The hospital industry is a sector within the economic system

that provides goods and services to treat patients with curative,

preventive, rehabilitative, and palliative care. The modern
health care sector is divided into many sub-sectors and
depends on interdisciplinary teams of trained professionals and
paraprofessionals to meet health needs of individuals and
populations. The hospital industry is one of the world's largest
and fastestgrowing industries. Consuming over 10 percent of
gross domestic product (GDP) of most developed nations,
health care can form an enormous part of a country's economy.
For purposes of finance and management, the health care
industry is typically divided into several areas. As a basic
framework for defining the sector the United nations
International Standard Industrial Classification
categorizes the health care industry as generally consisting of

1. Hospital activities

2. Medical and dental practice activities

3. Other human health activities

Other human health activities involve activities of nurses,

midwives, physiotherapists, scientific or diagnostic laboratories,
pathology clinics, residential health facilities, or other allied
health professions. The global industry classification standard
and the industry classification benchmark further distinguish
the industry as two main groups, Health care equipment and
services; and Pharmaceuticals, Biotechnology and related life
sciences.

Health care equipment and services comprise companies and

entities that provide medical equipment, medical supplies and
health care services such as hospitals, home health care
providers and nursing homes. The second industry group
comprises sectors companies that produce biotechnology,
pharmaceuticals, and miscellaneous scientific services.
The World Health Organization estimates that there are 9.2
million physicians, 19.4 million nurses and midwives, 1.9
million dentists and other dentistry personnel, 2.6 million
pharmacists and other pharmaceutical personnel, and over 1.3
million community health workers worldwide, making the health
care industry one of the largest segments of the workforce. The
delivery of hospital services from primary care to secondary
and tertiary levels of care is the most visible part of any health
care system, both to users and the general public. Improving
access, coverage and quality of health services depends on the
ways services are organized and managed, and on the
incentives influencing providers and users.

Hospitals are classified into different types depending upon

different criteria. Hospitals are divided into:

1. Classification based on objectives

2. Classification based on ownership

3. Classification based on system of medicine

1. Classification Based on type of management and

Objectives:

Hospitals are classified into categories based on objectives as

follows.

a. General hospitals

b. Specialty hospitals

c. Multispecialty

d. Super specialty

e. Teaching-cum-research hospitals

f. Rural hospital g. Isolation hospital

2. Classification based on ownership:

a. Government hospitals

b. Semi-government hospitals

c. Voluntary agencies hospitals

Goyal R C, (2006).Hospital Administration and Human Resource

Management, PHI Learning Ltd, Fourth edition 97 d. Private
hospitals e. Charity hospitals

3. Classification Based on System of Medicine

a. Allopathic hospital

b. Ayurvedic hospital

c. Homoeopathic hospital

d. Unani hospital Hospitals have been classified in many ways.

The most commonly accepted criteria for the classification of

the modern hospitals are:

1. Classification based on length of stay of patients

2. Classification based on Clinical basis

3. Classification based on Ownership control basis.

3.3.1 Types of management of hospitals:

1. Government of India: All hospitals administered by the

Government of India, viz. hospitals run by the railways,
military/defense, mining, or public sector undertakings of the
Federal Government such as teaching/specialist hospital.

2. State government: All hospitals administered by the state

government authorities and public sector undertakings
operated by state such as state university teaching hospitals,
specialist hospitals, general hospitals, comprehensive health
centers.
3. Local bodies: All hospitals administered by local
governments, viz. the rural and basic health centers (Primary
Health Care Centers), dispensaries.

4. Private: All private hospitals owned by an individual or by a

private organization.

5. Voluntary organization: All hospitals operated by a voluntary

body/a trust/charitable society registered or recognized by the
appropriate authority under federal/state government laws.
This includes hospitals run by missionary bodies and co-
operatives.

6. Corporate body: A hospital ran by a public limited company.

Its shares can be purchased by the public and dividend
distributed among its shareholders. The level of hospitals and
specialties provided in respective type of hospitals are primary,
secondary and tertiary level and are described in Table No. 3.1
as follows140

India 16000

Bangalore city hospitals:

The average occupancy ratio for private hospital in Bangalore is

70-80 per cent. The cost of treatment in Bangalore hospitals is
1/5th of that the cost in Europe and USA. Bangalore has second
highest literacy rate i.e. 83 per cent and the per capita income
of 0.03 USD million. So there is better health awareness and
willingness to spend. There are approximately 320 hospitals
with the total number of 22,000 beds. It has approximately 212
private hospitals. The growth for Cardiac and Cancer will grow
at 13 per cent, but there are very less Cardiac and Cancer
Centers in Bangalore. The demand for beds/1000 population is
3.96 beds/1000 populations but the supply is only 2.2
beds/1000 population, so in order to reach the demand
approximately 16,000 beds needs to be added. For the bed
strength of 700 beds, the average 117 number of out-patients
visiting the hospital/day is about 1000, and the average
number of inpatients admitted/day is 420. For the bed strength
of 200 beds, the average number of outpatients visiting the
hospital/day is about 290, and the average number of in-
patients admitted/day is 140.

Source: IRDA, CII, Grant Thornton, Gartner, Technopak, TechSci Research Note:
PPP is Public Private Partnerships, Management contracts - An arrangement
under which operational control of an enterprise is given to a separate entity for
a fee