Leadership Pipeline Development in Indian Healthcare

The titans of Indian healthcare industry be it Frontier Life Line Hospital, Medanta, Narayana Health, Apollo or Manipal Hospitals are all clinician-led organisations. Can an MBA attract top specialists to a tertiary care hospital or does he need a degree in medicine? Healthcare Executive finds answers to these difficult questions related to leadership development.

Earlier leadership was all about strategic thinking, decision making, capacity building, mentoring, and change management. But running a healthcare business in the age of disruption is more complicated than ever now.

Resonance of ethos between administrator and people on the ground is vital for a standard, scalable and meaningful business model. And that’s the reason why most of the corporate hospitals in India are clinician-led models. Take the example of Narayana Hospital, famous for its affordable care model. According to news reports, NH has an Average Realisation Per Occupied Bed (ARPOB) of 80 lakhs on an annual basis compared to 1.5 crores of other private chains. ARPOB is basically average room rates. That’s because the hospital has more wards than deluxe rooms. It maintains strict control over its expenditure and avoids hiring star doctors.

The Intangible Trait that You Need to Succeed

Brand Devi Shetty is the most attractive feature of the organisation. He still performs surgeries at NH. And many wonder whether it will be a sustainable brand without him.

Ranjan Pai, Chairman of Manipal Education and Medical Group (MEMG) has a medical degree. The general perception is that hospitals perform better when led by physician-leaders. Naresh Trehan led Medanta is also another example of clinician-led healthcare establishment. He started his own venture at the age of 64. His career graph also proves the role of super specialists in a hospital. Fortis stock price fell more than 4 percent, when the management fired Trehan in 2007. And Apollo share value went up, when he joined them.

What You need to Know to Succeed

So, does the new generation of leaders need a degree in medicine to run a hospital? The sustainability of a hospital  depends on who the founders give their batons to. Preetha Reddy of Apollo Group, for instance, does not have a degree in medicine. According to sources the non-physician manager focuses a lot on learning. Her team also updates her about the latest drugs and innovations in the sector. .

How to Create a Leadership Development Program that Actually Works

At CMC Vellore, PGI Chandigarh, or AIIMS, clinicians themselves become administrators based on their merit. “We have a unique system of the executive leadership selection,” says Dr Sunil Chandy, former Director and cardiologist of CMC Vellore. “There are no MBAs in an executive position in our organisation be it director, principal or dean, unlike corporate hospitals. This model is in fact, followed by healthcare organisations across the world. There was a big crisis in NHS UK when an administrator replaced a clinician administrator. Even in the several US hospitals have started promoting clinicians to leadership positions. It was more of an organic process at CMC Vellore, which was started by the founder and a few missionaries,” he recalls.

Chandy, whose tenure as a director, ended recently is also a classic example of leadership grooming at CMC. He started his journey as a student and later worked as a cardiologist at the institution. He got exposed to the administrative process during his stint and eventually got the role of the director. He believes that for optimal care, leading healthcare providers must hire clinicians at their helm. CMC Vellore, for instance, has survived for 120 years and handled a footfall of 1500 patients a day. “If you are looking at sustainability, patient care, compassion, holistic healing, we have proved that our model works. Most of the private hospital chains have a lifespan of 30-40 years.”

Interestingly, there are primarily two types of leadership executive leadership and managerial leadership. Executive leadership comprises people who determine policy, vision, mission and the ethos of an organisation. And the administrative team who runs the organisation. At times, a healthcare leader should be comfortable with ambiguity especially, when it comes to new technology like Robotics when there is no data to support decision making. Even though hype regarding the technology hasn’t sustained, many doctors still consider it was a worthwhile exercise to invest in the technology.

A Sundar Pichai might not work for the Healthcare Industry

That's why healthcare leaders need domain knowledge, says Chandy. Domain knowledge helps leaders to take better decisions, he notes. “A doctor at the top will understand why an MRI machine of 3.4 crores needs to be bought. An MBA will ask for ROI, and whether money can be made within five years. A clinician would understand that the latest technology might not have data to support it, but it's a worthwhile investment,” he adds.

While CMC chooses its leaders from in-house, it also sends its aspiring leaders for small modules of training at premier institutions like IIMB, XLRI, based on what the role requires.

Why Leadership Development Has to Happen on the Job

Many experts also point out that there are no scientifically developed healthcare programmes in India. Most of the courses offered by institutions rely on curriculum cobbled together from healthcare literature available on the internet. “They float a class because it is lucrative. It is taught often by engineers. They collate information from the internet and customise it to the Indian situation. Healthcare industry in India is a mess because of the state of the management education. Many are still confused about healthcare management and healthcare leadership. Many do management programmes hoping to be a CEO.

“Further, there are no leadership courses in India. Leadership and management are entirely different things, and often courses don’t help. These are just primer courses, which will introduce you to the jargon of finances, infrastructure, strategic planning etc. You will hardly fund goal setting, soft skills, human resources, communication skills etc. in these courses,” says a doctor who doesn’t want to be named.

Lastly, the female leadership numbers still remain dismal in the healthcare sector. Clearly, it would take years to reach pay and leadership parity. However, not planning for the leadership requirements of future means pitfalls for the organization to stumble upon.