Malar Hospital

Organization Structure & Design

Prepared By: Group 5 DoMS, IIT Madras, Batch of 2010 Cotnact: sarang.bhutada@gmail.com

Introduction to Fortis Malar Hospital

Subsidiary of Fortis Healthcare Ltd Fortis Healthcare, paid Rs 34.6 crores for a 48.8 percent stake in Malar Hospital in 2008

FORTIS HEALTHCARE LIMITED:

Leading healthcare group in India matching international standard First hospital opened in 1999 at Mohali Hallmark is patient-centricity approach At present it has 22 hospitals and 2,500 beds.
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Malar Hospital
 Located in South Chennai  5 super specialty centers setup MALAR Heart Institute (MHI-Commencing shortly at Malar) MALAR Institute for Renal Sciences (MIRS) MALAR Specialty Centre for Joints (MSCJ) MALAR Health care for OBG and Gynecology MALAR Health care Centre for Diabetes (MHCD)

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Organizational Life Cycle

Maturity Decline Growth

Malar Hospital

Formation

F & C stage
Formalization of rules Stable structure Emphasis on efficiency 6/23/2011 4

Effectiveness

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Malar Hospital - Effectiveness

Productivity and profit
 Net Profit for the year ended 31th March 2008 was Rs 77.56 Lac  Profitability ratio is a healthy 26 percent  Occupancy rate 70-80 %

Quality
 Wealth of medical expertise with the finest talent amongst doctors, nurses, technicians and management professionals

Utilization of environment
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 Located in best of residential locations

Evaluation by external entities

 Financial audits are conducted every year by external auditors  ISO 9001:2000 certified by International Certification Services Limited

Emphasis on Training and Development

 New joiners go through an initial training program  Fortis training centers are also used

Participation
 Community outreach programs for senior citizens named Arokya, Kids & Teens
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Applying strategic constituencies approach

Shareholders: Profit margins of 26 percent Doctors and Administrative Staff: Competitive remuneration, Learning opportunities Patients: Multi-specialty, Quality Service Community: Various community outreach programs Government: Transparent in operations

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Competing Values Approach

Flexibility

People

Organization

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Control

Structure

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Malar Hospital - Structure

Structure can be analyzed on following dimensions
 Level of complexity  Centralization  Formalization

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Complexity
Horizontal Differentiation
 37 Medical departments covering the entire breadth of medical specialities  6 other departments (HR, Finance, Marketing and Sales, Materials, Engineering and Nursing)  Social Specialization Doctors  Functional Specialization Nurses, Technicians

Vertical differentiation
 3 levels of Hierarchy
1. 2. 3.
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Zonal Director Head of Departments of all 43 departments Teams under each department
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 Wide span of control

Zonal Director

Unit Head HR

Head Admin

Materials Head

Head Engg

Medical Director

Head Sales & Marketing

Finance Controller

Nursing Matron

Team HR

Materials Team

Engg Team

Consultation & Doctors

Marketing Team

Finance Team

Nursing Team

HK

Security

PCS

F&B

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Formalization
Standard operating procedures (SOP) High level of standardization for administrative tasks Low level formalization for Doctors Subcontracts are highly formalized Recruitment process is highly formalized

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Doctor writes ARF to initiate the process

Patient Cycle at Malar A formalized procedure

Patient registers the ARF at the reception

Patient/Family counseled about the estimated expenditure/ hospital rules & guidelines

Admission confirmed after two forms filled

Patient expected to bring previous consultation & investigation records

Treatment carried out. Follows the consulting cycle (next slide) Patient informed about interim bills on a daily basis. Bills settlement at the time of discharge The doctor/nurse hands over the signed discharge summary and other relevant documents.
1. Consent form for admission 2. Cashless facility form for insured patients

Patient discharged after paying the bills in 6/23/2011 cash, debit/credit card or demand draft

Bills prepared at billing office (Admin)

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Consultation Cycle at Malar A formalized procedure

DMO allotted a patient, based on availability

DMO provides initial consultation. Refers to a specialist unit, if needed

Observations by DMO/subsequent departments are recorded on a chart

These include diagnosis, tests, subjective tests, objective & subjective comments

Nurses divided into geographical zones, but are flexible on availability

Divided floor-wise & then department wise

Diagnosis and treatment under a nurse, DMO/visiting consultant

Nurse/DMO confirms completion of treatment, based on expertise 6/23/2011 16

Centralization
All departments are controlled by Head of Departments Heads report to Zonal Director Autonomy for each individual in the organization is limited Financially Highly Centralized Functionally Moderately Decentralized

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Size

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Malar Hospital - Size

Medium-sized organization No apparent change in size, after Fortis deal 37 departments 250-bed facility 256 full-time staff Workforce divided into department heads and teams

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2 MR co-ordination 2- Marketing initiatives

Nurses Ward Boys Trainees

External Contractors

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67 visiting consultants 31 DMOs

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Impact on Structure
Medium-sized but multi-specialty hospital Low Vertical but High Horizontal complexity Moderately formalized No direct impact on centralization

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Strategy

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External Threats and Strategy Implemented

External factors Increasing cost of funds Strategy Cost effective business model

Availability of funds from Financial institutions

Focus on improvement in revenues, improvement of occupancy rate

Stiff competition from other players

Addition of departments, quality health care, improvement in infrastructure facilities, focus on high end health care services

Unexpected eventualities

Improvement in infrastructure and increase in buffer capacity Constant interaction with the market Company will try to increase its own brand value

Change in regulatory framework Changes in parent company

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Different types of strategies

Corporate strategy
 Brand Extension by opening medical college & school

Business strategy
 Focus on improvement in revenues and cash-flow by enhancing neuro and ortho departments  Enhancing the facilities in Cardiac department  Focus on high end health care services (Minimal Invasive Surgery)
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Functional strategy
 Use of strong HIS backbone, and PACS technology to safely transmit patient information  Use of HL7 and DICOM standards for telemedicine purpose  Self-defining and self-expiring passwords for maximum privacy

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Strategy - Structure Relationship (Chandlers Theory)

Time

t+1

t+2

Multi specialty Low High

Structure

Simple

Functional

Divisional

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Miles and Snows Strategy Theory

Strategy type Analyzer Description Structure

High level of standardization, routinization and mechanization for efficiency Also flexible in reacting to increased competition and changes in the market

High Formalization

Moderately centralized control

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Porters Competitive Strategy

Differentiation focus strategy
 Focused on upper middle class citizens of Chennai  Differentiated itself by emphasizing on high technology, patient-centric centers, high end health care service

Impact on structure
   
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Moderately flexible structure Moderate complexity in terms of hierarchy Moderate formalization at higher level Highly formalized, moderately decentralized decision making at operational level
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Industry analyses
Capital requirements
High low

High

Productinnovation rates
Low
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C category
Highly structured and standardized Centralized structure
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Environment

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Specific Environment
Competitors

Suppliers

Patients

Malar Hospital

Pharma Industry

Government

Doctors/ Consultants

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Environmental Uncertainty

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Burns & Stalker Model

Characteristic Structure

Rigid Task Definition

Mechanistic

Lateral Communication

Organic

High Formalization

Mechanistic

Expertise Influence

Organic

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Centralized Control

Mechanistic

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Lawrence and Lorsch Theory

Fair collaboration exists Collaboration between the departments defines the quality of service to the customer Internal environment varies between departments matches differentiation and integration activities

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Environment Structure Relationship

Formalization

Complexity

Centralization

Environment

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Technology

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Technology @ Malar Hospital

Technology is applicable at all stages: Input, Conversion and Output
 Inputs: Skills and Expertise of Personnel, Softwares like HIS  Conversion: Medical equipment and techniques and Work procedures  Output: Infrastructure (Ambulance etc), Periodic checkups

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Perrows Model
Task Variability
Few exceptions Many exceptions

CRAFT
Ill Defined

NONNON-ROUTINE

Malar Hospital
ROUTINE ENGINEERING

Problem Analyzability
Well Defined

Structural Predictions Low on formalization High on centralization

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Moderately wide on span of control

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Thompsons Model

Inputs Resources A B C D E

Transformational Process

Output

Feedback

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Intensive Technology Model

Form of task interdependence
 Reciprocal

Main type of coordination

 Mutual adjustment

Strategy for reducing uncertainty

 Specialism and diversity of task activities

Cost of coordination
 High
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Structural Predictions
 High Complexity ---37 medical departments leads to high horizontal differentiation  Low Formalization ---Low formalization in the way doctors work  Moderate Decentralization ---Financially Highly Centralized ---Functionally Moderately Decentralized

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Culture

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Value system
Confrontation
 Facing, rather than shying away from, problems

Authenticity
 Congruence between claims and actions

Pro activity
 Take initiative, pre-plan, take preventive action

Autonomy
 Use and give freedom to plan and act in ones sphere
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Collaboration
 Give and ask for help to and from others

Experimentation
 Use and encourage innovative approaches to solve problems

Direction
 Clear objectives and performance expectations

Management support
 Managers provide clear communication, assistance, and support to subordinates
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Control
 Number of rules and regulations, amount of direct supervision used to control employee behaviour

Trust
 Maintain confidentiality of information, integrity in dealings

Conflict Tolerance
 Employees are encouraged to air conflicts and criticisms openly

Reward System
 Reward allocations are based on employee performance
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Forgiving Nature

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Major Culture changes at Malar

Hospital on its inception was positioned as an elite hospital Changed its positioning as it realised the acute need for quality health care in the poorer sections of the society In 2008, Malar hospital was taken over by Fortis group
 Major decisions were taken by the owning family and now the board of directors have taken the place.  More patient friendly than before.  The look and feel of the hospital underwent a major change

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Thank you

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