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Business at Oxford | Managing health care for growth

Business at Oxford | Managing health care for growth
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First Published: Mon, Mar 16 2009. 09 35 PM IST

Updated: Mon, Mar 16 2009. 09 35 PM IST
India faces enormous challenges to growth if it fails to address its health care requirements and protect its environmental resources. Most countries face similar urgent challenges, but for India the stakes are particularly high and the responsibilities especially great—partly because of the size and complexity of the country.
What is the scale of the challenge? What plans exist to address it? What ideas and inspirations are available to help refine an appropriate response? With millions of lives at stake—human and animal—the urgency of addressing these issues cannot be overstated.
Business and management have a role to play. From large corporations to public- private partnerships, or PPPs, to entrepreneurial ventures, the role of business management in addressing the growth challenges represented by health care and the environment is becoming increasingly important.
In health care especially, the situation is immediately pressing. Already, India needs some £300 billion (about Rs22 trillion) in hospital and medical facilities for its expanding population. These must be low-cost, high-quality facilities to meet the needs of the numerous poor. Rural and other areas, currently underserved, constitute a priority, before demographic pressures result in further problems in the near future.
But quality health care requires quality health care management; medical resources must be matched by management ones—financial, operational, human—to ensure that they are properly allocated and distributed. Thus, in addition to buildings and doctors and machines and medicines, there is a management challenge in health care that must be addressed simultaneously. Indeed, without addressing it, there is little chance of meeting more immediate medical needs. This is one area where business can help achieve goals in health care and where India’s management schools, like its medical schools, have much to offer.
In environmental matters, the situation is harder to define and measure but no less urgent. Without conformity to new global and national regulations—sometimes costly at first—future crises will become devastating. Obvious examples are close by: floods in Myanmar and tidal waves in Sri Lanka. There are less obvious consequences of environmental pressures: Climate change alters weather patterns, depleting agricultural resources and output, and sending increasing numbers of migrants into cities to stress infrastructure and support systems beyond their limits.
As with health care, environmental threats must be met with environmental management. Better coordination between functional departments and across states, an increased sense of urgency to overcome short-term political exigencies, a general disaggregation of effort away from the government and towards other social forces—these are only some of the tactics requiring coordination. And a highly effective management will be required for any real hope of progress.
What management resources can be deployed to meet these challenges in health care and the environment, especially in economically turbulent times? Education, already mentioned, is vital. It is certainly an encouraging sign that business and management schools are emerging all over India with enormous demand growing at a rate faster than anywhere outside of India. Because this rising proportion of management capacity in India will be home-grown, it will be highly sensitive to particular local challenges, and accustomed to dealing with social, political, regulatory and technical obstacles. Also, since a huge element of management effectiveness comes from tapping into networks, gaining access to resources not currently controlled, more home-grown management education will greatly strengthen these networks. In time, the Indian management capacity will be greater than the sum of its parts and can continue to tackle challenges with increased vigour and effectiveness.
Other management resources for meeting the health care and environmental challenges can be grouped into three general headings: Business involvement PPPs Entrepreneurial activity
Increased involvement by business in building infrastructure to address health care needs is already happening along with increased business conformity to regulations and laws designed to protect environmental resources from exploitation, depletion and mismanagement. Economic liberalization has energized a market economy that creates and finds value in such projects, sometimes on a very large scale. Now that the global financial crisis is obviously affecting India as well as the rest of the world and most industries are beginning to see cuts in jobs, wages, benefits, overheads and even production output, some such projects may be threatened. But the economic crisis can be an opportunity instead of a threat: Lean-and-mean organization is more necessary now and industries such as health care and environmental management are accustomed to trim management.
PPPs create opportunities that might not otherwise arise. They help overcome obstacles represented by public borrowing constraints and they increase the efficiency, incentives and accountability of private capital involved in the public sector.
In India, the 11th Plan (2007-2012) projects sectoral investments through PPPs totalling nearly $500 billion (about Rs26 trillion), with about $100 billion relating in various ways to health care and environmental management (water sanitation, irrigation, among others). But there are major constraints to achieving growth by this means: policy and regulatory obstacles, inadequate availability of long-term finance, weak management capacity and advocacy for PPPs in public institutions, and lack of confidence among private institutions in the returns to be realized.
Still, instead of threatening health care and environmental projects, the economic crisis represents an urgent opportunity to address these inadequacies by energizing and expanding public-private finance.
Entrepreneurial activity is growing in India’s increasingly liberalized market economy. It has always been a vital, if hard-to-measure, sector. Now it must be encouraged to pursue opportunities in health care and environmental management while competition from larger business and government is weakened—because entrepreneurial organizations are designed to operate in resource- constrained situations.
As the crunch tightens and the growth challenges to Indian health care and environmental management increase, entrepreneurs and other business managers have a vital role to play.
Such challenges will be the focus of Saïd Business School’s fourth Oxford India business forum in New Delhi on 25 March. Global business leaders, academics, policymakers and sector specialists will gather to debate “Health and the Environment: Challenges to India’s Growth” and, in two panel sessions, will explore both the environmental issues for India and discuss how best to provide the Indian population with adequate health care.
Pegram Harrison is a fellow in entrepreneurship at the Said Business School, University of Oxford
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First Published: Mon, Mar 16 2009. 09 35 PM IST