There is a silent restructuring going on in Indian healthcare. It doesn’t always make headlines or seem spectacular, but its effects are huge. Clinics are closing. People are buying small and medium-sized hospitals. Many are getting by on very little money, expecting that the following financial quarter will be better. What makes this change so distressing is that most of these institutions are not clinically weak. They have good doctors, decent infrastructure, and dedicated personnel. They are able to do things.

But just being capable is not enough anymore.

In one area evaluation, more than 1,300 clinics and more than 400 small hospitals shuttered in five years. Large hospital chains are increasingly moving into Tier-2 and Tier-3 cities all throughout India. Private equity is becoming more and more common. Independent hospitals, which used to be important parts of community care, are now under structural pressure. This isn’t a coincidence. It is change in the system.

The Financial Math Few Confront Healthcare today is just as much about money as it is about clinical achievement. A hospital that can stay in business needs an EBITDA margin of 18–25% or more, a bed occupancy rate of 60–70%, and a revenue per occupied bed (ARPOB) that is in line with its specialty and location. This is usually between ₹18,000 and ₹35,000 per day in secondary and tertiary hospitals. Ideally, labor expenses should stay below 30% of revenue, and the rates of OPD-to-IPD conversion should be easy to anticipate.

But a lot of hospitals only have 35–45% of their beds filled and 8–12% EBITDA margins, or worse. Fixed costs are still considerable. Money loss continues. Inefficiencies in billing eat away at profits. Departments work hard, but there is still financial instability behind the surface. They are busy, but not for long.

Similar patterns can be seen all around the world. Over the past ten years, rural hospitals in the United States have been closing at an alarming rate because of low margins and problems with payer mix. Studies in JAMA and Health Affairs show that operational inefficiencies and reimbursement limits often have a bigger impact on survival than clinical skill. The lesson is universal: having a lot of something without a plan does not mean it will work.

Michael Porter, a management expert, has said, “The essence of strategy is choosing what not to do.” In healthcare, that increasingly involves not just adding more services, but also controlling costs, allocating resources wisely, and integrating systems.

The Actual Issue: Inconsistency

Most hospitals that are having trouble don’t fail because they don’t have enough patients. They don’t work because they’re broken up.

Departments put up a lot of effort, but not jointly. Decisions happen, but they don’t all agree. There are processes, but they don’t link. There are separate areas for finance, operations, clinical services, and marketing. Capability exists in solitude. Performance does not.
Operational inconsistency shows up in small ways: uneven discharge planning slows down bed turnover; poor inventory control raises procurement costs; insufficient clinical documentation slows down insurance payments; and not having data dashboards makes it hard to see where money is leaking. These little mistakes add up over time to become a threat to life.

Dr. Atul Gawande has said, “Better is possible.” It doesn’t take a genius. It takes hard work. It requires moral clarity. That diligence today necessitates systems thinking—integrating clinical processes, financial supervision, and patient flow into a cohesive framework.

The Change from Capability to Coordination to Consistency

Healthcare has changed. Patients still want to see doctors who are good at what they do. But operational excellence keeps institutions going.

Size alone is not likely to be what makes a hospital successful in the next ten years. They won’t always have the biggest structures or the best tools. Star consultants won’t be the only ones who can help you survive. Instead, robust systems, clear responsibility, financial transparency, integrated teams, and methods that are easy to understand will make things last.
Internationally, integrated delivery systems like the Mayo Clinic and Cleveland Clinic focus on team-based treatment models and standardized standards that link finance to results. Their achievement is not just in the clinic; it is in the whole system.

India must embrace similar concepts, tailored to local circumstances. Independent hospitals can stay open, but only if they take strong steps toward Consistency.

How Consistency Works in Real Life

Data visibility is the first step toward Consistency. You must now have real-time dashboards for occupancy, ARPOB, duration of stay, and departmental profitability. Clinical leaders need to be financially literate, not just accountants.

Second, it is important to have clear governance. Ownership structures should make it obvious who has the right to make decisions. When authority is unclear, things take longer and aren’t always the same.

Third, discipline in the process must be built in. Standard operating procedures for admissions, discharges, billing, and purchasing lower costs and make things more consistent.
Fourth, it’s very important that the strategy and service mix are in sync. Not every hospital needs to have every expertise. Strategic concentration raises both quality and profit margins.
Peter Drucker famously said, “Efficiency is doing things right; effectiveness is doing the right things.” Consistency necessitates both.

The Moral Aspect

Healthcare is more than just a business; it is a social trust. When local hospitals close, people in the area can’t get care as easily. Patients move to costlier tertiary care centers. Prices go up. Inequality grows.

Dr. Tedros Adhanom Ghebreyesus of the World Health Organization has said that health systems need to be “resilient, fair, and long-lasting.” For resilience, operations must be stable. Equity needs to be easy to get to. For sustainability to work, finances must be in order.

Corporate growth alone cannot guarantee the future of healthcare in India. Independent institutions are still very important, especially in areas that are semi-urban or regional. But feelings won’t keep them safe. Systems will.

The Next Ten Years: Hospitals don’t usually fall apart suddenly. They get weaker over time because of mismatched incentives, mismanaged expenses, and hidden inefficiencies. Eventually, recovery becomes unlikely.

In the next ten years, people who move from competency to coordination to Consistency will be rewarded. The question is not if independent hospitals can stay open. The most important question is if they are willing to change.

Because in today’s healthcare, skill earns respect.

But Consistency is what keeps you alive.

Dr. Prahlada N.B
MBBS (JJMMC), MS (PGIMER, Chandigarh). 
MBA in Healthcare & Hospital Management (BITS, Pilani), 
Postgraduate Certificate in Technology Leadership and Innovation (MIT, USA)
Executive Programme in Strategic Management (IIM, Lucknow)
Senior Management Programme in Healthcare Management (IIM, Kozhikode)
Advanced Certificate in AI for Digital Health and Imaging Program (IISc, Bengaluru). 

Senior Professor and former Head, 
Department of ENT-Head & Neck Surgery, Skull Base Surgery, Cochlear Implant Surgery. 
Basaveshwara Medical College & Hospital, Chitradurga, Karnataka, India. 

My Vision: I don’t want to be a genius.  I want to be a person with a bundle of experience. 

My Mission: Help others achieve their life’s objectives in my presence or absence!

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