Hospitals 2: Why are some government and charity hospitals so good?

Many charity hospitals are quite good. That to many should be quite surprising.  No profit motive.  Limited access to funds. Non professional governing boards run by business families or religious leaders. Board positions are passed down based on kinship or religious ties rather than professionalism.  It seems charity hospitals prove most economic and management gurus to be doing nothing but bakwaas. And then there are those islands of excellence within the government system also.  They are widely considered to be among the best hospitals in India.

But most data on hospital efficiency, will tend to show how government run hospitals are the worst run, most prone to wastage, have high levels of negligence, and how private hospitals are better in all these domains.  And frankly we do not need data to know this.  And so many of us tend to be inclined more and more to the private.

But consider this. Arguably among the best hospitals in India happen to be Charity hospitals.  Gangaram, and Holy Family are examples from Delhi; Jaslok, Bombay, Tata Memorial are only a few examples from Mumbai, Poona Hospital in Pune, and so on.  (It could be argued that for-profit hospitals were not really allowed in the past. I agree, all that I am saying is that a large part of the ‘good’ numbers that we ascribe to private health care, actually originate in charity hospitals).

But curiously  charity hospitals are not the only ones.  Another set of hospitals that are of very high quality are government hospitals like AIIMS in Delhi or JIPMER in Pondicherry, and there is typically at least one government hospital in every state capital that is quite good.  But these are not all.  Yet another set of government run hospitals known for their high quality are run by the defense services.

Therefore charitable hospitals and hospitals frequented by high level government functionaries and officers can arguably achieve a high level of quality at a relatively low level of cost, and have far superior ethical practices.  (Admittedly municipal or district hospitals rarely achieve high levels or quality, care, or efficiency, I will try to figure a bit later).

Two aspects matter the most in any organization’s functioning.  First has to so with the working environment faced by the team; and the second has to do with compensation.  (And both of these require a decent system of monitoring.)

When senior government functionaries’ loved ones are likely to visit a hospital, it is in their interest to make sure that it runs well. Work environment is a bit better, they are better resources, they receive permissions and funds a bit earlier etc.  I also find another aspect.  Whether charity hospitals or better run government hospitals, they tend to be run as independent entities, and do not follow a standard one size fits all set of processes.

This does not apply to municipal or district hospitals, which all have similar or even same processes across different entities and those governing or serving in them are not directly impacted by their functioning.  Neither the doctors nor those administering the hospital, nor those governing the hospital board impacted, directly or indirectly, by either the quality of the service or its reputation.

But there is also another critical difference on the compensation side.  The doctors in the better run hospitals tend to be compensated better and are also recognized for good work in different ways.  An example, but not the only one, is the higher number of Padma Shri and Padma Bhushans doctors in government facilities such as AIIMS get.  Defence hospitals also reward doctors with different ways of recognition.  Charity hospital have their own idiosyncratic methods of recognition – through social and religious means.

In other words, hospitals run well when those governing the hospitals are (1) stakeholders in the sustained quality of their services and (2) have the ability to change administrative processes as per the specific requirements of that specific hospital.  Moreover they run well when the health care providers are recognized for good work and not simply by reward for treating more.  In other words, motives other than profit can work very well in getting good health outcomes.

Yes better run government and charity hospitals do tell us a lot about what makes a good health system run.  But most government hospitals work quite badly, why? And what should we do about them? That’s for the next and last one.  The answer is quite surprising because it has been staring at us all along, just that we refuse to acknowledge it.


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