Analyze the potential of pay per use model for IT products in Indian health care industry

Abstract

The Indian Healthcare Industry is slowly realizing the benefits of IT automation in improving their operational efficiency and patient care but it is struggling to find the right solutions and the right vendors. A hospital generally requires multiple IT solutions to automate its workflow. All these solutions need to work together to provide a seamless integration, which is key to maintaining the integrity of data, and improving productivity of the doctors. The hospitals have multiple choices in procuring these systems.? Outright purchase from an experienced vendor like GE, Siemens, Philips.? Purchase from a small Indian vendor with limited expertise.? Build the solutions in-house. Each of these options has their pros and cons and none of them have been a major success. A new model Pay Per Use (PPU or ASP, Application Service Provider) has emerged in the developed countries where the hospitals do not own the solutions but outsource the complete solution to a 3rd party service provider and pay on a per use basis. This helps hospitals in better cost management, allow them to focus on their core competency, avoid IT maintenance issues and provides better service. The aim of this project was? To understand the perception of the care-providers (hospitals) towards IT automation (in general) with specific focus on the acceptability of PPU model in the hospitals.? Provide recommendation for any vendor planning to provide PPU The research consisted of two parts.? Literature review to identify key factors that were instrumental in the transition of other industries to PPU model? In-depth interviews with the key stakeholders in the hospitals and a survey of the patient community to check the applicability of those factors in accelerating or hindering the adoption of PPU model in the Indian Healthcare Industry. The research suggests that even though there is economic value in moving to PPU model and the factors like cost control, and improvement in service quality are important to the hospitals but there other factors like? Lack of standardization of workflow and related applications? Lack of collaboration and data sharing between hospitals? Lack of seriousness in the patient community towards health record management? Need of hospitals for control and ownership of patient data. Lack of push from government towards health record management? Lack of accountability are big hindrance to the acceptability of PPU model. In general the Indian hospitals do not appear to be ready as of now to move to the PPU model. It may take another 5-8 years for the industry to mature and applications to standardize. The small and mid tier hospital could drive the adaptation of the PPU model once they see value in it. For now the ASP vendors should focus on bringing in standardization by educating the end users, physicians and government. They can also look for specific segments like small chain of hospitals, and some mid-tier hospitals to prove the feasibility of the solution and build vendor trust.