade reveals that the economics of outbound and inbound medical tourism is based on the advantage of comparative advantage of costs, quantity and access.

The cost advantage is based on business models: value innovation, low fixed costs, employee wages as well as liability insurance premium.

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The driving force of outbound medical tourism will continue to be the iron triangle: COST, ACCESS AND QUALITY.

edical tourism has become a major force for the growth of service exports worldwide, while concentrating on a selective number of recipient countries with India and Thailand as major global markets.

â&#x20AC;&#x153;Specialization and free trade result in gains from international tradeâ&#x20AC;?

Medical tourism offers a financial valve for the growing burden of healthcare costs in matured markets like the USA and provides an alternative for developing nations with questionable quantity and access to healthcare. The traditional Ricardian model of international trade, reveals that the economics of outbound and inbound medical tourism is based on the merits of comparative advantage - costs, quantity and access. â&#x20AC;&#x153;Historically, patients of developing countries often journeyed from less developed countries to medical centres in

et us briefly take a closer look at the major characteristics of international or cross-border medical tourism. When looking at the broader healthcare tourism industry we differentiate between wellness tourism and medical tourism. The latter can be further broken down into cosmetic surgery and elective surgery. Our focus will be on the non-cosmetic surgeries and medical treatments. In the near past patients from less developed countries traveled to major medical centres in industrial countries. There, they looked for sophisticated, often technologically advanced services that were typically not available in their home countries. These patients were usually wealthy individuals. On the reverse, you have individuals from rich countries seeking services that were either not covered by their health country or the services were simply not available often due to legal restrictions like organ transplants. The majority of those services were of limited medical complexity. Treatments in India and Thailand refer to high quality, full service and internationally accredited hospitals

more developed countries, where they received services that were not available in their countries of origin as medical know how and technology were missing. As technology and medical know-how dissolved into emerging markets, a new model of medical tourism from rich to poor countries evolved over the last two decades. Rich country tourists started to exploit the possibility of combining tourist aspects with medical ones. Today, one finds modern hospital facilities close to major tourist attractions. In countries like India, Hungary, South Africa, Thailand and Turkey, hospital and even dental clinics look more like first class hotels, and they actively promote tourist packages with their medical services. Therefore, medical tourism is increasing in part with the growth trend of general tourism.

with clinicians that were predominantly educated at respectable universities in developed countries. These hospitals often seek affiliation with well-known USA or U.K teaching hospitals to lift standards as well as reputation. The cost advantage is based on the business models of value innovation - low fixed costs, employee wages as well as liability insurance premium. To offer internationally marketable and competitive services, the hospitals must be accredited by a third party like Joint Commission International or must comply to ISO 9000. Also, hospitals offer package deals for standard procedures, thereby trying to limit the risk of exploding costs for the patient. Since it has become a major industry, several websites of medical tourism agencies and even non profit organizations inform patient clients and promote international travels by linking the patients to hospitals or individual clinicians. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 63

VALUE INNOVATION Narayana Health

t is known as a low cost and high quality Indian healthcare service provider. It has been bestowed with this title for its ability to reconcile quality, affordability

and scale. This unique business model of Narayana Health has become a

Global Healthcare and Harvard Business School case study. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 64

“The current price of everything that you see in health care is predominantly opportunistic pricing and the outcome of inefficiency,” Dr. Srinath Reddy

“It

evi Shetty is obsessed with making heart surgery affordable for millions of Indians. On his office desk are photographs of two of his heroes: Mother Teresa and Mahatma Gandhi.

Cutting costs is especially vital in India, where more than two-thirds of the population lives on less than $2 a day and 86 percent of health care is paid out of pocket by individuals.

Shetty is not a public health official motivated by charity. He’s a heart surgeon turned businessman who has started a chain of 21 medical centers around India. By trimming costs with such measures as buying cheaper scrubs and spurning air-conditioning, he has cut the price of artery-clearing coronary bypass surgery to 95,000 rupees ($1,583), half of what it was 20 years ago, and wants to get the price down to $800 within a decade. The same procedure costs $106,385 at Ohio’s Cleveland Clinic, according to data from the U.S. Centers for Medicare & Medicaid Services.

Changing Procedures

shows

that

costs

can

substantially

contained,” said Srinath Reddy, president of the Geneva-based

World

Heart

Federation,

Shetty’s approach. “It’s possible to deliver very high quality cardiac care at a relatively low cost.” Medical experts like Reddy are watching closely, eager to see if Shetty’s driven cost-cutting can point the way for hospitals to boost revenue on a wider scale by making life-saving heart operations more accessible to potentially millions of people in India and other developing countries.

One of the ways in which Shetty is able to keep his prices low is by cutting out unnecessary pre-op testing. According to him, ‘urine samples that were once routine before surgery were eliminated when it was found that only a handful of cases tested positive for harmful bacteria’. The chain uses web-based computer software to run logistics, rather than licensing or building expensive new systems for each hospital. When Shetty couldn’t convince an European manufacturer to bring down the price of its disposable surgical gowns and drapes to a level affordable for his hospitals, he convinced a group of young entrepreneurs in Bangalore to make them so he could buy them 60 percent cheaper. In the future, Shetty sees costs coming down further as more Asian electronics companies enter the market for CT scanners, MRIs and catheterization labs - bringing down prices. As India trains more diploma holders in specialties such as anesthesiology, gynecology, ophthalmology and radiology, Narayana will be able to hire from a larger, less expensive talent pool.

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THINK DIFFERENTLY C

oming back to America was, for me, much more of a cultural shock than going to India. The people in the Indian countryside don't use their intellect like we do, they use their intuition instead, and their intuition is far more developed than in the rest of the world. Intuition is a very powerful thing, more powerful than intellect, in my opinion. That's had a big impact on my work. Western rational thought is not an innate human characteristic; it is learned and is the great achievement of Western civilization. In the villages of India, they never learned it. They learned something else, which is in some ways just as valuable but in other ways is not. That's the power of intuition and experimental wisdom. Coming back after seven months in Indian villages, I saw the craziness of the Western world as well as its capacity for rational thought. If you just sit and observe, you will see how restless your mind is. If you try to calm it, it only makes it worse, but over time it does calm, and when it does, there's room to hear more subtle things - that's when your intuition starts to blossom and you start to see things more clearly and be in the present more. Your mind just slows down, and you see a tremendous expanse in the moment. You see so much more than you could see before. It's a discipline; you have to practice it. Credit: Walter Isaacson

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THIS MAN CHANGED BUSINESS FOREVER

Steve Jobs 1955 - 2011

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LEADERSHIP SUCCESS IS CONTEXT SPECIFIC CHURCHILL WAS GREAT IN WAR AND USELESS IN PEACE. You have to find the area in which your unique strengths will flourish. The same leader in different contexts achieves different outcomes. As leaders, we have to find the context in which we best flourish.

The same person in different scenarios could be a hero or a zero. The person did not change, the context changed.

ou do not need to be the best leader on the planet. Even “best” leaders have their faults.

No leader in history has been perfect.

You do

not need to be perfect either, because perfection does not exist in leadership.

Searching for

perfection is like searching for smoke signals in the fog. It is an exercise in futility. There are only leaders who fit and leaders who do not fit. Churchill was the classic example. Before the war, he was something of a misfit. In the war, he became the Great British hero. When he became prime minister again after the war, he was memorable for more or less nothing. As leaders, we have to find the context in which we best flourish. Leading in one organization is no guarantee of success in another organization.

“If an

investment banker, and a hospital CEO swap roles, the result will be ugly”. Leaders succeed in the platform they know: take them out of context and they struggle. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 68

Going round the world or even within one country, or industrial sector, each leader was clear about the essence of leadership. But each leader has a completely different formula for success.

But even the worst boss has his one or two signature strengths which propelled them to the top. Successful leaders are like any successful performer: they build on the strength not the weakness.

There is no single formula for success. If there was, you could program a computer and ask it to lead, perhaps we will get to that stage one day. Each leaders makes their own success formula, and they do what it takes to succeed in their unique environment.

If you want to succeed, work on what you are really good at. Then make sure you find roles where you can play to your strengths. Avoid assignments that focus on your â&#x20AC;&#x153;development opportunitiesâ&#x20AC;?, unless you want to set your career back by years.

As a leader, you do not need to be perfect. But you do need to grow your unique talents and make sure you are in the right place to use them well.

The way to deal with weakness is not to dwell on them, but to work around them. Leadership is a team sport; so make sure you have a team that complements your talents: if you are not great at accounts, or data, or strategy or public relation or financial analysis, you can find plenty of people who are.

Be the best of who you are, play your strength;

As leaders, we have to find the context in which we can succeed.

To succeed, you need not be a mix of Nelson Mandela, Lord Nelson, Churchill and Mother Teresa all put together. Imagine Mother Teresa on horseback leading the Mongols on their rampage across Asia. For most people, this does not work. So it is clear, we cannot succeed by being someone else. We are who we are, and we are not suddenly going to become Churchill or Mandela.

Be the best of who you are: This means focusing on your unique strengths. Think of the various bosses you have had, you may wonder how some of them became a boss with their glaring weakness.

There are three good reasons why leaders only succeed in the context most familiar to them: The rules of the game vary from place to place. Taking risks in the hospital is not same for an investment banker. Leaders have to know how to get things done. Inside their normal territory, they know who to call, how the power structures work and they have established a trusted network of colleagues on whom they can rely. Move context and the leader loses that trust network, has no idea how the power structures work and does not even know who to call to make things happen. The great leader becomes a useless leader very fast. Industry expertise counts: It helps to know the markets, the competition, and technology. In theory, you can read about this in reports, but in practice, it takes years to master the reality of the sector. Credit: J.O. Owen HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 69

L e a d e r s h i p

HOW REASONABLE AND AMBITIOUS ARE YOU? HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 70

If Alexander the Great had been reasonable, he would have realized that he could only rule his tin pot state on the far edge of Greek Civilization. Alexander the Great was not reasonable, he conquered the whole of the known world, and a bit beyond, by the age of 30. That was why he became Alexander the Great, unlike his obscure cousin Alexander the reasonable.

eing reasonable is a disaster for leaders. There are always reasons why

the project was late, why cost must go up, why we must cut our prices,

why budget will be missed. When you accept excuses, you accept

failure. Good leaders are ambitious and unreasonable. Leaders are always ambitious for the organizations they lead. Ambition means having the courage to chase challenging goals that force the organization into

Reasonable people have brilliant ideas, but they never execute them because they listen to all the reasons why they could not succeed.

business not as usual: force people out of their comfort zone and discover new ways of doing things. Being ambitious is inherently unreasonable: you are setting goals that are not easy to achieve. But if you want to conquer the healthcare delivery challenges, or drive your organization forward, you have to be unreasonable. Reasonable managers accept all the reasons why something cannot be achieved. “When you accept excuses, you accept failure.” Most great business today are not created by “reasonable people”. (Ryanair was insane to take on the mighty British Airways.) There is an art form to being unreasonable as a leader. It is not about shouting at people, arguing and demeaning colleagues. If you ask for the moon, you have to help them get there. In practice that means: -

Be unreasonable about the goal and stick to it.

Be flexible about the means: don't second guess your team.

Support your team all the way: financial and political support.

Don't be deflected by setbacks.

To lead is to live beyond the comfort zone. The art of leadership is helping others stretch themselves, develop and live outside their comfort zone as well. Credit: J.O. Owen HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 71

are we terrorized by technology?

So how can hospitals adopt new technologies? Turf wars influence how new technology is adopted in hospitals.

n the story of Turf Wars in Coronary Revascularization, Pisano and Huckman looked at competing treatment methods for coronary artery disease and discovered a tough battleground brewing for a new technology called PTCA, or percutaneous transluminal coronary angioplasty. Not only was PTCA going up

against an established and effective procedure known as coronary artery bypass grafting (CABG), but also against the Surgeons and other interests in the hospitals that invested in the older procedure.

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In an extract from an interview granted by Pisano and Huckman to Sara Grant, we highlight a blue print for new technology adoption in Healthcare.

Sara Grant: In studying the adoption of innovation in hospitals, you note an interesting road block: turf wars. Can you describe how turf wars influence hospital decisions to buy new technology? Have you seen similar turf wars in other industries?

Pisano and Huckman: Hospitals are characterized by the presence of multiple groups of highly trained specialists, each of which has its specific technological and clinical approaches. When multiple specialty groups converge on the treatment of a particular patient population as is the case with cardiac surgeons and cardiologists, turf wars can emerge. Very often, these turf wars are created because hospitals have already made initial investments in two or more competing technologies, thereby, leading to the development of a constituency around each technology. For example, when angioplasty entered mainstream use in the 1980s', most hospitals that already had cardiac surgery programs felt that they needed to adopt angioplasty to â&#x20AC;&#x153;round outâ&#x20AC;? their portfolio of cardiac services. At the time, this decision did not create much conflict between surgeons and cardiologists, as the two technologies were not great substitutes for each other. As angioplasty's performance improved overtime, however, the two technologies became increasingly substitutable and the clinical groups associated with each moved into closer competition with each other. Where turf wars do seem to have more of an impact is in how aggressively a hospital supports its initial investment in a given therapeutic areas, in terms of ongoing financial support for update technology, marketing to patients, and recruitment of new clinicians. These turf wars clearly exist in other industries, though unlike the hospital settings, these battles are often fought before initial investments in a technology are made by the firm.

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Sara Grant: Once an innovation is brought into a hospital, staff must learn it. What were the variables you saw in a team learning a new technique or technology? What role did “psychological safety” play in the ability of a team to master an innovation?

Pisano and Huckman: Most people think that, the skill of an individual surgeon is the most important driver of success, but we found that what really mattered was how the entire surgical team was managed and how it prepared for adoption. We found that teams that learn new technique fastest had a very different approach to adoption. They didn't just look at adoption as a technical problem, but instead, focused on what the new technique meant for each member's role and responsibilities. The surgeon's role was critical, not just as an individual user of the technology, but as the leader of the team and the individual responsible for framing the change. Where the challenge was framed narrowly as a technical problem, adoption was more problematic. But where the surgeon framed the challenge as one of organizational learning, we saw much more success with adoption. Psychological safety, a concept originally developed by Amy Edmondson, played a critical role in successful adoption. Adoption was much more rapid in teams where the surgeon promoted open discussion of problem and “speaking up” by individual member.

Sara Grants: From your study, what lessons are there to be learned about organizational learning?

Pisano and Huckman: First, organizational learning is not automatic. Too often, it is assumed that with practice and experience, performance improves. That's true on average, but it is a lot of variance. Learning has to be actively managed. “Learning depends on the climate you create in the organization”. Second, learning depends on the climate you create in the organization. If people are afraid to speak up and discuss problems, you lose a critical source of feedback, and you can't learn without feedback. Finally, learning must occur in real time. That is, while after action reviews can be helpful, reflection on the spot is often the best source of knowledge. You can't always do this reflection immediately, but the longer you wait, the less you will learn. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 75

ARE YOU READY FOR THE BIG JOB?

e know that different times and different circumstances call for different

leadership skills, so when it comes to managing your career: ...How do you prepare yourself to move up? ...What abilities should young would-be healthcare executives focus on developing as they choose organizations, functions, and jobs? ...What skills should working executives hone as they strive to reach the next level?

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These are not easy questions, though we can definitively identify the skills that companies seek now, pin pointing those that will be useful in the future is unavoidably speculative. One striking consistency is that once you reach the c - suite, technical and functional expertise matters less than leadership skills and a strong grasp of business fundamentals. You need to know how to create healthcare business models, appreciate risk management, how to design a succession plan and talent structure.

T T

The skills that help you climb to the top won't suffice once you get there.

he skills needed for top jobs change with the times. The résumés of today healthcare executives look much different from those of their predecessors from 10 or 20 years ago.

For most senior healthcare executives, functional and technical expertise has become less important than understanding the healthcare business environment, fundamentals and strategy.

The types of skills increasingly in favor of healthcare executives are strong communication, empathy, collaboration, and trust building. One skill that will be of foremost importance will be the ability to elicit public trust as the face of the organization.

The requirements for healthcare executives, have shifted toward business acumen and “softer” leadership skills. Technical skills are merely a starting point, the bare minimum. To thrive as a C-level executive, an individual needs to be a strategic thinker. The C-level person in healthcare organizations needs to be more team oriented, capable of multitasking, continuously leading without rank, and able to resist stress and make sure that his subordinates do not burn out. And he/she needs to do all this with a big smile in an open plan office.

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Leadership always takes COURAGE. “Today's leaders do not need physical courage. But they do need courage to make unpopular decisions and lead people where they would not have gone themselves”.

Many leaders have become very confused about leadership: they are in position, but they are not in power. They are not leading.

Kings were meant to lead their

have gotten by themselves”. Many

troops into battles, rather than sitting in a

leaders fail this text: they simply

bunker issuing commands.

administer a legacy which they inherited.

hroughout history, leaders have

Henry Kissinger, defined leadership as

been expected to be brave.

“taking people where they would not

Taking people where they would not So what has courage got to do with

have gone by themselves takes moral

leadership? Physical bravery does not

courage, not least of all, because there is

appear on the must have list of qualities

a real risk of failures. Followers will

for the hospital CEO. But you cannot be

inevitably have their doubts and are

a good leader without courage. Both

ready to point the finger of blame when

emerging and established leaders need

things go wrong.

courage. Failure is always lonely, until leaders are Emerging leaders need courage to grow

able to take difficult and often unpopular

and learn. “If you never fail, you have

decision, they are not leading.

never tried hard enough”.

Leadership always takes courage.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 78

the inertia of success CEO Hospital CEO

ost CEO's and heads of departments in healthcare organizations got to where they are by having been good at what they do. And overtime, they have learned to lead with their strengths. So it's not surprising that they keep implementing the same strategic and tactical moves that worked for them during the course of their careers especially during their “championship season”.

When the environment changes in such a way as to render the old skills and strengths less relevant, we almost instinctively cling to our past. We refuse to acknowledge changes around us, almost like a child who does not like what he is seeing so he closes his eyes and counts to 100 and figures that what bothered him will go away. We too close our eyes and are willing to work harder, to dedicate ourselves to our traditional tasks or skills, in the hope that our hard work will get us This phenomenon is called “inertia of there by the count of 100. The phrase success”. It is extremely dangerous you're likely to hear at such times is and can reinforce denial. “just give us a bit more time”. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 80

LEADING THROUGH THE VALLEY OF DEATH Credit: Andrew S. Grove

hen an organization is meandering, its management staff is demoralized. When the management staff is demoralized, nothing works: Every employee feels paralyzed. This is exactly when you need to have a strong Leader setting a direction. And it does not even have to be the best direction. Just a strong, clear one. Organizations in the valley of death have a natural tendency to drift back into the morass of confusion. They are very sensitive to obscure or ambiguous signals from their management. At this time, experimentation is over. The time to issue marching orders, exquisitely clear matching orders to the organization is here. And the time to commit the resources of the corporation as well as your own resources, your own time, visibility speeches, statements in external forums (which are always given more credibility in the organization than what you say directly to your employees) is upon you. Most of all, you must be a role model of the new strategy. That's the best way to prove that you are committed to it. You have to role-model your strategy, by showing interest in the elements that lead to the strategic direction, by getting involved in the details that are appropriate to the new direction and by withdrawing attention, energy and involvement from those things that don't fit. To make it through the valley of death successfully, your first task is to form a mental image of what the organization should look like when you get to the other side. This image not only needs to be clear enough for you to visualize, but it also has to be crisp enough so you communicate it simply to your tired, demoralized and confused staff. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 81

CAREER INFLECTION POINT

YOUR CAREER IS YOUR BUSINESS

M Credit: Andrew S. Grove

As CEO of your own career, you will have to supply both vision and commitment yourself.

illions of career changes occur each year in health. Some of them are natural, but many more occur in adverse circumstances.

Whether you're an employee or self employed, your career is literally your business and you're the CEO. Just like the CEO of a large corporation, you must respond to market forces, head off competitors, take advantage of complementary and be alert to the possibility that what you are doing can be done better in a different way. It is your responsibility to protect your career from harm and to position yourself to benefit from changes in the operating environment. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 82

You must open up your mind to outside views and stimuli. Ask yourself a series of questions: -

How would an important change manifest itself in your situation?

- Would you know about such changes from the kind of business information that you routinely get from your organization?

When environmental conditions change, as they inevitably will, the trajectory of this business of one undergoes a familiar curve, reaching a defining point where the action of the CEO, 'You', determines whether your career path bounces upward or accelerates into a decline. In other words, you face a “career inflection point”.

When a new machine or a new computer system comes in, can it change the way your department does their work? Are your skills as good in doing things with new techniques as they were before? Are you confident of learning the new ways? If not, what should you do?

Just as strategic inflection point marks a crisis point for a business, a career inflection point results from a subtle but profound shift in the operating environment, where the future of your career will be determined by the actions you take in response.

When there's a fundamental change in the industry and you don't change your skills, you will lose at b o t h w i n i n g o rg a n i z a t i o n s a n d l o s i n g organizations.

While those actions will not necessarily introduce an immediate discontinuity into your career, their impact will unleash forces that, in time, will have a lasting and significant effect. The most important and the most difficult is to be alert to changes in your environment.

Success in navigating a career inflection point

When you got this job, even though deep down, you knew it was unlikely to be what you would do for the rest of your life, you may very well have tacitly relinquished responsibility for your welfare to your employer. But by taking your eyes off the environment in which your organization operates, like the CEO of a large organization, you too may be the last to know of potential changes that could have an impact on your career. Consider how developments originating in other industries might have a ripple effect on your job.

The stages of dealing with a career inflection point,

depends on a sense of timing. Are you picking up on the portent that something may be changing? Have you already anticipated a change and prepared for it? Or are you waiting until the signs are incontrovertibly clear before you make your move?

is emotion laden. “You have invested a lot in getting your career to where it is. More important, you have invested your hopes in the further upward trajectory of your career. As signs appear that the curvature is shifting downward, your whole being will work at trying to deny that it is so. Often, you will be tempted to believe that because of your particular individual excellence, you will be exempted from the change. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 83

In reality, a change made under the benign bubble of an existing job, when things are still going well, will be far less wrenching than the same change made once your career has started its decline.

ou will think, “It may happen to others but not to me” this is a dangerous conceit. It's the equivalent of the “inertia of success” that trails organizations that have done well. Career inflection points caused by a change in the environment do not distinguish between the qualities of the people that they dislodge by their forces. No one is immune to these environmental changes, no matter how skilled and how invulnerable he or she may feel. Denial can come from two wholly different sources. If you have been very successful in your career, the inertia of success may keep you from recognizing danger. If you have just been hanging on, fear of change and fear of giving up whatever you have achieved may contribute to your reluctance to recognize the situation. Either way, denial will cost you time and cause you to miss the optimal moment for action at or near the inflection point. As in managing business, it is rare that people make career calls early. Most of the times, as you look back; you will wish you had made the change earlier. In reality, a change made under the benign bubble of an existing job, when things are still going well, will be far less wrenching than the same change made once your career has started its decline. Furthermore, if you are among the first to take advantage of a career inflection point, you are likely to find the best pick of the opportunities in your new activity. Simply put, the early bird gets the worm; latecomers will get only the leftovers. There are two things that will help you get through the career valley: Clarity and Conviction.

You have to constantly question your work situation by examining the tacit assumptions underlying your daily work. “...get into the habit of conducting an internal debate about your work environment.”

Clarity refers to a tangible and precise view of where you're heading with your career: knowing what you'd like your career to be as well as knowing what you'd like your career not to be. Conviction refers to your determination to get across this career valley and emerge on the other side in a position that meets the criteria you have determined. Pour your energy, every bit of it, into adapting to a new world, into learning the skills you need to prosper and into shaping it around you. Whereas, the old world presented limited opportunity or none at all, the new world enables you to have a future whose rewards are worth all the risk. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 84

Innovation within Established Enterprises Credit: Geoffrey A. Moore

Innovation comes in many forms - products, processes, marketing, business models, and more. Which kind should you be pursuing? It depends: where are you in your product category's life cycle?

s commercial processes commoditize in a developed economy, they are outsourced or transferred offshore or both, leaving onshore companies with unrelenting pressure to come up with the next wave of innovation. Failure to innovate is tantamount to a failure to differentiate, garner profits and revenues needed to attract capital investment. It behooves us to use our brains to get out in front of this Darwinian process. How are managers and executives to decide where to focus? Which type of innovation should they pursue? ''There was a time when the notion of ''Core Competencies'' was invoked to solve this problem: Pick the things you are best at and focus your resources accordingly. But companies have discovered that being the best at something doesn't guarantee a competitive advantage. A distinctive competence is valuable only if it drives purchase preferences. Customers frequently ignore companies core competencies in favour of products that are good enough and cheaper .

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 85

Battling Inertia The implication of the Life-Cycle model is that enterprises must mutate their core competencies over-time to sustain attractive returns. Product innovation skill which serves a company wonderfully in a market's early stage will not sustain it on main street, where new enterprises in process management and marketing is needed. But management's efforts to change direction are thwarted by the inertia that success creates.

The most common mistake executive teams make when they seek to introduce change is leaving legacy structures untouched. Their hope is that the success of the new will draw resources away from the old and allow change to occur organically and painlessly.

he deeper the enterprise is into life cycle, the more successful it has been: then the greater its tendency to return to its former course. For most executive teams, battling the inertia demon is the biggest challenge they face. Sad to say, the demon usually wins. To overcome the inertia, management must introduce new types of innovation while deconstructing old processes and organizations. The most common mistake executives team make when they seek to introduce change is leaving legacy structures untouched. Their hope is that the success of the new will draw resources away from the old and allow change to occur organically and painlessly. This approach has little chance to succeed. The way to move forward is to aggressively extract resources from legacy processes and organisations and repurpose them to serve the new innovation type, or, if that's not possible, take them out of the company altogether.

So management must pursue a twofold path of concurrent construction and deconstruction. For construction, the goal is to create the next generation of competitive advantage, so the focus should be on the innovation team. It is important to recognise that differentiation: creating innovation, a n d p ro d u c t i v i t y : c r e a t i n g deconstruction must be conducted in tandem. If you try the latter, the inertia demon defeats you. If you try the former without the later, the inertia demon defeats you. If you try the later without the former, you do nothing to overcome the forces of commoditization; you are simply able to endure them longer. By running the two efforts in parallel and migrating resources from legacy processes to innovation where possible, you not only improve your return in the market place, you renew and rejuvenate the company. Neither Darwin's forces nor Demon's will defeat you.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 86

CEO'S COMMON ERRORS IN JUDGEMENT Each of the Executive Judgement errors can be traced to the unique architecture and thought processes of the brain, whose connectionist structure makes it vulnerable. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 87

Undue optimism /over Availability Bias confidence

co m

Acting without thinking is how the vast majority of managers do their jobs. Prof. Henry Mintzbers

Patten matching

rr or s

Frames

rs rro

Exe cu

on judge m m o me c e n iv

e t mon judgemen

The mind thrives on imperfect data. We can turn nonsense into sense because our brains has been designed for a world where a fast, plausible interpretation is often better than a slow certain one. Yet, the strength of this everyday intelligence carries with it unexpected liability. The very way our minds have evolved to process information is often the root cause of the most common and most dangerous errors in executive judgement. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 88

UNDUE OPTIMISM/

â&#x20AC;&#x2DC;'Undue Optimism'' or ''Over confidence'' is not a personality trait, such as arrogance or inflated ego. Rather, it refers to the

OVER CONFIDENCE

common tendency to subconsciously overestimate how much we know about a particular subject, blinding us to our lack of the critical information required. To render a skilled answer, we tend to make immediate

The mind naturally focuses on what we know about a situation, to the exclusion of what we do not know.

decisions without considering the limitations of the facts that form the basis of our conclusions, so we develop beliefs with unjustified conviction. As a result, we often do not know enough about a problem we are confronting before we've already decided on a solution for it. It is the brain's connections structure that makes undue optimism such a pervasive problem. It fails to ask a crucial question: what else do we need to know in order to reach a

people can be so focused on providing what they know about a topic that they fail to consider what they don't know.

sound conclusion? Instead, the mind's tendency to make instant connections creates over confidence that our initial assessments are complete. Over confidence causes decision makers to jump to premature conclusions. As key decision makers in the health sector, we often encounter situations where people want to show how 'smart' they are. But not so much in an egotistical sense. I think it's more of a way for people to exert some control over their environment and achieve some level of security. If one can cite numerous facts and show a really good grasp of the data, then this person feels as though they have a bit of 'protective coating'. However people can be so focused on providing what they know about a topic that they fail to consider what they don't know. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 89

AVAILABILITY BIAS

Executives and key decision makers also frequently suffer from “availability Bias”. We are inherently prone to assume that the most available information is almost the most relevant, even when such conclusions are totally illogical. For instance, the last person who has the bosses ear about a particular issue can often hold an undue influence over his or her final decision. This is the brain's equivalent of an optical illusion, a trick similar to the one presented in the well-known drawing of two figures standing on a sloped plain. In the picture, the man in the foreground always appears much larger; yet if we were to measure the two individuals with a ruler, we would discover both to be the same size. In a similar way, information that is close at hand often takes on disproportionate importance.

The most readily available data, because it is immediate and vivid, tricks the mind into thinking that it is critical to the issue at hand. Such automatic assumptions can be very

Our best CEO's always look skeptically at the data they are given not just in terms of accuracy but also in terms of relevance and sufficiently regarding the issues being considered. These leaders are incisive, insightful, and dogged to get to the bottom of something. They have what I would call a healthy skepticism.

misleading, because often the most pertinent data is neither the most obvious nor the most accessible.

“I have seen some of our best CEO's get very granular, asking tough questions about the information they have been given, what it means, and what it does not mean, and what else they will still need to know. This innate curiosity is so critical. Our most outstanding CEO's are incredible investigators; they don't stop until they have gotten to the truth of what they are confronting”. Availability bias is not a result of lazy executive behaviour. It is a natural tendency of all human beings to make instant associations and magnify information that is presented to them. But these inferences often occur before we've critically evaluated the facts themselves. Without conscious effort to dig further, the most valuable insights often remain hidden.

HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 90

FRAMES

One of the most frequently discussed mental habits that influences executives and key decision maker's judgement is the use of 'Frames', the negative side effects of which are considered to be

Subconsciously our mind guides us, based

one of the most crucial and persistent causes of inaccurate analysis.

upon our past experiences and memories. But the pitfall of relying upon experience and

FRAMES are mental accommodations that allow us to control what information we attend to and are just important as what we

memory is that our minds tilt towards one

filter out. Because of time constraints in the real world, a

particular interpretation of reality and away

completely open mind would be paralyzed if it were forced to

from others.

consider all possibilities. Instead, we are capable of focusing on only a fraction of the information available to us at any given time. How do we choose what to focus on and what to ignore? Creating frames often enables us to anticipate the way things will play out and how people will behave. In some aspects, this is very useful, because it allows us to apply our limited experiences to a broader range of situation or circumstances. But the price we pay for this is a distortion of reality.

PATTERN MATCHING

There are flaws inherent in ''pattern matching'' The human mind instinctually assumes that the world is casually connected. The mind has developed a short-cut-that stimulates how the world works and nine times out of ten it is right, or at least in the ball park. But, this is only an approximation of our reality. It is hardly a

Patterns allow our brains to simplify the world

complete understanding of all the circumstances surrounding us at

into predictable system, one that

any given moment.

approximates how the world works and

When we think about descending a flight of stairs, we don't pay

allows us to function efficiently within it. It is, in

attention to the height of each step. We walk down without thinking

fact, the creation of these cause-and-effect

about it, because we've performed this task thousands times before.

links that makes the world seem less chaotic. But there is a cost to our reliance upon these

If, however, there is some unexpected variations in the height between two steps, we tend not to notice it, and we stumble. This is not a result of lack of coordination; it's simply a result of our minds

patterns; our tendency to apply them leaves

attempting to navigate our world. If we were to analyze every

us vulnerable to massive errors in judgement.

staircase we come to, we would be paralyzed. Just as geologists, when prospecting have come to know the characteristics that signal the presence of precious metals below the surface, it is necessary for us to be able to spot the telltale sign of good executive judgement. HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 91

Leadership

F O C U S

hen Churchill was leading the British war effort, penicillin was in scarce supply. In June 1942, the US had enough stocks to treat 10 patients. As demand began to rise, the question of priorities came up: who do you treat first with this life saver? Who would you prioritize for treatment with the new wonder drug? (a)Soldiers who had received serious wounds in combat, and needed large amounts of penicillin? (B)Soldiers who had caught syphilis on leave, but needed a little penicillin to return to active service? Churchill was clear: the only thing which counted was winning the war. That meant getting as many soldiers fit for combat as fast as possible. The wounded war heroes on the North African front would have to take their chances, because they could not take the penicillin. The penicillin was used to sort out syphilis and get soldiers back to the front line fast. Cruel but necessary.

In business, it is exceptionally hard to maintain focus. The management marathon is one where you have to juggle twenty items at the same time while running faster and faster just to stay still. The noise of day-to-day crises and deadlines drowns out everything else. But good leaders achieve focus: they create clarity out of fog. I am yet to hear a top leader call for less focus.

Think of the great leaders of the 20th century, besides massive ambition, they all tend to have obsessive focus on what is most important to them. Credit: J.O. Owen HEALTHCARE MANAGEMENT REVIEW MARCH - April. 2014 92

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Rova College of Healthcare Executives Rova College of Healthcare Executives is a leading provider of executive and advanced learning opportunities that strengthen the leadership and management capacity of both individuals and their organizations in the healthcare sector. Our top priority is developing leaders and managers that would drive innovation, drop out dated approaches and engage with a new generation of medical employees, partners and clients to improve health outcomes.

We provide the ideas and tools you need to power your performance in the healthcare sector. ROVA COLLEGE OF HEALTHCARE EXECUTIVES 14b, Thaba Tseka Street, Off Adetokunbo Ademola Crescent, Wuse II, Abuja, Nigeria. Tel: 08053621816, 08033247431 E-mail: rova_healthmgt@yahoo.com Website: www.rovacollegeofhealth.org