Healthcare Industry : From Social Service to Money Minting business
Posted in Finance Articles, Total Reads: 2013
, Published on 20 June 2011
5 star luxury suites with king-size beds and mattresses.
Centrally air-conditioned building.
Rooms with Plasma and LCD TV sets.
Ambience and pleasant surroundings.
These are some things which one finds in plush hotel resorts, where people are willing to spend thousands for their comfort and luxury. But people need a reality check. These days one finds these exotic facilities as the most unexpected place- Hospitals. And this is because the healthcare industry is no longer a social service but it’s a full fledged profitable business.
Gone are the days where people used to have health checkups which were cheap and affordable. In metros, the scenario has become completely different as hospital bills are spinning out of control, especially the private hospitals.
There are a lot of factors which have made the healthcare industry into a professional money making business. Some of the important reasons behind hospitals charging exorbitant fees for services are discussed below:
• Surgeries have become important part of healthcare due to advancements in technology and better spending power of people. Patients are willing to spend a lot more on heart surgeries, cancer treatment etc. Apart from that, healthcare insurances are another area where hospitals make a lot of money.
• Hospitals these days charge more from patients largely due to the property prices. People in metros prefer going to hospitals at posh locations rather than going to smaller dispensaries. Thus, value of the property plays a pivotal role in the higher prices charged by these hospitals.
• Rooms in hospitals are no longer merely for patients to stay after surgery. Luxurious rooms with large beds, air-conditioning, TV sets, internet access etc are no less as compared to hotel rooms. People with higher incomes don’t mind spending more on these services provided by hospitals thereby adding more money to their bills.
• Latest state of the art medical equipment for diagnosis adds to the bills of patients. Earlier simple tests were conducted by medical authorities but now with advancement in technology, hospitals make sure patients undergo all possible tests before and after the treatments. Also, technologies become obsolete within 5 years. So hospitals have to continuously invest more in getting better diagnostic machines.
• An employee salary in posh hospitals is at par with the best in the hospitality sector, if not more. Hospital management has become an important aspect of the healthcare sector as doctors, consultants, staff have become extremely professional and charge huge salaries.
• Brand equity of hospitals is another major factor which has made hospitals a part of the money making business. Well renowned hospitals spend on their brand presence and ambience to ensure the elite of the society come to their hospital to avail their services, which indirectly adds more value to the brand of the hospitals.
• Extensive use of information technology in hospital management, from keeping patient records to online transactions to bill payments, has lead to larger investments in hospitals.
Healthcare industry is one area which will never fade out as people, whether rich or poor will always need the consultation of doctors and experts for a healthy life. And as long as people are willing to shell out money for these services, the healthcare industry would gradually move from being a social service to a money making profitable business.
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