Most clients begin our interactions with a one standard question: “How do we go about setting up a hospital?”

My answer is simple, and it is exactly what I teach in the classroom. No matter what the size of the hospital, big or small, all hospital facilities will need the same 5 step approach:

Step 1 :  Project Conceptualization :  This is the preliminary stage where one is trying to visualize his / her hospital in terms of its ownership, philosophy, bed-mix, facility-mix, etc.  This requires undertaking at the very least a basic but comprehensive research of the physical, geographic surroundings of the proposed area. Most important, this information can be obtained through the web, current and archived newspaper mentions, municipality reports, and then undertaking a short survey or holding focus group discussions.  The basic idea is to understand the gaps in the medical market in that area and intending to fulfill them, unless of course, the owner is a Doctor entrepreneur, who knows exactly what he wants.

Step 2 : Feasibility Analysis :  When the project concept in understood, agreed on and locked-in, the next stage is to understand the viability of the proposed hospital.  This would mean undertaking a detailed working of at least the following :

Project Cost:  Comprising of civil work, medical equipments, furniture and fixtures, professional fees, interest during construction, pre-operative expenses and contingency expense appropriations.

Department wise assumptions of income, expenses, depreciation schedule, loan repayment schedule, etc.

Profit & Loss, Balance Sheet,  Cash Flow Statements.

Sensitivity Analysis:  This is the most important document generated for the project and helps the Promoter to undertake a “go or no go” decision. It also identifies the financial limitations of the proposed project and  frequently helps the Promoter to structure the means of financing the project.  It’s important to note here that all assumptions should be made with a realistic view.

Step 3 : Hospital Designs :  Hospitals are highly engineered buildings, so this step requires a meticulous attention to micro details.  For this reason alone, its vital that one hires a competent team of designers, which would include a  architect, a structural consultant, a electrical consultant, a plumbing consultant, a interior and designer consultant, a landscape consultant, etc.  The emphasis should be a building which does its job brilliantly, more functional than glamorous.  The focal point of this exercise should be to ensure that energy efficiency, natural light and ventilation and ease of maintenance get all the special attention they need. Always remember that the highly engineered buildings cost more and the per sq.ft. cost  would vary between Rs. 1,500  and  Rs. 3,000 per sq. ft.

Step 4 :  Project Management  :  The  notion that an architect is automatically a good Project Manager is a myth. Even from a layman’s angle, it should not be very difficult to understand that the architecture should effortlessly accommodate the complexities of engineering services and the installation of very sophisticated, very costly medical equipment — apart from the various financial  and speed of work related issues involved in project execution.  You can see why it is extremely important to have a separate project management entity to ensure that the final designs are executed as per what was envisaged.  All tendering activities, quality of construction, managing change of design midway, site safety and bill certification periodically are some of the vital aspects of project management.

Step 5 :  Commissioning the Hospital :  The last step of hospital project is to ready it for accepting patients and starting all operations.  This process should begin at least 6 to 9 months prior to inauguration as there are a plethora of activities  to be completed before the patient walks in, issues like developing personal policy, salary structure, standard operating procedure for all department selecting and customizing hospital information system, recruitment, trial runs of equipments, stationary, designs, etc.  It is generally easier to put up the hardware, but the success of the project will depend on how the software bit of commissioning the hospital is handled.

I hope this is a sufficient primer to this issue, and it throws light on how best to set up a Healthcare facility.