Prefeasibility report for setting up of diagnostic centre at district hospital uttara kannada

Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Uttara Kannada Karnataka Infrastructure Development Department Project Submitted by ICRA MANAGEMENT CONSULTING SERVICES LIMITED, NOIDA Submitted to Karnataka Infrastructure Development Department Infrastructure Development Dept. (PPP Cell), 1 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Room No. 8, Ground Floor, Vikasa Soudha, Bangalore – 560 001.

Table of Contents
2 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar

3 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar

Executive Summary
Laboratory diagnostic service is required for providing effective diagnosis of the disease suffered by the patient, measure the quantum of medicines to be provided, quantify the extent of cure effected, identify the medical sensitivities of the patient to avoid wrong/under/over medication resulting in adverse effects and to extend the research and development capabilities of the medical process. District hospitals providing secondary medical care are supposed to have a certain bandwidth of lab tests as per the availability of specialties and the type of medical care to be provided as per IPHS norms, but most hospitals in India are not equipped to this extent. This shortage of essential medium to high-end diagnostic service severely handicaps the effectiveness of service delivery at the hospital and results in unwanted referrals resulting in overloading of patients in higher delivery centre. This objective of this project is to establish district diagnostic centers at district hospitals of Gulbarga, Dharwad and Uttara Kannada districts of Karnataka on PPP mode. The partner is expected to provide diagnostic service for the district hospital, the partner can establish as many collection centre at taluka hospitals in the district and provide services. For services not available at the district hospital, the partner shall procure the same from the market for the government at the agreed prevailing market rates. The proposed project will be offered on Own, Operate and Transfer mode (OOT) to the successful bidder, the bid variable being the fractional cost of CGHS rates for diagnostic services that the bidder charges the government for providing the service. The partner can service the patients referred by the private doctors also but at government rates. The service provider will be responsible for investing in the requisite equipments and manpower as per the terms of reference, operating the centre, providing the service and adhering to the laws and regulations that govern the process. This project shall be verified for its success and ability to meet the specified objectives at the end of every year. Upon successful achievement of the objectives, the project may be replicated across the state following the same model or modifying it as per the requirement. 4 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar

Chapter 1 – Introduction
Project idea
1.1. Basis for selection of this project
The public healthcare service delivery in Karnataka follows the national pattern and consists of different levels of public healthcare institutions, starting from the bottom of the pyramid of healthcare facilities and going to the top, an integrated; step up referral system with a network of sub-centers, primary health centers, community health centers, taluka hospitals, district hospitals, and medical college hospitals. Patients are provided advanced level of curative, surgical, and diagnostic services as they move up the hierarchy. Primary healthcare delivery is provided at PHC and CHC where the patients are treated for minor sickness, basic specialties, and minor surgeries. District hospitals provide secondary medical care, delivering service in General Medicine, Obstetrics and Gynaecology, Orthopaedics, Opthalmology, ENT, Dental, Laboratory and Radio diagnosis. The Government of Karnataka in its commitment to improve the health and well-being of the people has provided extensive resources to the primary and secondary level public health facilities, one of the major components of the same is access to high-end diagnostic service. Medical diagnosis has evolved from visual and aural observation, tasting of body fluids, primitive testing with basic chemicals and heat to advanced atomic level measurements at present. Medical diagnosis presents a truer picture of the nature of disease, status of penetration of the disease, degree of cure and the health of the cellular components of the body. Medical treatment procedures have become highly dependent on diagnostic service to provide measured, accurate and effective treatment, 80% of the medical treatment is dependent on proper diagnostic service. The branches of medical diagnosis is widely divided into two, anatomical pathology and clinical pathology. Anatomical pathology includes histopathology, cytopathology, electro microscopy etc and Clinical pathology includes, microbiology, bio chemistry, haematology, genetics, reproductive biology etc, each of these sub sections have further specialized fields of study which offer an in depth view of the disease and the body. While the advantages medical diagnosis is well documented and proved in medical treatment efficacy, it is also equally costly to provide for high-end diagnostics. Diagnostic centres originally associated as a part of hospitals have branched out as a separate business, so as to economise the service and provide a wide spectrum of service. A laboratory diagnostic service has to be mandatorily approved by a qualified pathologist in India. District Hospitals are secondary level health care providers in India with basic specialties, though IPHS has laid down norms with respect to the number of specialties, types of treatments, and requirement for diagnostic services, most states in India are not able to adhere to the same for want of one or more factors. It is observed in most public hospital laboratories of Karnataka that the diagnostic 5 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar

centres are not adequately equipped with equipment, technology, and manpower. Factors that influence the inadequate availability of diagnostic services are, 1. Non availability of modern automatic and semi automatic equipments which increase efficiency 2. High capital cost of high-end equipments required for advanced tests 3. Shortage of skilled manpower for operating the diagnostic centre 4. Insufficient supply chain and logistics of consumables and other chemicals required for the 5. Inadequate resources to meet the diagnostic load of the hospital 6. Lack of standard operating procedures for sample collection, management, testing, reporting, patient management and infection control 7. Inadequate bio medical waste management practices Major Gaps in Diagnostic Services
These lacunae in the system adversely effects the efficiency and operation of the hospital by, 1. Delaying the treatment procedure 2. Restricting the treatment capacity of the medical practitioners 3. Absence of proper diagnostics may lead to judgmental errors on the condition of the patients 4. Everyone is immune or counter reactive to certain drugs and chemicals, lack of diagnostic service may adversely affect the treatment out comes 6 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar

5. Inhibits the continuity of medical treatment 6. De-motivates the medical practitioners are they are not able to extend to their fullest capacity Hence, the government of Karnataka decided to pilot a project on operating district diagnostic centre on PPP mode to bring in the efficiency and resources of private players. Gulbarga, Dharwad, and Uttara Kannada districts have been selected for the pilot project, upon successful operation and ratification of the same, other district hospitals might be considered for further PPP options. 1.2. Why PPP for this project?
Diagnostics forms a critical input for medical treatment. It comprises of two major fields:
Laboratory Diagnostics and Imaging. In India, 60-70 per cent of medical treatments are based on
laboratory diagnostic tests, thus making it one of the most indispensable segments in the healthcare
industry. Diagnostics may not completely aid in curing the disease but can go a long way in this
direction.
Innovation and up gradation forms the critical element in this business. The paradigm shift
towards improved quality, error-free services, and the need to ensure patients' satisfaction has prompted laboratories to adopt novel technologies such as automation and point-of-care in order to reduce their expenses. Advances in nanotechnology and genomics have enhanced the role of diagnostics in the healthcare market. This advancement in technology is helping Diagnostics segment to keep up with current medical practices. Diagnostics is a capital intensive segment of Healthcare and requires efficient management
systems to make it financially sustainable. The main reason for the capital intensive nature is the non-availability of equipments in the country. The Indian equipment industry is in its nascent stage compared to the global players that leaves the facility provider with few options to choose among. Most of the time, facility provider ends up importing the equipment and bears a high cost in order to maintain quality standards. Facility provider also incurs additional running cost of consumables and maintenance. To survive and succeed in these challenging conditions, it is imperative for government to look for ways to adapt and implement new strategies. In today's competitive environment, revenues per test are continually falling, thereby requiring Diagnostic centers to increase their productivity for survival. To bridge the gap between the existing and expected level of Diagnostic services, Government of Karnataka has come up with projects on Regional Diagnostic Centers to be implemented on Public Private Partnership mode. With the introduction of private service, providers in Diagnostics following improvements are expected: 1. Population of the given district can avail high-end Diagnostic services at government-approved 2. Private service provider will invest the capital and ensure the maintenance of equipments. 3. Private service provider will also recruit the manpower and train them to deliver desired level of quality services. 4. With introduction of private player, Diagnostic centers are expected to work more efficiently as the risk is shared by both government and private partner 5. Sample collection centers at sub districts will ensure district hospitals have equitable coverage. 7 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Government Initiative in Healthcare PPP
In the section 5.6 of the Karnataka Integrated State Health Policy 2004, Karnataka government has proactively identified the potential role of private sector in the healthcare delivery to the public. Few goals declared in the policy also highlight the GOK's intent for PPP: 1. To establish equity in delivery of quality health care
2. To encourage greater public private partnership in provision of quality health care in order to
better serve the underserved areas 3. To strengthen health infrastructure
This planned strategy of having PPP is most suitable for this project as state intends to bring the diagnostic service affordable and available. 1. GoK is evolving its role from that of provider to that of a regulator to ensure fair and transparent healthcare delivery to its citizens. This transformation requires the government to not only provide a transparent governance system but also partner with private organizations 2. The operation is a service delivery excellence intensive model, and private diagnostic centers pioneer this across the country, a PPP contract would bring in both the private sector efficiency and bring down the cost of service delivery 3. PPP is diagnostics service is an established model across the country and there are ample examples to emulate 4. Diagnostics is both capital and operation cost intensive equipment, offering the service on state government funds puts additional strain on the public exchequer operating within a limited fiscal space 5. Delay in reporting of problems in the hard & soft healthcare infrastructure lead to bigger and un-reparable problems. The PPP model has been designed on the following guiding principles, 1. Cost effectiveness: For sustainable partnership, the diagnostic centre must be viable and at the
same time affordable. 2. Comprehensive coverage: Services must cover all the basic categories of standard diagnostic
tests like pathology, clinical pathology, bio-chemical, haematological, microbiological, serological, and radiological. 3. Acceptable Quality: The operating procedures prescribed by the Government, must be followed
for good quality testing accompanied with compliance monitoring and timely reporting 4. Upward and Downward Linkage: Non-standard and special tests to be made
5. available through seamless linkages with designated referral laboratory. Similarly, samples for
testing would also be collected from taluka hospitals via collection centre 8 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
The mutual benefit arising out of the project is described as below, Stakeholder
Benefit from PPP model
1. Better quality diagnostic services to the masses Benefit to Government 2. Reduction in fixed costs on diagnostic services 3. Better utilization of resources 1. Increase accessibility to improved quality of Benefit to Community diagnostic services at low or free of cost 1. Reduced business risk 2. A sizeable client base Benefit to Private Partner 3. Availability of ready infrastructure 4. Lower initial investment 1.3. Objectives of the project
PPPs combine the varied skills and resources of partners in innovative ways and allow for the sharing of benefits, risks, and responsibilities. Therefore, the government looks increasingly to PPP as a model to: 1. Provide Diagnostic service by tapping the expertise of the private sector 2. Speedier diagnosis, reduced incidence of complications due to delays in diagnosis 3. Improved ability of the public health system to respond to health needs of the people 4. Increased confidence of the community in public health services and improved 5. Utilisation of Rural Hospital /Block Primary Health Centres services 6. Increased access of people to improved quality of diagnostic services at affordable costs 7. Reduction in upstream treatment costs of complicated conditions resulting in financial savings to the government, which can be channeled to preventive healthcare 8. Mobilize private capital to speed up the delivery of infrastructure and services and eliminate 9. Enable efficient use of Diagnostic service by improving the identification of long-term risks and their allocation, while maintaining affordable tariffs 10. Provide higher quality of services 11. Access best practices 12. Enable regular maintenance and upgrades 9 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Approach & Methodology, studies, surveys including data collection, analysis
A primary research was carried out to, Study and understand the operations of the selected district of the state and identify their Assess the availability of Diagnostic services for the district population with the public and private facilities Assess the business environment in terms of market dynamics, pricing competition, Discussions with key stakeholders in the location, to ascertain the market opportunities in the selected regions and the expectations of clientele A detailed sensitivity analysis on the base case projections with respect to the key drivers affecting revenue, streams of business and capital cost. Based on the detailed research and modeling, the ideal pricing structure for the diagnostic service has been proposed. Secondary research We supplemented the primary survey with secondary research focused on similar PPP models across the country, operating models of diagnostic centres and pricing of services 10 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Chapter 2 - Sector Profile
Industry Overview
In India, majority (70-80 per cent) of medical treatments are based on laboratory diagnostic tests, thus making it one of the most promising sectors in the healthcare industry. In India, the medical diagnostics industry accounts for almost 10 per cent of the healthcare sector's revenues. With the growth in income and health insurance coverage, there is an increasing demand for better healthcare services among the growing population of the country. The sector's growth will be driven by the country's growing middle-class, which can afford quality healthcare. Healthcare diagnostics is growing at the rate of 15-20 per cent per annum. The major driver for this growth is the wide gap of 70-80 per cent cost-advantage that Indian companies have over different countries. Today, patients from neighboring countries in Asia are coming to India to receive specialized medical treatment. India is now meeting international standards at a cost advantage compared to developed countries. In addition to this, the vast difference in costs between Western countries and India, the country is being seen as the preferred destination for quality health solutions. This has been reflected by increasing medical tourism. The Indian diagnostic market is broadly divided into equipment and services. The service sector is found to be largely unorganized, with a large presence of players located at the regional or city level. However, a clear and structured format is being established to have better regulations and proper definition for the market. The use of advanced and cutting-edge technologies in understanding a disease prognosis has further strengthened the sophistication level of participants in the sector. Key Players in Diagnostic Market
In the primarily diagnostics segment, the top-four corporate players by sales include Metropolis, Dr Lal Pathlab, Super Religare and Piramal Diagnostics (now a subsidiary of Super Religare). This section profiles some of the large corporate diagnostic services providers in India. Share of Major Corporate Players 11 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Peer Comparison (2009-2010) – Corporate Diagnostic Service Providers
Patients
Million)
Million)
d daily (No.)
Metropolis
Super Religare
Diagnostics
Dr Lal Path 51.9
Labs
Quest
Diagnostics
region (14 centres) Medinova
Thyrocare
Brief Profile of Major Private Players
International presence
Specialised/ Esoteric tests
Metropolis
collection centres Nepal, Africa, Seychelles, South Africa, Sri Lanka, UAE Super Religare
Saudi Specialised/ tertiary tests form reference labs, 50 Arabia, Oman, Bahrain, 50% of business. Super specialty satellite labs, 1,000 UK, SAARC and South East tests collection centres and genomics tests Esoteric tests performed at Diagnostics
centres, and 100 Centres of Excellence. There are collection centres six such centres for Microbiology & Immunology, Histopathology, Molecular Biology, Haematology, Cytogenetics, 12 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Lal 60 labs and 1,000
collection centres Saudi Arabia, Sri Lanka, Kuwait, India - total 300 tests, of which Diagnostics
120 are routine and 200 are specialised tests; Esoteric tests referred to labs in the US Medinova
25 franchises and - Thyrocare
Lab in Mumbai, 600 NA Tie-up with Genome Biotech for collection centres, molecular diagnostics IMaCS interacted with few players in the above list to know their willingness to serve in remote districts of Karnataka. They showed interest in the idea provided it has good business prospects and also full commitment & support from state government. Regional profile

Gulbarga district has a wide spread network of small scale private laboratories, where the level of automation and the bandwidth of tests available is very limited, hence there is a dearth for high end diagnostic service. Local private laboratories lack the capability to provide comprehensive quality lab services as per the NABL standards. In December 2007, Bangalore ranked 2nd among the 593 districts in the country in terms of existence of health facilities. Bangalore rural district stood at an impressive 67. Ten districts in Karnataka have below-100 ranking as shown in the table below, District
Dakshina Kannada 13 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Table 2.1: Ranking of districts of Karnataka on the basis of existence of Health Facilities
According to McKinsey survey report, commissioned by the Confederation of Indian Industry in March 2011, Karnataka's GDP grew at 8.7% between 2005 and 2010. The report predicts South India could spearhead the country's growth over the next few years with its GDP projected to hit $500 billion by 2016 and close to $650 billion by 2020. GOK's intense focus on providing quality healthcare to the state population, its proactive approach on PPP model and increasing per capita income make Karnataka an ideal place for investment in this segment. Key Issues
The key issues in setting up high-end diagnostic centers are, 1. High cost of capital equipments 2. Limited availability of trained clinical and para clinical manpower – Pathologists are in short across the country, most laboratories are run by qualified lab technicians 3. Complex process to scale up because of the variety of tests and intricacies in logistics management of consumables and chemicals 4. The business needs close tie-up with medical practitioners who provide the captive market to the laboratories 5. Requires rigorous infrastructure set up 6. Regular maintenance of equipments as the running time of machines is high 7. High cost of associated employee salary 8. Power supply, procurement of supplies adds to cost 14 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Chapter 3 - Market Assessment
The need for high-end diagnostic service is dependent on availability of medical treatment facilities that support such service. Uttara Kannada has one district hospital providing secondary treatment, and one Ayurvedic medical college in Sidhapur taluka. There are several laboratories, but they lack the technology, automation, and scale required to provide high-end diagnostic service. The number of patients who would require diagnostic service at the district hospital level has been worked out in the project financials part of this report. Chapter 4 - Project
Description of the Project

GOK is planning to provide district diagnostic centres on PPP at the district hospitals of Gulbarga, Dharwad, and Uttara Kannada. 1. The diagnostic centres will be located in the District hospital premises. The centre will take over the operations of the existing district laboratory, upgrade it to provide all tests available as per the contract, and provide the necessary equipments for the test as required. 2. The partner shall employ two pathologists per district who will provide the interpretation of results and will be in charge of the day to day operations of the centre. 3. The partner shall also employ adequate number of administrative staff, lab technicians, lab attendants and cleaning staff for optimal operation of the diagnostic centre. 4. The partner shall establish the district hospital centre as a hub and can have collection centres in as many public hospitals in the district including Taluka Hospitals. 5. The diagnostic centres shall serve both the patients from the district hospital, referrals sent from Taluka Hospitals 6. In addition the centre shall serve patients referred by private practitioners, but the charges will be same as for government patients. 7. The partner shall comply with the agreed turn-around time for each test so that the operational efficiency is maintained high 15 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
8. The partner shall maintain optimal supply chain of diagnostic centre consumables and chemicals, and shall not run out of stock at any point 9. The partner shall collect the minimum charges prescribed by the government for availing diagnostic services from the beneficiaries and submit it with the government. The government shall reimburse the partner for the number of cases served at agreed rates as per the annuity. 10. The partner shall adhere will all the existing Clinical Establishment Act & Rules, Bio Medical Waste norms and other norms of the land Components of the project

For setting up of a district diagnostic centre in a district hospital the requirements are as follows, a) Space for diagnostic service – 3000 sqft to 4000sqft of built up space for providing all the necessary variety of test, sample collection, waste disposal, rest room, cleaning and store room b) Requisite number of semi automatic, fully automatic and manual equipments as it needs for the service mix c) Sample collection set up d) Patient waiting area e) Computerisation, networking of equipments and installation of a Lab Management Information System for integrating sample collection, test results recording, data base management and delivery of results f) Consumables and chemicals as required
Services/ Items to be provided by the Government

General Provisions
Administrative responsibilities, required space, provision of water and electrical power required for
running the project. Professional and other support services
Prescription for required investigations, response to the generated test results, co-ordination
between departments IPD/OPD for sample collection, testing and reporting shall be ensured by the Government.
Services/Items to be provided by the Partner

Infrastructure Works
The partner shall execute the work of modifying the existing civil and electrical infrastructure to
facilitate and establish Diagnostic Centre. The partner shall put in place logistics and cold-chain system to collect samples from Taluka hospitals 16 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Diagnostic Equipments
The partner shall provide, install, maintain and operate necessary equipments including fully auto
analyser, semi auto analyser, incubator, distilled water plant, glucometer, elisa reader cum analyser, blood gas analysis equipments, haematology analyser, refrigerators, bio safety cabinet, RO plant, histopathology equipments etc as required by the agreed list of tests. The partner is responsible for comprehensive maintenance and standby of equipments in case of breakdown of machine in any of the centres to ensure uninterrupted service. Computerisation and LMIS

The partner shall provide and install computers to network the diagnostic equipments for seamless recording of test results generated. The computers shall be integrated with a Lab Management Information System which shall track, update and report the status of diagnostic tests, consumables and chemicals used for the same.
Bio Medical Waste Management
The partner shall arrange for necessary certification of the diagnostic centre under Bio Medical Waste Management and Handling Rules 1998. The following shall be the duties of the partner in respect to BMW management, 1. Collection of bio medical waste as the diagnostic centre premises 2. Instruction of patients regarding handling of BMW waste 3. Display of IEC material regarding BMW collection and handling at the diagnostic centre 4. Temporary storage of BMW waste 5. Treatment of infected water and chemicals using Hypo Chlorite solution or equivalent before discharging into the waste stream 6. Collection, sterilisation and disposal of sharps, needles, broken glass etc 7. Usage of proper coloured bins and bin liners 8. Tagging of BMW waste as per category 9. Classification and recording of waste collection regularly The disposal of the BMW from the hospital premises shall be as per the existing systems in the district hospital, the partner shall deliver the BMW at transport-able condition with proper tagging at the common collection centre located in the hospital premises every day or as per the agreed terms.
Ancillary equipments
The partner shall provide and maintain all ancillary equipments like the Weighing scale, BP
apparatus, Stethoscopes, Ph meter, TDS meter, autoclave, test tube, ESR tube, tube stands, cell counter etc. required for proper operation of the system. The partner shall provide the backup power requirements for 90 minutes to the machines to have uninterrupted diagnostic service. 17 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
The partner shall provide facilities for the disposable equipments and patient belongings as per the standard requirements The partner shall arrange for proper Biomedical Wastes collection as per Karnataka State Pollution Control Board norms and shall provide all the necessary infrastructure supports that are required. Summary of Commitments
Private Provider
Government of Karnataka
Assurance that all investigations generated Commitment to service all samples generated in hospital will be services by Private service provider Commitment to Turn Around Time (TAT) for various Provision of space Procure and operate / maintain required lab Provision of utilities (water, power, AC) equipments and LIMS Basic renovation of the facility provided by GoK Provision of BMW disposal Set up collection centres at taluka hospitals identified Security of premises Lab operations (including provision of consumables 18 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Description of the District Hospital Uttara Kannada

Uttara Kannada, also known as North Kanara, is district in theofIt is bordered by the state oandto the noandto the easandto the south and theto the west. The city of is the administrative headquarters of the district. Uttara Kannada District is one of the biggest districts of Karnataka state with abundant natural resources. The district has varied geographical features with thick forest, perennial rivers, abundant flora & fauna and a long coastal line of about 140 KM in length. The various talukas of the Uttara Kannada district are Karwar, Ankola, Kumta, Honnavar, Bhatkal Sirsi, Siddapur, Yellapur, Mundgod, Haliyal and Joida. The Nanjundappa Committee based on various socio-economic indicators assessed the development of 175 talukas in the state of Karnataka. Four talukas of Uttar Kannada district came under backward category. Backward Talukas of Uttar Kannada District
CCD Index
19 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
District HQ
10,291 square kilometres Western coast of Karnataka Population
Population Density
140 inhabitants per square kilometre Population growth over decade
Literacy Rate
Sex Ratio
Mining, Cement, Food Processing, Aromatic and Focus Economic Sectors
Herbal processing, Fishery, Engineering and construction Karwar, Ankola, Kumta, Honnavar, Bhatkal, Sirsi, Siddapur, Yellapur,Mundgod, Haliyal, Joida Science •District Hospital, Karwar
Colleges in Uttar Kannada District
•Dhanvantari Ayurvedic Medical College Taluk Level Hospital Ankola (100) Taluk Level Hospital Kumta (100) Taluk Level Hospital Honnnavar (100) Taluk Level Hospital Bhatkal (100) Taluk Level Hospital Sirsi (100) Taluk Level Hospital Siddapur (100) Taluk Level Hospital Yellapur (100) Taluk Level Hospital Mundgo (100) Taluk Hospitals with bed Strength
Taluk Level Hospital Haliyal (100) Taluk Level Hospital Joida (100) All the Taluka Hospitals are been approved for 100 beds strength by state government but only Bhatkal & Sirsi are having the 100 bedded hospitals in operation. Rest are in the process of up gradation. Number of PHC
78 3 are sanctioned 1 is in operation 2 are in process Number of CHC
of up gradation to become a CHC 20 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
District Hospital, Karwar
District Hospital, Karwar is a 400 bedded government hospital with average bed occupancy of
100-125 per day i.e. 25-31 %. The length of stay varies from 3 days to 3 months depending upon
the case. The various specialities available in the hospital are: Medicine, Gynaecology, OBG,
Paediatric, General Surgery, Orthopaedic, Anaesthesia, ENT
Number of Beds
Average Bed Occupancy
average 100-125 per day Average length of stay
3days to 3 months (depend on the case) Medicine, Gynaecology, Paediatric, General Surgery, Orthopaedic, Anaesthesia, ENT, Multiple Specialities available Psychiatry, Dental, Skin

Workload

The workload of the District Hospital, Karwar has increased from 88503 in year 2008 to 108582 to year 2011. It has been observed that on one hand, the number of OPD cases have increased while on the other hand, IPD cases have almost remained same. Radiology Department of District Hospital Karwar

The following table shows the existing services that are available in Karwar District Hospital
Quantity
Comments
available Manufacturer
Equipment

User Charges for Services
The user charges levied by the District Hospital are shown in the table given below
21 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
User Charges
Service Name
(Rupees)

Staff in Radiology Department
Radiology Diagnostic Department of District Hospitals has the following staff members
Number of staff
Staff Members
Senior Technician Workload of Radiology Department

The following table shows the number of X-Rays taken from 2010 to 2011 of District Hospital, Uttar
Kannada,
NO.OF X-RAY TAKEN

Diagnostic Laboratory of District Hospital Karwar
Laboratory equipment
Karwar District Hospital has the following major Laboratory equipments
SL.NO. NAME OF THE INSTRUMENT
ERBA SMART LAB(BATCH ANALYSER) ELISA READER(ERBALISA) QBC REFERENCE -II READER SYSMEX CELL COUNTER(KX -21) BINOCULAR MICROSCOPE 22 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
SL.NO. NAME OF THE INSTRUMENT
ERBA SMART LAB(BATCH ANALYSER) ELISA READER(ERBALISA) QBC REFERENCE -II READER MONOCULAR MICROSCOPE MICROLINE - 25 SEMI AUTO ANALYSER REFRIGERATOR WITH STABILISER ELECTRICAL STERILISER SYRINGE DISTROYER
Workload of Laboratory Department

1. PATHOLOGY
CLINICAL PATHOLOGY
PHORPHOBILINOGEN STOOL: OVA / CYST STOOL OCCULT BLOOD 23 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
PATHOLOGY TESTS
f Test
o r 600
Months 2011
STOOL: OVA / CYST STOOL OCCULT BLOOD 2. HAEMATOLOGY
SPECIMEN/TESTS
2011
HAEMATOLOGY
1439 1208 1447 1444 1454 1589 24 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
HEMATOLOGY TESTS
f Test 1000
Months 2011
3. BIOCHEMISTRY
May June July Aug LFT: BILIRUBIN
SODIUM / POTASSIUM / CHLORIDE 25 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
BIOCHEMISTRY TESTS
f Test
o r 500
Months 2011
SODIUM / POTASSIUM / CHLORIDE 4. MICROBIOLOGY
BLOOD GROUP & RH 376 HBsAg ELISA / SPOT 26 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
MICROBIOLOGY TESTS
f Cases
o r 300
Months 2011
BLOOD GROUP & RH HBsAg ELISA / SPOT

Quality parameters of District Hospital Laboratory
Quality parameters of the district hospital lab are; Quality Parameter
Time taken for reporting lab tests being conducted in DH? 5 -10 minutes
a. For routine tests 4 hours; due to the OPD load all the samples are
b. For special tests collected till the first session and the reports are given in the afternoon. Number of computers available in the Is data stored in computers? Cleaning and mopping with Phenyl, Sodium
How is the laboratory sterilized? Hypo chloride, twice a day
Is proper BMW Management practices observed strictly in Lab? Yes, colored BMW bins and puncture proof
container for storing needles are used, lab
27 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
employees use protective gear and liquid lab wastes treated overnight before being released into the sewage system. How frequently have you faced stock out in the Occasional stock outs, not frequent 6 months a
last one month/year? year/ more than that
Interaction with stakeholders

For primary information, IMaCS visited District Hospital Karwar and discussed with the key officials of the hospital including the Chief Medical Officer, Radiologist, Lab Technicians, and had an in-depth discussion on the status of the laboratory diagnostic service available at the hospital and the type of facilities available. This interaction with key officials brought out following key issues; 1. Scope of the District Hospital Karwar laboratory needs to be widened by enhancing its investigating capabilities. List of presently ‘available tests' and ‘desired tests to be available' at the hospital lab are given in the following table; Name of the Test
Available
Required
Name of the Test
Available Required
HAEMATOLOGY
Rubella (IgM/IgG) BLOOD MORPHOLOGY LE Panel (Full Panel) RETICULOCYTE COUNT Fungal Culture Only Any others specify Fungal Culture & COAGULATION TEST
PROTHROMBIN TIME Micral/Crea Ratio URINE EXAMS
Serum Osmolality Any others specify 24 HR URINE CHON HEPATITIS MARKERS
28 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
CREATININE CLEARANCE ABBOTT PREGNANCY TEST SPECIAL URINE TEST
Urine Amino Acid Urine Catecholamine Urine Metabolic Screening Urine Metanephrine Urine Osmolality C-SERIES
DRUGS OF ABUSE
Ca 15-3 (breast) Ca 19-9 (pancreas) METHAMPHETAMINES TUMOR MARKERS
GLUCOSE TESTING/DIABETIC
Carcino-embryonic alpha-feto protein MCA (Breast C.A) Lutienizing hormone Follicle stimulating MICROALBUMINURIA THYROID FUNCTION
OTHER CHEMISTRY EXAMS
17 OH Ketosteroids 29 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Barbiturates (Qualitative) Bone Fraction Serum Alka. Phos. HISTOLOGY/CYTOLOGY
Anti Cardiolipin IgM & Dilantin/Phenytoin Anti Mitochondrial Abs Anti Phospolipid Abs Anti Smooth Muscle B2 Microglobulin Blood C/S with ARD Torch (Qualitative) Chromosonial Analysis Circumoval Precipitin Fetal Hemoglobin Electrolytes (3)
Rubeola IgM & IgG Varicela IgG (Titer) Lipid Profile (7)
Total Cholesterol LIPID PROFILE
30 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
VLDL Cholesterol TC / HDL Cholesterol KIDNEY PROFILE
BLOOD UREA NITROGEN Liver Profile (10)
Bilirubin (Total) LIVER PROFILE
Bilirubin (Direct) Bilirubin (Indirect) Alkaline Phosphatase Renal Profile (5)
Blood Urea Nitrogen CARDIAC PROFILE
Serum Creatinine BUN/Creatinine ratio Iron Deficiency Profile
Total Iron Binding SEROLOGIC EXAMS
ANTI-NUCLEAR ANTIBODY (ANA) Hemogram (17)
White Cell Count CRP (Predictive Quantitative) RHEUMATOID FACTOR Mean Corpuscular Mean Corpuscular 31 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
MCH Concentration Red Cell Distribution Leptospiral Test (Lat Test) Platelet Distribution Anti-H Pylori (Qualitative) Anti-H Pylori (Quantitative) Mean Platelet Volume Any others specify NOTE: The columns in between are vacant; as microbiologist has filled it as per his requirements Current inadequacy of lab services result in referral of patients to the nearest Medical College, Panaji, Wockhard hospital and SDM Dharwad as well. Skilled manpower availability in the lab is inadequate. Current manpower availability against IPHS norms is given in following table; IPHS Norms for 301-500 Bedded Hospital Name of Post
IPHS Norm
Current Availability
Laboratory technician Laboratory attendant 32 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Best case studies for similar projects in India
1. Contracting of Clinical Lab services in Bihar
Shortage of lab technicians and irregular supply of Problem with system before PPP reagents required for pathological tests
Private service providers
Central Diagnostics and Sen Labs Services provided
Pathology, Biochemistry, Microbiology lab services Price set by
State Health Society Bihar (SHSB) 25 District Hospitals, 23 Sub-Divisional Hospitals, Coverage in state
76 Referral Hospitals and 398 PHCs
Shortage of lab technicians and irregular supply of reagents required for pathological tests led to a
situation where in government hospitals were unable to provide efficient pathology services to patients.
In order to improve the provision of such services in government hospitals, the Government of Bihar
outsourced pathological services to private labs.
Two agencies were selected on the basis of technical evaluation process – Central Diagnostics and Sen Labs, each serving 19 districts. Rates for the tests were fixed. Initially, the charges for the tests were paid by the patients themselves. However, after a period of time, a decision was taken to provide free testing services to patients in government hospitals. Following this, rates for testing were fixed by the State Health Society Bihar (SHSB) – the private providers would conduct the tests at no charge to the patients and would later be reimbursed by SHSB. Clinical lab services including pathology, biochemistry, microbiology lab services were provided. Central Diagnostics and Sen Labs set up labs in the District Hospitals and collection centres in health facilities below district level. They developed infrastructure using advanced equipment at central locations; logistics are managed in such a way that samples from all the collection centres could reach the central locations within a few hours. At the central locations, the samples are processed using advanced equipment and reports are dispatched electronically to the respective health centres to ensure that they are delivered within 24 hours. The coverage under this partnership has extended to 25 District Hospitals, 23 Sub-Divisional Hospitals, 76 Referral Hospitals and 398 PHCs across Bihar. The private providers pay a nominal rent for space in the District Hospitals and the Sub-Divisional Hospitals. 2. Contracting Radiology services in SMS Hospital, Jaipur, Rajasthan
SMS Hospital in Rajasthan did not have capital Problem with old system
intensive facilities like CT Scan and MRI. Private service provider
Vardhaman Medicare Pvt. Ltd. Prices set by Government
Rs.750 for a CT scan and Rs.2500 for an MRI Services Provided
CT scan and MRI facilities 33 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Sawai Man Singh Hospital (SMS Hospital) in Jaipur, Rajasthan is a government-run tertiary care hospital and medical college. The hospital provides free medical treatment to the poor. In 2004, the hospital entered into a Public Private Partnership (PPP) with Vardhaman Medicare Private Limited to provide Magnetic Resonance Imaging (MRI) and Computerized Tomography (CT) scan facilities to patients at low rates with the objective of providing these facilities at the lowest possible costs to patients within the hospital premises. SMS hospital previously did not have CT scan and MRI facilities. Given the capital intensive nature of these facilities, Government decided to outsource this. In August 2004, SMS Hospital issued open tender, inviting applications from interested private agencies to install, operate and maintain CT scan and MRI facilities in its premises. In this process Vardhaman Medicare Pvt. Ltd. was selected and the contract was signed for a period of seven years. As per the contract, the hospital would provide the space within its premises for a monthly rent of Rs.5000/-. The private provider is responsible for the installation of the machines and equipment, arrangement of and payment of electricity and water connections, staff salaries, security and maintenance of premises. The private provider will also maintain records and send regular reports to SMS Hospital. The contract allowed the hospital to use these facilities for teaching and training purposes relevant to the attached medical college. The rates to be charged by the private provider have been agreed in the contract at Rs.750 for a CT scan and Rs.2500 for an MRI. Moreover, the private provider is obligated to provide free services to 20% of all patients from poor economic categories; the eligibility of patients for free services is verified by the Medical Superintendent of the hospital. Monitoring and evaluation of the PPP is under the purview of the Rajasthan Medicare Relief Society (RMRS). Other Diagnostic facilities with Public Private Partnerships

In Madhya Pradesh, the Rogi Kalyan Samity of Indore District Hospital (a registered society) outsourced high end diagnostic services from private providers who are allowed to set up within the hospital premises and allowed to charge fees as agreed with the society which are substantially lower than the market rates. DoHFW, Government of West Bengal has already established diagnostic facilities in 53 Rural Hospitals / upgraded BPHCs in West Bengal under PPP till September 2009. A Modern Diagnostic Unit is being set up under PPP in Gandhi Memorial Hospital, Kalyani. DoHFW, Government of West Bengal has also established facilities of CT scan in seven Medical College & Hospitals and MRI in one Medical College and Hospital in the state under PPP. Seven more MRI Units under PPP are coming up in seven Medical College and Hospitals. CT Scan Units are also being set up in 12 District Hospitals under PPP, four of which have already started functioning. Source a UKaid supported information site 34 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Project Design
Type of Agreement
The Karwar district hospital has an established radio diagnostic centre with multiple X-ray machines, CT scan and Ultra Sound, a regular radiologist is in place, whereas the laboratory is in want of modern equipment, manpower, and better service delivery. Hence, it is proposed to operate only the laboratory diagnostic centre on PPP basis. The project is designed will be offered on Own, Operate and Transfer mode to the successful bidder, the bid variable being the fractional cost at which is the service is provided compared to the existing CGHS rate. The agreement shall be between a private service provider and the government, where the service provider is in charge of procuring and managing the equipment, consumables, manpower, and providing the service. This service provider will be responsible for operating the centre, providing the service and adhering to the laws and regulations that govern the process. The contract shall be awarded district wise to the partners; the partner will be required to set up the diagnostic centre at the district headquarter hospital and provide the service. The partner shall establish spokes across the taluka hospital in the district and shall provide logistics to collect the samples from these collection centers. A partner may also win multiple districts depending upon their quote. The government may also decide to bundle all three districts and give it on PPP to a single partner/consortium. The primary roles and responsibilities of the Private partner and Government is as follows, Roles and Responsibilities of the Government
1. To provide built-up space inside the government district hospital as is, where is condition 2. The laboratory associated with the district hospital will cease to function and all the tests from the district hospital will be conducted by the partner 3. The government will encourage the private partner to set up as many collection centres as possible/required in government hospitals of the district 4. The private partner can take over all equipments deemed necessary from the existing laboratory 5. The private partner can employ the existing government staff if they satisfy their norms and are encouraged to give a nominal amount to the absorbed employees in addition to the government salary they draw 6. List of tests to be conducted onsite will be provided to the partner by the Government 7. While Bio Medical Waste collection and segregation at site is the responsibility of the partner, the government will undertake the BMW disposal activity 8. Providing a conducive organizational atmosphere for the set up to operate 35 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Roles and Responsibility of the Service Provider
1. To undertake renovation of the space provided for operating the district laboratory 2. To arrange back up power for equipments and water storage necessary 3. The partner shall serve all patients referred by the government district hospital doctors, and the government shall reimburse the cost of the service at a fraction of CGHS rate agreed upon 4. The partner shall establish "Standard Operating Procedures" for proper clinical and administrative management of the diagnostic service, the centre will be auditable against the SOPs by the host hospital and Health and Family Welfare department at anytime 5. There shall be no differentiation in terms of service to APL/BPL patients, but the partner shall keep a record of APL/BPL patients served 6. The partner shall equip the laboratory will all requisite infrastructure and shall operate an integrated Lab Information System to manage the process 7. The partner shall collect the specified amount as designated by the government from the patients and shall submit the same with the district hospital every week 8. The partner shall employ manpower as described in the model and shall ensure continuity of service. The partner shall continuously train the manpower for better service delivery 9. The partner shall ensure availability of all consumables and requisites for smooth operation of 10. The partner shall adhere to the existing laws and regulations for operating the diagnostic centre 11. The partner shall co-ordinate with the hospital authorities and employees for delivering the 12. The laboratory and equipments shall be maintained in operable condition 95% of the time 13. The partner shall provide the necessary service and maintenance required for the equipments 14. The partner shall ensure quality of service by adhering to established SOPs and shall get the lab NABL accreditated within three years of commencement of operation 15. The partner shall ensure Turn Around Time (TAT) for all lab tests as agreed during the 16. The partner shall agree on the type of tests to be provided as per IPHS norms and specialty existence at the district hospital, for tests which are not available at the establishment set up by the partner, the partner shall get the service delivered from an equally qualified centre at the market rate for the government 17. The partner shall provide for necessary security services of the diagnostic centre premises 18. Sub-meters for electricity and water supply shall be installed and the report shall be submitted to designated hospital authorities every month. 19. On the expiry or earlier termination of this Agreement, the said hospital space / room shall be vacated peacefully and handed over to hospital authority in the condition they had received. 36 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Contract Period
It is proposed that the Diagnostic centre is provided on contract for a period of ten years, following which it will be rebidded. The reasons for selecting 10 years as optimum concession period are following; 1. Rapid Technological changes happening in the current era are making existing diagnostic technology obsolete in 10 years. So better diagnostic tools will render current machines undesirable and non operational in coming 10 years. 2. Of the total capital investment of 1.50 crores, around 90 percent is pertaining to the machinery. Cost of Service
The service provider shall charge the government a fixed amount towards each test conducted, this shall be an agreed fraction of the existing CGHS rates for diagnostic service delivery. The fractional cost at which the partner agrees to provide the service shall be the bid variable during the process for finalizing the service provider. The government shall revise the service cost as and when the CGHS rates are revised, which is once in two years normally. The partner is encouraged to set up the district laboratory as a hub and establish collection centres in all Taluka Hospital of the district. The tests not available in the Taluka Hospital shall be done at the district hospital laboratory and results delivered back at the respective hospital. This process shall ease the load at district hospital for want of diagnostic service at lower hospitals. The partner can service the patients referred by the private doctors also but at government rates. Thus the service provider has two streams of revenues, 1. Reimbursement by the Government from tests referred from DH and other public hospitals (at a fractional cost of prevailing CGHS rate) 2. Referral patients from private practitioners, who pay personally for the service delivered It is to be noted that the service provider would have to collect user charges from the patients undergoing tests as per the government norms. The amount collected from the patients shall be deposited in a designated bank account and the government shall reimburse the service provider separately every month in proportion to the service provided as per the annuity. In addition to above for maintaining transparency, avoiding any accounting problem such as deliberate escalation of patient volume and thus leakage in revenue, it shall be mandatory for the service provider to maintain proper record of patients in LIMS which must include OPD / IPD number generated by the government institutions. This linkage of Lab number and OPD / IPD number will help government in traceability of patients, thus creating a check over service provider. 37 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Chapter 5 - Project Financials
Current cost of Lab service:

Senior Technician Senior Technician Nonclinical worker *Manpower cost includes Basic pay + HRA Cost of consumables
Lab reagents and consumables*
15,31,734
*List of consumables and their cost is given in annexure 5 Total annual cost (in Lakhs)
38 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Financial projections of the proposed project model
Modeling the financial projections of a diagnostic centre is complex because of the following reasons, 1. The service delivery mix varies from lab to lab, this influences the infrastructure, consumables, capital and manpower used, which results in variation in pricing 2. The pricing depends on the cost of capital at each location 3. Different tests have different cost associated with them, it is difficult to project exactly the number of tests that would be conducted and determine the price based on the same 4. The price is also dependant on the type and extent of equipments used for conducting the test; many tests can be done in multiple ways each with an associated cost 5. The price also depends on the quality of consumables used, for example vaccutainers would definitely cost more than using syringes, but vaccutainers offer better sterility, easier and efficient handling of sample, reduced contamination of sample and least discomfort to patient 6. If the laboratory is NABL or equivalent certified it would increase the administrative cost of the establishment, ultimately increasing the cost of service delivery 7. The cost of service delivery also depends on the operational process and turnaround time expected from the service provider, while computerization and networking of equipments increases the effectiveness and efficiency of the laboratory it also increases the cost of service delivery Hence, IMaCS used reverse costing method to assess the minimum volume of business required to ensure quality operation, and adequate return on investment for the private partner. The financial modeling involved the following process, 1. Projection of the district population 2. Projection of OPD and IPD attendance at the district hospital 3. Projection of number of cases which require diagnostic service ( the standards for the same have been taken from reputed medical referral texts) 4. Projection of associated expenditure 5. Deduction of revenue required per patient to achieve pre tax project IRR in the range of 15-20% 6. Calculation of total business from the above derivations It is observed that to achieve a pre tax IRR of 12% a minimum business of Rs 1.20 Crore is required in year one gradually increasing to Rs 11.86 Crore by tenth year. The financial model is presented below. 39 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Cost Estimation
5.1.1. Capital Infrastructure for Building & Equipments
The model assumes that the existing laboratory will be provided or the requisite space will be provided to the partner at free of cost in an as is where is basis, the partner's responsibility is to refurbish the centre as per their work/process flow and NABL standards required. The partner is also expected to put in place an Lab Management Information System, which will integrate the processes and equipments in the laboratory. CAPITAL BUDGET HEAD
Cost of ready building on 3000 sqft area [@1500/sq ft] Cost of Renovation Cost of the Lab equipments with 5 years of AMC Cost of Generator Total Capital Cost (in crores)
5.1.2. Manpower cost
The model assumes the following manpower requirement for the District Diagnostic Centre, Human Resource Requirements Total Salary /
Position
Person Required
annum (in crores)*
Administrative staff Lab Attendants & others Total Capital Cost
* Salary also includes 20% 'Incentive for working in remote area'
5.1.1. Logistic cost
As per the project design, the private partner shall be encouraged to establish the district hospital laboratory as the hub and shall establish collection centers at Taluka hospitals and have milk runs fetching the samples. Total seven vehicles will be required to collect samples from 11 taluka hospitals. The logistic cost of the project has been tabulated below; 40 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Operative Cost*
Locations for collection
Vehicle**
Capital Investment
required
(in Lakh Rs.)
1,157.33
1,157.33
Sub total
Average distance (in Kms) covered per liter diesel Diesel cost per liter Total Capital Cost (in Lakhs)
Total Operative Cost (in Rs. Lakhs)
Total transportation Cost (in Lakhs)
Cost Head
Annual cost
required
Total Manpower Cost
Maintenance cost
Total Logistic Cost (in Lakhs)
* Average distance (in Kms) covered by vehicle per liter diesel is 12 and per liter diesel cost is Rs. 56
** Vehicle is fitted with ILR (Ice Line Refrigerator) for maintaining cold chain for samples.
5.1.2. Building rent
Private player will pay the monthly rent of the building to GoK as tabulated below; 41 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Tariff Revenue Stream
5.2.1. Population and Diagnostic Centre Load Assumptions for the Project Model
The population of the district and the metropolitan area of the district headquarter is projected, depending upon which the OPD/IPD numbers of the hospital is projected and ultimately the number of patients requiring diagnostic service is derived. Population Projection Assumptions No. of operation days* Minimum Assurance on Revenue and hospital working days by GoK
* Lab services will be available 24X7 for IPD and emergency cases. However to make calculation simple, 310 days have been taken when the OPD
services will also be available.
Projection Period
Population Increase per annum
Population Projections (Based on census 2011)
1,436,847
Uttar Kanada Metropolitan area
Rest of the district
1,018,216
Population Projections
Total population of Uttar Kannada District Uttar Kannada Metropolitan area (Direct Rest of the district (Indirect Population) OPD patient attendance (% of direct population)
OPD patient attendance (% of indirect
population)
OPD patient volume Projections
42 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
OPD Patients from Uttar Kannada Metropolitan
area (Direct Population)
OPD patients from Rest of the district (Indirect
Total annual OPD Per day OPD
Number of beds available in the hospital
Bed Occupancy
Average number of In-patients on any given day
Percentage of IPD patients going for lab investigations per day
Projections of patient volume for Lab from IPD
Per day patient volume for Lab Diagnostic Centre from IPD
Percentage of OPD patients going for lab investigations per
Projections of patient volume for Lab from OPD
Total annual patients in Lab from OPD 34,454 34,626 34,799 34,973 35,148 35,324 35,500 35,678 35,856 Per day patient volume for Lab Diagnostic Centre from OPD
5.2.2. Expenditure and Revenue Related Projections for the Diagnostic Centre
The assumptions towards expenditure and revenue projected are briefed below. EXPENDITURE RELATED
Capital cost
Building cost (3000 Sqft Functional area @ Rs. 1500/sqft)
Cost of renovation
0.20 Crores 43 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Equipment cost
1.10 Crores Cost of LIMS
0.20 Crores Cost of Generator
0.04 Crores Total Capital cost
1.54 Crores
Operative cost
Rent of the building to GoK
0.01 Crores Manpower cost
0.80 Crores Supplies and consumables (% of annual revenue of the Lab)
Purchased services (Water, Power, Telephone, Power back up)
0.03 Crores Logistics
0.75 Crores Insurance Cost
0.15 Crores NABL cost (third year onwards)
0.01 Crores Assumptions
Annual Escalation of Manpower expenditure
Annual Escalation of Expenditure (other than Manpower)
Annual decrease in insurance cost
Surveillance audit cost of NABL (% of accreditation audit cost)
REVENUE RELATED
Assumptions
Frequency of Escalation of investigation rates - once every
Escalation Rate for Services
44 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
5.2.3. Cash Flow
The cash flow of the diagnostic centre for five years is projected below and the IRR is derived, INVESTMENT
Capital investment (in crores) Income to the centre per patient OPERATING REVENUE
Project Year

Per day patients in Lab from OPD
Per day patients in Lab from IPD Per day patient volume in Lab TOTAL OPERATING REVENUE (in crores)
9.905 11.863
OPERATING EXPENDITURE
Rent of the building to GoK Supplies & Consumables Purchased services NABL cost (third year onwards) TOTAL OPERATING EXPENDITURE (in crores)
NET CASH FLOW - (SURPLUS / -DEFICIT)
PRE-TAX PROJECT IRR (5 years)
45 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Ranking of the Project
It is observed that a minimum business of Rs 1.20 Crore is required in the first year and it has to progress to Rs 11.86 Crore by the tenth year to achieve a pre tax IRR of 12%. This translates to a higher per patient laboratory service revenue of Rs 215 in the first year increasing to Rs 315 in the tenth year. It is therefore imperative that a minimum load of patients has to be serviced by the partner; hence, the following steps need to be taken by the government, 1. The district hospital laboratory should be handed over the partner to ensure captive market 2. The partner shall be encouraged establish the district hospital laboratory as the hub and shall establish collection centres at Taluka hospitals and have milk runs fetching the samples and delivering reports 3. The partner shall be encouraged to serve the patients referred by private practitioners at a cost agreed with the government Considering the situation there are multiple ways to finance the project, Advantages
1. The public would not be able to financially provide for the service 2. The lab service is currently being Collect the charges
1. Enables the project provided at a heavily subsidized rate, involved in providing the
financially viable the rates charged by the partner will service from the public at
2. Ensures market be very high compared to that 3. Double standard in service cost cannot be maintained by the government 1. It is a complex process to establish rates for individual tests as it depends on multiple reasons as explained earlier 1. Provides a stable 2. Even if a rate is agreed upon The mutually agreed price
projection for both the depending on projected number of may be paid by the
government and the test mix, variation of the government for every test
partner to plan for the number/type of tests which happens done, and a minimum
in actual may adversely affect either business may be ensured
2. Ensures minimum the government of partner by the government
reimbursement for the 3. The planned service delivery mix may inhibit the degree of sophistication and automation brought in the process by the partner 4. The partner is nor encouraged to look 46 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
for additional sources of income and there is no incentive for efficiency improvement by the partner The government
1. Ensures minimum reimburses the partner
standard of payment against a established
1. Lack of clarity on the number of high 2. Private partner price standard for service
end tests that will ensure better encouraged to provide delivery as per actual
better services and number of tests
2. The government may not be able to increase his operational conducted and allows the
control the actual price setting for partner to serve referral
private patients 3. Ability to compete with patients from private
the other private labs in practitioners as well (but
at an agreed rate)
Considering the above options, it is preferred to follow an established price standard to be reimbursed
on actual, but considering the facts that,
1. The firm is provided a constructed building which brings down the infrastructural cost 2. The government ensures captive patients for the partner 3. The firm is provided with additional government patients from taluka hospitals 4. The firm is allowed to serve private patients with following two riders 4.1. No discrimination in prices i.e. Price of diagnostic tests for private patients will be same as for government patients 4.2. Priority shall be given to patients referred from government institutions. However exception to this can only be made in case of very sick / serious patient or an emergency situation. It is proposed that the government can demand services at a multiple cost of CGHS rates, this multiple
(could be premium or discount over CGHS) can be the bid variable during the procurement process.
The government can also decide to provide a minimum business by providing minimum guaranteed revenue that can help meet the fixed costs of the facility thereby reducing demand risk further. The decision on guaranteeing minimum business could be arrived at during detailed feasibility study to be done with the transaction advisory process upon further refinement of the financials. 47 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Value for Money Analysis
The value for money analysis of the project has been tabulated as below; In-house Diagnostic services
Outsourced Diagnostic services
GoK ensures no leakage of patients and minimum revenue of 1.31 crore per annum in the first year to private service Cost of services 51.19 Lakhs per annum provider. It will only bear the cost of utilities. Spared manpower can be deployed at other public facilities to fill the manpower gap. Quality of services Unable to scale up and match Strict adherence to ensure Lab NABL standards become NABL accredited in third year 24X7 Lab Service availability 24X7 Availability of supplies & Availability of latest technology Down time of used machinery Need to train manpower Manpower with requisite skill sets will be deployed Reliability of test results is low Reliability of test results is high and match market standard Administrative burden Patient and staff satisfaction Image of the hospital 48 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Special Scenario – Lab diagnostic services upgraded by GoK
In case GoK wishes to upgrade the existing lab in the district hospital to enhance its scope of investigations, capability and quality, following will be the estimated cost; Investment
CAPITAL BUDGET HEAD
Cost of ready building on 3000 sqft area [@1500/sq ft] Cost of Renovation Cost of the Lab equipments with 5 years of AMC* Cost of Generator Total Capital Cost (in crores)
*This is 75% of the cost incurred by the private player for augmenting the existing equipments.
Human Resource Requirements Position
Required
Administrative staff Lab Attendants & others Total Capital Cost
Operative cost
Rent of the building to GoK
Manpower cost
Supplies and consumables (% of annual revenue of the Lab)
Purchased services (Water, Power, Telephone, Power back up)
Logistics
Insurance Cost
NABL cost (third year onwards)

Expenditure related assumptions
Annual Escalation of Manpower expenditure
49 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Annual Escalation of Expenditure (other than Manpower)
Annual decrease in insurance cost
Surveillance audit cost of NABL (% of accreditation audit cost)

Revenue related assumptions
Frequency of Escalation of investigation rates - once every
Escalation Rate for Services
Cash Flow
INVESTMENT
Capital investment (in crores) Income to the centre per patient OPERATING REVENUE
Project Year
Per day patients in Lab from OPD Per day patients in Lab from IPD Per day patient volume in Lab TOTAL OPERATING REVENUE (in
OPERATING EXPENDITURE
Rent of the building to GoK Supplies & Consumables Purchased services NABL cost (third year onwards) TOTAL OPERATING EXPENDITURE (in
NET CASH FLOW - (SURPLUS / -DEFICIT)
PRE-TAX PROJECT IRR (5 years)
50 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Scenario Analysis using economic criteria

In order to make healthcare services available to all and fill gaps in health infrastructure, GoK plans to rope in private player for providing Lab diagnostic services to the population. So effectively GoK will be the client for the private player who will reimburse him as per the volume of patients serviced per month. Whether these patients will be charged or not, if charged then will it be as per the prevailing market rates or at some concessional rates, how much concession will be given to patients, whether to make any distinction between BPL and APL category patients etc. all these issues are political sensitive and needs to be decided by the government of Karnataka. Above scenarios are based on the premise that service provision and thus the reimbursement of private player will not be affected by economical strata of patients. However the social sector has some peculiarities which require special mention. Health services are vulnerable to segmentation between rich and poor. As a result the public sector ends up providing subsidized services to the poor whereas the private sector providing the paid services to the rich who can afford them. So government, in order to judicially use its limited financial resources, may need to allocate the budget to financially support only the poor patients while providing the facility to others at concessional rate. Above mentioned project scenarios are analyzed in this section to know the financial implications on GoK if this strategy is adopted to implement health PPPs. Projections of total and BPL population for the three districts chosen for this project are given in the annexure. Analysis of this data reveals that proportion of BPL population in Uttara Kannada district is 82.47%. Based on this it is assumed that of the total patient load in the Lab diagnostic centre, 68% are from BPL category that will not pay anything for the service while 32% are from APL category that will pay for investigations as per the cost decided by the state government. For computation purposes it is assumed that income to the centre per APL patient will be as calculated above for two scenarios. Using the economic criteria, the two project scenarios have been compared in the following Scenario analysis using economic criteria
diagnostic
diagnostic
services
services on
Lab diagnostic services on
Lab diagnostic services
upgraded by
upgraded by GoK
GoK provides quality Lab Diagnostic services by provides land Diagnostic GoK provides land and ‘ready to services by and ‘ready to move in' infrastructure and providing necessary infrastructure the infrastructure and providing 51 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
necessary resources differentiated differentiated differentiated into BPL / differentiated into BPL / 68% of total patients 68% of total patients are from BPL category are from BPL category which will get services which will get services 32% of total patients 32% of total patients are from APL category are from APL category which will pay for services which will pay for services at the rates decided by at the rates decided by Income to the centre per patient Minimum Financial Burden on GoK in the first year (in Crore Rs.) So the minimum annual financial burden of GoK in the first year of operations will be Rs 0.82 crore for first scenario while Rs. 0.79 crore for second scenario. 52 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Chapter 6 - Policy, Statutory and Legal Framework
Policy Framework: - Section 5.6 of the Karnataka Integrated State Health Policy 2004, provides the
framework for PPP in healthcare sector. This section, under the heading ‘Public, private and voluntary
sector partnerships' states that
"The state Policy recognizes the role of the voluntary and private sectors in public health care. Though already existing in an adhoc and often informal manner, public, private and voluntary
partnerships will be further developed in a planned, systematic manner in order to develop in spirit and
practice for better health care and also for optimal utilization of health resources. District and Taluk
health action networks and issue-based networks will be encouraged with active participation from the
public sector in such voluntary sector initiatives. Participation of voluntary and private sector will be
enhanced through outsourcing certain services, in infrastructure maintenance and investments in
health services".
Statutory and Legal Framework: - The diagnostic centre shall be governed by all existing bio medical,
statutory and legal laws governing an imaging centre. The diagnostic centre along with the hospital or
independently as the case and situation may apply shall get itself certified for/obtain the following
certificates,
1. Building Permit 2. No objection certificate from Chief Fire Officer 3. Indian Medical Council Act and Code of Medical Ethics, 2002 4. Drugs and Cosmetics Act, 1940 5. License under Bio-medical Management and handling Rules, 1998 6. Right to Information Act 7. Consumer Protection Act, 1986 The service provider shall be responsible for procurement and management of all statutory and legal requirements for the diagnostic centre. 53 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Chapter 7 - Indicative Environmental & Social Impacts
Environmental Impacts

The diagnostic procedure does not produce harmful radiations or noise, but body fluid wastes are generated during the procedure, which needs to be collected, stored, and disposed safely. Stringent bio medical waste disposal processes need to be developed and implemented by the partner. Social Impacts
Lab diagnostic service will be accessible to all the citizens irrespective of his/her region, urban/rural location, gender, social and economic groupings. This will also bring equity in healthcare services which also encompass disadvantaged groups (Scheduled Castles and Tribes) and vulnerable groups (street children, elderly). Other social impacts of this project are;  The project will enable provision of high quality and high end diagnostic service for the public which is currently unavailable at the district hospital and at the same time is costly at private diagnostic centres  Improved efficiency of the government hospital due to availability of better diagnostic service  Reduced referral to higher institutions for want to diagnostic service, thereby reducing the cost of providing ambulance logistics facility  Reduced referral from lower institutions for want of diagnostic service, thereby reducing  The low cost availability of the service will reduce the cost of service at a private centre  Society will get the best of public and private services at one place i.e. private sectors quality and efficiency at public rates thus reducing their economic cost of availing the healthcare services.  Enhanced patient satisfaction and diminished strain  Improved utilization of public healthcare facilities  Timely diagnosis leads to better treatment and better medical results.  This initiative will also help state government to achieve its goal of prevention of physical disability by its early detection and intervention. This will bring major gains in terms of human well-being, development and economic productivity.  Patients will get access to high-end diagnostic imaging facility within the MCH premises saving the travel time of going to another public health facility / private facility; this reduces the out of pocket medical expenses. This way this project will help state government in mitigating the adverse effect of escalating prices of diagnostics on state population.  Employment generation for the trained manpower  Streamlined operation and efficient work culture of private partner will impact the public healthcare functioning in the long run  Reduces the cost of diagnostic service at the private facility due to market competition effect 54 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Mitigation Measures

Diagnostic equipments and process should be operated under strict trained manpower supervision, the following safety measures need to be taken into account, 1. Diagnostic machines and associated equipments must be located and designed as per the manufacturer's specific layout guidelines 2. Machine should always be under CMC for regular maintenance 3. Proper sterilization and infection prevention practices should be adhered to 4. Quality of consumables should be maintained for consistency and efficiency of results 5. Proper BMW collection, storage and disposal norms should be developed and adhered to 55 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Chapter 8 – Operating Framework
Project Structure at a Glance

Parameter
Description
Own, Operate and Transfer Concession Period Ten years, following which it will be rebidded. Concession Component 1. Right to operate diagnostic centre at government hospital 2. Building and utilities provision at the concerned hospital 3. Reimbursement for patients referred from the Government 4. Referral facility from all government hospital 5. Can serve private patients but at government rates Government Support 1. Space and building 2. Water and electricity expenses borne by the government (Power back up to be arranged by the private partner) 3. Assurance of captive patients from the district hospital Project Benefits 1. Provision of advanced diagnostic services to the public 2. Taluka hospital are also provided with the service 3. Improved quality of services 4. Will bring down the existing market rate 5. Improved hospital efficiency through better diagnostics 6. Private sector efficiency in operation and maintenance 1. Operation of the diagnostic centre equipments 2. Ensure 95% machine uptime 3. Operates on two shifts from 8AM to 2PM and 2PM to 8PM, available on call from 8PM to 8AM for emergency cases 4. Service provider to address all maintenance related issues 5. Provide requisite reports as agreed in the TOR User Charges Involved 1. User charges collected as per government norms and deposition with the government 2. The diagnostic centre is free to serve private patients at government rates Inventory Management 1. Procure and manage all consumables and inventory required 2. Maintain optimum inventory and ensure nil stock out Revenue Management 1. The diagnostic centre will be reimbursed at an agreed rate by the Government every month as per the number of cases 56 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Risks & Mitigation

In PPP arrangements, risks are inherent in the project due to the varied pursuits and value systems of the two sectors involved in the contract. The private sector is predisposed to prioritizing shareholder return and taking measured risks, whereas regulations and authorities, political opinion and the achievement of societal goals influence the public sector. Additional problems arise because public taxpayers may not welcome the idea of PPPs due to a perceived lack of transparency in the private sector. Full disclosure may also be an issue for the private sector who has an interest in protecting proprietary information to ensure their competitiveness. Following are the perceived risks involved in developing a diagnostic centre 1. Construction / implementation risk arising from a. Delay in project clearance b. Contractor default c. Construction cost overrun 2. Market risk arising from a. Insufficient demand b. Impractical user levies 3. Finance risk arising from a. Inflation b. Change in interest rates c. Increase in taxes 4. Operation and maintenance risks arising from a. Termination of contract b. Technology risk c. Manpower risk 5. Legal risks arising from a. Changes in law b. Changes in lease rights The emphasis is on optimal allocation of risk or risk transfer. This can "incentivize" partners to ensure that objectives of the agreement are met. Risk transfer has the opportunity to be extremely beneficial to the public sector but if not appropriately managed insufficient risk is transferred to the private sector. Governments cannot allow essential services such as healthcare to fail, so the ability of the public sector to transfer risk to the private sector becomes nonexistent and therefore no longer a benefit of partnership. For example under the Private Financing Initiative (PFI) in the UK, some failed partnerships have required the government to step in and subsidize a service and yet the core essence of the PFI contract is that the private sector should take on appropriate risk in return for the appropriate reward. 57 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Risk Mitigation Strategies
Category
Risk Incurred by
Mitigation Strategy
1. Government to provide all clearances for initiation of the project within 60 days of selection of partner from competitive bid process. It will also help the private partner Delay in project to get the necessary licenses for establishment and operations of lab diagnostic centre in district hospital. 2. The partner has the right to terminate the contract with three months prior notice if the government fails to honour the commitments 1. Only organisations with prior experience in operating an diagnostic chain for the past 5 years are qualified for bidding 2. The partner should have currently operating chains in at least four states across the country of which Karnataka is mandatory 3. The partner should have at Rs 5 Crore turn over ever year in the past three years 4. The partner should have an established laboratory in the state to service tests which is capable of undertaking tests not available at the district site Contractor Default 5. The partner should submit list of employees associated with them specifying their qualification and experience 6. It is preferred that the partner/service provider has experience in PPP projects, qualifying marks shall be provided for such bidders; if the bidder has experience in operating diagnostic centres on PPP then they shall be provided additional qualifying marks 7. Government to retain the earnest money in case the private partner defaults before signing the contract 8. Client default payment clause to be inserted as a part of the 58 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
9. The government has the right to terminate the contract with one-month notice if the service provider is not adhering with the Terms of Reference mutually agreed. 10. The government shall give two warning notices and provide adequate time for rectification before sending a notice for termination of services. The termination notice shall be given only by the Commissioner Health and Family Welfare or by the Secretary Health and Family Welfare 11. The service provider shall not sub-let the premises or service to any other party without the prior permission of the government. The government has the rights to terminate the contract in the event of any such activity with a 15 day notice, and take control of the premises, equipment and accounts during the period and afterwards till the case is resolved 1. Land/Building shall be recognized for this purpose prior to the issue of RFP 2. Building to be provided to the partner wherever available 3. Land/Building shall be handed over within 30 days of signing of the contract, in as is where is condition Construction/Renovation Partner/Government 4. Private players shall be invited to inspect the land/building cost/time overrun during the bidding stage to assess the time taken to commence the operation 5. Time frame to be agreed upon to commence operations, failing which the service provider has to pay liquidate damages as mentioned in the TOR 1. The service provider shall provide a list of manpower already Non availability of under employment during the bidding stage Medical and technical 2. The centre to be staffed within the operation Partner/Government personnel to operate the commencement time frame assured to the government, failing which the service provider has to pay liquidated damages as mentioned in the TOR Insufficient demand 1. The government shall ensure that all district hospital 59 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
diagnostic requirements are channeled to the partner 2. The partner is also encouraged to set up collection centres at other government hospitals of the district and provide a milk run facility 3. The government may assure a minimum value of tests irrespective of the mix of tests 4. The service provider is free to service patients referred from private institutions, but shall not levy charges more than what agreed for with the government 1. The service shall be priced as a fraction of CGHS rate for Impractical user levies Government/Partner both, government and private patients The government shall revise the reimbursement rate for diagnostic service as and when the CGHS rate is revised Change of interest The partner has to bear any changes in interest rates and tax rates by the state/central government The partner has to bear the exchange rate fluctuation during the procurement process 1. The initial contract is for a period of five years, beyond which if the parties agree to continue the contract the diagnostic centre should be upgraded to meet the latest technology specification at that point of time 1. The service provider shall employ manpower as agreed with 2. The service provider shall frame effective human resource policies for the training and retaining manpower at the centre, there shall be defined plans for replacement of trained manpower. Man power retention 3. The centre shall not be deficit of the number of employees agreed for not more than one week at a stretch 4. Should employees go on leave, fall sick or leave the organisation the service provider has to ensure the replacement within a week 5. The service provider shall adequately train its manpower 60 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
6. All new recruits by the service provider shall be trained by the service provider for a period agreed with the government in an established set up 1. The government shall provide the electrical and water supply 2. The service has to maintain power stabilizing equipments and power backup generator as required 1. The service provider shall maintain detailed books of records a. Diagnostic test records b. Consumables – in stock, out of stock, consumption pattern – as per the existing government guidelines c. All expenditure involved in the day to day operation of the hospital as per the existing government guidelines d. Maintain and display quality indicators as per the machine standards e. Display MIS of the centre 2. The diagnostic unit shall maintain and adhere to detailed Process adequacy and Standard Operating Procedures for, Quality of Service a. Service delivery b. Patient handling c. Documentation management d. Emergency and Disaster management e. Bio Medical waste management f. Ethical treatment and management of patients g. Cleaning and sterilisation h. Infection prevention i. Any other process deemed necessary by the H&FW 3. The diagnostic centre shall get itself NABL and ISO 9001:2008 certified within two years of commencement of operation 61 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
4. The service provider shall produce a report to the Commissioner Health and Family Welfare on the operation of the diagnostic centre every month. The report shall contain, a. Staff attendance report b. Number and variety of diagnostic tests conducted on Outpatients/In patients/Private patients c. Expenditure statement for consumables, separately for Inpatient, outpatient, special clinics d. Uptime/downtime of the machine e. Maintenance work which have been conducted in 5. This monthly report shall be scrutinised by the Commissioner of Health and Family Welfare and the state nodal officer for the project 6. The diagnostic centre shall be subjected to six monthly stock audit, monthly accounts audit and weekly visual inspection cum audit 1. The service provider and the equipment manufacturer need to produce a defined maintenance contract document at the time of contract award 2. The cost of any maintenance of the machine has to be borne by the service provider 3. Insurance cost of the machine shall be borne by the service provider, the government is not liable for any damage Equipment Maintenance Government caused to the machine either during operation or during the idle period 4. The service provider shall maintain 95% uptime during a 5. All service issues shall be attended to within 24 hours of intimation by the equipment manufacturer 6. If there is a equipment downtime period of more than 72 hours at a stretch, the service provider has to arrange for 62 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
diagnostic service to be provided from an alternate centre at the same cost, while bearing the cost of transportation of patients 1. The government shall be cognizant of the impact of any policy change that may adversely affect the contract (this is apart from the issues relating to taxes, inflation changes, change of interest rates, exchange rate fluctuation which Changes in Policy have been discussed above) 2. The government shall insulate the contract from any such policy changes, or see to that the partners are adequately compensated for losses incurred because of policy change 1. The private partner is responsible for adherence legal and regulatory compliances Adherence to legal and 2. Any loss arising from inadequate compliance to legal and regulatory compliances regulatory norms are to be borne by the private partner 3. The partner shall get the process/centre ISO 9001:2008 certified to adhere to all process in place 1. The medico legal risk is shared between the Government, Medico legal risk Government/Private the service provider and the equipment manufacturer on a case to case basis 1. The service provider is absolutely responsible for any legal risk arising out of employee disputes Employee legal risk 2. Employees of the service providers cannot claim themselves as employees of the government and are not liable for any facilities and perks provided to government employees 63 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Chapter 9 – Way Ahead
Currently the project plan is to set up district diagnostic centres in the three districts of Gulbarga, Dharwad, and Uttara Kannada. Once implemented the success of the project can be measured in terms of the impact of service delivery, availability of universal access, assistance in treatment, benefits accrued to the society, and the feasibility of the project. Other districts of qualifying size and volume can adopt this model in future. This model shall be showcased as a flagship project for investors. This also exhibits the forward marching initiatives of the Government of Karnataka in engaging with the industry both in economic and social fronts. 64 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Chapter 10 – Annexure
Annexure 1- Existing lab tests and rates in Karwar District Hospital

HAEMATOLOGY
USER CHARGES
DIFFERENTIAL COUNT BLOOD GROUP & Rh FACTOR USER CHARGES
BUN (BLOOD UREA NITROGEN) DIRECT BILIRUBIN INDIRECT BILIRUBIN ALBUMIN / GLOBULIN 65 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
TOTAL CHOLESTEROL HDL- CHOLESTEROL LDL- CHOLESTEROL CLINICAL PATHOLOGY
USER CHARGES(RS)
URINE EXAMINATION SEROLOGY INVESTIGATION
USER CHARGES (RS)
VDRL / RPR SYPHILIS WIDAL FOR TYPHOID Annexure 2 - Laboratory tests that shall be made available by the partner

Specialty
Diagnostic Services/Tests
Clinical Pathology
Haemoglobin estimation Total Leukocytes count Differential Leucocytes count Absolute Eosinophil count Reticulocyte count 66 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
(IGM, IGG, IGE, IGA) - Fibrinogen Degradation Prothrombin time Peripheral Blood Smear Malaria/Filaria Parasite Packed Cell volume Blood Cross matching ELISA for HIV, HCV, HBs Ag ANA/ANF, Rhemmatoid Factor Urine for Albumin, Sugar, Deposits, bile salts, bile pigments, acetone, specific b. Urine Analysis gravity, Reaction (pH) c. Stool Analysis Stool for Ova cyst (Ph), Hanging drop for V. Cholera Bacterial culture and sensitivity d. Semen Analysis Morphology, count Analysis, Cell count etc. f. Aspirated fluids Cell count cytology Pathology
Bone Marrow Aspiration Immuno haematology Coagulation disorders sickle cell anaemia d. Histopathology All types of specimens, Biopsies KOH study for fungus Smear for AFB, KLB (Diphtheria) Culture and sensitivity for blood, sputum, pus, urine etc. Bactriological analysis of water by H2s 67 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Stool culture for Vibrio Cholera and other bacterial enteropathogene Supply of different media* for peripheral Grams Stain for Throat swab, sputum Serology
RPR Card test for syphillis Pregnancy test (Urine gravindex) ELISA Leptospirosis, Brucellosis Elisa test for HIV, HBsAg, HCV DCT/ICT with Titre Services as per norms for the blood bank including services for self component Blood Bank
Glucose tolerance test Glycosylated Hemoglobin Blood urea, blood cholesterol Liver function tests Kidney function tests Serum Phosphorous CSF for protein, sugar Blood gas analysis Estimation of residual chlorine in water Thyroid T3 T4 TSH Chloride (Desirable) Salt and Urine for Iodine (Desirable) Iodometry Titration 68 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Annexure 3 - Laboratory Equipments as per Indian Public Health
Standards (IPHS) for 301 to 500 bedded District Hospitals 2011

Name of the Equipment
301-500 Bedded
Binocular Microscope Chemical Balances Electric Calorimeter Fully Automated Auto-analyser Semi auto analyser Micro pipettes of different Distilled water Plant Electricentrifuge, table top Cell Counter electronic Counting chamber Haemoglobinometer tCDC count apparatus ESR stand with tubes Test tube stands Test tube holders Rotatry Microtome Auto Embedic Station Timer stop watch Elisa Reader cum washer 69 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Blood gas analyser Electrolyte Analyser Glycosylated Haemoglobinometer Blood Bank Refrigerator Haematology Analyser with 22 Blood Collection Monitor Laboratory Autoclaves Blood Bank Refrigerator Ordinary Refrigerator Emergency Drug Trolley with auto Dialected tube scaler Class – I Bio Safety Cabinet Air Conditioner with Stabilizer Computer with UPS and Printer Automatic Blood Gas Analyzer Fine Needle Aspiration Cytology Histopathology Equipments Pipette – 1 ml & 5 ml Burette 10 ml Conical Flask Biker/Glass bottles Glass or plastic funnel Glass stirring rod small stainless steel bowl Electronic weighing scale Measuring cylinder Gas Burner Laboratory balance Stop watch, Cyclomixer Micro pipette 10-100 ml :10-200 ml Micro tips Centrifuge, Oven Bath Serological Digital calorie meter Stirrer with stainless steel stirring rod Digital electronic temperature controller 70 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
i. Ion – meter Table Top (specific for fluoride estimation in biological fluid) ii. Table Top Centrifuge without refrigeration iii. Digital PH Meter iv. Metaler Balance v. Mixer vi. Incubator Pipettes/Micropipettes Dry Biochemistry Whole Blood Finger Prick HIV Rapid Test and STI Screening Test Blood Component Separator Platelet Agitator Platelet Thawing Machine * To be provided as per need. ** To be provided for salt and Urine analysis for Iodine. *** For analysis of Fluoride wherever applicable
71 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Annexure 4 – List of consumables currently used and their cost
Lab Reagents and items
Quantity
1 AEC Diluting fluid 3 Bilirubin Total & Direct (Jenrassik &Grof method) 4 Cell pack PK-30L(Azide free) for SYSMEX-KX 21 5 Cholesterol(CHOD/PAP) 6 Combi pack Blood Grouping antigen(Anti A,B,D each) 7 Creatinine(mono) Jaffs Reactions 9 Distilled Water 10 Ehrlichs Reagent 12 Glucose Reagent(GOD/POD) 13 HBsAg Test Device 14 Leishman's stain 15 Luxure fine permanent marker(black,blue,red each) 16 Microscopic cover glass(22 mm x 10 gms) No. 1 17 N/10 Hydrochloric acid 19 Sahli's Hb% Pipette (standard Calibrated 20 microlitre 20 Sahli's Hb% Square Tube 21 Semen Diluting fluid 22 Sodium Hyphochlorite soln. 23 Stromatolyser WH-200 for SYSMEX-KX 21 24 Sulphosalicylic acid 25 Thermal paper Roll for Sysmex KX-21 & ERBA Smart Lab 26 Tissue paper roll 27 Tri-glycerides(GPO-Trinder method, End point) 28 Urea(mono reagent) 29 Uric Acid(Uricase/PAP method) 30 Uricticks for urine Sugar 31 Urine Pregnancy Test Device 32 Westergreen ESR Tubes 33 Widal(Slide &Tube method) 72 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Annexure 5 – District wise population projections until 2018

District
Gulbarga
Source: Data developed by SANIGEST for GoK project under WB TA assistance
Annexure 6 – District wise BPL population projections until 2018

1,171,11 1,187,04 1,203,18 1,219,54 1,236,13 1,252,94 1,269,98 2,150,28 2,179,52 2,209,16 2,239,21 2,269,66 2,300,53 2,331,82 Gulbarga
1,002,31 1,015,94 1,029,76 1,043,76 1,057,96 1,072,35 Source: Data developed by SANIGEST for GoK project under WB TA assistance
……………………. End of report………………….
73 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar
Disclaimer: The report is based on information collected by IMaCS from sources believed to be reliable. While all reasonable care has been taken to ensure that the information contained herein is not untrue or misleading, IMaCS is not responsible for any losses that the client may incur from the use of this report or its contents. The assessment is based on information that is currently available and is liable to change. The analysis that follows should not be construed to be a credit rating assigned by ICRA's Rating Division for any of the company's debt instruments. IMaCS is not a legal firm and our advice/recommendations should not be construed as legal advice on any issue. 74 Prefeasibility Report for Setting up of Diagnostic Centre at District Hospital Karwar

Source: http://www.iddkarnataka.gov.in/docs/70c_DiagnosticLab_UK.pdf