Health Watch, Gomantak Times 30 May 2010

While a routine health check may seem frivolous and unnecessary, today’s lifestyle makes it more of a necessity. But is Goa ready for health check-up packages, asks Giovanni D’Cunha

[The writer is a faculty at the Marian Institute of Health Care Management, Panjim]

You walk into a restaurant and the first thing you ask for is the menu. The day is not far when you walk into a hospital and demand for the best deal on offer. Or if you are a health conscious executive on the fast track, but don’t have the time for a regular blood test, would this option appeal to you? Your blood sample is collected by personnel from the path lab in the comfort of your home and the reports are delivered to you the next day, or you collect them on your way home.

One way that an individual can monitor his health today is by going for a periodic health check-up which may include diagnostic tests. These tests help to identify specific problems that may crop up due to unhealthy food habits, lack of exercise or a sedentary life style. As a result of the lifestyle that we lead we can become victims of modern diseases-diabetes, cardiac problems, obesity and hypertension-to name a few. Corporate hospitals and diagnostic labs today try to meet the need to provide facilities to conduct diagnostic tests which will aid a doctor to make a conclusive diagnosis of the patient’s current health.

A common process is the following: the patient goes to the doctor, the doctor conducts a physical examination of the patient. Depending on the initial diagnosis, the doctor may prescribe certain diagnostic tests which the patient has to do. He may get these tests done in the hospital’s diagnostic lab or may go to any diagnostic lab in the vicinity that would do the tests for him. Armed with the results the patient goes back to the doctor. The doctor now makes his final diagnosis and prescribes the treatment.

Health packages take this scenario to a different level. Not only does it call for preparedness on the part of the patient but more efficient use of the doctors’ time. Doctors today are dealing with an informed patient. The internet has thrown open doors of medicine and technology to a lay person like never before. Looking at meeting such a need, a number of diagnostic labs have come up in Goa. Hospitals too have recognized a demand for self-prescribed pathological health check-up packages coupled with their revenue potential. Any person can avail of this independently without consultation from a doctor. Packages of this kind are available at many hospitals, but often come at a cost.

Would people in Goa be looking for such a high cost, yet high convenience benefit?

HEALTH CONCIOUS

An extensive study was conducted in Goa this year to understand the patient and doctor perception towards such health packages. The target population was the people in and around Panjim.

The study served to confirm the assumptions of the researchers that people in Goa, living a fast-paced

lifestyle, welcome the idea of health check-up packages. This was chiefly seen among office goers. It was also found that office goers in a higher income bracket preferred to go in for general tests and blood profiling and would also like to design and develop their own test package with the tests that they need. Ronald May, marketing manager at Manipal Hospital, affirms this fact when he says, “Goans are becoming increasingly ‘preventive-conscious’ today. There is a growing trend in people to invest in such packages and curb any illness, if any, in the initial stages itself.”

There are various categories of health packages one can avail of, be it cosmetic, dental, eye, pre-marital, or just a general body-watch. Besides general blood tests, a comprehensive health check-up consists of tests such as the lipid profile, liver, thyroid and kidney screening, stress screening, eye and ENT examination, pulmonary function tests, gynaecologist consultation and pap smear tests.

Today’s unhealthy lifestyle makes it mandatory for everyone to undergo a complete health check up, at least once in a year. The periodic check up helps in identifying the cause of diseases at a very early stage and provides the opportunity for the proverbial “stitch in time”.

The Navhind Times – Zest, 15 May 2010

The focus is shifting and healthcare delivery has moved from the domain of physician care to the domain of the healthcare delivery organization. While new insights continue to be gained from professional practice in the field of health care, one also needs to look at practical aspects of delivering healthcare.

[The author, Meena Parulekar, is faculty at the Marian Institute of Healthcare Management]

The health sector encompasses various services that aim primarily towards affordable care and preventive medicine. Availability of skilled medical personnel, access to healthcare and insurance for the poor, freedom from preventable diseases like malaria and pneumonia are a few issues that are faced in delivery of healthcare.

While these continue to be challenges for the public health system in India, the last decade has seen changes like growth of organized healthcare with players like the Apollo group, Ranbaxy, Max India, Wockhardt and Fortis entering the healthcare market and opening up of the insurance market to the private sector.

With competition setting in, the emphasis is on value and greater transparency about quality, services and prices. One of the most important reasons cited is the changing expectations of the patient who wants to be actively involved in the ‘care’ delivery process. A paradigm shift of hospitals towards service lines in this changing scenario would hence become inevitable. In a well established clinical service line, physicians and administrators can exchange views more easily and share best practices with colleagues elsewhere in the system. If we look at the existing systems of knowledge exchange in the healthcare domain , it appears to be a one way flow from research which is funded by external agencies to the delivery stage (doctors, nurses ) and then to the patient. This meant that the doctor is the main caregiver.

The focus is shifting and healthcare delivery has moved from the domain of physician care to the domain of the healthcare delivery organization. While new insights continue to be gained from professional practice in the field of healthcare, one also needs to look at practical aspects of delivering healthcare, e.g. In the materials management department of a large tertiary hospital, who will do what, when, where and how? How will they hand over tasks, decision rights and accountability to the next person? These are issues that require managerial intervention. In a hospital where patient handling is critical, focus on managing patient waiting times becomes important. Similarly, considering the work environment of health care workers like nurses in a hospital, understanding their social and job related needs becomes a critical issue.

The McKinsey report of December 2008 on healthcare spending in the US re-affirms the need for healthcare reform while highlighting the importance of its stakeholders-doctors, payers and hospitals- involvement. Despite having among the better facilities in terms of hospitals and innovations in technology, it has been found that the cost of spending on healthcare for the common man in the US is perhaps the highest.

Thus, there is a felt need to narrow the gap between clinical practice and management practice in healthcare delivery organizations in order to ensure effectiveness and efficiency of ‘care’ delivery.

Management is a science that is based on observation and facts. The role of a healthcare manager would be to plan, organize and manage care and management of institutions in which care takes place. Put simply a healthcare manager would be in a position to guide these centers of healthcare delivery in making effective decisions that benefit the patient while also serving the organization interest . Any new intervention of designing processes and operating systems for the organization would require an understanding of the nature of clinical processes and the relationship between the medical knowledge, care processes, organizations and practitioners. Thus, healthcare as a domain, is fast emerging to be an integrated discipline. There is a component of industry intervention (pharmaceuticals, biopharmaceuticals and insurance) and patient focus that guides the efforts of skilled professionals in this sector.

A healthcare management program can be objectively designed keeping the above requirements in consideration. What a student is able to achieve through a healthcare MBA program is this objective of (a) Understanding the working of the organizations in the health sector,

(b) Drawing on management knowledge and competencies to deal with the specific issues faced in managing healthcare, and

(c) Gathering an integrated view of the entire system of healthcare delivery

Given the emerging trends in scale and needs of healthcare in India, a focused management approach to the specific issues faced in healthcare would serve the needs of the sector and also help the individual to contribute to achievement of better standards and in turn enhance the quality of overall healthcare delivery.

ExpressPharma 31 March 2010

Sherin Moraes, a student at Marian Institute of Health Sector Management, Goa writes about the implications of liquidity and profitability in a pharmaceutical company

A firm is required to maintain a balance between liquidity and profitability while conducting its day to day operations. Investments in current assets are inevitable to ensure delivery of goods or services to the ultimate customers. A proper management of the same could result in the desired impact on either profitability or liquidity.

Liquidity is a precondition to ensure that firms are able to meet its short-term obligations. The ‘liquidity position’ in a company is measured based on the ‘current ratio’ and the ‘quick ratio’. The current ratio establishes the relationship between current assets and current liabilities. Normally, a high current ratio is considered to be an indicator of the firm’s ability to promptly meet its short term liabilities.  The quick ratio establishes a relationship between quick or liquid assets and current liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value.

Consequences of low liquidity

a) A company that cannot pay its creditors on time and continues not to honor its obligations to the suppliers of credit, services and goods could result in losses on account of non-availability of supplies and lead to possible sickness or insolvency. Also, the inability to meet the short term liabilities could affect the company’s operations and in many cases it may affect its reputation as well. Lack of cash or liquid assets on hand may force a company to miss the incentives given by the suppliers of credit, services, and goods as well. Loss of such incentives may result in higher cost of goods which in turn affects the profitability of the business.

b) Every stakeholder has interest in the liquidity position of a company. Suppliers of goods will check the liquidity of the company before selling goods on credit. Employees should also be concerned about the company’s liquidity to know whether the company can meet its employee related obligations–salary, pension, provident fund, etc. Thus, a company needs to maintain adequate liquidity.

Profitability is a measure of the amount by which a company’s revenues exceeds its relevant expenses.4 Profitability ratios are used to evaluate the management’s ability to create earnings from revenue-generating bases within the organization.

The ‘profitability position’ of a company is measured using the ‘gross profit margin’ and the ‘net profit margin’. The gross profit margin is an indicator of the profit a business makes on its cost of sales, or cost of goods sold. It is the profit earned before any administration costs; selling costs and so on are removed. The net profit margin is an indicator of the amount of net profit per rupee of turnover a business has earned. That is, after taking account of the cost of sales, the administration costs, the selling and distributions costs and all other costs, the net profit is the profit that is left, out of which the company will have to pay interest, tax, dividends and so on.

Consequences of low profitability

A profit ratio indicates how effectively management can wring profits from sales. It also indicates how much room a company has to withstand a downturn, fend off competition and make mistakes. Potential investors are interested in dividends and appreciation in market price of stock, so they focus on profitability ratios. Managers, on the other hand, are interested in measuring the operating performance in terms of profitability. Hence, a low profit margin would suggest ineffective management and investors would be hesitant to invest in the company.

Thus, a financial manager has to ensure on one hand that the firm has adequate cash to pay for its bills, has sufficient cash to make unexpected large purchases and cash reserve to meet emergencies, while on the other hand, he has to ensure that the funds of the firm are used so as to yield the highest return.

This poses a dilemma of maintaining liquidity or profitability as indicated in the figure below:

The liquidity and profitability goals conflict in most decisions which the finance manager makes. For example, if higher inventories are kept in anticipation of increase in prices of raw materials, profitability goal is approached, but the liquidity of the firm is endangered. Similarly, the firm by following a liberal credit policy, may be in a position to push up its sales, but its liquidity decreases.

Similarly, there is a direct relationship between higher risk and higher return. A company taking higher risk could endanger its liquidity position.8 However, if a company has a higher return it will increase its profitability.

The liquidity and profitability ratios of four pharmaceutical companies-Cipla, Divi’s Laboratories, Bafna Pharmaceuticals, and SMS Pharmaceuticals-over a four year period were analysed to understand the relationship between liquidity and profitability. (See Box)

The liquidity and profitability ratios of the above four pharma companies indicate that liquidity and profitability could go hand in hand. Except the year 2008, there is a positive correlation between the movement in the profitability ratios and the liquidity ratios. Despite the limited scope of this study, the observations would suggest that a company while planning working capital need not maintain a trade off between the two as is usually felt. In the light of the above, financial managers would need to reflect on the implications of each decision that usually involves a trade-off between liquidity and profitability. It would also be useful to assess the effect of one decision involving this trade-off vis-à-vis another, so that an overall view can be taken.

The present economic scenario has its implications on liquidity and profitability. ‘Recession means a general slowdown in economic activity over a period of time. Production, employment, investment spending, capacity utilization, household incomes, business profits and inflation fall during recessions; while bankruptcies and the unemployment rate rise. Because of this, companies are reverting inwards. In order to survive during these times, frugal measures need to be adopted. ‘Frugal basically means prudent, not wasteful, wise in expenditures, and inexpensive’. Being frugal would involve measures such as:

Decreasing the size of sales force and concentrating on highly trained sales reps that have already established relationships with physicians. This reduces the amount of liquid cash needed to be kept to pay salaries to sales reps; thereby increasing the liquidity position.

Focusing on already established relationships rather than trying to build new ones reduces the amount of money needed to be spent in order to acquire new customers.

Embracing technology,such as use of e-detailing programs, can reduce expenses incurred by the company, and hence enhance the liquidity position of the firm.

REFERENCES:

http://www.msrit.edu/dept/mba/iitpowai.pdf; Date accessed: 23rd August 2009

http://www.accounting-ebook.com/15/1.pdf; “Meaning and importance of liquidity”; Date accessed: 23rd August 20093. http://moneycentral.msn.com/investor/invsub/results/compare.asp?page=financialcondition&symbol=prx, Date accessed: 23rd August 2009

http://campus.murraystate.edu/academic/faculty/larry.guin/fin330/liquidity%20vs%20profitability.htm, “the liquidity vs. Profitability tradeoff”, date accessed: 23rd August 2009

http://www.bized.co.uk/compfact/ratios/profit3.htm, Date accessed: 22nd August 2009

http://www.investopedia.com/articles/fundamental/04/042804.asp – the bottom line on margins, Date accessed: 22nd August 2009

http://www.exinfm.com/board/profitability_ratios.htm, Date accessed: 15th August 2009

http://www.my-quickloans.com/LIQUIDITY-vs-PROFITABILITY.html, Date accessed: 15th August 2009

http://money.rediff.com/companies/, Date accessed: 15th August 2009

http://en.wikipedia.org/wiki/Recession, Dt acc: 20th feb 2010

http://social.eyeforpharma.com/story/recession-and-pharma-how-be-frugal-still-build-business, Dt acc: 20th feb 2010

The Graduating Batch 2010

The graduating students expressed their sentiments at being the first batch to pass out of the Marian Institute and their enriching experiences while studying here. The faculty too shared their own experiences being part of the learning experience of the students.

The celebration culminated with the distribution of mementos and a sumptuous buffet hosted by the first year students.

All the best to the second year batch!

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The students and faculty of Marian Institute of Health Care Management express their joy on the recognition of Fr. Romuald D’Souza’s contribution to education.

Fr Romuald D Souza SJ

The Padma Shri was conferred to Fr Romuald D’Souza for ‘Literature and Education’ on 26 January 2010 by the Government of India.  The Padma Shri is a civilian award for distinguished service.

Felicitation at MIHM

A felicitation ceremony was organized at the Marian Institute on 28 January in honor of Fr D’Souza at Mayfair. Ms Meena Parulekar and Ms Lyka Da Costa expressed sentiments of pride on behalf of the faculty and the students at the Marian Institute.

Felicitation at MIHM

Fr D’Souza expressed his own views about being conferred this award and his vision for the education system in Goa.

Fr. R. D Souza SJ

Here are a few words of wisdom from Fr D’Souza:

“We are not working for awards, we just carry on doing our work.”

“Education is not a matter of acquiring information but learning to create knowledge.”

“In education, the emphasis is on the learner, not the teacher”

Fr D Souza receives the Padmashri from President Pratibha Patil

{More about Fr. Romuald D’Souza SJ}

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