Final Project on Wazir Ali Industries

Change Implementation.

The changes brought in Medicare are gradual and evolutionary charges. The CEO feels that there is no need to bring abrupt changes e.g. if new equipment is introduced in hospital it will be an incremental change as the change in medical technology is normally not a big change and new machinery introduced is compatible with old one. In order to reduce the resistance of employees to work on new machinery, Dr. Mehdi himself trains the employees to work on new machinery. In order to facilitate change, they believe in CME i.e. continuous medical education. E. g. Experts are called for refresher courses of employees. But as far as longer period training is concerned, employees resist to go on training for longer period as they have to sign a bound. They resist it as salaries in Medicare are quite low and as they want to leave the hospital as soon as they get good jobs somewhere else.

Current Strategy.

Medicare’s focus is on providing quality medical care to its patients in a caring manner by an outstanding team of health care professionals.

1.    Medicare is differentia ling itself from its competitors on the basis of quick response (e.g. whenever a patient enters the hospital, he is immediately attended by doctors), better health care management and caring attitude towards patients.

2.    Medicare’s current strategy is to go for expansion and to pro vide wider medical coverage. So it is expanding its building to add new rooms. More important is that it is adding new medical services so that any patient can be fully investigated and treated undue one roof e.g. few months back a dial sis unit is established in Medicare. They also have started providing “ Skin Care” service from last three months and now they are going to establish a Heart Surgery department for which feasibility is completed.

3.    As far as implementation of change is concerned, Medicare goes for incremental changes but not for radical changes.

SWOT ANALYSIS.

Strengths

1.    One strength of Medicare is their modern technology and machinery that is not available in other Hospitals. Medicare has centralized oxygen system and ventilator that is not available in other private hospitals in Multan. Similarly its ICU is best among the private hospitals. This is mainly because the head of ICU in Nishtar and Medicare is same i.e. Dr. Mehdi, so he cares very much that Medicare’s ICU is in good condition with modern equipment. Other modern equipment of Medicare includes dialsis unit, Cardiac monitor, incubator for babies, equipment for laproscofic surgery   etc. Similarly Medicare is for the first time starting open heart surgery unit in Multan.

2.    Apart from medical treatment provided by Medicare, its ancillary services are also a source of strength. These services are better than other hospital and Medicare has special beds for patients, which are imported from Sweden and each bed has cost Rs. one  lac Similarly there is phone provided in patients room so that they can call at national or international level. A medical store with good medicines (i.e. no counterfeit medicine), cafeteria, gift shop and mosque etc is there.

3.    Medicare’s consultants have excellent medical expertise. It s consultants are foreign qualified and have good history of work. Most of them have experience of working in different countries, so they are more aware of high quality health care practices and have breeder vision. Medicare is the only private hospital having anesthetist.

4.    The major strength of Medicare and advantage over competitors is “Quick response”. Whenever an emergency comes in Medicare it is handled with out any delay. There is emergency room on each floor.

5.    Similarly Medicare has got competitive advantage on the basis of “differentiation” It has get differentiation from its competitors by having a culture promoting caring people for rights, feelings and individual needs of patients and their attendants. On each floor of Medicare there is one doctor, two nurses, one ward boy and one sweeper to take care of patients. Arrangements for convenience of attendants of patients are also made e.g. there is also arrangement of bed in patient’s room for his attendant. Most of the people come to Medicare because of its ability of providing better patient care. Medicare currently employs 103 people and it seems overstaffed being a 60 bed hospital, but this more staff is maintained to provide good care to patients.

6.    Though Medicare is newly established as compared to other hospitals like Fatima Medical Centre and Sial Medical Centre but due to its competencies it has build a very good image. Recently a study was conducted buy Civil Aviation Authority to see that if some air accident happens then in what hospitals patients could be admitted in emergency. Medicare is the only private hospital selected for this purpose among all other private hospitals in Multan.

Weaknesses

1.    The changes of Medicare are quite high and because of high changes its market is limited to few people who can afford to get treatment from here while its competitors are not that much expensive e.g. In Fatima Medical Centre, which is main competitor of Medicare, the charges of deluxe room are Rs. 1100/- and that of VIP room are Rs.1500/- and Rs.1800/- for VVIP room. While in Medicare charges of deluxe room are Rs.1500/- and for VIP room these are above Rs.2000/-

2.    It is only a 60 bed hospital and serving a low percentage of overall population. But with the passage of time people are becoming more health conscious. There exists a big market but due to low capacity Medicare is not able to serve a bigger portion  of this market. Similarly due to high charges it is not able to serve common man.

3.    Medicare is offering low pay to its medical staff i.e. MBBS doctors and nurses etc. It even gives salary of Rs.3000/- or Rs.4000/- to MBBS doctors. While in Fatima Medical Centre, medical officers are paid Rs.6500/-. So it is a discouraging factor for its employees and it can not sustain its employees for a longer period. These employees can be a source of strength for Medicare if it can retain its employees.

4.    Most of the decisions are made by the directors in Medicare and participation from employees is low there though employees can give suggestions to their immediate heads but these suggestions may not be implemented depending upon directors, decision. So this lack of participation is also resulting in low satisfaction level in employees. Though  Medicare gives award of “ Best employee” of the year on best performance but this is not sufficient to increase motivation level in employees.

5.    Medicare believes in “ Continuous Medical Education” and Dr. Mehdi himself trains the employees on new equipment, similarly different refresher courses are arranged for employees. But no long term training program for doctors and nurses is there in Medicare.

Opportunities

There is mismatch between number of patients and hospitals in this region. Similarly the people are becoming more health conscious and go to doctors for their health problems. The population growth is also high. So the market is expanding.

A number of health care services are not offered in Multan and people have to go for it to big cities. So Medicare can offer these medical services in Multan e.g. oncology department, open heart surgery, etc.

Medicare has developed a good image. It can open new branches in different areas of Southern Punjab and its good image will be very helpful in this regard. There is potential for new branches in these areas as very few hospitals are there and a number of people have to come to Multan for getting medical treatment.

Threats

1.    New hospitals are being established in Multan e.g. Kaswar Hospital, Medisurge, etc. So these hospitals will give tough competition. Similarly Medicare is providing better health care as compared to other hospitals but this level of quality is not like that of Shifa International Hospital, Agha Khan Hospital, etc. So if a new competitor comes with better services, Medicare will loose its share.

2.    Purchasing power of the people is decreasing. On the other hand Medicare’s current strategy is to expand e.g. it is adding new rooms and new medical services. Due to decreasing purchasing power of people Medicare may not be able to attract a big proportion of market.

Other sources of threats can be as follow:

Government

If heavy taxes are imposed by govt. on private hospitals then it will be a threat. Or if govt. fixes the amount doctors and hospitals can charge from patient, it will hurt Medicare as they are charging amounts.

If employment opportunities for doctors and medical staff arise with better salaries, it will be difficult for them to retain their workforce. It is very important to have low employee turnover as employees can be a source of strength because of their experience. Similarly high employee turnover increases the costs.

Technology can also be a source of threat. If there is a big change in medical technology, it will be a threat as existing equipment will obsolete. Similarly employees would require more training on new equipment and technology.

PEST Analysis

Political Factors

1.    No govt. policy is supporting private hospitals.

2.    For opening a private hospital, we have to deal with different organizations so it is a difficult process.

3.    Taxes on revenues of hospitals and duties on importing machinery.

Economic Factors

1.    Though a number of people cannot afford the services of Medicare but as it is a 60 bed hospital (i.e. not a big hospital) and focusing only a small portion of Southern Punjab population so it can find sufficient number of patients who visit the hospital.

2.    But due to inflation the cost of hospital is increasing and affordability (purchasing power) of people is also being affected.

3.    The hospital has achieved 70-80% of the vision of founder. They are going stepwise towards improvement and high level of technology. They can achieve the level of better health services if they were having more number of investors and more investments. So few number of investors is a limiting factor for them.

4.    Most of the time they are acquiring their machinery through leasing but due o higher interest rates, they have to bear higher cost (but this is the problem every hospital in Pakistan).

Socio Cultural Factors

1.    Most of their target market is upper class who can afford their cost. In Southern Region Medicare has sufficient number of such people so they do not face problem of under utilization of their capacity.

2.    People are now becoming more conscious about their health and now they go to doctors then doing self-medication. So there is growth in this sector.

3.    Today people are more conscious about quality health care facilities. They are more educated and do not compromise when it is a matter of health. So now they prefer to go for good hospitals even if they have to pay high charges. So demand for Medicare facilities is increasing.

Technology

1.    In Pakistan there is not as such spending on medical research. But for Medicare this is not a big problem as its CEO has work in UK, Germany, Holland, Middle East, Sweden, etc so in his foreign trips he keeps an eye on the new technology.

Critical Success Factors

2.    Their modern machinery e.g. centralized oxygen system, Ventilator is only in Medicare and in Nishtar, their ICU is very good as it has same incharge as in Nishtar. It is the only hospital having Anesthesia Specialist.

3.    Its consultants who are foreign qualified have worked in foreign companies so have broader vision, good work history these consultants have.

4.    Good patient care, they have 103 people working in 60 bed hospital though it seems overstaffing but they have more workforce to provide better patient care, whenever a patient enters hospital he is immediately given treatment.

5.    Similarly good medicines, gift shop, they also care for the attendants of patients so beds for attendants are also there in the rooms.

Industry Analysis

1.    There are 118 hospitals in Multan. Names of some hospitals under govt. are Nishtar Hospital and Civil Hospital. Govt. hospitals are better in terms of technology i.e. they have modern equipment as they get funds from govt. e.g. there is Radiology department in Nishtar which is not in other hospitals. But these hospitals lack caring attitude towards patients and better health management as the employees working here work in relaxed environment and do not have fear of being laid down.

2.    In private sector major competitors of Medicare are Fatima Medical Centre and Sial Medical Centre. In terms of technology there are certain equipments available in Medicare but not in Fatima or Sial Medical Centre or vice versa e.g. Medicare has Ventilator and centralized Oxygen System but this is not present in any other hospital in Multan. On the other hand Sial Medical Centre has C.T. Scan which is not present in Medicare. But founder of Medicare has the view that they first want to go for life saving and then they will go for sophistication e.g. C.T. Scan.

3.    The major thing that is differentiating Medicare from other hospitals is its caring attitude towards patients. Patients are given proper care, timely treatment and high quality health care management is there e.g. it is made sure that no counter fiet medicines are available on drug store, rooms are clean, emergencies are immediately handling etc.

4.    Health care industry is ranked high in terms of its attractiveness as currently there is mismatch between number of patients and hospitals, there is growth in population and people are willing to pay even higher charges for health care.

Industry Attractiveness

Medicare position in above matrix is in the upper right quadrant. Thus is because there is rapid market growth in health care sector. Similarly business position of Medicare is also high as it has strong competitive position. So the strategy for Medicare is to invest. It should concentrate on single business i.e. health care, as there is potential in it and can go for expansion in health care services.

Value Chain Analysis

Value chain analysis of Medicare is as follow.

Secondary Activities

Firm Infrastructure:

In secondary activities first is firm’s infrastructure. Medicare is highly centralized organization where all the decisions are made by its directors. Medicare has “functional structure” but her4e departments on the basis of functions are not very much developed and there are not clear boundaries between the departments which help in better communication and co-ordination between the departments. As the chief executive in Medicare has got more authority so he plays important role in implementing strategies. He believes in strict control over employees and makes them work according to the rules through strict control.

Human Resource Management:

Medicare believes in “Continuous Medical Education” and for this it arranges different refresher short courses for its employees. But it lacks long term training for its employees. Medicare also do not have sufficient incentives to motivate the employees. Though there is “Best employees of the year” award announced every year on good performance of an employee but it is not sufficient to increase motivation level in employees. Similarly low salaries and lack of participation is also causing dissatisfaction in employees.

Technology Development:

Medicare believes that proper equipment is very important to provide good health care. That is why Medicare is continuously buying modern technology for its hospitals. For example Medicare has recently bought Dialsis Machine. Similarly it has Incubators, Ventilators and Centralized Oxygen System which is not present in other hospitals of Multan. Despite these efforts Medicare is not fully successful in introducing modern technology and this is because of lack of funds. For example, Medicare does not have C.T. Scan which is quite sophisticated equipment. The strategy of Medicare is first to go for life saving then sophistication. So first they are going for equipment for life saving than sophisticated equipment.

Procurement:

The equipment of Medicare is purchased from foreign countries. While there are local suppliers for surgical instruments, bed linen, etc. so it is made sure that best surgical instruments and other supplies are provided by suppliers. As far as medicines are concerned, there is a drug store in Medicare which is given on contract to 3^rd party but Medicare’s management makes it sure that there is no counterfeit medicine there.

As Medicare’s main product is health care service, so its most important supplier is its medical experts who treat the patients and also the nurses, ward boys, etc. to serve the patients. Medicare has the advantage that its consultants are foreign qualified and have good work history.

Primary Activities

Inbound Logistics, Operations, Outbound Logistics:

As Medicare is dealing in health care services so we can not separate inbound logistics, operations and outbound logistics for its services as a single person i.e. a specialist along with his team of doctors and nurses perform these functions. Apart from these services, preventive medicine is also very important for health care, so they make it sure that no counterfeit medicine is available in their drug store.

Operations of Medicare are the strongest activity that gives it competitive advantage and differentiates Medicare from other hospitals. Operations of Medicare are its strong activity because its highly qualified and experienced consultants e.g. its experienced Gynecologists. Similarly modern equipment and good nursing makes Medicare’s operations its core competence.

Marketing

Medicare is not very active in marketing and as such no promotional activity is carried out by Medicare. Currently the image of Medicare and its competency in its ability to provide high quality health care is attracting patients. But as it is now going for expansion, so Medicare must focus on marketing activities. Though there is a public relationing department in Medicare to get feed back from patients, but its not sufficient as it is focusing only on those who visit the hospital. Medicare must also focus and attract those people who have never visited Medicare and they are potential market for Medicare.

Services

Along with core medical services, the auxiliary services provided by Medicare are contributing towards its success. Medicare takes care of patients comfort. One example for it is that Medicare has imported special beds for patients costing Rs. 100,000 each from Sweden. Similarly it has one doctor, two nurses, one ward boy and one sweeper every time on each floor to take care of patients. There is a gift shop in hospital. Similarly there is arrangement for care of patient’s attendant. So a bed is also there in patient’s room for his attendant. Whenever a patient is admitted in hospital, public relationing officer goes to him to ask if the patient has any problem and then this problem is eradicated.

Problem Statement

We have identified three problems in Medicare.

a.    Satisfaction level in employees is quite low and their turnover is high. This low satisfaction is due to the low salary paid to them e.g. Medicare pays even Rs. 3,000 or 4,000 to its doctors which is quite low. Similarly employees are not given participation in decision making which also causes dissatisfaction. Most of the decisions are made by Dr. Mehdi Hassan Mumtaz and if there is some major decision, it is made by directors jointly.

b.    The second problem with Medicare is that it is quite expensive hospital e.g. charges of Deluxe Room in Medicare are Rs. 1,500 and more than Rs. 2,000 for VIP room. While in Fatima Medical Centre Rs. 1,100 is charged for Deluxe Room and Rs. 1,500 for VIP Room. Similarly their consultants charge high fee for their hospital but people go there because health is very important thing and Medicare has certain competencies in its health care services e.g. painless delivery, ICU etc.

c.    Third problem is unethical practices in Medicare. The doctors working in Medicare are also employed by govt. so they give time to Medicare by not fulfilling their responsibilities in govt. hospitals. Similarly it is quite unethical to charge high fee for their expertise. Dr. Mehdi who is the founder of Medicare is also employed in Nishtar Hospital and being a govt. employee he is not allowed to own private hospital. So the Medicare Hospital is in his wife’s name and she is chief executive of Medicare but only in papers. In actually Dr. Mehdi who runs Medicare, sits in chief executive office and makes the decision. So this is quite unethical that he is running a private hospital despite govt. restrictions.

Recommendations

1.    As satisfaction level in Medicare’s employees is quite low and it results in high employee turnover, so their satisfaction level must be improved. For this their salaries must be raised. Similarly they should be allowed to participate in decision making. This will not only increase their satisfaction level but also result in some good ideas by employees to improve the hospital. With satisfied employees, turnover of employees will decrease and Medicare will benefit from the experienced employees. Otherwise it is a great cost to loose experienced employees and consume resources on hiring and training new employees.

2.    Medicare must reduce its changes as new competitors are entering in the market and will be a great threat for Medicare e.g. Kaswar Hospital and Institute of Cardiology. Due to intense competition it would be difficult for Medicare to charge high amounts from patients. So it must decrease its charges and lowering their unethically high profit margins can also do this. This will also help to further improve Medicare’s image.

3.    Medicare is currently offering few medical services. So it must add new medical services to serve the people of Southern Punjab as these people have to go to by cities for getting such medical services. The new services will help Medicare to exploit the potential in the market. Those new services can be for example Oncology department, Radiology department, Psychiatry department, Plastic Surgery, etc. Similarly with increased competition and inflation, Medicare’s margin will decrease. So they must increase their capacity from a 60 bed hospital. This will not only help them serve a bigger proportion of population but also help them earn efficient revenues.

Recommended Marketing Strategy and Action Plan

As far as marketing strategy is concerned, Medicare is currently changing quite high prices and their market is mainly the upper class who can afford it. But a number of people from lower middle and lower class also get treatment from Medicare as their health consciousness is increasing and they are ready to pay higher charges for better medical care. For further when there will be intense competition, we recommend that Medicare should lower its charges. As currently Medicare is going for expansion, these low charges will help to attract sufficient number of patients to make its capacity maximally utilized.

Similarly in terms of product, it must go for product development. As Medicare’s product is its medical services, so new services can be added e.g. Oncology Department, Plastic Surgery, etc. and it will help Medicare to exploit the potential in growing market. Medicare should also keep on introducing modern equipment in its hospital as it will give them a competitive edge.

In terms of promotion, Medicare is lacking promotional activities. Though now Medicare is having good image but in future when it will go for expansion and competition will be high, it will be required to have intensive promotional activities. Being a hospital Medicare can not directly advertise itself (as its govt. regulations) but it can advertise about eth doctors and specialists who practice in Medicare. Similarly it can go for publicity by arranging symposiums on health care and walks to increase health consciousness like it is arranged by Shifa International Hospital for their publicity. Such activities will promote the name of Medicare.

As far as Medicare’s employees are concerned, it must offer them salaries competitive to other hospitals. Similarly they must also be encouraged to give suggestions and participate in decision making as employees can make quite good contribution towards improvement of an organization by their suggestions. Medicare currently arranges for short term training of employees by arranging different refresher courses but its employees do not go for long term training as they are dissatisfied with the hospital and will leave it as soon as they get high salaries job somewhere else. But training is very important especially in the field of health care. So Medicare must increase salary of its employees so that they are satisfied and ready to go on long-term training. Similarly it should motivate them to go on training by giving more incentives and high salaries to employees who have completed their training.

Medicare’s strategy should be to concentrate on single business i.e. health care as the health industry is quite attractive because of its growth and high profit margins, and Medicare also have strong competitive position. Owners should not diversify into unrelated businesses. They should concentrate on health care area and go for expansion in this area.