Risks in hospital business

Healthcare is considered be a recession free industry and hospitals are thought of as stable business organization. Hospital management studies generally teaches students on how to manage operations effectively with large and increasing volume of patient coming to hospital. However not getting sufficient patient is an equally likely possibility and continuing with this situation for even few months may adversely affect the sustainability of hospital.

Beside many other risk factors, there are 3 factors which are very relevant to hospital business and must be taken into consideration by managers.

Excessive reliance on star doctors – 

Many hospitals in India depends on one or few of their star doctors to generate 70%-90% of their revenue. When these star doctors leave, most of their patient just stops coming to the hospital and go wherever the doctor goes. This impacts the top-line severely and hospitals must be cognizant of this risk. While hospitals may take good care of their star doctors, there is always a risk of losing them for one or other reason. It is better to reduce the risk if there is one. Promoting other non-star doctors, increasing loyalty of patients to hospital’s brand and building a good referral chain may be some of the ways to counter this risk.

Poor online image – 

Online mediums of information sharing is extensively affecting every business and hospitals are no exception. A hospital might have best infrastructure and doctors, but if patient community speaks negatively about it in online mediums, the hospital is at a risk of running out of business. Patients’ choice of a hospital for their treatment is increasingly getting impacted by online reviews. Thus managers of hospitals must regularly look into their online image and do all possible to maintain it positive. You may like to read my article on ‘Avoiding poor online rating of your hospital’.

Negative image in society and media – 

Compared to most organizations, hospitals more closely connect with civil society and are expected to be doing good for humankind. If any incidence, that can be considered as inhuman or antisocial, happens in a hospital, it badly affects the sentiments of general public. Media also heavily highlights such incidence and this leads to a severe negative publicity of the hospital. Patients’ community in general tend to avoid that hospital for many months after the incident gets highlighted, posing a big risk to hospital’s sustainability. The managers must always be wary of such incidence and avoid any such things happening in their hospital. Having good management practices and clearly defined policies and protocols for various critical situations may reduce the probability of grave incidence happening in hospital. There should also be a plan on dealing, in case such situation occurs. 

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