Chapter 3

LITERATURE REVIEW OF QUALITY OF HEALTHCARE SERVICES

IN INDIA

3.0 Introduction

Healthcare services demand is related to population size, life expectancy and purchasing
power. On all these counts, the potential demand for healthcare services is promising in
India. The health of populations is a distinct key issue in public policy discourse in every
mature society often determining the deployment of huge resources. A need to address all the
issues of quality of healthcare including availability, accessibility, affordability, efficiency
and effectiveness has been debated by policy makers, healthcare providers, healthcare
managers and academia. In the first part of this chapter issues and challenges in healthcare
industry in India with reference to infrastructure, changing demographic and epidemiologic
trends, growth of private healthcare sector, health insurance, and medical tourism are
examined. In the second part, the quality of services, regulatory and accreditation
mechanisms for healthcare in India are discussed. This review includes the quality
initiatives taken by both government and private sector healthcare providers. Also, the latest
trends in quality management practices in terms of ISO certification and implementation of
TQM principles for achieving high quality among healthcare organizations are examined.
Finally, research gaps in TQS in healthcare literature in India are identified.

3.1 Indian Healthcare Industry

Over the last five decades India has built up a vast healthcare infrastructure and manpower at
the level of primary, secondary and tertiary care in government, voluntary and private
sectors. With the Indian economy showing a steady growth, the industry is heading towards
a growth phase. There is an extensive three tier public health infrastructure consisting of
about 163, 000 facilities including 4000 rural sub district hospitals (Community Health
Centers-CHCs), 24,000 Primary Health Centers (PHCs), and 135, 000 sub-centers (SCs)
(Ramani and Mavalnkar, 2005). However, there is a shortfall of 16 per cent of PHCs/SCs
and as high as 58 per cent in the case of CHCs. The plan outlay of Planning Commission for
the tenth five year plan of 2002-2007 has allocated Rs. 10, 252 crores towards centrally
sponsored programmes and central health schemes (Source: Union Ministry of Health and
Family Welfare). Central contribution to overall public health spending in States is limited to

Literature Review of Quality of Healthcare Services in India 82

15 per cent. State budgetary allocations have declined from 7 percent to less than 5.5 per
cent in many states. Currently private sector health services range from those provided by
large corporate hospitals, smaller hospitals and nursing homes and clinics run by qualified
personnel. However, the distribution is lopsided, with the bulk of services located in urban
areas and dominated by the private sector.

Health is a state subject in India and many states do not have clear health policies. In
general, the National Health Policy and National Health Programmes guide strategies at the
state level. There is no systematic planning and monitoring of the healthcare delivery at the
state level and health services continue to be supply-pushed than demand-driven. Presently
Indian health expenditure accounts for 5.2 per cent of its GDP; in fact, public health
investment has declined from 1.3 per cent of GDP to 0.9 per cent by the year 2001.
Considering the health needs of the people our National Health Policy (2002) envisages an
increase in public health spending from the present 0.9 per cent of GDP to 2 per cent by the
year 2010. Out of the total health expenditure, 17 per cent comes from taxation, 1 per cent
from Employee State Insurance Scheme (ESIS), 14 per cent from private insurance sector
and 68 per cent from out-of-pocket expenses. It is estimated that for every one rupee spent
by the government only 10 per cent is going to the consumer.

In general, our health services capacity is much lower than WHO norms. The Planning
Commission's latest review of the country's health sector shows that there is just one doctor
for 1, 800 people and one bed for 1,123 of the populations (WHO, 2000; Singh, 2004). India
ranks 171st out of 175 countries in terms of public health spending. It ranks 18th in terms of
private spending on health which is nearly 4.2 per cent of GDP. India’s public health
spending is only 0.9 per cent of GDP. Countries like China (2 per cent), Nepal (1.5 per cent)
and Bangladesh (1.6 per cent) spend more than India. In the region only Pakistan spends 1
per cent of GDP which is close to India’s spending. Public healthcare expenditure of Nigeria,
Indonesia, Sudan and Myanmar are lower than India. India’s achievements in health
outcomes are only moderate by international standards as India was ranked 118 among 191
member countries based on overall health performance (WHO, 2000). Private health sector
is larger in terms of health spending and people tend to use private services more than public
sector.

Literature Review of Quality of Healthcare Services in India 83

3.1.1 Demographic and Epidemiologic Spectrum of India

A brief description of demographic and epidemiologic trends would be helpful to understand

the availability and efficiency issues of quality in healthcare in India. India is said to have a
'population growth syndrome', 2-3-4-5-syndrome as it is sometimes referred to as. That is, it
has an overall population growth at 2 per cent, urban population growth at 3 per cent, its
mega-cities are growing at the rate of 4 per cent and slum population growth is at 5 per cent.
These in themselves are major challenges in terms of provision of healthcare services (GoI,
2003). Improving life expectancy and rise in income levels are leading to increased demand
for healthcare. It is estimated that India has the largest geriatric population, namely, 55 years
and above, who will be a major segment for healthcare consumption in the future. Also,
there is an increase in the proportion of the working age group (15-54 years) accompanied
by rise in per capita and disposable incomes together with increase in real private
consumption (Source: Statistical Outline of India, 2001-2002).

The increase in affluence among the middle class which is fast growing and estimated to be
about 300 million is creating a demand for higher standards of care. In general, multi
speciality private hospitals are preferred for treatments even when the person has to bear the
costs himself or herself. In the period between 1993-1994 and 2001-2002 aggregate
household expenditure on health services has increased at an annual compounded rate of 9.3
per cent (Ernst & Young, 2003). In addition to the demands of high quality care among
those who can afford, increased information dissemination and consumerism have led to
more demands. For instance, healthcare services grievances are under the purview of
Consumer Protection Act; recently the Supreme Court has held that the services rendered by
the Railway Hospitals in the country would come under consumer courts to enable
consumers to redress their grievances for deficiencies in services (The Hindu, 2005).

The changing disease patterns and demands have given rise to new ways of managing
healthcare. From the management point of view, hospital managers would definitely be
interested in reducing the impact of litigation and ensure that the patients are satisfied with
the services provided. Indian public healthcare initiatives have yielded some significant
results over the years. Eradication of small pox and Guinea worm and substantial decline in
the number of leprosy, polio and malaria cases etc have all been possible in the last 4-5
decades (NHP, 2002). Maternal, infant and child mortality rates used as standard indicators
of any country's health system effectiveness have shown a significant decline, but these still
continue to be higher than those of developed nations. Even now, among more than 100, 000

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maternal deaths that occur every year, 75 per cent are preventable if proper and timely
medical attention is given. Average infant mortality rate (IMR) of 70 per 1000 live births
and a child mortality rate (CMR) of 95 per 1000 live births are high compared to 5-6 CMR
in developed nations. A range of communicable and non-communicable diseases and their
management continues to burden the existing healthcare system. Approximately, 5.1 Million
HIV/AIDS cases are reported and this number is highest in any country outside the African
continent. Poor health of urban poor and lack of urban planning have brought in further
challenges to healthcare management. The latest on the bandwagon of our 'disease burden' is
the environmental and lifestyle diseases. It is estimated that there are 25 million
cardiovascular diseases, 25 million cases of diabetes, 2.4 million cancer and these diseases
are generally regarded as lifestyle diseases (NHP, 2002; Ramani and Mavalankar, 2005). In
addition to this disease burden, if one takes into consideration people affected by natural and
other man-made disasters, the healthcare capacity is not adequate to meet the needs of the
entire population.

3.1.2 Private Healthcare Sector in India

Nandraj et al (2001) have reported that 60-70 per cent of outpatient cases and 40-50 per cent
of hospital in-patients are managed in the private for-profit sector. Since the Government
has not yet made registering of private healthcare facilities mandatory, the scale of
operations is not very clear. A total of 30,000 hospitals and 1,000,000 beds are estimated to
be available (Ramani and Mavalankar, 2005). It is estimated that the private sector accounts
for nearly 56 to 67 per cent of the total number of hospitals and 30 to 33 per cent of hospital
beds (Phadke, 1993; Nandraj et al., 2001 and Ramani and Mavalankar, 2005). Private sector
also accounts for over 60 per cent of the 5 million doctors in the country (Ramani and
Mavalankar, 2005). It is one of the highest levels of direct doctor-to-patient or hospital-to-
patient transactions in Asia.

The private health care sector in India is very complex and highly heterogeneous. Despite an
increasing interest in this sector by analysts in the recent past and the commissioning of
several special studies, private health care still remains under-researched and therefore
poorly understood. Overall, the health sector in India is characterized by a mixed ownership
pattern, many types of providers, and by different systems of medicine. The evidence also
suggests that about 60 percent of private hospitals are owned by one individual, usually a
practicing doctor. These are classified as sole-proprietorship hospitals. A substantial number
of private hospitals have a partnership model of organization, and a very few belong to the

Literature Review of Quality of Healthcare Services in India 85

“corporate, public limited” category or the “trust hospital” (equivalent of nonprofit)
category. The size of the sole-proprietorship and partnership categories is likely to vary
across states, but there are very few corporate, public limited hospitals in any of the states
(Muraleedharan, 1999). If we also consider stand-alone clinics that provide only outpatient
services, the sole-proprietorship category is likely to constitute more than 80 percent of the
private sector. Most sole-proprietorship hospitals, usually called nursing homes, have no
more than 10 beds. Their services range from simple treatments to sophisticated operations.
The provision of laboratory and diagnostic services and blood banks is usually limited to
urban and semi-urban areas (Nandraj and Duggal 1996).

The national surveys on healthcare have shown that, in both rural and urban areas,
dependence on the private sector for both outpatient and inpatient services have substantially
increased over the past decade. Especially data from the 52nd National Sample Survey
(NSS) show that the proportion of people treated as outpatients in rural private sector health
facilities has increased from 74 percent in 1986/87 to 81 percent in 1995/96; in urban areas it
has increased from 72 percent in 1986/87 to 80 percent in 1995/96. In the case of inpatient
care, the increases in rural and urban areas over the same period were 40 to 56 percent and
40 to 57 percent, respectively (NSSO 1998). Even more important to note is that the
financial burden per episode in both public and private institutions has grown substantially.
The average expenditure (at constant 1986/87 prices) for inpatient treatment per episode of
illness in public institutions has gone up by 26 percent (in 1995/96) in rural areas and by 48
percent in urban areas. In the private sector, the increase in out-of-pocket expenditure for
inpatient treatment per episode is even more alarming: 63 percent in rural areas and 50
percent in urban areas over the same period at 1986/87 prices. The growth and share of
private sector hospitals and beds over the years is shown in Figure 3.1. While there has been
a substantial increase in the number of hospitals under the private sector during the 1990s,
the rise in the number of beds has been modest.

Literature Review of Quality of Healthcare Services in India 86

Currently private sector health services range from those provided by large corporate
hospitals, smaller hospitals/ nursing homes to clinics/ dispensaries run by qualified
practitioners and services provided by unqualified persons. A majority of the private sector
hospitals are small establishments; 85 per cent of them have less than 25 beds with average
bed strength of 10 beds. Private tertiary care institutions providing speciality and super-
speciality care account for only 1 to 2 per cent of the total number of institutions while
corporate hospitals constitute less than 1 per cent. There are wide inter-state differences in
the distribution of private sector hospitals and beds. The private sector prefers to set up
facilities in more prosperous districts/states. The private sector accounts for 82 per cent of all
outpatient visits and 56 per cent of hospitalization at the all-India level (Figure 3.2), with no
significant variations across income group.

Literature Review of Quality of Healthcare Services in India 87

A majority of government and private sector hospitals and beds are located in urban areas.
This continues to result in lack of accessibility of qualified and registered private sector
doctors or private sector institutions are to remote rural and tribal areas because people do
not have ability to pay and there is a lack of social infrastructure. However, data from 52nd
round of NSSO, National Family Health Survey (NFHS–2) and a National Council of
Applied Economic Research (NCAER, 2000) study shows that there were distinct patterns
for the utilization of out patient and inpatient services.

A majority of the population both from below and from above the poverty line, approach the
private sector for outpatient curative care for minor ailments. However, people use
government institutions when it comes to obtaining immunization or antenatal care, most
people, irrespective of their income status. For inpatient care for all ailments 60 per cent of
the below poverty line (BPL) families tend to use government hospitals and while an equal
proportion of above poverty line (APL) families prefer private hospitals (Figure 3.3).

Private healthcare providers, especially large hospitals are motivated to show the public that
they have quality systems in place. The major limitations in private sector participation
include:

 The focus till now has been mainly on curative services

 The quality of services is not defined by specific standards

 The poorer sections of population cannot afford to pay for these services.

Literature Review of Quality of Healthcare Services in India 88

The government after considering the country's healthcare capacity and its limited sources
has allowed the private players to provide services. Some of the noteworthy policy
initiatives in the healthcare sector in India are:

 The Government liberalized entry norms for private players in healthcare sector in
the 1980s including land allocation at subsidized rates.

 The health insurance market was opened for private competition in April 2000.

 A number of tariff and non-tariff incentives are set up by the Government in order to
stimulate market to allow more number of hospitals to offer necessary care. E.g.
reduction in import and customs duty on medical equipment and conferring of
infrastructure status to health care industry.

 The National Health Policy (2002) has envisaged increasing funding over the next
ten years and it has welcomed private participation in primary, secondary and
tertiary care.

 India has given commitment under the GATTS agreement, allowing foreign equity
up to a limit of 51% for investment in the hospital sector. This has been increased to
74% and up to 100% subject to approval by the Ministry of Commerce and Industry.
Since liberalization in 1991, a number of foreign partnerships are seen among Indian
health sector. For instance, Apollo-Gleneagles Hospitals Ltd., is a 50:50 joint-
venture set up between Apollo Hospitals Ltd and Parkway Group of Singapore. Max
Healthcare and Singapore General Hospital (SGH) have entered into collaboration
for medical practice, research, training and education in healthcare services.

Further growth in the private sector is envisioned with the National Health Policy’s (2002)
provision for private sector participation in primary, secondary and tertiary care. NHP also
aims to widen the extent and coverage of care to people. The private health sector is
responding well to meet the healthcare needs. To bridge the demand-supply gap in health
care services investment of nearly Rs. 100, 000 to Rs. 140, 000 crore is required according to
CII-McKinsey (2002). The market is estimated to grow from US $ 18.7 billion to around
US $ 45 billion- equivalent to 8.5 per cent of GDP in 2012. The private health care accounts
for 75 per cent of the total healthcare expenditure. There is corporatization of private health
sector and in the past two decades, a number of Indian private companies have set up nearly
150 hospitals and large clinics such Apollo, Wockhardt, Max, Fortis and Escorts. They
represent rapidly growing state-of-the-art facility hospitals with tertiary care and super
speciality areas. Corporate presence is growing in diagnostic services, which include premier
players like SRL-Ranbaxy, Metropolis Health Services and Dr. Lal's Pathlabs (Ernst and

Literature Review of Quality of Healthcare Services in India 89

Young, 2003). A number of Centers of Excellence have come up in the last 10-15 years in
India in the speciality areas of eye, cardiac and cancer care with technological and
professional excellence. Aravind Eye Hospital in south India, the single largest provider of
eye surgery in the world, is an outstanding example of performance excellence. It performed
1.2 million outpatients and 183,000 cataract surgeries in 1998. This hospital has a high
productivity with a gross margin of about 40 per cent despite the fact that 70 per cent of the
patients pay minimal charges or almost nothing and the hospital does not depend on
donations The management and performance excellence of the hospital is of great interest
to practicing managers and case study of Aravind Eye Hospital is taught by Harvard
Business School.

3.1.3 Health Insurance in India

Utilization of private healthcare of nearly about 60-70 per cent for outpatient and nearly 50
per cent for in-patient services as mentioned above brings up an important issue of
affordability on one hand and equity on the other. The fact is that the poor people get private
healthcare services at a higher cost. The financing of health services is predominantly
private, through out-of-pocket spending by households on a fee-for-service basis. Studies in
Maharashtra State reveal that, on an average, households spend Rs. 500 per capita per annum
privately on health (Madhiwala et al., 1999; Nandraj et al., 1998). Private households spend
about four to five times as much as the government on health services (Duggal et al., 1995).
This private spending works out to between 4 and 5 percent of gross domestic product
(GDP).

In India, hospital industry predominantly operates on a cash and carry basis where hardly
any credit sales are done except in large public undertakings and corporate houses. It is the
top 10 to 20 per cent of the population who can afford the services of corporate hospitals,
that is nearly 200 million people. The escalating costs of modern healthcare and lack of
funds among the poor make affordability issues even more crucial. Health insurance is one
viable option to address the issues of affordability. There are five forms of insurance: private
insurance, social insurance, employer-provided cover; community insurance schemes and
government health spend. Only 3-4 per cent of our population is insured and only about 2.5
million people are covered under voluntary medical insurance. Since the opening up of
insurance including health to private companies in the year 2000, it has grown by 100 per
cent in the last two years. Further, estimates indicate that an insured base of 30 million in
2005 will grow to 160 million by 2010 which is less than 15 per cent of the population

Literature Review of Quality of Healthcare Services in India 90

(Source: Indian Country Commercial Guide, 2002; Ernst and Young, 2003; Ramani and
Mavalankar, 2005). During 2003, health insurance premium in India crossed the US $ 22
million mark, the highest in the non-life category insurance.

The India Health Report has pointed out that as the private sector is unregulated, its cost,
quality and distributions are not guided by national health goals. "The poor are then forced
into a situation where they have to pay for private health care they cannot afford. Their
deprivation and vulnerabilities makes them ill more easily and illness makes them poor", it
said. Only 10% have some form of insurance in health. Healthcare costs are prohibitive to
most Indians. World Bank concluded that the hospitalized Indian spends more than half of
his total annual expenditures on buying health care. More than 40% of the hospitalized
people borrow money or sell assets to cover the expenses. The study also suggested that out-
of-pocket medical costs alone might push 2.2% of the population below the poverty line in
one year (Jain, 2004). Non Governmental Organizations (NGOs) and community-based
organizations offer a number of health insurance schemes for the poor and vulnerable groups
to meet the high cost of healthcare. E.g. schemes like Yeshasvini, Arogya Bhagya, Yojana,
and Arogya Bhadrata address the affordability of health care needs of rural farmers and other
groups of people.

The voluntary health insurance schemes are expanding rapidly. Insurance companies have to
deal with unregulated healthcare providers who work in an environment where there are no
standards or quality benchmarks or treatment protocols and where highly variable billing
systems and significant price variations exist across providers. As insurance intermediaries
such as third party administrators (TPA) are emerging and are bound to play a key role in
facilitating the managed healthcare system, the Insurance Regulatory and Development
Authority (IRDA) has come up with regulatory guidelines for TPAs and insurance companies.
However, health insurance schemes and programmes may not be very effective without
addressing the issues of quality of healthcare delivery and ease of availability and access to
services.

3.1.4 Medical Tourism

Medical tourism has gained momentum in India over the past few years. This trend is
underpinned by India’s low-cost advantage and the emergence of new high-quality
healthcare service providers. India is witnessing a surge of patients from developed countries
as well as from countries in Africa and South and West Asia that lack adequate healthcare

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infrastructure. The emergence of low-cost, high value specialist medical care territories in
India has been noteworthy. For instance, New Delhi has emerged as a prime destination for
cardiac care. Similarly, Chennai has established a niche for quality eye care, while Kerala
and Karnataka have emerged as hubs for state-of-the-art ayurvedic healing. These “medical
hotspots” are beginning to witness an influx of health tourists from non-traditional
geographies. Among others, foreign health travelers to India comprise a large number of Non
Resident Indians (NRIs) (Srinate, 2004).

Making use of the facilities and services the country has and by leveraging the brand equity
of Indian healthcare professionals across the globe, it is estimated that a huge inflow of
foreign tourists will avail treatment in India. A number of state-of-the-art hospitals in the
country such as Escorts Heart Institute and Research Center (EIHRC) in New Delhi, Apollo
Group of Hospitals, Wockhardt and Breach Candy in Mumbai, Manipal Hospital and
Narayana Hrudayalaya in Bangalore are treating a growing number of foreign patients.
Medical tourism is gaining importance for the following reasons:

 India's medical capabilities and medical professional expertise is very well

established.
 Poor quality of medical attention in our neighboring countries, e.g. Bangladesh
citizens seeking medical attention in Indian hospitals.
 Cost factors such as rising costs of medical care in some other countries. E.g. High
costs of care in the U.S. and U.K. and availability of quality care at lesser cost in
India than their own country such as South Africa.
 Long waiting times (ranging from 6 to 18 months) of medical care especially for
elective procedures for patients registered with their country's national health
insurance such as in NHS of UK. This combined with very high costs of private
health insurance makes India an attractive designation for treatment.
 The possibilities of combing health, treatment and tourism have given an extra
dimension for the attractiveness of the niche market

The growth in medical/health tourism is expected to reach Rs. 270, 000 crore by 2012 as per
PHDCCI estimates (The Hindu, 2004). Another estimate is that the medical tourism market
in India is worth US $ 333 million and expected to grow over US $ 2 billion by 2012 (CII-
McKinsey Study, 2002). Tax and other incentives for private groups for setting up hospitals
with 100 or more beds have given a boost to the growth of the industry. However, PHDCCI
study has noted that European countries especially Great Britain did not want to refer their

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patients to India as the hospitals lack proper accreditation such as those given by JCAHO.
Lack of accreditation and standards in terms of quality, non-availability of rates of healthcare
procedures, absence of hospital grading system and far from perfect insurance sector in the
country are pointed out to be major obstacles in the growth of medical tourism.

The industry and healthcare experts are trying to formulate strategies to address the issues of
quality in order to facilitate medical tourism. India’s independent credit rating agency
CRISIL has assigned 'Grade A' rating to super speciality hospitals like Escorts and multi
speciality hospitals like Apollo. The British Standards Institute has accredited the Delhi-
based Escorts Hospital. ISO certification is another approach many hospitals have
undertaken in order to boost medical tourism. The Federation of Indian Chambers of
Commerce and Industries (FICCI) has formed a task force comprising of eminent people
from public and private sectors to make recommendations on promoting medical tourism in
Maharashtra (IBEF, Srivastava, 2003; Srinate, 2004). Apollo Group of Hospitals also uses
Six Sigma and is ISO 9002 certified. Recently, Joint Commission International of JCAHO of
U.S.A certified two hospitals Apollo Indraprastha, New Delhi and Wockhardt Hospital in
Mumbai.

The above discussion on Indian healthcare industry underscored the accessibility,

affordability and efficiency issues of healthcare services. Efficient management of
healthcare delivery system in India is essential considering the limited capacity to meet the
healthcare needs of the population, changing demographic and epidemiological spectrum. In
addition, the debate on quality of services has come to the forefront because of the growth
trends of the private healthcare sector, health insurance and medical tourism. The next
section closely examines the quality of healthcare services in India.

3.2 Quality of Indian Healthcare Services

Ramani and Mavalankar (2005) have reported that the problem of poor quality in health
sector is quite prevalent and the utilization of the public health infrastructure is low. Several
policy and management constraints continue to render the system ineffective. In case of
public health system, the problems of non-availability of staff, weak referral system,
recurrent funding shortfalls, lack of accountability for quality of care and poor logistics
management of supply of medicines and drugs are the major concerns which have been
repeatedly documented in the past several years. Lack of efficiency and optimization of
available resources are common in many units/centers. Many central and state level

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healthcare schemes are redundant or under-financed. States have not framed comprehensive
health policies that guarantee adequate healthcare to all citizens. Accountability and data
quality is highly questionable. People in general have a preference the private sector and the
Government facilities are used more often for in-patients.

Various studies have also pointed out the poor quality of care provided in the private sector.
A number of problems of diagnostic and treatment practices such as use of inadequate
facilities and equipment; over-prescribing, subjecting patients to unnecessary investigations
and interventions, charging patients exorbitantly, using unethical and irrational practices, and
failing to provide information to patients are well documented. Despite the poor quality of
the care, the majority of people still choose to use the private health sector, probably because
of its accessibility in terms of distance and timing, private providers’ responsiveness to
patients, and because of relatively poor quality of services in the public sector (Bhat 1999;
Nandraj 1994; Nandraj and Duggal 1996; Phadke et al, 1995; Uplekar et al., 1998; Yesudian
1994). Most hospitals have no proper patient records retrieval system. Financial performance
data are not easy to obtain. A general perception is that better quality care is available only in
large city hospitals.

Studies have shown that that there is an abundance of medical equipment and technology in
urban areas compared with rural areas, leading to excess capacities (Jesani and Anantharam
1993). Such an influx of technology may have led to irrational use of medical equipment and
services, though this has not been systematically analyzed in India. In many hospitals,
doctors are under pressure to see that the beds are occupied all the time and the equipment is
utilized fully. In India, with its dominant private health sector and relatively weak
government oversight, there is a need to develop self-regulatory systems that involve the
various stakeholders.

It is evident from the above discussion that there are many different quality issues involved
in healthcare sector. Hospitals are complex organizations with multiple services offered and
it important to involve everyone in managing quality. In general, the areas of productivity
and efficiency are very crucial to health care delivery systems. Berman and Eliya (1993)
have highlighted the role of Government policies in influencing the development of private
services in developing countries. They have said that the quality aspects of technical care are
least likely to be guaranteed through market forces. Since technical quality is least subject to
evaluation by consumers, licensing and regulation are most important mechanisms. Even
when such regulations exist, enforcement has not been effective. The authors have

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suggested that the licensing of facilities can be made contingent up on suitable levels of
quality of basic amenities, staffing, and service. Quality in terms of clinical outcomes is
much more difficult to assess and regulate. The lack of an effective healthcare system in
India is now jarring, especially in non-urban areas, where there is a high incidence of
infectious, communicable diseases and high infant mortality. Despite huge investments over
many years, Indian public sector health infrastructure is neither adequate and well managed
nor sensitive. They have concluded that the role of Government is essential to ensure a
minimum baseline service of healthcare through regulation and accreditation.

Agrawal (2004), a political and business trend analyst has rather said strongly about lack of
proper mechanisms to regulate the health care, "… healthcare is a core public good in India,
it has escaped the requisite feedback loop, public scrutiny, regional customization, local
involvement and overall accountability, all of which has become a field dominated by arcane
and ultimately ineffectual policy seminars, publicity campaigns and NGO activity which
only a narrow band of dedicated people nearly follow." Though the government has built a
network of hospitals, delivery systems and research institutes, it has rather overlooked its
role as a regulator to guarantee minimum safety standards and to curb both corruption and
negligence. Further, consumer awareness, demands for value and questioning the efficacy of
the healthcare services are becoming important factors in healthcare quality. The recent
demand from NHRC (The National Human Rights Commission) for an answer from AIIMS
on the decision to increase user charges for various investigations and surgical/operative
procedures has brought up the issues of role of various stakeholders in their ability to
question the healthcare providers (The Hindu, 2006). Therefore, no hospital, public or
private, can ignore the issue of satisfying various groups of customers in providing quality
care at reasonable prices.

The Indian healthcare sector has started focusing on serving the customers better, keeping in
mind the need to balance the issues of profitability and broader social objectives of equity
and social responsibility. Professionalism and formal management systems are becoming
important in the sector. Hospital administrators and managers are searching for innovative
ways to manage and excel because of factors such as entry of the private & corporate sector
in health care, establishment of diagnostic facilities, day care surgeries, competitiveness,
limited financial resources, consumer awareness, medico-legal issues and rising medical care
costs (Sahni, 2001). The setting up of quality systems in place and implementation of
quality programmes in hospitals is as much market driven as medical professional/provider

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driven. It is true for both the public and private health care systems. Time and again many
researchers and hospital managers have identified the following (Reddy et al, 2002):

 Healthcare is complex, e.g. managing heart attacks involves a number of

professionals and different specialists.

 Public expectations and demands for high quality services from healthcare providers
are increasing.

 Payers of healthcare are concerned about healthcare costs and possible inefficiencies.

The media attention on health sector in the recent years has been on the poor status of our
public health system. Interestingly, the public health system also has some of the best
hospitals in the country especially those with an autonomous status. Such public hospitals
have advanced medical and research capabilities, e.g. All India Institute of Medical Sciences
(AIIMS), New Delhi and National Institute of Mental Health & Neurosciences (NIMHANS),
Bangalore. In the last decade, a growing band of private/corporate/trust hospitals has caught
the media attention, e.g. Apollo Group of Hospitals, Wockhardt Hospital Pvt. Ltd, Manipal
Hospital etc. as they provide high quality care and world-class services. Teaching hospitals
like CMC, Vellore, and speciality care hospitals like Aravind Eye Hospital, Escorts for
cardiac care and Manipal Hospital for super speciality care are known for their organization
wide quality management practices. From the above discussion one can see that many major
hospitals (mostly private/trust run) have set up quality systems in place and provide high
quality of care and also are trying to attract patients from outside the country. However,
systematic ways to evaluate and study quality issues, regulation and management need to be
addressed in most hospitals in India. Regulatory mechanisms for Indian hospitals are rather
weak and in the following section important mechanisms are briefly discussed.

3.2.1 Regulation of Healthcare Services in India

Medical training regulation, professional standards, rules for hospital waste management,
clinical laboratory accreditation and consumer protect act are described here.

 Medical training regulation is quite well established in India. Medical Council of

India (MCI) is a statutory body, concerning the quality of medical education and for
ensuring an environment conducive to learning in the teaching hospitals. In practice
it is reportedly inactive and ineffective in curbing irrational practices and
malpractices (Phadke, 1993). Accreditation of hospitals by National Board of

Literature Review of Quality of Healthcare Services in India 96

 Examinations by the Government of India (Ministry of Health and Family Welfare)
for conducting post-graduate and fellowship programmes in super speciality areas is
mandated.

 One way of ensuring high level of technical quality of care is through setting
standards and monitoring by professional associations. Indian Medical Association
(IMA) is a voluntary body for setting professional standards and for licensing &
registering of medical and surgical professionals. However, IMA does not mandate
renewal of registrations based on continuing medical education (CME) credits for
professionals which is a standard practice in many countries.Comparing CME
requirements from across the world, U.S.A. has the most stringent requirement with
their state medical boards requiring from 12 hours (state of Alabama) to 50 hours
(several states) of CME per year for license re-registration. Austria has CME
certificate over a 3-year cycle, made mandatory since 2001. Netherlands has
introduced re-registration with a 5-year interval required from 2003. Annual
revalidation system of all licensed practitioners was made mandatory in Dec 2004,
but is now under review in the UK. In India, MCI has proposed an annual continuing
education (CME) but government favours registration by every 5 years. The doctors’
opinions are divided on this and the cost of revalidation is a contentious issue
(Mukherjee, 2005).

 Hospital waste management and proper disposal of biomedical waste is not only
important for keeping the hospital employees, patients, patient families etc safe, it is
also a major environmental and community safety issue. GOI Gazette notification of
Bio-Medical Waste Management and Handling rules of 1998 established a deadline
for hospitals having 500 beds and above to have waste treatment in place by 30th
June 2000. Many hospitals, especially the large ones, have begun to implement the
waste management programmes. The State and the Central Pollution Control Boards
are a part of the regulatory authority in terms of implementation.

 National Accreditation Board for Laboratories (NABL, Department of Science and

Technology, India) has developed ISO: 15189:2000 standards for evaluation of
quality of work and competency of medical laboratories effective from June 1st
2005. Earlier ISO: 17025:1999 were available for all general laboratories. The
accreditation is voluntary and expensive. With an estimated one million clinical

Literature Review of Quality of Healthcare Services in India 97

 diagnostic laboratories in India, hardly 25,000 are reported to have a fair level of
instrumentation and qualified staff as per the requirements.

 From the consumer point of view, medical services come under the Consumer
Protection Act and grievances of medical neglect by the hospitals or health care
providers are addressed through this.

In general, the healthcare regulatory mechanisms are inadequate to ensure high quality of
services in India. The factors that contribute to the poor quality of services offered by the
private sector are lack of monitoring by authorities, outdated and inadequate legislation, and
the inability or failure of the government to enforce existing regulations (Bhat, 1996; Jesani,
1996; Nandraj, 1994). The studies also indicated that professional bodies, whether
sanctioned by government or voluntary medical associations, have not played a significant
role in improving the private practice, especially individual practitioners and hospitals. Study
by Nandraj et al. (1999) indicated that various stakeholders of hospitals in Mumbai were in
favour of an accreditation system for private hospitals. With the rapid growth of private
sector in India, the government has to increasingly play a complex role of being a competitor
to, catalyst for and regulator of private initiatives, as it in itself cannot provide services for
everybody given its limited funds. Developments in setting up of accreditation for hospitals
are discussed in the next section.

3.2.2 Hospital Accreditation in India

There are no accreditation schemes for hospitals in India and in the recent past a number of
people including Government have taken a serious note of the matter. Nandraj et al. (2001)
studied the stakeholder responses towards hospitals in Mumbai in India. Hospital owners,
hospital administrators, professional associations, consumer organizations, insurance &
financial companies and government officials were included in the study. Quantitative and
qualitative data were collected using survey method and interviews to elicit views on the
introduction of accreditation and its contents. The study indicated a high level of support for
the classical features of accreditation: voluntary participation, periodic assessment by health
professionals, and the introduction of quality assurance measures and provision of assistance
to hospitals to meet the standards. The study showed that there was a preference for graded
rather than a minimum standards-based approach to assessing hospital performance. Based
on their research, Nandraj and others have initiated hospital accreditation for Mumbai city
hospitals. This “Health Care Accreditation Council” would formulate and evolve standards

Literature Review of Quality of Healthcare Services in India 98

for the wards, labour room, operation theatre, essential drugs, waiting area or reception
room, consulting room, pantry, medical records and waste management for smaller hospitals.
Accreditation body is in the process of being registered under Section 25A of the Companies
Act in Mumbai city.

At the national level, the Ministry of Health under the aegis of Quality Council of India has
set up the National Accreditation Board of Hospitals and Healthcare Providers (NABH). It
is developing accreditation mechanisms for hospitals and recommendations to facilitate
Quality Management in organizations. The projected activities such as licensing, regulation
and enforcement, technical and consumer information dissemination, management of
technical competencies, technical and financial supports for updating standards and
certification schemes for hospitals are being considered. The Quality Council of India is
considering the options for Quality Assurance, Clinical Standards, Quality Systems and
Physical Standards for hospitals.

Some large hospitals are already examining JCI accreditation as a strategy to attract medical
tourism. They are making huge investments in Information Systems and hospital
infrastructure in order to achieve world-class quality standards. However, internationally,
especially in the high-income countries with sophisticated health services much of the debate
on accreditation has been around the limitations of the classical, organizational structural and
process measurement approaches to assessing quality (Hurst, 1997). Also, industry leaders in
India are voicing their concerns about the usefulness of ISO and JCAHO certification for
Indian hospitals (Viswanathan, 2002a). Therefore, a need to implement continuous
improvement based on TQM principles and to focus on patient-centered care processes,
outcomes and performance indicators are recognized as important by many hospital
managers.

3.2.3 Quality Management in Indian Healthcare Organizations

Healthcare professionals and hospital administrators are setting up formal mechanisms to

ensure quality at the hospital level. In the absence of hospital accreditation in India, quality
management approaches and trends in hospitals have largely varied. The latest rush to get
ISO certification by hospitals indicates that there is a trend to show the public that the
hospitals are taking quality seriously. Dr. Shakti Gupta has emphasized the need for an
organization like JCAHO of U.S.A. in India. He has said that quality certification by
agencies like Bureau of Indian Standards (BIS) and Standardization Testing Quality

Literature Review of Quality of Healthcare Services in India 99

Certification (STQC) or ISO 9000 would be helpful as India does not have its own
accreditation organizations yet for hospitals (Gupta, 2004). Further, Rao and Aggarwal
(2003) have discussed the importance of risk management in Indian hospitals. They support
the CII-McKinsey (2002) study report urging the government to define and enforce
minimum standards for healthcare facilities and make them mandatory across all parts of the
country.

Based on the analysis of issues and challenges of the Indian healthcare industry, the
following driving factors for quality initiatives were identified:

 A disparity between demand and supply of healthcare services has underscored the
need to address the quality issues in terms of availability, access, affordability and
equity of quality in healthcare in India.
 The demands on the health system are adversely affected by demographic factors of
growing population, large number of elderly people and poverty. The
epidemiological trends and 'disease burden' including the HIV/AIDS, communicable
and non-communicable diseases have led to renewed efforts in ensuring medical care
to all. Lifestyle diseases further compound the problems of low capacity and
availability of existing healthcare delivery system.
 Accreditation and effective quality management mechanisms in hospitals are
extremely limited in India. Existing regulatory mechanisms such as licensing of
medical professionals, MCI regulations for medical college hospitals, and
accreditation for clinical laboratories have not been effective enough for ensuring
high quality of clinical care and services at the hospital level.
 Hospital administrators are interested in formalizing quality management
programmes because of increasing patient awareness, consumer group activism and
litigation.
 Demand for quality services is increasing among the middle class due to awareness
and affordability factors.
 As the private health insurance sector is growing, the hospitals and clinics have to
ensure quality of care and need more formalized reporting on quality indicators in
order to streamline the claims, fees structure etc.
 New opportunities for growth of private/corporate hospitals are triggered by medical
tourism and the flow of revenues expected by treating foreign patients.
 Accreditation and certification for hospitals is a recent phenomenon in India. Quality
has become a competitive strategy; the private sector hospitals have started

Literature Review of Quality of Healthcare Services in India 100

 increasingly looking for external certification. Hospitals are obtaining ISO
certification to overcome the lacuna of accreditation in the country. Many view
accreditation for health organizations as the most viable option for our country.
Some large corporate hospitals have started initiating the certification process of
Joint Commission International (JCI), a part of JCAHO of U.S.A. Recently two
hospitals Apollo Indraprastha, New Delhi and Wockhardt in Mumbai were certified
by JCI. A lot of progress on accreditation has taken place in the last decade in India.
NABH has been set up by Ministry of Health under the aegis of Quality Council of
India which is finalizing the guidelines for accreditation of hospitals and other
healthcare providers.

Though private/corporate sector is responding to meet the demands of health care services,
there is a need to address the issues of high quality of care at reasonable costs. Quality
management practices at hospital level and improvement of the overall services are essential.
Efficiency and effective management of hospitals as a health care provider and a business
enterprise requires a holistic approach. Indian public health system has so far remained
mostly unaffected by the experience of many large-scale successful reform measures of
different countries described in the previous chapter. Nine states in India have taken up
health sector reforms and the results have been encouraging (GoI, 2004). The following
section briefly discusses some significant public health initiatives taken up in five states.

Located in South India, Andhra Pradesh (AP) is the fifth most populous state in India and the
health status of AP is marginally higher than that of Indian national average. Owing to the
problems of poor level of functioning and management of the public health system and
limited financially resources Andhra Pradesh Vaidya Vidhana Parishad (APVVP) was set up
to manage the district hospitals. The mission of each Parishad Hospital shall be to provide
healthcare services with ‘Care, Comfort, and Courtesy’. The Parishad developed innovative
ways of fund rising including charging user fees, the Anna Dana schemes, donations,
lotteries, and external assistance. Major areas chosen for improvements included
infrastructure and utilities for the hospitals (such as buildings, equipment, water &
electricity, toilet facilities etc.). Quality of clinical care in terms of scientific evidence-based
diagnostic services, hospital infection rates, drug availability, service attitudes of care &
concern; referral services, patient satisfaction etc were focused. Subsequently a number of
reports on performance have indicated substantial improvements in quality. The Parishad
constantly tries to improve its services levels not only in terms of accessibility, availability
and utilization but also focuses on meeting the needs of the people with appropriate clinical

Literature Review of Quality of Healthcare Services in India 101

care and service levels. Though the initiatives, reforms and actual implementation appear to
be going well, there is a long way to go for achieving excellence in quality.

Tamil Nadu Medical Services Corporation (TNMSC) has implemented an excellent logistics
management system in order to coordinate the activities of purchase, storage, and
distribution of drugs and medicines in Tamil Nadu (TNMSC, 2003). It is also certified by
ISO (ISO 9001: 2001) and many states are planning to set up similar mechanisms to improve
public health services. The state of Maharashtra is implementing a project titled
"Maharashtra Health Systems Development (MHSDP) under the state public health
department with an aim to provide quality services to patients. There are 136 project facility
hospitals including community hospitals, sub district hospitals and district hospitals. They
are developing hospital performance analysis, patient satisfaction surveys, informatics,
public health data bases etc. in order to improve overall service levels.

Karnataka has undertaken an initiative to accredit district and taluka hospitals in the state
(Viswanathan, 2002b). Its task force on Health and Family Welfare has already achieved ISO
certification for 30 health centers in Bangalore and has conducted a pilot project on ten
public hospitals.

Some states are also taking up innovative projects, for instance, the state of Madhya Pradesh
has taken up a pilot project named Rogi Kalyan Samiti (RKS, 2003) in Indore with a
committee formed to take full control of Maharaja Yashwantha Rao Hospital (MYH). The
committee consists of people's representatives and some government office bearers. The
goals of the project are to: enhance efficiency of doctors, arrest the deterioration of the
hospitals, improve general condition of the facilities and increase in the number of patients at
MYH. The results of such efforts have proven effective in enhancing utilization and
efficiency of the system.

The above discussion highlighted the quality management initiatives taken up by selected
public healthcare system of India. The following section identifies TQM trends in Indian
hospitals from literature. There is an increasing interest in the use of TQM tools and
techniques in various departments of hospitals across the country. In the last ten years global
trends in quality management and implementation of TQM appear to have had an impact on
the sector.

Literature Review of Quality of Healthcare Services in India 102

3.2.4 Total Quality Management of Hospitals in India

Recent trends in quality management in hospitals in India have been towards implementing
Total Quality Management practices in order to make services more customer-oriented.
Evidence-based continuous improvement methods have been applied in various departments
or units and for various hospital services. The studies highlight the importance of the
concept of systems approach and system design. Rao and Agarwal (2003) have highlighted
the problems of medical errors and patient safety as not just errors committed by individuals
but the resultant of system failures. Using the concept of 'Vulnerable System Syndrome'
they have argued that the inherent faults that lead to errors are a result of organizational
pathologies. This represents the failure of system design and processes. Therefore, it is
important to redesign systems geared to prevent, detect and minimize the effects of
undesirable interaction effects of design, performance and circumstance.

Reddy et al. (2002) have argued that the strategic implementation of the Six Sigma concept
with complete involvement of the top management would make quality and measurement
oriented culture in healthcare sector. The study reported on the reduction of waiting time in
ultrasound department of a corporate hospital. It was achieved through Six Sigma process of
DMAIC (Define, Measure, Analyze, Improve and Control). In this study developing QFD,
identifying processes Critical to Quality (CTQ), customer expectation survey and DMAIC
processes helped achieve reduced waiting time, procedure time and reporting time for
ultrasound procedures.

Gupta (1998) studied the quality of services of Indraprastha Apollo Hospital, New Delhi and
reported that quality management is guided by TQM. Quality is seen as everybody's
responsibility and that everything the hospital does reflect quality. Quality management
tools and techniques are implemented throughout the organization. The report highlighted
the achievements in the area of Human Resource Management & Development of the
hospital. Training of various groups of staff, exit interviews, 360 degree performance
appraisal etc is carried out in order to achieve high quality of care. Risk management, quality
management systems, good servicescapes, accreditation etc have made organization wide
implementation of quality management possible. The report identified weaknesses in the
areas of measurement, data analysis and information integration in the hospital.
Subsequently, Indraprastha Apollo has obtained JCI accreditation.

Literature Review of Quality of Healthcare Services in India 103

At the hospital level, the case example of Tata Main Hospital (TMH), Jamshedpur provides
useful insights into understanding of TQM implementation. TQM implementation was
initiated in order to improve the perceptions of the community the hospital served (especially
complaints about medical care and services), to make services cost-effective, and to meet
newer demands from patients (Mitra, 2001). The hospital used Tata Business Excellence
Model (TBEM) based on the MBNQA model of U.S.A. Implementation of the TQM
techniques in the hospital utilized Juran Institute’s TQM approach consisting of proof of
need, diagnostic journey, remedial journey and implementation and holding gains. The case
study demonstrated the importance of moving beyond ISO system in order to achieve
excellence in quality. The long-term benefits included improvements in systems (various
departments) and processes, streamlining human resources (reduction of workforce, training,
establishing quality culture, motivation and empowerment) and fiscal discipline (& waste
reduction).

Table 3.1 outlines the advantages of TQM in hospitals in India. The table indicates that
majority of the studies reported are from Tata Main Hospital and therefore applicability of
MBNQA based model needs to be further researched.

Table 3.1 Applications of TQM in Hospitals in India

Focus Application Benefits Reference

Patient Care Intensive Care Unit (two major Continuous reduction in overall Samaddar et
Value Engineering projects expenditure by eliminating waste and al., 2001 *
comprising of many small modified conventional practices to
projects) on oxygen consumption improve quality of care. Over a period
and E.C.G. electrodes. of 8 years nearly Rs. 24 lakhs were
saved cumulatively.
Patient Care Critical Care (by defining value, Plan to identify causes for poor value, Ray, 1999 *
finding reasons behind poor reduce costs and steps for Value
value/performance, and Value Engineering was identified for CCU.
Engineering).
Patient Care Cardiac Care (in-hospital delays Streamlining hospital systems and Bharat et al.,
extending from arrival at hospital procedures helped reduce door to 1998*
till thrombolytic infusion is needle time in thrombolytic therapy for
started, i.e. door to needle time). Acute Myocardial Infarction.
Patient Care Obstetric Unit- Perinatal Mortality Root causes were lack of on-the job Singhal et al.,
Rate Reduction using root cause training of baby's handling and 2000 *
analysis. resuscitation and improper protocol for
high-risk pregnancy identification.
4.5% cases of stillbirths were
identified as preventable after an
analysis over a year (Sepsis, birth
asphyxia, and meconium aspiration
syndrome main causes of neonatal
death).

Literature Review of Quality of Healthcare Services in India 104

Administrative Waiting time in outpatient services Improvement of waiting time carried Bharat et al.,
Practices in Cardiology. out by appointment system for chronic 1999*
patients, efficiency improvement of
availability of doctors, introduction of
practice guidelines and time
management of elective procedures.
After two months the average waiting
time for consultation decreased from
58.6 minutes to 7.7 minutes without
any additional manpower or resources.
Process Radiology Department Increased efficiency of processes with Varghese,
reengineering overall cost reduction was possible. 2001
Process Emergency Care and Patient Helpful in minimizing process times. Reddy and
improvement Discharge Process Acharyulu,
2003
Process Cardiology Services Analysis and process improvement Bharat et al
improvement along with patients and doctors 1998*
education resulted in reduction of
complications from 4.9 to 1.03 per 100
patient years, thereby improving
patient safety.

Cost Burn care (applying the concept of Nearly 50% savings in cost of dressing Bharat,
minimization Value Engineering). materials and antibiotics were 1994 *
achieved.
Cost Resource utilization in laboratory Lowered cost without compromising Mishra et al.,
minimization testing (Indigenous modification quality. 2001*
in the bulb holding system for two
imported microscopes using low
cost durable bulbs using Value
Engineering and team effort)
Support Service Hospital Kitchen Improved patient satisfaction. Dhanjal,
Quality circle improved creativity of 2001*
kitchen staff.
Improved motivation of workers.
Support Service Handling and Management of The implemented waste management Das et al.,
Hospital Waste met the statutory and legal requirement 2001*
of the Government as per Bio-medical
Waste Management rules 1998 and
amendment of 2000.
A recurring income of Rs. 1.0Lakh per
annum was generated through sale of
non-hazardous wastes.
*The studies were carried out at Tata Main Hospital, Jamshedpur, India.

3.3 Research Gaps

Based on the literature review the following factors of TQM implementation in hospitals in
India were identified:

 Obviously, technical and medical aspects of care are important components of

patient care services in terms of procedural appropriateness and risk management such as
reducing hospital infection rates (Vij et al., 2001, Gupta and Kant, 2002) and improving
patient care service with inputs from patients (Bharat, 1994; Sammaddar et al., 2001;

Literature Review of Quality of Healthcare Services in India 105

 Bharat et al., 1998; Ray, 1999; and Singhal et al., 2000). Technical competency and
advanced investigation facilities were found important for insuring patient satisfaction
(Bharadwaj et al., 2001; Verma and Sobti, 2002; Bedi et al, 2004).

 Customer focus including satisfaction, perceptions, expectations of patients (and

families) as well as doctors/staff and medical officials play a crucial role in providing
high quality healthcare services both in public and private health care organizations
(Bharadwaj et al., 2001; Mahapatra et al., 2001; Verma and Sobti, 2002; Bedi et al.,
2004; Rameshan and Singh, 2004). In general majority of these studies indicated that
communicating patient information, empathetic attitude, and responsiveness to
customer’s needs was found important for patient satisfaction. Mahapatra et al. (2001)
found corruption in public health system as the top cause of patient dissatisfaction. The
study by Verma and Sobti (2002) showed that the dissatisfaction levels were higher for
government hospital services than private ones. Study by Bedi et al. (2004) showed that
patient expectations were higher for tertiary care than secondary care services.

 Hospitals are incorporating process management as a very important managerial

system to improve technical/medical care provided to patients (Verghese, 2001; Reddy
and Acharyulu, 2003). Some studies reported the success of process management of
support services (Dhanjal, 2001; Das et al., 2001)

 It is established that the servicescapes and physical infrastructure of hospitals

are important criteria to ensure smooth flow and integration of various services within a
hospital, which contributes to patient satisfaction and healing (Kant and Gupta, 2002).
Facility tangibles like utilities and infrastructure like water supply, fans, lights,
cleanliness were found to be important (Bharadwaj, 2001; Verma and Sobti, 2002, Bedi
et al., 2004; Ramesh & Singh, 2004).

 Role of human resource management and development in quality services is

often recognized as one of the most important criteria. Training, multi-skilling, service
culture, performance appraisal and reward mechanisms have been identified as focus
areas (Gupta, 1998; Arya et al., 2003).

 Importance of administrative practices to reduce waiting time, to integrate

processes and for continuous improvement in order to achieve total quality is highlighted
(Bharat et al., 1999).

Literature Review of Quality of Healthcare Services in India 106

  Hospital-wide implementation of TQM practices at Tata Main Hospital in
Jamshedpur, has been found to be successful. This strengthens the usefulness of
MBNQA’s seven criteria on which TBEM model is based. The criteria of Leadership,
Strategic Planning, Customer and Market Focus, Measurement, Analysis and
Knowledge Management, Human Resource Focus, Process Management and Business
Results were found effective in organization-wide TQM implementation (Mitra, 2001;
Sahni, 2001). The analysis of TQM implementation indicates that establishment of
service culture is very important for hospitals.

Further, from the websites of major hospitals, it can be gathered that Apollo Group of
Hospitals; Manipal Hospital, Bangalore; Shankarnetralaya, Chennai etc report of use of
TQM based Quality Management Systems. Though the above studies support the advantages
of TQM practices, the level of implementation of various factors and their criticality is not
researched and confirmed by systematic studies at multi-facility (hospitals) levels. Such
research would provide specific directions to hospitals that are interested in establishing
Total Quality Services (TQS).

The above discussion establishes the fact that the hospitals are initiating a number quality
management practices and systems; however, research in TQS implementation is in its
nascent stage in hospitals in India. Though a number of studies reported above identified the
advantage of TQM in a healthcare setting in different departments or units, literature on
organization-wide implementation is limited. Critical factors research for TQS was carried
out by Sureshchandar et al. (2001a, b) in India on the banking services. The study indicated
that servicescapes and service culture as essential to services whereas MBNQA criteria do
not include it as separate criteria. The authors have further recommended research on TQS in
healthcare organizations with necessary modifications. The above literature review clearly
indicates a need for identification & validation of TQS constructs for hospitals in India.
Such a framework (& hence the testing instrument associated with measuring scales) of TQS
constructs would give specific directions for hospital managers to operationalize the
principles of TQM effectively.

Literature Review of Quality of Healthcare Services in India 107

3.4 Chapter Conclusions

This chapter examined the issues and trends of quality of services of Indian healthcare
sector. The first part discussed the Indian healthcare industry, its infrastructure, the main
features of demographic and epidemiologic spectrum and growth of private sector and its
utilization. The demand-supply gaps, growth of health insurance sector, competition and
medical tourism have spurred the interest in quality management initiatives by healthcare
providers. The second part of the chapter discussed the quality issues and trends in the
Indian healthcare sector. Professional management of hospitals is becoming important in
order to enhance efficiency and effectiveness of the services. In general, regulatory
mechanisms in India are quite weak and there is a lack of accreditation schemes for
hospitals. Quality of many public and private healthcare services is rather questionable and
some state government reforms are starting to address the issues of quality. At the same
time, major high-tech hospitals, many of them private are providing high quality of care and
are well known for superior quality of medical professionals. Many of these large hospitals
are setting a number of quality systems in place, obtaining ISO certification and hospital
rating by commercial agencies, improving infrastructure, and technological capabilities etc
in order to improve the quality of services. Industry leaders are showing a keen interest in
the achieving high quality through applications of TQM principles. The literature review
clearly indicated that hospitals are focusing on improving technical & medical aspects of
care, customer satisfaction, process management, servicescapes & hospital infrastructure
facilities, human resources management & training, and administrative practices.
Measurement of results of hospital wide TQM applications is very limited and research in
the area of critical success factors for TQS is lacking in the Indian healthcare context.
Development of a framework of TQS critical factors would fill the research gaps. Such a
framework would be useful for decision makers and healthcare managers for developing
appropriate strategies for measurement and implementation of quality management strategies
holistically. Also, such an effort would contribute to theory building in management research
areas of TQS in healthcare.

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