Master Thesis

Master's Programme in Industrial Management and

Innovation

Service Innovation Framework In Complex

Healthcare System

Industrial Management, 30 credits

Halmstad 2021-06-05
Rahul Lochab
HALMSTAD
UNIVERSITY
 “Service innovation Framework in complex healthcare system”

By Rahul Lochab. This thesis has been written within the course of Industrial management 30.00 HP
IN7001 100% NML Halmstad program FRIS VT 2020 to fulfil the requirements of Master´s Program
(120 credits) in Industrial management & innovation 120 credits at,

The School of Business, Engineering and Science, Halmstad University, Kristian IV: s väg 3, P.O. Box 301
18 Halmstad, Sweden Phone: +46 35-16 7100. All rights reserved.

No part of this thesis may be reproduced without the written permission by the authors Contact:

rahloc17@student.hh.se;
 ACKNOWLEDGEMENT

Firstly, I would like to thank Management of Venkateshwara hospital for their kindness and support during
these hard times to help me with my work. I would especially like to thank the director of Venkateshwara,
and my Co-supervisor Dr. Nagendra Solanki for allowing me freedom and constant support to aid in data
collection. His warmth and professional expertise were one of the key reasons for this study to be a
possibility.

I also would like to extend my sincere gratitude towards my co-supervisor Dr Anant Pandey, Associate Prof.
Venkateshwara College, University of Delhi, for providing his professional guidance. I would also like to
thank my main supervisor Prof. PD Sahare faculty of Delhi university in providing expert technical
knowledge and providing a solid structure to the research.

I would also like to thank respected faculty of the course namely Deycy Sanchez who in the monthly
seminar sessions provided me with expert guidance allowing me to learn, grow and understand the
shortcoming and positives of the work. This helped me to overcome my fear and provided me with
encouragement to keep moving forward. I would also like to thank my fellow peers who provided positive
critique and support to keep digging and do a great job.

Lastly, I would like to extend my sincerest thank Dr. Maryam Imam and Dr. S.P Lochab for providing the
research idea and final proof reading.

Finally I extend my gratitude towards my parents and family members for their support !

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ABSTRACT:

In the last two decades Innovation in healthcare has brought about a significant transition from the
conventional methods relating to activities within the healthcare system such as medical record journaling
and patient diagnosis and additionally to the way clinical care is delivered to the patients. Service innovation
as opposed to product innovation is integration or positive increment of new or existing services cum
processes in the system through introduction of new methods, techniques, or abstract services. Healthcare
industry is primarily a service driven sector. As compared to other industries it is unique given its setting.
It is emotionally vulnerable, highly sophisticated and encounters life-death situations on a daily. Service
innovation holds the key for large private multi-speciality to move forward.

As of now, numerous challenges plague the healthcare sector such as increased healthcare costs, reduced
monetary and ethical quality of clinical value care. Service innovation holds the key especially for large
private multi-speciality to move forward towards. Inclusion of ancillary services such as rehabilitation,
testing, nursing, emotional care coupled with digital service innovation (Telemedcine, Electronic health
records, billing systems) overcome challenges of efficient billing, remote diagnosis, emotional burnout, and
high medical expenditure for patients.

The purpose of this thesis to underline the need for service-based innovation and its framework in
correlation to a complex healthcare system. Case of an upcoming super-speciality Venkateshwara hospital
located in New Delhi, India is analysed to answer the research question and understand theoretically the
conflicting nature of barriers of different stakeholders involved in the process. Currently, most literature is
centred around the importance of product innovation, with lacking focus on concept of service science. The
study fills the gap by providing an exhaustive approach of defining service-based innovation within
healthcare setting and addressing difference between product drive logic and service dominant logic.
Additionally, a new service model is implemented utilising NK Kauffman model and Greenhalgh’s (2008)
eight pillar model.

Since the Hospital is a private entity, paradox specific to healthcare that is “ethical vs economical”
conundrum is assessed through primary empirics. Complexity of a tertiary healthcare organisation is
addressed in relation to level of interrelatedness between services innovation. Venkateshwara as multi-
speciality service system ranks into a highly complex organisation with high interrelatedness between
varying components.

Study is qualitative with explorative nature. Primary data is collected via semi-structured interviews and
physical observation of the organisation, while secondary data is collected via official website and
brochures. Triangulation method serves the purpose of data analysis and rigour. Data Analysis section uses
thematic coding to generate themes and complexity of Venkateshwara Hospital is mapped through
component and interrelatedness graph.

Discussion section puts forth detailed overview of over-arching and sub themes coupled collected data
(Primary and secondary) to highlight significance in need for service innovation. Results formally answer
the research question. New services such as value-based care and telemedicine are discussed. Challenges
specific to Venkateshwara hospital are put forth and categorised by needs of different stakeholders when
implementing the service innovation framework. Concluding remarks include future need of service
innovation. Lastly, theoretical, and practical implications of the study are provided.

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Table of Contents
INTRODUCTION .................................................................................................................................. 8
1.1 PRIVATE HEALTHCARE: Indian Context ...............................................................................................................................11
1.2 PROBLEMATISATION .....................................................................................................................................................................12
1.3 RESEARCH QUESTION ..................................................................................................................................................................15
1.4 RESEARCH OBJECTIVES ................................................................................................................................................................17
THEORY .............................................................................................................................................. 19
2.1 ORIGIN OF SERVICE BASED INNOVATION ...........................................................................................................................19
2.1.1 CATEGORIZING SERVICE BASED INNOVATION ........................................................................................................21
2.1.2 SERVICE SCIENCE ...................................................................................................................................................................22
2.1.3 SERVICE DOMINANT LOGIC ...............................................................................................................................................25
2.1.4 MULTI DIMENSIONAL APPROACH .................................................................................................................................26
2.2 SERVICE INNOVATION IN HEALTHCARE .............................................................................................................................27
2.2.1 UNIQUE CHALLENGES OF HEALTHCARE ....................................................................................................................28
2.3 TYPE OF HEALTH CARE SERVICE INNOVATION ...............................................................................................................31
2.3.1 ANCILLARY SERVICES ..........................................................................................................................................................33
2.3.2 NEED FOR EFFECTIVE DIGITAL SERVICE INTEGRATION....................................................................................36
2.3.2.1 STAKEHOLDER IMPLICATION .................................................................................................................................37
2.3.3 TELEHEALTH SERVICE ........................................................................................................................................................38
2.3.3 NEED FOR PATIENT SATISFACTION ..............................................................................................................................40
2.4 SERVICE INNOVATION: Quality Assessment .......................................................................................................................42
2.5 HOSPITAL AS COMPLEX SERVICE SYSTEM ..........................................................................................................................43
2.5.1 TERTIARY HEALTHCARE IN METRO CITY ..................................................................................................................45
2.5.2 PRIVATE HEALTHCARE SECTOR OF NEW DELHI....................................................................................................46
2.6 SERVICE INNOVATION FRAMEWORK ....................................................................................................................................48
2.6.1 SYSTEMS APPROACH ............................................................................................................................................................49
2.6.2 COMPEX ADAPTIVE SYSTEM: NK KAUFFMAN MODEL .........................................................................................50
METHODOLOGY ................................................................................................................................ 55
3.1 RESEARCH MODEL ..........................................................................................................................................................................55
3.2 RESEARCH PHILOSOPHY ..............................................................................................................................................................57
3.3 RESEARCH APPROACH ..................................................................................................................................................................58
3.4 RESEARCH STRATEGY ...................................................................................................................................................................59
3.3 CASE DESCRIPTION ........................................................................................................................................................................61
3.4 RESEARCH CHOICE: Semi-structure Interview ..................................................................................................................65
3.4.1 PREPARATION FOR THE INTERVIEW ...........................................................................................................................66

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 3.5 IMPLEMENTATION OF TRIANGULATION METHOD ........................................................................................................71
3.6 PILOT TESTING .................................................................................................................................................................................72
3.7 RELIABILITY .......................................................................................................................................................................................73
DATA ANALYSIS ................................................................................................................................ 74
4.1 THEMATIC ANALYSIS.....................................................................................................................................................................74
4.2 THEME GENERATION ....................................................................................................................................................................78
4.2.1 FIRST SET OF THEMES .........................................................................................................................................................79
4.2.2 SECOND SET OF THEMES ....................................................................................................................................................81
4.2.3THIRD SET OF THEMES .........................................................................................................................................................82
RESULT ............................................................................................................................................... 85
5.1 ASSESSING FRAMEWORK THROUGH COMPARISON .......................................................................................................85
5.2 NEED OF SERVICE INNOVATION FRAMEWORK ................................................................................................................88
5.2.1 UNDERSTANDING NEED: MANAGERIAL PERSPECTIVE .......................................................................................88
5.2.2.1 IMPROVING OVERALL PATIENT SAFETY ...........................................................................................................89
5.2.2.2 IMPROVING FEEDBACK INTEGRATION ..............................................................................................................90
5.2.2.3 PROVIDING ENHANCED PATIENT EXPERIENCE ............................................................................................90
5.2.2.4 TACKLING UNPREDECENTED CHALLENGES ....................................................................................................91
5.2.2 UNDERSTANDING NEED: PROVIDER PERSPECTIVE..............................................................................................91
5.2.2.1 WORK STRESS MANAGEMENT ................................................................................................................................92
5.2.2.2 EFFICENT HEALTHCARE DELIVERY .....................................................................................................................92
5.2.3 UNDERSTANDING NEED: SERVICE RECIEVERS .......................................................................................................93
5.2.3.1 COST EFFECTIVE BILLING .........................................................................................................................................93
5.2.3.2 BENEFIT OF SERVICE PERSONALISATION ........................................................................................................93
5.3 SERVICE INNOVATION FRAMEWORK MODEL: Venkateshwara ................................................................................94
DISCUSSION....................................................................................................................................... 99
6.1 INTEGRATING DIGITAL SERVICE INNOVATION ................................................................................................................99
6.1.2 TELEMEDICINE AS A DIGITAL SERVICE .................................................................................................................... 101
6.1.2 REMOTE DIAGNOSIS AS A SERVICE ............................................................................................................................ 103
6.1.3 ADOPTION OF NEW TECHNICAL SERVICES ............................................................................................................ 105
6.2 NOVEL SERVICE CREATION: USER INVOLVEMENT ...................................................................................................... 106
6.2.1 PATIENT INVOLVEMENT IN SERVICE CO-CREATION ........................................................................................ 107
6.2.2 NEED FOR ANCILLARY SERVICES INNOVATION................................................................................................... 108
6.2.3 SHIFTING TO VALUE BASED CARE .............................................................................................................................. 110
6.3 SERVICE INNOVATION IN A COMPLEX SYSTEM ............................................................................................................. 111
6.3.1 INTER-RELATEDNESS BETWEEN SERVICES .......................................................................................................... 112

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 6.3.2 COMPETITION IN PRIVATE HEALTHCARE .............................................................................................................. 115
6.3.3 SERVICE INNOVATION CHALLENGES ........................................................................................................................ 117
CONLUSION ..................................................................................................................................... 119
REFERENCES................................................................................................................................... 122

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 TABLES:

Table 1 : Defining key service concepts capturing its value, process, and intangible process,
modified & adapted (Katzan, 2008)............................................................................................................. 20
Table 2 : Service innovation defined through demarcation, assimilation and synthesis
perspective (Witell et al., 2017). ................................................................................................................... 22
Table 3 : Value creation in service-based system using S-D logic, modified, and adapted
(Vargo et al, 2008).............................................................................................................................................. 25
Table 4: division of service innovation based on incremental or radical approach
(Samuelsson et al., 2018). ................................................................................................................................ 32
Table 5 : Single case study parameters (Stake, 1995), modified and adapted from Yazan
(2015). .................................................................................................................................................................... 61
Table 6 : Department based breakdown of ancillary and technical services. .............................. 64
Table 7 : Description of managerial respondents. ................................................................................. 69
Table 8 : Description of direct service provider respondents ........................................................... 70
Table 9 : Description of service receiving respondents. ...................................................................... 71
Table 10 : First set of major and sub-themes. .......................................................................................... 81
Table 11 : Second set of major and sub-themes. ..................................................................................... 82
Table 12 : Third set of major and sub-themes. ........................................................................................ 84
Table 13 : Department wise service division and challenges upon integration into a
framework. ......................................................................................................................................................... 115

FIGURES:

Figure 1 : Comprehensive list of all stakeholders in a healthcare setting, collaged from

various online sources...................................................................................................................................... 31
Figure 2: NK Kauffman model to determine successful jump for a firm (Chae, 2010). ............. 52
Figure 3 : Research "onion" methodology construction model (Saunders et al., 2016). .......... 56
Figure 4 : Ten stage interview analysis, adapted from Burnard (1991). ....................................... 75
Figure 5 : Continuous and embedded service innovation implementation approach,
Greenhalgh (2008). ............................................................................................................................................ 96
Figure 6 : Variations in service innovation due to supply side, customer side and
geographical variables. .................................................................................................................................... 97
Figure 7 : Functioning Scheme of remote health monitory system (Grashchew & Rakawsky,
2009). .................................................................................................................................................................... 104
Figure 8 : Degree of complexity of a system based on no. of components and their
interrelatedness (Kannampalli et al, 2011). ................................................................................... 112

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 INTRODUCTION

Healthcare sector is a vital, necessary, and instrumental pillar for a society. Its flourishing as a service
sector is a must for a society to thrive mentally and physically. Unlike any other sector, it cannot be
negotiated with, cannot be comprised with, and needs to be well-integrated and constantly innovated for
both, a developed and a developing economy. For any nation, the main concern is to provide better,
efficient, reliable, trustworthy healthcare services provided at affordable prices for the public (Omachonu
et al., 2010).

The healthcare sector has grown to become a major innovation hub in recent times. Lavis (2003),states
that any positive impact activity in the healthcare sector is referred to collectively as “innovations”, such
as new ideas, beliefs, services, knowledge, practices, programs, and technologies. Later, healthcare
providers were considered within the definition and healthcare Innovation was defined as “a new way of
helping medical professionals work smarter, faster, better, and more cost effectively while providing high-
quality care” (Thakur et al. 2012). Miller & French (2016), viewed the need to see that healthcare as
system an defined innovation in healthcare as transformations regarding designing an adaptive system
with efficient service delivery, to improve coordination, quality, and efficiency. Previously majority of the
studies have focused on innovation as an internal factor in healthcare (Becker et al., 2000; Castle, 2001).
Internal factors included stable leadership, clear goals, task orientated approach, participatory safety,
reflective team practices, active internal marketing, timing, employee motivation and participation, lack
of stress and adequate resources (Edmondson et al., 2001; Ericson, 2001), highlighting the qualitative
aspects of healthcare delivery. While on the quantitative side, R&D department was approached in
context of medical innovation (Hall & Sen; 2002; Hubbard & Love, 2004). Other studies have pointed out
that developments in the healthcare sector are generally positive. However, innovation in healthcare,
tends to represent a unique case, the healthcare setting is high-risk, vulnerable to human emotions and
error and case sensitive. Researchers have indicated that it is possible to change clinician habits and
achieve quality care towards patients (Greco & Eisenberg, 1993), by implementing proper medical services
in healthcare organizations (Shortell, Bennett, & Byck, 1998; Shortell et al., 2001).

The Main advancements so far have been brought forth to find a balance between quality healthcare
delivery system and cost containment (Omachonu et al. 2010). Additionally, pharmaceuticals,
biotechnology, medical devices, and health services, accounts for a large share of the global research
budget (Herzlinger, 2006). Involvement of technological services has opened up new ways to revolutionize

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healthcare delivery and management (Bates, 2002; Scott et al, 2007; Sultan, 2015). Currently, numerous
challenges are faced by the healthcare sector from consumers of the service (Patients) and healthcare
service providers (Berry, 2019). If we take the example of USA, health care costs have risen and account
for 20% of GDP (Papanicolas et al., 2018). On an average developed country are spending more (9.6 % of
the GDP) compared to developing south Asian counterparts (Word Development Indicator, 2012). Despite
rapid economic growth over the last two decades, spending on healthcare in India has not significantly
increased. Spending on health care in India (3.9%) is slightly higher than its South Asian neighbors ' average
expenditure, but significantly lower than the developed nations (Barik et al, 2014). Increased expenditure
thought not limited to can be linked with administrative inaccuracies and financial waste, along with high
prices for pharmaceuticals and lack of an innovative approach in the healthcare services (Cutler, 2011).

Healthcare is a service setting where customer’s needs (patients and their families) are met but with its
own unique challenges. Service based innovation becomes crucial in healthcare, to aid in providing
smooth necessary services, to deal with vulnerable and high emotion nature of care and to consecutively
incorporate technological advances to enhance the competitive structure of a healthcare organization
(Berry, 2019). Van Ark et al. (2003) has defined service based innovation as “a new or substantially
changed concept of service, customer interaction mechanism, service delivery system or technical
framework which, individually but most likely in combination, results in one or more renewed service
functions that are new to the company and change the service / good provided on the market and
involve structurally new services. While on the other hand non-technological services innovations stem
mainly from investments in intangible inputs”.

But why is service based innovation so crucial in the healthcare sector? While the general public
marvels at the scope and pace of innovation in high-profile medical technologies, there is less
praise for innovation in the processes of basic clinical, business, and service delivery. Latest 21st, century
medical technologies are routinely used and incorporated into a service -delivery and patient flow
process— with appointments, waiting rooms, etc.— which has remained fundamentally the same since
the 1950s (Benneyan et al., 2003). Since Benneyan et al. paper in 2003 which mainly focused on
standardized services, Joiner & Lusch (2016) and Mcoll-Kennedy et al. (2017) suggested the need for
innovation in healthcare services which focused on personalized customization of services to deal with
personal, emotional nature of the sector. Unlike the other sectors healthcare industry deals with
situations far critical than other consumer-based industry. A study conducted by WHO (World health

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organization, 2019)1 on preventable cases showed that out of 26 hospitals in middle- and low-income
countries, on an average 8% were those cases which went southwards as a result of inefficient healthcare
service because of ineffective pathways, outdated services, lack of coordination between the service
providers. Out of 8%, 83% were preventable and rest could have been improved with proper service
framework within the hospital. Moreover, the same study pointed out that greater patient engagement
is the key to cost reductions and safer care. It was estimated that 15 Billion dollars could be saved annually,
as cost of preventive care is much lower than cost of the care itself. Therefore, improvement of healthcare
services should be based on patient feedback and proper integration of healthcare services which would
eventually lead to a better future for the healthcare sector and society in general. The increase in both
cost and demand can be directly attributed to advancements in medical technologies and an aging of the
population; we are living longer because of changes in healthcare and society. Nevertheless, the dramatic
increase in healthcare spending over several decades has not been matched by drastic changes in
healthcare outcomes, particularly in developing nations (Joiner &Lusch, 2016). Service Innovation has
become a top priority to confront this situation, through improved improved procedures with regards to
medical care and affordable intervention to existing health delivery services, private as well as public
health institutions are moving towards service-based innovation. The emphasis has also now grown from
a limited focus on medical and radical technical product innovation to include innovation in services of
healthcare delivery, physical processes, and implementation of new service-based innovation model.

Healthcare is a sensitive setting, theoretically speaking challenges such as reduced cost, efficient care and
safety have been addressed in studies focused on product innovation as opposed to service based
innovation. What healthcare requires urgently is introduction of service-based innovation. Innovation in
service means developing new techniques and principles, rather than new core innovations (Preissl,
2000). This suggests a smaller role and influence of radical product development but instead upgradation
of existing services in conjunction with new value creation services especially for the largest organization
in the healthcare sectors, i.e., private multi-specialty Hospitals. For hospitals to shift towards improved
services, they need to be clear about the needs. Assuming they grasp needs such as enabling proper
patient care, improved ancillary services, understanding the needs within the complex system, a service
innovation framework becomes easier to understand and implement in a multi-specialty Hospital.

1
Who.int. 2019. Patient Safety. [online] Available at: <https://www.who.int/news-room/fact-sheets/detail/patient-safety> [Accessed
13 March 2020].

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1.1 PRIVATE HEALTHCARE: Indian Context

Private healthcare providers dominate India's healthcare system. The private sector's share of the overall
healthcare market was just 8% in the early 1950s, but it has since grown to 70% of all hospitals and 40%
of total hospital beds available (Katyal et al., 2015). The private sector in India exists in many forms but
mostly dominated by privately owned multi-specialty hospitals.

Recently, in the intensive care unit of MAX, a multi-specialty Hospital in New Delhi, the nurse was unable
to procure the dialysis equipment for the patient within the required time. The MAX hospital management
investigated the situation and reported that on an average 43 minutes were spent searching for the
equipment, consequentially reducing vital patient care time. To avoid search hassle, assistant physicians
and nurses started hoarding the equipment; this led to false shortage and in turn resulted in MAX investing
in more dialysis equipment. Thus MAX needed an efficient system for nurses to handle the equipment.

MAX on advice of the innovation manager created a new system and subsequently allotted a new room
which was branded as the “Equipment dispensary”. A color-coded scheme was set in place, where all the
medical emergency equipment was placed, which included sterilized injections, blood pressure pumps
and dialysis equipment. Items were marked as “blue” for in use, “red” for not available and “white” for
free to use (Toussaint & Berry, 2013). The new process allowed for faster medical equipment delivery,
reduced patient care time. Berry’s (2019), definition of “service innovation” exemplifies the case of MAX
hospital, MAX hospital was able to cut down their overhead procurement costs by 200,000 USD because
of a simple overhaul “Equipment Dispensary” system. An innovative service process providing a new
benefit or a new way of delivering an existing benefit viewed by customers or those serving customers as
having greater value than the alternatives available. An advancement in service generates value by
providing benefits to prospective adopters that outweigh the monetary and/or non-monetary strain of
converting from the old to the new, contributing to significant acceptance. MAX hospital is a privately
owned healthcare organization; thus, they had monetary flexibility to experiment with service-based
innovation which in hindsight paid off. On the other hand, government funded healthcare institutes such
as AIIMS and Safdarjung are government funded and barely tapped into the potential of service innovation
(Adkoli et al., 2015).

India is a developing economy and as such faces a host of daunting problems such as hunger, malnutrition
and a large burden of air borne disease, all intertwined in a vicious circle — hunger contributes to

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malnutrition, leading to illness (Wakeel et al., 2018). India is also dealing with a crisis involving non-
communicable diseases (NCDs). It is estimated that 60% of all deaths in India account for cardiovascular
diseases, cancers, chronic respiratory diseases, diabetes and other NCDs, rendering them the main cause
of death, ahead of accidents and communicable, medical, prenatal, and nutritional conditions. Non-
communicable diseases impact not only health but productivity and economic development as well
(Harvard School of Public Health, 2016).

Previously, researchers have put forth that accessibility of reliable service innovation framework as key to
affordable and high-quality health care. Cheaper drugs, low-priced health-care infrastructure models,
efficient services can work wonders in a developing country's healthcare sector (Wakeel et al., 2018). In
addition to access to affordable healthcare in India, India is also a populated country facing many social
problems, including access to safe and affordable healthcare (International Institute for Population
Sciences and Macro International (IIPSMI, 2007). In addition to the size of its healthcare challenges, the
Indian background is unique in its heavy dependence on non-subsidized, privately financed healthcare,
unlike developed nations that depend heavily on public healthcare systems. In urban areas, reliance on
private healthcare providers is as high as 70% and in rural areas it is 60% (IIPSMI, 2007).

The thesis is utilizing the case of Venkateshwara hospital based in New Delhi, India. Therefore, naturally
it becomes useful to analyze effect of variables such as competition, internal and external motivation for
service innovation, political and cultural hindrances particular to geographical region in and around New
Delhi. India is a developing country, with private healthcare on a steep rise as pointed out above. Within
the private healthcare, multi-specialty hospitals are growing at a rapid especially in the four major metro
cities. Being the capital of India, New Delhi has large number of highly reputed super-specialty hospitals
such as Fortis, Max, Ganga Ram hospitals etc. which are not only competing within themselves to attract
both national and international patients but also with world renowned government funded super-
specialty Hospitals such as AIIMS and Safdurjung in New Delhi.

1.2 PROBLEMATISATION

Previous researchers have defined - service innovation as new ways of implementing and developing
services involving upgradation of unique set of tangibles (technical services) and intangible (holistic
healing, spiritual and emotional wellbeing) variables in medical development (Toivonen & Tuominen,

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2009). More specifically service innovation is further categorized into radical and incremental (Synder et
al., 2016). The magnitude of change may determine whether an innovation is the former or the latter in
terms of technology, process, product, or cost. This means that innovation taking place are not just the
outcome of delegated innovation programs, but originate from organizational processes such as
efficiency, marketing, and managing human resources. Thus, it can be argued that organizations must
include both the types of innovation (Ottenbacher & Harrington, 2010). With the increasing importance
of service sector in the economy, there has been significant attention given to service innovation over
product-based innovation, Ostrom et al., (2010, p.15) states: "To tackle the challenges of globalization
and economic change, many product-centered companies have concentrated on conventional service-
related innovation over the last decade." Different views correspond to different definition of service
(add-ons to products; a unique set of offer categories; or value creation), there are also different views
on how service innovation should be defined and how service innovation be achieved. Coombs & Miles
(2000) identify three corresponding service innovation approaches: assimilation, demarcation, and
synthesis. This these integrates these three conceptual approaches in understanding and defining service-
based innovation framework necessary to guide an organization to shift from product to service driven
innovation framework.

The central problem to be studied in this thesis are the issues of introducing new services within
a new system, ancillary services and technical services, complexity of a system and challenges in
implementing a robust framework within a healthcare system are considered. The investigation has been
streamlined and narrowed down into three key components.

Firstly, service innovation is growing field with high significance within the theoretical and the industrial
fields. Majority of the firms within an economy are transferring and investing into a service oriented
driven approach of innovation (Sheehan, 2006). Simply put, it is expensive and time consuming to indulge
in a product-oriented innovation approach. The healthcare industry is no stranger to the service
innovation approach to better its stance within a competitive sector. There is substantial research on
service innovation, service science, service dominant logic (Li & Peters, 2019, Chae et al., 2011). What is
lacking are the concepts being implemented within the private healthcare sector. Now, researchers have
broken down service innovation into different perspectives, namely service technology perspective
(Galup et al., 2009), service market perspective (Sumukadas et al., 2004) and service operations
management (Menor et al, 2002). Service technology is addressed in this these via adoption of new

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technical services, service market perspective is addressed through the competitive factor of the
organisation and lastly, service operation is addressed through key inputs of the managerial perspective.

Secondly, even though there are studies which have put across the service innovation perspective within
the healthcare sector (Omachone, 2010; Berry, 2019), they have overlooked the concept of complexity.
Addressing the complexity of a system is important to be able to implement a service-based framework
within the healthcare system. A large system has many components which interact with each other over
a large scale. Within large service systems particularly multi-speciality hospitals, there are various actors
which collaborate with each other to provide the service to the patient across different departments. Each
actor presents its own challenge and a need. Academicians have provided little attention to
highlight different perspectives of implementing service-based innovation from perspective of primary
care gives such as doctors and secondary care providers ancillary services. Multi-speciality hospital is a
complex system, with many service components working in synchronicity with each other to provide high
quality services towards patients. Not only are multi-speciality hospital a major pillar for the healthcare
sector in a nation, but also serve as interesting case to pursue research of current service innovation
components and to be able to suggest a framework suited within an Indian context.

Thirdly, privately funded multi-speciality hospital provide an ethical vs economical conundrum. With the
growing trend toward a technological approach as a cost-cutting strategy, healthcare management are
being pressured to meet productivity goals by implementing cost-cutting solutions. Service innovation
especially for a newly set-up Hospital within a highly competitive environment requires management to
invest in overhauling of healthcare services. On one hand patients are the customers and need to have an
effective treatment for a full recovery. Effective recovery will include emotional, spiritual,
and physical needs fulfilled especially for patients undergoing extensive trauma. Previous research has
shown a phenomenon of infiltration of managerial culture into healthcare sector (Kogstvedt, 2001). In
fact, it appears that managers' primary incentive for achieving these goals is to reduce treatment
outcomes. Simultaneously, the fundamental evaluation of a service's appropriateness tends to be based
predominantly on cost-effectiveness factors, i.e., regarding the environment in which treatment is given,
rather than an assessment of the service's effectiveness (Barile et al., 2015). As a result of this trend, the
healthcare service delivery process is increasingly drifting away from the original doctor-patient relational
approach focused on individual values and needs, overlooking the patient satisfaction. Regarding this, this
study aims to highlight expectations of a patient from a multi-speciality hospital and to address the
emotional health component of a patient’s wellbeing into a service innovation framework.

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1.3 RESEARCH QUESTION

Healthcare is a sector which needs to be treated differently. The healthcare setting unlike other industries
is highly sophisticated, vulnerable, emotionally driven, technology driven and needs to be treated as such.
Previous studies have focused upon innovation in healthcare from the perspective of business modeling,
sustainability, literature analysis and action-based research (Omachon & Einspruch, 2010; Länsisalmi et
al., 2006; Weberg, 2009). Few have pointed out the importance of service-based innovation in healthcare
(Hanseth & Bygstad, 2015; Hwang & Christensen, 2008), little has been put forth regarding the significance
of service-based innovation in healthcare. Also, the same studies have neglected healthcare as a “complex
system” and thus a gap remains in terms of addressing changing variables associated with it such as
stakeholders, ancillary care providers, and effect of government policies particularly on a pivotal
healthcare organization i.e., private multi-specialty hospital.

This thesis will fill in the literary gap and lay in the foundation for firstly understanding the drivers service
innovation in healthcare and consequently addressing the current challenges predominant in the private
healthcare system. Secondly, addressing metro and non-metro city healthcare scenarios within India, and
with it challenges associated with introducing a service-based innovation framework within a privately
owned complex multispecialty Hospital will be addressed and analyzed.

In today’s time, service innovation has become a major necessity for healthcare sector. Clearly it has more
importance in a privately owned Hospital, where financial resources are lean and competitive nature of
market requires highest level of service for the patients to retain loyal clientele. India being a dominant
force in providing high level of medical services which has pushed medical tourism to grow exponentially
needs its services to be upgraded and expanded on a regular. Still the theoretical literature and
approaches to this phenomenon are under-developed, under evaluated and core variables such as
complexity of large - scale systems have not been integrated. Therefore,

“Q.What is the need of implementing a service-based innovation framework within a

complex private multi-specialty Hospital?”

Becomes a well-rounded research question with both theoretical and practical implication. The thesis will
be an explorative attempt to theoretically addressing the challenges faced by the healthcare sector and
need based integration of service-based innovation framework suited for multi-specialty hospital in a
metro city.

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In answering the above research question, this thesis seeks to add context-rich insights into the role of
service innovation in private healthcare sector, recognising two significant gaps in previous understanding
of the concept. Firstly, to note and put forth the equivocal evidence between the relationship of a complex
system and service-based innovation between, which denotes the importance of context in examining
this relationship. Relevant research based on private healthcare sector within India are assessed (Tiwari
& Herstatt, 2012). However, there is limited knowledge of how large super-speciality hospital chains
catering to the service innovation segment simultaneously balance the exploration and exploitation of
available resources to deliver high quality but affordable healthcare to national and international patients.
This gap remains despite the growth of innovation research within healthcare emerging economies,
especially in India. The paradox of managing stakeholder needs in a recently established super-speciality
healthcare institute (Venkateshwara) while overcoming regulatory, geographical, and situational
challenges presents a fertile opportunity to identify service innovation framework in a developing country
as opposed to developed nations.

It is important to highlight the key definitions of the terms used in the research question for mainly three
reason. Firstly, to allow the researcher to narrow down the scope of the literature, secondly to avoid
contextual confusion.

“Service Based innovation” – Van Ark et al. (2003) have defined SBI in three broad yet distinct contexts.
Firstly, innovation in terms of service products, i.e commodities or public services. Although it can include
technological components, but it mostly deals with service design or NSD (New service development).
Secondly, innovation in service processes includes innovation service processes, innovation may or may
not be technical, and technique based which involves organization restructuring and thirdly, management
of service innovation within service organizations.

In this thesis the Service concept will be referred to as a concept that is a new a specific market–a new
service in turn, or a "new value proposition" in the terminology of Edvardsson et al., (1996). Many service
innovations include the service's relatively intangible features, and others include new ways to coordinate
solutions to problems (new or familiar). Examples may include new types of bank account or service of
information. There is much discussion about "formats" in some service sectors, such as retail, such as the
organization of shops in different ways (specialized, based on quality or cost-saving etc.). In this case, new
information technology is especially important to services since it allows for greater efficiency and
effectiveness in the information-processing elements that are prevalent to a great extent in services
sectors. Other than this, service innovation can be tangible or intangible with regards to health. Tangibles

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are services which are physical in nature such as diagnosis and routine treatments, while intangible mostly
pertain to services which deal with the emotional aspect of healthcare.

“Complexity”-In both natural and social sciences, complex systems are becoming increasingly important.
Scholars and researchers have pointed out the need of classifications of complex systems. There is
however no clear description of a complex system, let alone a definition that apparently all researchers
agreed upon on (Ladyman & Lambert, 2013), which states that –

“In one characterization, a complex system is one whose evolution is very sensitive to initial conditions or
to small perturbations, one in which the number of independent interacting components is large, or one in
which there are multiple pathways by which the system can evolve. Analytical descriptions of such systems
typically require nonlinear differential equations. A second characterization is more informal; that is, the
system is “complicated” by some subjective judgment and is not amenable to exact description, analytical
or otherwise.”

This aligned with the research question for two main reasons. Firstly, healthcare sector involves various
internal and external stakeholders, thus increasing “Independent interacting components”. Secondly, as
mentioned earlier, healthcare is critical and sensitive, though it involves commercial aspects, defining
characteristic solely depends on accurate treatments of patients, hence “subjective judgment” of end
users plays a defining role.

1.4 RESEARCH OBJECTIVES

❖ To categorize service innovation literature in healthcare, in doing so systematically, narrowing

understanding the origin of service innovation by referring to literature on service systems.
❖ To highlight key stakeholders within healthcare of a multi-specialty Hospital.
❖ To strongly distinguish between product innovation and service innovation by addressing the
foundations of product and service dominant logic.
❖ To highlight the need for digital service innovation within a new health organization surrounded
by established competitors.
❖ Address intangible challenges of healthcare providers such as emotional burnout and holistic
approach of the service providers to the recipients (Patients). In doing integrating and co-

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 creating value for both the organization and consumer, which is the foundational premise for a
service-based system.
❖ To propose a service innovation framework for Venkateshwara Hospital based on its degree of
complexity utilizing the NK Kaufmann model for adaptive systems and Greenhalgh’s innovation
diffusion model as applied to a private hospital.
❖ To predict a future course of action and implications based on the empirical findings, which
becomes an important component given the highly complex situation of the global pandemic in
which currently hospitals are at the focal point.

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 THEORY

This section of the thesis will put forth relevant theories and models relevant to the research question.
The sections will progress and is subdivided further to highlight the main concepts of the study. First
section will introduce theories on service system and their significance in defining the current concept of
service innovation. The main aim includes defining multi-speciality hospitals and differentiating them from
other types of healthcare systems. Along with it addressing multi-dimensional nature of service innovation
and describing need of ancillary service within multi-speciality hospital.

Secondly, service innovation framework will be addressed followed by section on complex systems.
Finally, challenges pertaining to service-based innovation in healthcare will be assessed.

2.1 ORIGIN OF SERVICE BASED INNOVATION

Service innovation can be an efficient way for a business to achieve and maintain a competitive
advantage. Adopting service strategies may help firms in overcoming the problem of maintaining growth
in saturated markets, as well as the problem of commoditization (Reinartz & Ulaga, 2008). This is an
important aspect of service innovation it provides a definite advantage to firms, who already have scare
financial resources. For example, if two privately owned multi-speciality hospitals opened in the same
locality, providing the same medical procedures, the consumer in this case the patient would avail the
lowest price product. But the procedure could be made efficient, relaxing, and easier both financially
and emotionally by bettering the service framework which would include upgradation of ancillary
services such as nursing and rehab but also provide better payment methods. Thus, service innovation
serves two-fold purpose not only does it create more value but also provides a better holistic approach.

Before, diving further into the service-based innovation perspective it becomes necessary to define
what exactly is a service and what are its basic concepts? The table below categorises basic of service
concepts needed to bring further clarity.

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 CONCEPT DEFINITION
SERVICE A service is traditionally characterized as work done by one individual or group
for the benefit of another. It is an independent activity. An organisation offers
services and knowledge rather than tangible goods. It can also be after services
provided by the manufacturer or retailer of a product. It is also referred to as a
provider/client interaction in which both parties participate and both parties’
profit from the relationship. The client and the provider share information and
take different positions in the process. A service is a type of operation that is
consumed at the point where it is produced. In most cases, a service element is a
process–or a set of activities–that can be applied in theory to industry, education,
government, and personal endeavours.
SERVICE SYSTEM A service system is a socially developed set of service events in which participants
exchange beneficial behaviour through a knowledge-based strategy that captures
the importance of a provider-client relationship. The idea is based on the concept
of a system, which is a set of interdependent components that work together to
achieve a common goal. The inherent service strategy is a complex mechanism
that orchestrates (or coordinates) infrastructure, staff, partners, and customers
in the co-creation of value. Research on service systems involves a systematic
study of different and complex service events to create a view of the service
scope, which is based on a theoretical framework for developing economies of
coordination.
SERVICE ➢ Service is a process - This notion is paramount to recognizing the far-
CHARACTERISTICS reaching importance of service science as an academic discipline. A
service takes input and produces output. In between the input and the
output, there exist one or more steps that constitute the service
process.
➢ Service Captures Value - A service event creates a benefit to both the
client and the provider, in the form of a change of state that is reflected
in their physical condition or location, a change in their possessions, or
in their assets.
➢ Service is intangible - A service event does not produce a physical
product as a result; however, a service can produce a noticeable result.
➢ Service is Co-produced - This characteristic emphasizes the fact that
because of the simultaneity of client and provider participation and the
fact that a service event does not result in the production of a good, but
rather in the state of something, it is commonly referred to as the co-
production of value in the sense that if either of the participants were
not present for the service event, it could not be interpreted as being a
service.

Table 1 : Defining key service concepts capturing its value, process, and intangible process, modified & adapted
(Katzan, 2008).

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2.1.1 CATEGORIZING SERVICE BASED INNOVATION

In previous research, service innovation is mentioned in vast fields of work, including significant
contributions in marketing, management, and operations. Though the term is commonly used, few
research papers have described service innovation specifically. Definition of term “service innovation”, is
limited and loosely defined, and requires further exploration and development (Ostrom et al., 2010). The
concept of service innovation is particularly problematic in that there is no common understanding of its
meaning (Flikkemaet al., 2007; Toivonen & Tuominen, 2009). To simplify the process of analysis, it is useful
to divide the definition into segments to understand the contextual definition. Following, Coombs & Miles
(2000) approach, the table below serves the purpose of defining “service” based on three broad
contextual themes. Firstly, by assimilation, which loosely translates to understanding of ideas and
information through process of taking in the data. The most numerous studies using the assimilation
perspective (Gallouj, 2002) focus on the impact of new technology, which early studies considered to be
the main driver of service innovation (Tether, 2005; Toivonen & Tuominen,2009). Secondly, by
demarcation, which loosely translates to action of fixing a clear boundary or limits. In comparison, the
demarcation indicates that service innovation varies significantly from product innovation in its essence
and character (Coombs & Miles, 2000). This viewpoint questions the theoretical basis for innovation
studies (Drejer, 2004), and calls for new sector- specific ideas and principles for understanding and
evaluating business innovation (Hipp & Grupp, 2005; Tether, 2005).Thirdly, by synthesis, which here refers
to combinations of both the former mentioned perspective. The main idea of this approach is that service
innovation theories should be broad enough to include both service and manufacturing innovation
(Coombs & Miles, 2000), and provide an integrative viewpoint that is not limited to technological
innovation.

ASSIMILATION DEMARCATION SYNTHESIS

“SERVICE Giannopoulou et al.
INNOVATION”- (2014) –
AS WHEN “A type of product innovation
MENTIONED IN involving the introduction of a
THE TEXT. service that is new or
significantly improved
with respect to its
characteristics or to its
intended uses” (p.25)
Kuo et al., (2014) – “A
Jian & Wang (2013) –
“Enterprises' intangible
activities formed in the
process of service, using a
variety of innovative
ways to meet customer
needs and maintain
competitive advantage.”
(p. 27)
Enz (2012) –
Ordanini & Parasuraman
(2010) –
“Offering not previously
available to the firm's
customers—either an
addition to the current
service mix or a change in
the service delivery
process—that requires
modifications in the

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 New way of business
thinking to reform relatively
conservative and inflexible
operational procedures and
processes, which can
transform organizations
to better meet the needs
of their markets “(p.697
CONTEXT BASED Innovation Outcome
DEFINITION OF
SERVICE
INNOVATION IN
THE TEXT
“The introduction of
novel ideas that focus on
services that provides new
ways of delivering a
benefit, new service
concepts, or new
service business models
through continuous
operational improvement,
technology, investment
in employee performance,
or
management of the
customer experience.”
(p.187)
Service Innovation
Outcome
sets of competences
applied by service
providers and/or
customers”
Skålen et al (2015) – “The
creation of new
value propositions by
means of developing
existing or creating new
practices and/or
resources, or by means
of integrating practices
and resources in new
ways
Service innovation
outcome as ongoing
process

Table 2 : Service innovation defined through demarcation, assimilation and synthesis perspective (Witell et al.,
2017).

2.1.2 SERVICE SCIENCE

What is the difference between service science and service innovation? Which came first? Is one the
subset of the other? It is peculiar that the terms “Service science” and “service innovation” are being used
in similar contexts in research either interchangeably or defined ambiguously but authors have not
provided clarity as to which is which?

It is important to distinguish between the two to understand the conceptual impact when applied within
healthcare. The origin of concept of service science implementation can be traced back to IBM. IBM is a
multinational information technology corporation. In December 2004, IBM's CEO and chairman, Samuel
Palmisano, published an article in the U.S. Council on Competitiveness journal Innovate America calling
for more research into "service science." (This concept was replaced with Services Research,
Management, and Engineering in July 2005) (Katzan, 2008). Although there have been few attempts to
provide a well-rounded definition of service science the most widely accepted has come from Paul Horn
(Head of IBM research) who stated that the interdisciplinary application of technology, engineering, and

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management for the purpose of enhancing services is known as service science. Service science also leads
to systematic innovation and increased efficiency, and it is the driving force behind service improvement
through increased predictability in productivity, quality, performance, enforcement, growth, information
reusability, and operational innovation. In addition, service science investigates the importance of service
providers and clients in the context of collaborative activities and risk sharing (Vargo et al 2008). It can be
argued that service innovation is an outcome of service sciences.

According to their research paper on “service science and service dominant logic” in 2008, IBM
researchers Spohrer et al., put forth and categorised ten foundational concepts of Service Science which
are necessary to be taken into consideration when forming a service framework for an organisation. These
parameters become important as a multi-speciality hospital as service delivery system is governed by
these fundamentals.

a. Resources - A resource can be described as something that has a name and is useful.
Physical and non-physical tools, on the surface, tend to be potentially useful. Physical-with-rights
(e.g., a person), not-physical-with-rights (e.g., a business), not-physical-with-no-rights (e.g.,
shareable information or records, such as a patent description), and physical-with-no-rights (e.g.,
a patent description) are the four forms of resources (e.g., a technology or part of the natural
environment).
b. Entities - The service system entities are complex resource configurations that can execute
behavior (or just entities, or sometimes just service systems). Not all resources are service system
entities, but not all service system entities are resources. Citizens, corporations, government
agencies, and non-profit organizations are only a few examples of organisations. People,
organisations, mutual knowledge, and infrastructure are all part of service system entities, which
are complex value-creation configurations.
c. Access rights - Intuitively, access rights are concerned with the social norms and legal regulations
that govern resource access and use. Access rights are relevant because many value-cocreation
interactions are mechanisms for modifying an entity's resource access rights. Access rights are
also a constraint on service system interactions and results, but they are more vulnerable to
violations than physical and logical symbol system restrictions.
d. Value-Cocreation Interactions: Otherwise classified as value-proposition-based relationship
mechanisms, these are the promises and arrangements that individuals commit to because they

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 assume that carrying them out would result in value-cocreation for all parties. A business model
is a recurring value proposition that generates income for a company.
e. Governance Mechanisms: Governance mechanisms, on the surface, tend to be a form of value
proposition between an authority service system entity and a community of administered service
system entities.
f. Outcomes - Value cocreation is but one of the potential outcomes when service system entities
communicate. In non-repeated two-player games, introductory game theory predicts four
potential outcomes: win-win, lose-lose, win-lose, and lose-win. Things are more complicated in
the real world, with more teams, repetitive play (short- and long-term), and more potential
variances in outcomes.
g. Stakeholders - Customers, providers, authorities, and competitors are the four main groups of
stakeholders. Designing new and improved value-cocreation structures and governance
mechanisms, as well as new and improved types of service system organizations, involves thinking
about different stakeholders and their perspectives on resource access.
h. Measures - Quality, productivity, security, and sustainable innovation are the four main types of
metrics. Customers evaluate efficiency, suppliers evaluate effectiveness, authorities evaluate
compliance, and rivals, in a very real sense, evaluate sustainable innovation. There is no
encouragement or opportunity to innovate if there are no competitors.
i. Networks - Service system entities, also known as service system networks, communicate with
other service system entities (normatively) by value-propositions. The patterns of regular
interactions for a population of individuals can be interpreted as networks with direct and indirect
communication strengths over time. Routine interactions can be defined as relationships, and a
relationship marketing approach that focuses on building value for multiple stakeholders can
provide a lot of insight into service system networks (Christopher et al., 2002).
j. Ecology: The macro-scale relationships of populations of various types of service system entities,
also known as service system ecology. Different types of service system entities exist in
communities, and the service system ecology or service world is the set of all service system
entities (Bryson et al., 2004).

Service science is study based on and out of service systems, especially how complex arrangements for
resources generate value inside and through firms (Spohrer et al., 2008). The idea of developing a science
of service arose several years ago, when business and academia realized that more and more economic

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activity was driven by intangible, heterogeneous, abstract, and perishable offerings (i.e., intangible,
heterogeneous, inseparable, and perishable offerings) – both within individual firms and across
economies – but that service innovation lacked the same scientific and engineered foundation as other
types of innovation.

2.1.3 SERVICE DOMINANT LOGIC

Aligning with the two fundamental concepts of service system; “Service is co-produced” and “Service
captures value” emerges the concept of service dominant logic (S-D logic). According to the S-D logic, all
trade is based on operation, and products are merely instruments for the distribution and application of
services when they are involved. (P. 40, Vargo et al., 2006). To put it another way, commodities are
vehicles for delivering services. Knowledge and skills are critical tools for competitive advantage in S-D
logic (Johnson et al., 2005). On the other hand, in case of the product dominant logic, economic trade is
used to create and distribute goods for sale. The value or utility of a good is embedded by a firm's
manufacturing process, which may include capital from other firms, and the value of the good is reflected
by the market price, or what the customer is willing to pay. Standardization and economies of scale, in
this view, are the keys to achieving maximum efficiency – and profit. Value creation and understanding
its foot holding becomes of utmost importance when dealing with service systems. Simply put service-
based innovation is guided by service dominant logic. Table below characterises value creation
characteristics for organisation, firm, private or public enterprise service system.

VALUE PARAMETERS S-D LOGIC

Value Driver Value in use or value in context
Creation OF Value Firm, network partners and customers
Process of Value Creation Customers begin the value-creation process
by using what firms sell in the market.
Purpose Of Increased Value Increase adaptability, survivability, and
system well-being through service (applied
knowledge and skills) of others. To stay
competitive in a dominant market.
Role Of Firm Propose and Co-create value, provide
service
Role of Customers Co-create value through the integration of
firm provided resources with other private
and public resources.
Table 3 : Value creation in service-based system using S-D logic, modified, and adapted (Vargo et al, 2008).

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2.1.4 MULTI DIMENSIONAL APPROACH

There have been a few attempts made to understand and breakdown the service innovation process in
its entirety. Hertog D., (2000), for example, proposed the "four-dimensional model of service innovation,"
which encapsulates the concept of service innovation in a knowledge-based economy. The four
dimensions of the model are as follows (pp. 494–498):

➢ Service Concept – Which refers to any new type of service in the market.
➢ Client Interface – Which is the engagement of clients in the service production and labels them
as a co-producer of the service.
➢ Service Delivery System – Which refers to novel ways of delivery services.
➢ Technology – Which refers to efficient engagement of technology in providing and carrying out
intangible service.

Another approach was put forth by Toivonen & Tuomnen (2009), who based their foundation on the
premise on the degree of collaboration and formality. The five-service based innovation processes in this
relation are –

a. Internal projects – Service innovation focusing on internal aspects of innovation on a firm,

mostly incremental innovation.
b. Internal Innovation projects – processes focused on improving service production systems.
c. Innovation projects with Pilot customer – testing and feedback from customer.
d. Innovation projects tailored for customers – service innovation for specific problems.
e. Outsourcing Services – Services are integrated from other service providing agents. For
example, IT industry provides information tracking and safeguarding for sensitive patient data
in case of Hospitals.

Addressing the importance of measuring Service based innovation in service dominant organisation such
as healthcare -

One major concern in regards with service innovation was how to measure it? Should it be done in terms
of quantifiable productivity terms as with product driven innovation? Services are heterogenous in nature
and intangible in nature. Meaning they differ from each other in terms of type, duration, quality, co-
producers involved, and value captured. They are also invisible, for example a nurse taking care of a
patient after a surgery is an abstract service.

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Djellal & Gallouj (2010) pointed out a two - fold gap for underdeveloped studies understanding service-
based innovation. The first one being the innovation gap. The innovation gap, according to the authors, is
a measure of the disparity between the reality of innovation in a service economy and how conventional
metrics capture and measure it. This statement is in line with Salter & Tether's (2006) findings, which claim
that one explanation why services are not given enough credit for their innovation is due to their low R&D
strength and patenting. In general, it could be argued that higher focus on product innovation driven by
R&D lead to a lack of attention to service innovation.

Second one being the productivity gap which, “reflects the imbalance between the reality of service
economy output and performance as measured by conventional economic tools (i.e., productivity and
growth)” (P. 8in Djellal & Gallouj, 2010). This performance difference, according to these scholars, has its
origins in economics and, more specifically, in Smith's work, which "compared the productive work
involved in manufacturing with the unproductive work involved in services, which vanished at the very
moment they were made" (Djellal & Gallouj, 2010, p. 8). This perspective emphasizes the intangible
characteristics of services, which make measuring them more difficult as opposed to conventional,
observable outputs like products. According to Vargo & Lusch (2004), academics' underpinning the
concept of service innovation is due to the conventional good-centred dominant logic, which focuses on
tangible resources, transactions, and production processes and is still prevalent in economics and business
thought. When applied in context of a hospital setting, these ideas present an interesting line of thought
to see what and how do they new services affect the patients and how do they reflect a positive impact
in terms of healing.

2.2 SERVICE INNOVATION IN HEALTHCARE

Service innovation in healthcare is a necessary ingredient for a thriving society, but there is also
tremendous financial and political pressure to provide quality and cheaper healthcare with available
resources. Although uniformity is needed through evidence-based clinical standards, healthcare services
often require customization to fit not only the medical condition of a patient, but also the age of the
customer, mental health, personal characteristics which extends to network including family and friends
(Joiner & Lusch 2016).

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It has become more than crucial to continuously provide service-based innovation within the healthcare
sector to relieve build up financial, emotional, and sensitive care delivery of the system. Healthcare
services can be a risky undertaking at times. Carelessness, inadequate staff coordination, professional
incompetence or exhaustion, needless treatment, or combinations of these factors injure far too many
patients. Several million patients in the United States develop preventable infections during hospital stays
each year due to several causes, including clinicians' inadequate hand hygiene, insufficient antiseptic
preparation of a surgical patient's skin, and failure to lift the head of a manually ventilated patient's
hospital bed, resulting in pneumonia (Torres et al., 2017; Anderson et al., 2014; Chassin et al., 2015).
Patients are often at risk of prescription mistakes, such as administering the incorrect drug or the correct
drug at the incorrect dosage or receiving several medications that interact negatively (Nuckols et al., 2014;
Bates & Slight, 2014; Wittich et al., 2014). Over diagnosis, which leads to overtreatment, may also affect
patients (Davies et al., 2018). These problems should be addressed when innovating services, a framework
cannot overlook details as minute as simple hygiene, which becomes more so important given the

2.2.1 UNIQUE CHALLENGES OF HEALTHCARE

Service challenge unique to healthcare – Emotional authenticity

As mentioned above, a service transaction takes place when both the client and the provider benefit from
it. But unlike other service setting for example that of an automobile industry, the emotional stake is not
high, and client and provider service transaction does not require emotional support or vulnerability as
compared to that of healthcare sector. As opposed to the automobile industry where the customer is
approached from the market profit driven mentality, patients on the other hand need to be treated as
recipients of care (Mcqueen, 2000).

Now, when we mention service innovation, where innovation being an additional value added to the
service system, should we acknowledge the emotional wellbeing of the patient? After all, the basic thumb
rule for any organisation is customer satisfaction, and then clearly a happy and cured patient is a satisfied
customer.

Speaking purely theoretically, previous researchers have identified linguistic changes influenced by
business-driven mentality (Mann, 2005; Bolton, 2001). As responses to "patient satisfaction surveys"

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become a key means of assessing the services rendered, mechanical efficiency sometimes takes
precedence over holistic wellbeing in this business context. According to Hunter and Smith (2007), the
National Health Service in the United Kingdom has changed from a public to a commercial model by
binding some of its activities to monetary rewards. As a result, while much of healthcare provider
professional training is focused on the premise that the job is qualitatively distinct from operating in a
retail service environment, hospital management strategies and organizational objectives are inclined
towards a profiteering model.

Contrary to this, healthcare organisations have previously tried to implement a service care delivery
model. Employees who deal with matters of life and death on a regular basis are uncommon in the retail
service sector. Healthcare workers are experiencing more emotional dissonance and doing less genuine
care work with customers especially in the privately owned healthcare organisation where they are
needed to fulfil their duties under heavy workloads and fixed pay (Hochschild, 2003).

This is reinforced by the fact that time and budget limitations require primary care givers (Nurses,
physicians) to neglect other crucial aspects needed for holistic healing (Psychological, spiritual, and
emotional) but rather focus on the physiological treatment. Nurses complain that they are caught in a
constant state of conflict between who they want to be as a nurse and who the job environment gives
them time to be because expressive nursing is not included in the standardized tests used to assess health
care (Bone 2002). Healthcare professionals confessed that they frequently avoid personally interacting
with patients as productivity is strained, workloads grow, and time demands increase, so that they can
complete the requisite physical tasks (Weinber et al., 2000). Therefore, it is a challenge for the healthcare
organisation to employ a holistic service-based innovation framework due to its unique nature.

Need to overcome Burnout Challenge -

A unique challenge which sheds light on this sector is the concept of burnout, a condition characterized
by fatigue, cynicism, and a reduction in work-related effectiveness, is common among physicians in the
United States (Shanafelt et al. 2017). According to study, more than half of all doctors in the United States
display at least one symptom of burnout (Shanafelt et al. 2015; Shanafelt et al. 2017). Burnout has been
related to higher physician turnover, higher rates of medical errors, and higher mortality rates for
hospitalized patients under their care (Wallace et al. 2009; Tawfik et al. 2018). When it comes applying
new care delivery services, primary care providers must carry out their duties with compassionate
attitude. Thus, in the process nurses with the doctors too suffer from job dissatisfaction (McHugh et al.

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2011; Shanafelt et al. 2015). Improving the standard of healthcare requires persistent, committed, and,
at times, brave efforts to address and overcome the primary causes of clinician burnout. Serving sick
customers necessitates enthusiasm, idealism, energy, and a sense of intent for the job, all of which are
victims of work-related burnout (Swensen, 2018). This phenomenon becomes particularly useful in todays
context when the primary care providers are working overtime and at a higher risk than before. Thus, it
will serve as a significant concept when collecting the primary empirics.

Need to overcome Stakeholder Challenge -

The innovation process is both dynamic and multidimensional, regardless of the field in which it is
implemented. Healthcare sector innovation has its own unique challenges. To understand the challenges
to service innovation, primary stakeholders in healthcare must defined and their individual challenges and
needs put across (Omachonu et al., 2010).

Nurses, physicians, rehabilitation therapists, ancillary services providers such as dispensary services,
ambulance services from the stakeholder core. Since these actors are involved directly with the patients
the stress of providing a better holistic experience falls upon them. Omachonu et al., (2010) referred to
healthcare stakeholders (patients, patient advocacy groups, healthcare providers, doctors, other
healthcare professionals, etc.) as pioneers to many of the changes in healthcare. Further he mentioned
that government is forcing the need for reform on healthcare organizations to address healthcare issues
and challenges.

This becomes a particularly interesting outlook as any new service implementation affects all the
stakeholders. Within these the primary focus of the thesis is on the direct service providers (Doctors,
nurses and ancillary care providers), service recipients (Patients), and framework developers or indirect
service providers (Managerial actors, IT adviser, business manager, Innovation consultant etc.).

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 Figure 1 : Comprehensive list of all stakeholders in a healthcare setting, collaged from various online sources.

2.3 TYPE OF HEALTH CARE SERVICE INNOVATION

Health services share many features with other types of services. They are intangible in the sense that the
primary benefits of medical diagnosis, care, and patient education are derived from performances. Rather
than acquiring tangible assets, patients (and third-party payers) incur a cost. Intangible services provided
by tangible goods (e.g., surgery in a well-equipped operating room) and tangible goods supported by
intangible services (e.g., pharmaceuticals and pharmacy services) are often included in treatment.
Understandably so, these services are labour intensive and need to be highly personalised owing to its
nature of working (Berry & Bendapudi, 2007).

A key feature of healthcare services is that they are typically inseparable because they are delivered for
individuals rather than for their land. Patients must be physically present when the doctor or nurse is
available to provide the treatment (for example, in a doctor's office or hospital). Inseparability can be
difficult for elderly, far-off located or inconveniently placed patients, and it frequently frustrates patients
who must wait for long periods of time for service (Cepeda-Carrion et al, 2012).

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The services within healthcare are diverse and wary from patient to patient. Being inseparable,
intangible, and perishable it becomes a difficult to classify service innovation within under one bracket.
A comprehensive attempt at this has been put across by Samuelsson et al., (2019). They separated
service innovation activities within healthcare within incremental and radical service innovation. The
case of Swedish healthcare was undertaken where both private and public health organisation were
taken into consideration. Hospitals were inquired about new service innovations, upgradation of
services and incremental steps to better services. Table below summarises the result.

Radical Service Innovation Incremental Service Innovation

A process for discharging patients with the
collaborations of caring neighbors
A process for discharging patients with the
collaborations of caring neighbors
A new model of care for senior patients with multiple
diagnosis
The implementation of a mobile solution for testing
drugs
The development of patient processes in multi-
professional teams
A process for discharging patients with the
collaborations of caring neighbors
A management system that connects social services
with healthcare
A new model of care for senior patients with multiple
diagnosis
A new transportation stretcher for small children in
ambulances
The fusion of a hospital and primary care units to
provide “borderless care”

Table 4: division of service innovation based on incremental or radical approach (Samuelsson et al., 2018).

The division is aligned with the commonly referred Lancastrian distinction between radical and
incremental service innovation is determined by how different the new offering's service characteristics
are from previous offerings. A radical service innovation has no service characteristics in common with
the previous offering, while incremental service innovation is focused on minor improvements to existing
service characteristics or the inclusion of a few new service characteristics without making significant
changes to the overall offering. The Lancastrian viewpoint looks at what a service innovation is from the
inside out, rather than from the perspective of the consumer or the impact that the service innovation
has on the market. Windrum & Garcia-Goni (2008) proposed that radical service innovation is a shift in
service characteristics, which often entails radical improvements for healthcare consumers and internal
resource organization.

The reasoning for dividing service innovation process within healthcare into incremental and radical
service innovation was too able to implement an efficient service- based framework. To succeed in
bringing a service innovation framework into practice, the right number of resources and intentional

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actions are needed by the Multi-speciality hospital to, make, and sustain institutional arrangements
(Koskela-Huotariet al., 2016). Most service developments, according to Gustafsson et al. (2016), tend to
be incremental, consisting of several minor improvements in a service ecosystem. One explanation for
the incremental existence of service innovation is that implementing and disseminating service
innovations requires time. Since the emphasis of radical service innovation is on new value-creating
methods, if the innovation is "too radical," it can be problematic. Incremental service innovations, on the
other hand, can have a significant impact on value-creating processes, and the cumulative effect of several
such changes can have a significant impact on the various actors (Bolton et al., 2014).

2.3.1 ANCILLARY SERVICES

This is a clear lack of literature regarding ancillary service within healthcare. Key feature of ancillary
services is that only multi-speciality Hospitals can avail their full scope. A patient's recovery does not
end when they leave the hospital, or in some cases their treatment begins much before they get admitted
within the hospital. Post-acute care, which includes everything from physical therapy to at-home care, is
an important part of the overall patient experience. Patients depend on their primary care physician at
every turn.

Ancillary services are used in this situation. Hospitals may offer a broader variety of healthcare services to
their patients by working with an ancillary service provider. Since this system has proved to be so effective,
ancillary care has become an integral part of the healthcare system for diagnosis, treatment, and patient
support. Ancillary service costs account for nearly 30% of all medical spending today, making them one of
the fastest growing markets in the healthcare industry. If healthcare costs continue to rise, this figure can
only increase.2

Borrowing the definition from table 1, where Enz. (2012), states “The introduction of novel ideas that
focus on services that provides new ways of delivering a benefit, new service concepts, or new
service business models through continuous operational improvement, technology, investment in
employee performance, or management of the customer experience”, patient being the customer in a
healthcare setting needs for care, support, and less hassle to deliver highest level of customer satisfaction.

2
Healthcents. 2021. What Are Ancillary Services? | Healthcents. [online] Available at:
<https://www.healthcents.com/resources/blog/what-are-ancillary-services/> [Accessed 28 March 2021].

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Looking intuitively, patients want best treatment at affordable expense. This is where the role of ancillary
care providers steps in, patients benefit from reduced costs and easier access to care when ancillary
services are available. When smaller hospitals work with ancillary organizations, they have more resources
at their disposal to assist in diagnosis, recovery, and long-term care. When it comes to ancillary
contracting, this desire to deliver holistic care may be used to press for higher prices.

Apart from being an asset for the patients, outsourcing ancillary services benefit large hospitals as well.
Firstly, they can create an efficient billing system for the Hospital by handling the insurance hassle.
Secondly, by linking hospital to a larger customer base insured under worker compensation, community
insurance, secondary group health, auto medical, and medicare programs, ancillary services allow them
to extend patient reach, which is crucial in a competitive environment. Thirdly, right ancillary service
providers provide highly qualified specialists and technicians. These facilities have been accredited to
meet strict quality and control requirements. They keep a close eye on the network to ensure that the
patients are getting the best possible treatment.

Though there are benefits for large multi-specialty to outsource providers and integrate these services
into their service model, it comes with it challenges.

▪ From the perspective of ancillary service provider, the lack of compatibility in the computers or
systems used by ancillary care providers for coding, billing, and tracking patient care is one of the
major challenges in ancillary technology. The mechanism for interacting with payers and billing
providers is broken, which is a crucial factor for seamless integration of services within multi-
speciality hospital. Patient satisfaction, utilization control, and adequate treatment are only a few
of the major factors that can influence the service and ancillary care providers' capacity.
▪ The lack of compatibility in the computers or systems used by ancillary care providers for coding,
billing, and tracking patient care is one of the most important challenges in ancillary technology.
The system for communicating and billing with payers and providers is broken, which is a crucial
factor if treatment is moved away from individual patients and into a society-wide or population-
based approach. Patient satisfaction, utilization control, and adequate treatment are only a few
of the major factors that can influence ancillary care providers' ability to deliver services.

Ancillary Services are classified into three types:

➢ Diagnostic Service - Diagnostic services make it possible to provide reliable, cost-effective

treatment in a safe setting. Pathology and Laboratory Medicine, Nuclear Medicine, and

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 Radiology are among the services offered. Acute care, ambulatory care, mental wellbeing,
recovery, and geriatric care are also placed where diagnostic facilities are used. The
primary physician would not have to spend time or money in ancillary services. Nurses,
nurses, managers, and technologists are among the ancillary care providers.
➢ Therapeutic Services - Therapeutic care is the term for the second line of medical
treatment, which covers everything from relief and rehabilitation to occupational and
physical therapy. It also means establishing a nurse-patient relationship founded on
mutual confidence and comfort, allowing a patient's physical and emotional needs to be
met. Massage, speech therapy, and chiropractic services are examples of normal
therapeutic treatment services. Although diagnostic services are concerned with
providing immediate information about a patient, therapeutic services are concerned
with long-term care options that aim to improve overall health and well-being. Allergy
Services, chiropractic services, nutrition and food service, speech therapy, physical
therapy, dialysis are examples of therapeutic services.
➢ Custodial services - Custodial services entails non-medical interventions that assist
patients with daily activities such as eating and bathing. Some patients with such physical,
medical, or mental disabilities are unable to perform simple everyday tasks such as
toileting, bathing, walking, changing clothing, and so on their own. Providing and
effectively administering various resources is not only expensive but also difficult for a
primary doctor, surgeon, or physician. Multi-speciality delivers all these services, ancillary
care helps the clinician to concentrate on the core processes while the ancillary service
providers perform the secondary functions. Another feature of custodial services is that
these have the longest duration as compared to the other services. These are abstract,
intangible and add hidden value to the patients healing. Though subtle in its nature but
provide physical, emotional benefits.

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2.3.2 NEED FOR EFFECTIVE DIGITAL SERVICE INTEGRATION

As of now there are several approaches to service innovation theories regard to healthcare. Wang et al.,
(2010) grouped the different meanings of service science into four major categories: Bitner et al., (2008)
discipline-oriented concepts; Maglio & Spohrer (2008) process approach concepts; Vargo & Lusch (2008)
value-oriented meanings; and Cai et al., (2008) content-based interpretation. Although these approaches
differ regarding the conceptual logic, the underlying purposes for the study of service science — to drive
innovation and improve productivity and quality (value) through rigorous scientific research methods —
are agreed upon. Additionally, digital aid in service innovation is touched upon by the scholars. Thus,it is
not surprising that technology and healthcare delivery are terms which are used together and studied
under the same bracket of digital healthcare which is derived mainly from use of information technology
within healthcare leading to services such telemedicine, electronic health billing systems, virtual
diagnostics, and remote monitoring services via M-Health (Mobile Health). More so these have been
gradually after passing of the HITECH (Health Information Technology for Economic and Clinical Health)
act in 2009. The growth in technology driven service innovation in healthcare is characterised by its
multidimensional nature (Agarwal & Selen, 2011), if improved and implemented upon properly it can
significantly influence the healthcare organisations (Agarwal & Selen, 2009). Concepts such as service
delivery practices, clear customer interfaces through the interplay of service concepts and service delivery
practices; Customer interfaces and the technologies of service delivery (Hertog, 2000; Miles, 2005).
Therefore, it is important to understand what the new opportunities will be as well as barriers and
challenges when innovating the delivery of healthcare services.

Previous studies mentioned that the key adopter of the new information technology will be the service
sector, and that advanced technologies would drive progress in the service industry (Barras, 1986).
Examining the classical dimensions of innovation (Schumpeter 1934)—product innovation, method
innovation, business innovation, input innovation, and organizational innovation, all these dimensions are
influenced by technological progress in healthcare provision. Until recently, information technology in
healthcare had focused primarily on R&D but now intangible services are being heavily influenced by
advent of IT (Audetet al., 2004). For example, handwritten patient information has been replaced by
Electronic journal keeping, better ways of data analytics and storage have led to faster treatments
reducing visit costs for the patients as well as the hospitals. Innovative delivery of clinical (the term clinical
in this context refers to treatment via direct medical care)

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In the healthcare industry, information technology (IT) is mainly used for recoding/retrieval of medical
records, patient identification, and payment transactions. While these are essential aspects of healthcare,
other aspects of healthcare, such as nursing, customer service, food and beverage, laboratory facilities,
and so on, are equally important because they affect the quality of service provided to customers, thus
influencing customer satisfaction. This also gives rise towards the need of understanding patient
satisfaction and its affect on influencing the services of a hospital itself.

2.3.2.1 STAKEHOLDER IMPLICATION

The way treatment is provided, with a greater emphasis on the patient experience, would be the key
implication for stakeholders. Consumers are increasingly expecting healthcare and social-care programs
to better adapt to their needs. Consumers want to exercise their independent right to participate in the
determination of their treatment. As a patient in a hospital, one example is deciding what to eat and
when. Since health-care facilities, such as hospitals, are closely connected environments of complexity
rather than flexibility, accommodating patient needs, particularly for seemingly minor requests, is not
always possible. This is due to connections with other standardised systems and procedures, such as the
availability of nursing staff to help with cooking, mass processing of meals, and logistics operating to tight
timeframes to serve large numbers of patients, among others. Although technology has allowed for
greater versatility in meal choices (at a cost), such adaptability is likely to be more prevalent in private
hospitals because choice is at the heart of the value proposition of private healthcare (Feldman et al.,
2013).

Realizing the importance of greater openness and data access in healthcare results in a more
knowledgeable patient and payer. Even though the technical infrastructure to enable data collection and
disclosure is in place, there are not yet any appropriate and scaled reporting processes in place. For
example, details such as the average length of stay for a specific procedure, the rate of unplanned
readmission, and the rate of infection is difficult to come by. To meet stakeholder demand for this
information, further discussion of policy and regulatory changes, as well as the legal considerations
needed to affect this dynamic, is required.

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2.3.3 TELEHEALTH SERVICE

A key service innovation in the field of digital realm for preventive and long-term medical care has been
the adoption of telehealth services within the healthcare organisations (Goodwin, 2010). It is
characterized as the remote monitoring of a patient's health to facilitate early diagnosis and intervention.
Telehealth is the use of technology to remotely track people's health, involving blood pressure, blood
oxygen levels, and weight. It therefore overcomes the problem of distance, allowing patients to receive
timely treatment while at home (Steventon et al, 2012).

Literature so far, has been unanimous in listing benefits of telehealth as a service innovation. Telehealth
can solve a wide range of issues in modern healthcare by improving quality, accessibility, usage, reliability,
and effectiveness while also lowering costs (Bashshur et al.,2000; Yellowlees, 2005). An important note
here is that the terms “telemedicine” and “telehealth” will be used interchangeably as even though
literature has vaguely put telemedicine as a subset of telehealth (Bashshur et al, 2000, Sood et al., 2007)
as telehealth is a subset of service innovation.

The most recent and noticeable positive impact of telemedicine has been noted during the current COVID-
19 pandemic. COVID-19 is an airborne transferrable respiratory disease characterised by high fever and
dry coughs, the major guideline to prevent it were to follow the norms of social distancing. In response to
the new challenges that COVID-19 posed, the Psychiatry department of Renmin multi-specialty Hospital
(Wuhan, China) deployed a comprehensive telehealth framework that enabled nurses and physicians to
provide effective patient care while minimizing the use of personal protective equipment and optimizing
social distancing. Both clinical workflows were converted to serve a telehealth model, including inpatient
psychiatry and consultation-liaison psychiatric services. Both regular staffing and rounding experiences on
inpatient psychiatry were performed by video (average daily census, 8.5, range 55–15), and 96 percent of
medical/surgical and emergency department consultations were completed remotely (110 in all, with five
in person) since the telehealth program was implemented (Kalin et al., 2020).

The software's functionality enabled primary care providers to carry on with their daily routines without
interruption. They were able to keep their morning multidisciplinary care planning meeting, hospital
rounds, and supportive psychotherapy appointments. A telemedicine platform that enabled them to
conduct real-time interviews with patients and multiple clinicians (e.g., nurse, resident, and attending)
was critical in ensuring that their patients received high-quality, patient-based training. Workers and

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patients quickly accepted telehealth because of these essential elements (Kalin et al., 2020). Even though
the widely accepted benefits of telehealth as a service innovation, it comes with its own challenges when
it comes to implementing its framework.

Challenges of telehealth adoption within a multi-speciality hospital

A telehealth service's complexity is often underestimated. Its performance is influenced by a variety of

factors, including technical issues, infrastructure, regulation, change management, and financial payment
systems in a hospital. Telehealth services are often distributed through several service providers to the
multi-speciality hospitals since they are delivered over a distance. Conflicting organizational cultures and
traditions, as well as incompatible business models and governance processes, are common among
barriers. Furthermore, telehealth systems bring together a diverse group of stakeholders, ranging from
healthcare professionals and information and communication technologists to economists,
administrators, and policymakers. The way decisions are made, problems are solved, and change is
handled is often related to a particular discipline, which contributes to the challenges of implementing
telehealth services (Alikarami et al., 2011). Additionally, Tanriverdi & Iacono (1998), listed four key barriers
for successful adoption of the service –

 Technical barrier: It is imperative that the appropriate technology is utilized and adoption of it is
provided by the latest service provider.
 Behavioral barrier: Doctors and nurses are often skeptical in engaging with new technological
service since the hassle to learn is often steep and financially less rewarding especially for nurses
who are often overworked as was the case during the Corona Pandemic.
 Economical barrier: Two major points of concerns of were that of reimbursing healthcare workers
for telehealth consultations and to open new patient markets.
 Organizational barrier: For hospitals it is imperative that the management ne able to integrate
telemedicine services into existing organizational structures and a separate core department
working to oversee the smooth operation for the service.

Keeping the aforementioned in mind, Finch et al. (2006), between 1997 and 2005, conducted a
longitudinal study on twelve existing telehealth facilities. 68 interviews with key actors in the adoption
and implementation of the service were conducted as part of the research to determine the factors that

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led to this service be readily implemented in hospitals. These parameters were grouped into the
following five categories -

 Policy context: Policies (both within the internal management and external government) must
be written in a way that encourages rather than discourages telehealth innovation.
 Managing risk: The most effective telemedicine programs were those that recognized potential
risks and designed protections into their systems. Furthermore, rather than structured,
empirical assessment, such services stressed close monitoring of effects and outcomes.
 Gain perception and associated commitment: Without consulting hypotheses on technology
adoption, Finch et al. (2006) concluded that there is a clear correlation between stakeholders
particularly within management's ability to commit to new technology and/or approaches and
the benefit they are considered to have.
 Reconfiguring services: The emphasis will be on the way the service is delivered rather than the
technology.
 Stakeholders commitment: Physicians must adjust their generally assumed professional roles in
tandem with shifts in work procedures to accommodate telemedicine in the system.

These categories align with foundational premise of a service system (2.1.2) and will serve as
baseline to determine which is a significant barrier as and when applied to the Venkateshwara
hospital case.

2.3.3 NEED FOR PATIENT SATISFACTION

In concurrence with foundational concept of Service Science (section 2.1.2) i.e., co-creation, value for the
service itself is created by both the patients and the service providers. When it comes to healthcare,
quality of services should be of the highest level to enable high ethical as well as professional aesthetics
of multi-speciality hospitals.

A critical setback for not being able to continuously innovate ancillary services has a detrimental effect on
consumer satisfaction. Given the high level of competition, for large super-speciality hospitals, low patient
satisfactions translate into a loss of business. Multi-speciality hospitals should look for ways to stop
delivering poor service. The vital non-clinical healthcare delivery processes must be improved to avoid

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poor service quality (Peabody et al., 2004). Strengthening service processes, as described by the Complete
Quality Management theory, entails identifying areas for improvement and implementing process
changes. This is the right approach, but companies should also consider system-based improvements that
address cost, quality, and productivity all at the same time (Lee et al., 2006). Within ancillary services
these entail diagnostic, therapeutic, and custodial services.

According to Lee et al. 2006 there is a direct co-relation between lack of good quality services and loss of
customers (patients) for multi-speciality Hospital. He proposed a model using the concept of word-of-
mouth communication within the healthcare sector. According to studies, word of mouth may be positive,
negative, or neutral. Consumers are more likely to spread negative word of mouth than positive word of
mouth, according to some reports. A positive experience will cause a customer to tell three other people
about it, while a negative experience will cause a customer to tell seven other people (Rosen, 2000). As a
result, hospitals should not only concentrate on developing meaningful customer experiences, but also
on preventing service shortcomings that would result in negative word of mouth.

Based on this logic, a survey was conducted taking 400 responses from patients. To calculate direct
customer loss, he presumed that 100 patients had poor service and about 70 of them are unlikely to visit
the same hospital again. Furthermore, out of every 100 patients who were offered bad service, about 75
would an average of nine family members and friends about their experiences. This would result in
approximately 675 future patients hearing about the negative experiences. Based on word of mouth,
some 465 of the organization's 675 potential patients would most likely not avail services from the
hospital again. What is the overall effect on a hospital if one out of every 100 daily patients is dissatisfied?
There is a direct loss of 70 daily patients and a 465 indirect loss (of potential patients) because of this
decision. In today's dynamic healthcare sector, such a detrimental effect from inadequate service would
be detrimental to large privately owned hospitals.

Clearly, not providing adequate and upgrade services has a negative effect on patients, impacting
customer satisfaction. Now, services being heterogenous, dynamic, perishable, and often abstract how
does one even begin to measure good or bad service framework for an organisation? Unlike observable
product quality, perceived service quality varies from customer to customer. Bad service quality can
become a cost burden for a multi-speciality hospital and alienate customers, while good service quality
can be a source of competitive advantage. Service providers in the healthcare sector deliver similar
services, but with varying degrees of service quality and professionalism (Pui-Mun, 2004). Customer
satisfaction is an effective measure of an organization's service quality efficiency.

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2.4 SERVICE INNOVATION: Quality Assessment

Referring back to section 1.1, private healthcare sector has grown in India over the last few decades In
the literature, the distinction between private and public sector organisations is well known (Zeppou &
Sotirakou, 2003). These variations are mainly due to the operating environment in which these
organizations work. Because of various incentives, consumer focus, and a decentralized business model,
the private sector is considered more productive than the public sector (Bhatta, 2001). These fundamental
differences provide strategic advantages that lead to private sector profitability and growth. These
benefits, however, come at a price. The most significant is a rise in consumer expectations for private
healthcare institutions' service quality (SQ). Only by assessing patient needs and perceptions can private
healthcare providers manage and surpass these expectations. This helps a service provider to better align
itself with ever-demanding customers while minimizing customer churn. This necessitates a robust and
dependable instrument that captures consumer preferences and perceptions of service quality.

Assessing quality of services provided from patient’s perspectives is an interesting approach to model a
service innovation framework around. Understanding variables of service quality and their
interdependence with each other allows a hospital to fine tune its service delivery capabilities. Several
studies have been conducted to measure level of services being delivered, in section 2.1.4 Djellal & Gallouj
(2010) pointed out the need for appropriate tool to measure intangible features of service-based
innovation in a service system. Clearly, the SERVQUAL model fulfils this gap.

The model not only incorporates intangible features but also the emotional quotient of the service being
delivered. Its five dimensions which are very critical for measuring and evaluating current healthcare
services delivered by a hospital, and they are reliability, assurance, tangibility, responsiveness, and
empathy. In this model empathy is defined as focus on the individual patient by the ancillary service
providers such as nurses and therapists. The physical facilities, such as laboratories, equipment,
infrastructure, and human resources that are used to provide healthcare services are referred to as
tangibility. Assurance refers to the employees' experience, skills, and abilities in delivering care, as well as
their ability to instil faith and trust in patients. The ability to deliver the promised services reliably and
efficiently is what reliability entails. Responsiveness refers to a hospital's ability to assist and facilitate
patients by delivering swift services. Patients being the most important stakeholders for hospitals, and
their primary role should be to provide finest care for them (Kansra & Jha, 2016).

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Butt & Run (2010), applied the SERVQUAL model to the privately owned hospitals of Malaysia. The
empirical data was collected by survey method using 340 patients within duration of 3 months. The finding
indicated that responsiveness and empathy were rated poorly, indicating mistrust and scepticism
between health service providers and customers. Also, service reliability and responsiveness scored
negative on the scale owing to easy going attitude of staff and services such as daily therapists and nurses
often lagging in reaching out to admitted patients. Another study conducted by Büyüközkan et al., (2011)
applied the hybrid model of SERVQUAL and Fuzzy AHP within the Turkey Healthcare sector, with the
primary purpose of assigning importance of each parameter according to the patients. Empathy ranked
the highest with 34 %, followed by service reliability and at 21% because of tangible features such as
technical expertise of primary physicians and proper treatment. When the model was applied within the
Indian context by Kansra& Jha (2016),case of a private hospital located within a non-metro city (Jalandhar)
was analysed. A similar trend was noticed where intangible features such as empathy and timely services
were rated high, but in addition the Indian context also weighed heavily on accurate patient record
services and well-balanced expenses after the treatment.

These findings are aligned with the research question and serve as a guide to design a service innovation
model which takes into consideration these issues but also justifies why innovating services with regards
to these components becomes vital for both the patient and the hospital management.

2.5 HOSPITAL AS COMPLEX SERVICE SYSTEM

The healthcare sector comprises of both public and private organisational undertaking. It consists of
privately owned clinics which focus on specialised core centre such as clinics which deal with specialised
priority. For example, Nephrocare, a world - renowned chain of clinic specialise in renal therapies and Dr
Lal Pathlabs which specialise in providing blood test diagnostics located in Delhi, India. Then there are
government owned and funded hospitals such as Safdurjung and AIIMS in New Delhi. While majority
consists of privately owned multi-speciality hospitals such as Fortis, Max, Ganga Ram and Venkateshwara
in New Delhi, India. The categorisations serve an important factor to divide and label different various
types of healthcare organisation.

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Healthcare providers are commonly divided into four major groups.

➢ Primary Care essentials - Most people are familiar with primary care. For symptoms and medical
problems, this the first stop. For example, if you have a new symptom or are worried that you
have contracted a cold, the flu, or another bacterial or viral illness, one seeks a primary care
physician. A broken bone, a sore muscle, a skin rash, or some other acute medical condition may
all be handled with primary care. In addition, primary care is also in charge of coordinating the
care with specialists and other levels of care. However, this does not always occur in the way it
should. Doctors, nurse practitioners, and medical assistants are examples of primary care
providers. There are also several specialties of primary care. OB-GYNs, geriatricians, and
paediatricians, for example, are all primary care physicians who specialize in caring for a specific
group of individuals.
Primary care providers support the healthcare system by providing improved access to
healthcare facilities, positive patient outcomes, and a reduction in hospitalization and emergency
room visits, according to studies (Shi, 2012).
➢ Secondary Care - Secondary care is typically brief, requiring occasional consultations with a
specialist for expert analysis and/or surgical or other specialized procedures which primary care
physicians (PCPs) are not trained to perform. Hospitalization, scheduled surgery, specialty
consultation, and recovery are all examples of secondary treatment.
➢ Tertiary Care - Tertiary care is the most advanced level of treatment, and it is required for
conditions that are uncommon. Tertiary care is usually hospital-based, highly specialized, as well
as technology-driven. Multi-speciality hospital especially those associated with universities,
provide most tertiary care. Trauma care, burn treatment, neonatal intensive care, tissue
transplants, and open-heart surgery are only a few examples. Tertiary treatment may be
extended in some cases, and the tertiary care physician may take up long-term responsibility for
the remainder of the patient's care. Each year, it is projected that 75 percent to 85 percent of
people in the general population need only primarily care services; 10% to 12 percent need
referrals to short-term secondary care services; and 5% to 10% need tertiary care specialists.

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2.5.1 TERTIARY HEALTHCARE IN METRO CITY

The focus of study is on tertiary care, and within that multi-speciality hospital. Since the case is of
Venkateshwara Multi-speciality hospital in New Delhi (Metropolitan city), the challenges, geographical
variations, socio-political demographics. Aligning with the research question, a concrete definition and
foundational knowledge on Indian Hospital context is vital to get familiarised with the theoretical
constituents.

Multi-speciality Hospital in a metro city

India is culturally, economically, and socially diverse nation. Categorization of multi-speciality hospital has
been provided based on their geographical location (metro and non-metro city). The classification is based
on population, that is used by India's VI Central Pay Commission to provide housing unemployment
benefit to its employees. Another classification is based on a combination of population, city status, and
other qualitative factors. Tier-I and Tier-II cities are divided under this grouping. Tier-I cities are metros,
and Tier-II cities are non-metro cities. Deloitte provides this Tier I and Tier II classification (2014).
Dermographia (2013) also employs a few qualitative indicators to distinguish between metro and non-
metro cities.

Literature, describes a multi-specialty hospital as one in which more than half of the beds (in a hospital
with more than 250 beds) are reserved for cardiology or other related departments, as specified by the
Medical Council of India (Gujarat, 2017). Multi-specialty hospitals are referred to as referral hospitals by
Jamison et al. (2006). Regardless of how multi-specialty hospitals are defined, multi-specialty hospitals in
metro cities need a completely different approach to patient care and other medical services than multi-
specialty hospitals in non- metro cities (IIPS, 2018).

Word of Mouth -

Benefit of Word of mouth in establishing a positive patient feedback and increasing overall reach for
private organisations is under looked but a crucial factor especially in a predominantly competitive
environment. Patients demand a guarantee of care in a hospital. References from another person, such
as a past user of the service or an acquaintance, are one of many ways to obtain such assurance. In any

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case, someone's view of the hospital has an effect – this is what word-of-mouth means. Word-of-mouth
can be positive or negative, and people's views of a hospital's facilities can be framed accordingly.

According to Kondasani and Panda (2015), word-of-mouth has a major effect on consumer preferences
for a service (including in healthcare). In a study conducted in Turkey, Kitapci et al. (2014) discovered that
in the healthcare services market, word-of-mouth and satisfaction have a clear and meaningful
relationship. They pointed out that positive word-of-mouth is followed by satisfaction with healthcare
facilities, and that word-of-mouth is critical in creating positive hospital expectations. Shabbir et al. (2010)
concluded that, along with service quality and confidence, word-of-mouth is a factor in assessing
satisfaction with healthcare services.

2.5.2 PRIVATE HEALTHCARE SECTOR OF NEW DELHI

In 2011, Delhi had a population of 1.68 crore (or 16.8 million), with 97.5 percent of the population living
in the urban region, a geographical area of 1483 km2, and a population density of 11,297 (range 3800–
37,346/km2). Nearly 18 lakh (1.8 million) people, or 11% of the population, live in slums, and a significant
portion of this population is made up of migrants from all over the world. Delhi is India's most populous
urban agglomeration and the world's third largest urban city. In Delhi, there are 12 different organizations
that provide health services. According to various sources, the number of health facilities in Delhi varies.
Delhi has 95 hospitals, 1389 dispensaries, 267 maternity homes and sub-centres, 19 polyclinics, 973
nursing homes, and 27 special clinics as of March 31, 2014. In addition, there are 15 government-run
medical colleges in the allopathic medical system. Out of which 55% come under privately owned
healthcare sector (Delhi, N., 2015). In the state of Delhi, health services are offered by approximately 25
different types of health facilities. Also, program managers lack clarification on service provision and many
of these facilities are identical, making it difficult to distinguish one from the other (DSH, 2015). The most
utilised facility among Delhi population is super-speciality Hospital, general hospital, medical college
hospitals, referrals hospitals, primary health centres, dispensaries, maternity homes, polyclinics, and
special clinics.

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Analysing the competitive challenge for private healthcare sector: Indian context

In terms of revenue and jobs, healthcare has become one of India's most important industries. Hospitals,
medical supplies, clinical trials, outsourcing, telemedicine, medical tourism, health insurance, and medical
equipment are all part of the healthcare industry. The Indian healthcare sector is expanding rapidly
because of improved coverage, facilities, and increased spending by both public and private players.

The public and private sectors of India's healthcare delivery system are divided into two categories. The
government, or public healthcare system, has a small number of secondary and tertiary care institutions
in major cities and focuses on delivering basic healthcare in rural areas through primary healthcare centres
(PHCs). Most secondary, tertiary, and quaternary care facilities are operated by the private sector, with a
concentration in metros and tier I and tier II cities. The large pool of well-trained medical professionals in
India is its key competitive advantage. In comparison to its Asian and Western counterparts, India is also
cost effective. Surgery in India costs about a tenth of what it costs in the United States or Western Europe.
In terms of healthcare quality and accessibility, India ranks 145th out of 195 countries.

With massive capital investment in advanced diagnostic facilities, the country has also become one of the
leading destinations for high-end diagnostic services, catering to a larger proportion of the population.
Furthermore, Indian medical service users are becoming more aware of the importance of maintaining
their wellbeing. The Indian healthcare industry is extremely diverse, with opportunities in every segment,
including suppliers, payers, and medical technology. Businesses are searching for the new dynamics and
patterns that will have a positive effect on their business as the competition grows. The hospital industry
in India is expected to grow at a CAGR of 16–17 percent from Rs. 4 trillion (US$ 61.79 billion) in FY17 to
Rs. 8.6 trillion (US$ 132.84 billion) in FY22.3

With an upward trend of health sector growth, it comes as no surprise that competition is on the rise
especially within the private healthcare sector (Bhangale, 2011).When the need for a robust service
innovation framework for a multi-speciality Hospital is addressed a key component is taking into
consideration the competitive dynamics of the healthcare sector. Out of the total 95 hospitals in Delhi, 25
are privately run super-speciality Hospital, and the major competition is between Apollo Hospitals,
Manipal Hospital, Max Hospital, Asian Heart Hospital, Venkateshwara and BL Kapoor Hospital. These

3
India and India, H., 2021. Healthcare Industry in India, Indian Healthcare Sector, Services. [online] Ibef.org.
Available at: <https://www.ibef.org/industry/healthcare-
India.aspx#:~:text=The%20hospital%20industry%20in%20India,billion)%20by%20FY22%20from%20Rs.&text=The%
20Government%20of%20India%20is,the%20country's%20GDP%20by%202025.> [Accessed 9 April 2021].

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major corporations attract many both domestic and international patients majorly from south-east Asia,
Africa, and Mid-Europe. In addition to these big super-speciality Hospitals, healthcare, particularly in New
Delhi also has new type of healthcare service provider know Mohalla Clinics. Mohalla clinics or community
clinics cater the economically poor section of the population within Delhi (Lahariya, 2017). While the
middle class and upper-middle class population is the main target audience for the multi-speciality
Hospitals.

Literature is ambiguous when it comes to the competitive dynamics in healthcare, “Some argue that
competition has no position in health-care systems, whereas others argue that competition is the solution
to expensive, ineffective services and even "saves lives." (Kessler & McClellan, 2000).However, since the
former argument does not hold in today’s societal structure, as naturally any private sector is bound and
driven by competition, and healthcare is no exception. There is going to be competition between privately
owned hospitals on the same services which they are offering to the patients. Patients in this care are the
major players in forcing the hospitals to innovate continuously to stay ahead of the peers. From the
managerial perspective hospitals must continuously add and be able to market their value to attract
consumers.

Now, two major routes for Hospitals are either to adopt product innovation or service innovation. A key
advantage for service innovation as opposed to product innovation is less resource intensive and easier
to implement and adopt (Kelly & Storey, 2000). Also, another improvement over traditional product
innovation as pointed out by the literature is its consumer centric approach (Salunke et al, 2019). This is
especially useful in providing a deeper patient satisfaction (refer to section 2.3.3) which invariably lends
itself to positive word of mouth to attract newer consumers for private healthcare.

2.6 SERVICE INNOVATION FRAMEWORK

Healthcare sector is a broad sector divided between private and government owned facilities, which are
further divided into the level of care provided (Section 2.5). Within the private sector of tertiary care,
multi-speciality hospitals are complex systems with many variables which interact with each other on
different scales. In terms of service system, the services offered are novel and assessing the quality of
services becomes challenging as it varies from patient to patient. Depending on the aspects, variability,
and circumstances multi-speciality hospital as complex systems can appear in a variety of ways. It is

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essential to remember, however, that such shifts in perspective have little effect on the system's
complexity, which is intrinsically determined and defined by the interrelationships of all its elements,
regardless of whether such interrelations are examined. Some areas of interest, levels of study, or
circumstances may show substantial system complexity, while others may not. As a result, researching
complex structures are highly dependent on the research question being asked and the degree of detail
and precision to which answers are pursued (Kannampallil et al., 2011).

The research question asked is “what is the need of service innovation framework in a complex multi-
speciality hospital?”, the intended outcome of the research is to assess the key practical challenges as
faced by key stakeholders and be able to suggest a service innovation approach which is (if not fully) at
least be able to incorporate these challenges within the framework. Three major stakeholders within a
hospital are the patients, management, and service providers (physicians & ancillary service providers).

Furthermore, application of service innovation and services delivered within hospital becomes more
complex due to high vulnerability of patients. Diversity of different organisations involved delivery care
via different pathways. Variability of healthcare policies and regulations depending on the locality. Inter-
dependency of insurance payers, management, care providers, patients, and family support.

2.6.1 SYSTEMS APPROACH

In this thesis a framework refers to an approach, an approach which incorporates intangible features of a
service innovation, which are “if the patients are satisfied with the upgradation of the service?”, “are the
service rendered incremental or radical in nature?”, “is the emotional need of the patient met? and “if
the current services are aiding in overcoming complication?”. A framework here also denotes a set of
ideas guided by a unified belief based on predicted assumptions. These assumptions are presented in the
form of challenges, for instance the “burnout syndrome”, effective integration of ancillary services and
the dynamic nature of the services itself. The question raised by the researcher is what the best approach
for a hospital? given its complex nature and what should be considered as essential knowledge when
creating a robust service innovation framework taking in account the current environmental dynamics
(Competitive dynamics, Covid- 19 Pandemic etc).

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Considering the complexity of the healthcare system and the risks involved, a notable framework is the
system approach to service innovation, which takes into consideration not the individual components but
a unified approach towards the system, to reduce physician stress and reduce unwanted complications.
The fundamental idea behind the theoretical concept of system approach within the healthcare setting
was to reduce clinical errors in delivery care services (Malhotra et al., 2007).

As opposed to product driven industries such as automobile, healthcare must take into consideration the
safety of the service being delivered. Innovation in service, takes a new form when intangible but
important factors such as way of delivery is considered. Systems approach when applied to a multi-
speciality hospital provides a holistic approach of the service overview and how each stakeholders service
affects the other. This theoretical approach has been particularly useful when applied to new upcoming
firms in a highly dynamic market.

2.6.2 COMPEX ADAPTIVE SYSTEM: NK KAUFFMAN MODEL

Complex adaptive systems, in its most basic form, is a way of thinking about and analysing things that
recognizes complexity, patterns, and interconnections rather than concentrating on cause and effect.
Based on Holland's (1992) work, the most common concept of a complex adaptive system is a dynamic
network of actors working in parallel, constantly responding to what the other actors are doing, which
affects behaviour and the network. The overall behaviour of the system is the product of many decisions
taken continuously by individual agents, and control is distributed and decentralized (Holland, 1992).

Contrary to the systems approach, assessing and understanding individual behaviour actors and their
interrelationship takes precedence. Viewing healthcare organisation as complex adaptive systems is
noted as beneficial to understanding the clinical behaviour and delivery of the service aptly, clearly a must
to understand the need of service innovation (Minas, 2005). The importance of complex adaptive systems
thinking for analysing healthcare service delivery has been discussed by scholars. For example, Australian
authors conceptualized healthcare organisation as a complex adaptive system whose characteristics are
determined by the patterns of interaction among the components rather than the characteristics of the
components themselves (Chen et al., 2007).

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Complex adaptive systems thinking has also been used to address healthcare challenges within
hospitals who are suffering from serious illnesses. Many people with type 2 diabetes, for example, have
poor blood sugar, blood pressure, and cholesterol regulation, putting them at risk for complications. A
variety of studies have proposed effective approaches to resolve these issues, but the best strategies for
implementing and maintaining interventions are unknown. This may be because most methods fail to
account for the primary care setting's diverse adaptive system characteristics, according to researchers in
the United States. The way people communicate within dynamic networks is considered by 'practice
facilitation.' It gives members of the team in and primary care clinic time to learn and reflect, with the
goal of improving communication and promoting a more personalized approach to better patient
outcomes (MacKenzie et al., 2008). Applied to organisational management of a multi-speciality it becomes
particularly useful in effective ancillary services integration in a hospital. Understanding of complex
systems becomes particularly useful in the Indian context as well. Given the gender, economical,
geographical, and cultural disparity of the consumers availing health care services, a framework inclusive
of multiple perspectives and uncertainty is particularly useful (Lessard, 2007).

NK Kauffman Model

A service innovation framework model which fits the Indian scenario is the NK model, developed by
Kauffman, is a well-known example of complexity theory. It explains the evolution of biological organisms
(or complex adaptive systems) in terms of gene interaction, which leads to genotypes. N and K are the
two components of the model. The number of elements or components in an organism is denoted by the
letter N. When applied to service innovation, N can represent a variety of elements in a service system
(for example, technological competences, and ancillary services). Kauffman's model also incorporates the
idea of fitness landscape, which depicts a group of genotypes as peaks and valleys in a mountainous
topography. These peaks and valleys may reflect various service element configurations. The degree of
interdependence among the elements, K, determines the ruggedness of the landscape, according to
Kauffman's model.

A mathematical model by nature, the NK kauffman model has been applied to both social and natural
science. Recently, it has gained traction within organisation science to understand nature of unpredictable
nature of innovation within organisations. The most notable integration of the model, and in alignment
with the research purpose, has been proposed by Chae (2011). According to him, Service innovation is an
evolutionary process which is unpredictable, interactive, and continuously evolving.

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In the figure below, Low K (K=0) produces a smooth landscape with an easily discernible global optimum
(or highest peak). However, as K rises, the terrain becomes more rugged, with numerous peaks and
valleys. There are an incredibly large number of peaks and valleys at k=N-1 (which is the maximum possible
K value). The terrain appears to be chaotic, with no consistency. The peaks in this landscape reflect higher
levels of fitness. A high fitness score or peak will indicate a service system that generates a lot of revenue
(or market share) and provides a good customer experience. The interdependence among the elements
of a service system does not result in K=0 (no interconnectedness) or K=N-1 (every element influences
everything else) in the real world. In the real world, the landscape would most likely fall somewhere in
the middle. This is symbolized by a rough fitness landscape that contains both regularity and randomness.

Figure 2: NK Kauffman model to determine successful jump for a firm (Chae, 2010).

Healthcare service context

Within the healthcare context the model varies accordingly. In a private hospital system, there are
varieties of services being delivered both at micro and macro level. For example, financial services
rendered by administration department, primary technical services offered by doctors to IPD patients,
secondary rehab services by ancillary care providers such as nurses and physiotherapists, medicine
delivery by outsourced chemists, ambulance services etc. vary at different level according to the needs of
the patients. These services can be further subdivided into smaller components, for example a
physiotherapist renders different style of service to different IPD patients, similarly nurses deliver
technical services plus emotional service in times of needs.

Therefore, service innovation must be a continuous process of recombining and/or reconfiguring certain
elements because service is made up of so many different components (Drejer, 2004; Gallouj and

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Weinstein, 1997; Voss and Hsuan, 2009). The number of possible service configurations (or systems) is
determined by how many elements there are.

If each element has only two states (e.g., 0 or 1), a simple service only with six elements (N=6) leads to 64
(2 raised to the power of 6) different service offerings. As N grows larger, the picture gets more
complicated. Service innovation must be able to initiate variations in established service configurations,
enabling a service system to hike into higher ‘‘peaks" due to the vast number of possible resources that a
rugged environment can provide. It is also important to remember that service providers and consumers
are economic actors who would be more likely to use "selective variation" than random variation (Axelrod
and Cohen, 2000). This means they use their diverse expertise (e.g., technology, industry, and institutions)
to develop new services.

Each service rendered to the patient is unique, and service innovation in large corporations is
unpredictable. Since the interaction (recombination and/or reconfiguration) of existing elements is
neither fully pre-programmed nor supervised, the evolution's path is fundamentally unpredictable
(Beinhocker, 2006). Service innovation can be visualised as ascending an unknown mountain without a
full map in the rugged terrain. Since neither the provider of the service nor the patient has full control
over the co-production process, it is difficult to predict the outcome of the relationship between service
provider and customer (e.g., whether a service would be a peak or a valley as depicted in the figure above).

Theoretically in the figure above if a multi-speciality hospital were to implement a service innovation
framework taking with a high N value, there will be positive jumps (A, B and C) and one negative jump (D).
Assuming an organisation jumps from A to C and not fall into D, factors need to be considered by the
hospital to take a successful jump. These are summarised as key propositions –

➢ For successful implementation of the framework, this hospital needs to view Service innovation
as an ongoing, emergent, and evolutionary process. For example, if a service is at the
configuration 1111, and an incremental innovation is added which alters the scenario taking it
either to 11110 or 11111, resulting in a lower or higher peak than the previous configuration.
Compared to a radical jump of adding or altering more than two services, provides a safer jump
as was in the case of the hospital (Section 2.3).
➢ A successful service innovation takes place when the level of crossover of services between
different actors is relatively high (Ahuja & Katila, 2004)

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 ➢ A successful service innovation for a hospital relies on not only creating new services but
improving the existing services too (Birkinshaw et al., 2007).

Greenhalgh’s Service innovation parameters

Service based innovation has been on the rise within healthcare. Hospitals are moving towards adopting
an innovation model based on improving tangible and intangible services via patient feedback, focus
groups and every changing environment dynamic. A hospital is a service driven organisation, meaning for
the consumer the value is driven not from a physical good but from perishable services such as diagnostic,
therapeutic, technical etc. With the need of a service-based innovation framework it also becomes
important to understand under what circumstance a large-scale health organisation will adopt the
framework. Greenhalgh et al.,(2005), was able to list down parameters under which a firm will be most
likely to shift towards adopting a new model. These parameters will also serve as “evidence” for when the
primary empirical investigation is performed through semi-structure interview.

 Complexity: Healthcare organisation is more likely to embrace service innovation that they find
to be easy to use. Practical knowledge and demonstration can help to minimize perceived
uncertainty. It would be easier to incorporate an invention if it can be broken down into smaller
pieces and implemented gradually. If there are few response obstacles to overcome in an
organizational environment, an idea would be more easily assimilated (Denis et al., 2002; Plsek,
2003).
 Risk: Service innovation is less likely to be accepted if the upgradation of the service has a high
degree of uncertainty of outcome that the organisation perceives as risky. Since the costs and
benefits of an innovation are not equally distributed in an enterprise, the better the risk-benefit
balance represents the organization's power base, the more likely the innovation will be
assimilated (Ferlie et al., 2001).
 Intended benefit: If the service innovation is important to the intended actors job performance
and enhances task performance, it will be implemented more readily. Innovations that boost
task relevance increase the likelihood of adoption success. If an idea is practical, workable, and
simple to implement, it is more likely to be adopted. Innovation that enhances the effectiveness
and workability of innovations for key staff members and teams increase the likelihood of
success.

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 METHODOLOGY

This chapter outlines the method adopted to answer the stated research question. The section includes
research model, research strategy, validity, and reliability as best suited for the research purpose.

Research Question - What is the need of service-based innovation framework in a complex multi-
specialty Hospital in Delhi?

3.1 RESEARCH MODEL

This study follows the methodological decisions proposed in the "research onion" model by Saunders et
al (2016). The model is well suited for the research question, it is systematic, each layer is definitive, and
the entire process is exhaustive and detailed (Raithata, 2017). It illustrates the study process's structure
and methodological decisions. Each subsequent subchapter describes one layer of the model as an
external strategy. Another reason for opting for this model was due to its external to internal perspective.
Research objective of “suggesting a future course of action and discussing the implication of the study” is
suggestive of future studies. This method was adopted and touted as the best approach to study a
phenomenon within the present, going on towards a future prediction (Melnikovas, 2018)

The thesis is explorative in nature since no hypothesis is being provided in the theory section. Exploration
is the foundational step for the research the thesis itself will provide new insights and observation into a
new domain of study. Innovation in services within private healthcare is both theoretically and practically
underdeveloped. Exploration will aid in opening a new dimension of future studies, for example service
innovation framework could also be applied to public healthcare sector of a developing nation.
Exploration within this thesis also serves as a pro bono for two major stakeholders in private healthcare
system; “Patients” and “Management”, by providing theoretical tools and insights to overcome challenges
and provide efficient healthcare which benefits both the parties.

I have also clearly stated in research problematization that research on concept of service innovation in
complex healthcare system is lacking, and the available research do not take into the account the “need”
or the “challenges” but simply move on to implementation stage i.e “How can service innovation be

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implemented in healthcare?”. Qualitative research is inherently explorative in nature. Its main motive is
to gain an understanding of the reasons, opinions, and motivations behind (Robson & McCarten, 2016).
It provides insights into the problem or contributes to the development of ideas or hypotheses for
potential quantitative research. Qualitative research is also used to reveal trends in thinking and opinions
and to explore the problem more deeply. (Bryman et al., 2011). Qualitative differs from quantitative on
many grounds, firstly quantitative deals with numbers and is generally used when the research has
numeric importance attached to it.

This study is based on an understanding of concepts from human social contexts “Qualitative research
contributes to an understanding of the human condition in different contexts and of a perceived situation”
(Bengtsson, 2016). When designing the study there are certain parameters as a researcher which I had to
take into consideration firstly, external forces and resources needed to be taken into consideration such
as duration of the study, potential informants and economics (financial resources being spent on the
study, since I am Masters student, I am not being provided by funding as opposed to what PhD students
receive, thus monetary factor also played a significant role in the study) (M. Bengtsson, 2016). Secondly,
internal factors needed to be considered, my own reflection of knowledge and critical analysis into
account to justify arguments while data interpretation (Long & Johnson, 2000).

Figure 3 : Research "onion" methodology construction model (Saunders et al., 2016).

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3.2 RESEARCH PHILOSOPHY

In the model there are five main research philosophy. Clearly positivism can be not applied here, as
positivism philosophy holds that only "factual" knowledge obtained by observation (the senses), including
measurement, is accurate. The researcher's position in positivism studies is limited to data collection and
objective analysis. The study results in these types of studies are typically measurable and quantifiable.
Since this study does not contain quantifiable data, it is nearly impossible for an objective construct to
exist. Neither can “pragmatism” be applied here since it is a hybrid philosophy approach of interpretivism
and positivism.

The environment is not seen objectively by interpretivists. Individuals, on the other hand, influence the
reality, each perceiving their own truth. Human beings create concepts when they interact with the world
they are interpreting, according to the interpretive view (Orlikowski & Baroudi, 1991). These facts must
be accepted to proceed with research. The interpretivist seeks to gain a comprehensive understanding
of the social phenomena under investigation and acknowledges the role of participant subjectivity in this
phase. When describing their perceptions and values, research participants are encouraged to draw upon
their own experiences and beliefs.

Interpretivism is best suited philosophy approach, owing to its subjective nature and its ideology.
Interpretivism, also known as interpretivism, entails researchers interpreting study components, thus
integrating human interest and subjectivity into a study. As a result, “interpretive researchers believe that
the only way to access truth (whether provided or socially constructed) is through social constructions
like language, awareness, common meanings, and instruments.” (Meyers, 2008). The criticism of
positivism in the social sciences served as the foundation for the development of interpretivist theory. As
a result, qualitative analysis takes precedence over quantitative analysis in this theory.

Albeit it is an effective approach here but it’s important to state its limitation. A disadvantage which it
carries is that the conclusion can be not generalised as data collection, analysis, interpretation may
contain hints of subjective biases. However, its merit is in the high quality of primary data gathered, due
to human trustworthiness and honesty between participants. The primary data are collected via semi-
structured interviews in this thesis which provides profound insights to explore the various perspectives
of vulnerable nature of healthcare services and allow the respondents to confide in a comfortable
environment.

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The basic assumptions of this philosophical method taken into consideration are as follows -

❖ Nature of reality – The hospital setting within Delhi is socially constructed; there are multiple
views of the shared reality. Hence a key point is to observe the concept of service innovation
from different perspectives of stakeholders.
❖ Goal of research – It is understanding the “need” and predicting the current challenges
mentioned in the theory section.
❖ Focus of interest – In interpretivism as opposed to positivism the focus of interest is unique,
specific, and deviant. The healthcare sector is unique owing to its highly complex nature.
❖ Knowledge generated – It based on relative contexts.
❖ Subject/ Researcher Relationship – Interactive, participative, and cooperative as opposed to
rigid separation in positivism.
❖ Desired information – How people interact with each other, how intangible and abstract nature
of services interacts with tangible aspect of services. It allows the researcher to dive deeper into
the human psyche to understand the challenges.

3.3 RESEARCH APPROACH

Generally, within research the two most common logic-based approaches are, deductive and inductive.
The distinction between deduction and induction can be discovered in the theory-research relationship.
Although an inductive strategy defines theory as a study result, a deductive method utilizes theory as a
study guideline (Bryman & Bell, 2011). Means a deductive approach follows the study strategy in the study
scenario to test current theories with hypotheses (Saunders et al., 2009). On the other hand, an inductive
strategy enables theory "to emerge directly from the information" (Fereday & Muir-Cochrane, 2006, p.
83). While there is no concrete separation between the two approaches, inductive approach is usually
associated with qualitative and deductive is associated with quantitative (Bryman and Bell, 2011).
However, research approach applied in this thesis is the abductive logic. Abductive logic as opposed to
deductive and inductive is “sometimes creative” (Thagard et al.,1995). Therefore, providing freedom to
derive conclusion based on the available data.

Abductive logical reasoning simply stated is observing a set of observation and theories on the said field
of interest and then seeking most likely conclusion based on it, in other words there is plausible conclusion
provided but with a remnant of doubt. More, specifically abduction is a middle ground between induction

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and deduction logic, it deals with knowledge generation and analysis pertaining to everyday concepts and
languages (Dubios & Gadde, 2002). Abduction is more versatile than deduction in that it allows for less
theory-based analysis. A paradigm that offers a preliminary idea of what theory could look like is one of
the outcomes of abductive research. Abductive research is also defined as "systematic combining" by
Dubois and Gadde (2002). They claim that systematic combining is a process in which the theoretical
context, empirical fieldwork, and case analysis all develop at the same time. When developing new
hypotheses and setting the foundations for future study, this approach comes in handy.

The reason for opting abductive reasoning Is that firstly, there is no perfect conclusion in qualitative
research, there are enormous variables which are out of control of the research topic and researcher
ability, thus abductive inference would allow generalizing but with scope of further research discussion
and improvement. Secondly, the primary data within this thesis co-incidentally been collected during an
unforeseen global even which has significantly impacted the working of a healthcare sector. Though not
explicitly mentioned in the theory but as a researcher a major variable like this cannot be overlooked.
Thus, flexibility of approach, and developing theory and the case itself have been revisited time and time
again to ensure an all-encompassing view.

3.4 RESEARCH STRATEGY

A single case study proved to be the most optimal approach research strategy out of all the available
options. To reiterate its advantages when applied to this research –

 Comprehensive and multifaceted overview: A crucial advantage of a single cast study is that it
enables a holistic and systematic analytic approach of the main concepts. The main intention is to
approach and understand service innovation within an organization. A framework is developed
by being able to understand and analyze different perspectives and their related theories when
applied to a practical case. A single case study, unlike standalone research methods that provide
a snapshot, such as surveys, allows use a variety of tools on a single topic. This allows for more
time and space to develop a thorough understanding of the subject, laying the groundwork for a
deeper dive into the factors that influence the empirical findings.

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  In contrast to a narrow and limited viewpoint in a survey response, case study captures a variety
of viewpoints. By diluting a single individual's agenda, this allows for a clearer understanding of
the issue at hand while also minimizing risk of bias.

Yazan (2015), summarizes work of three main scholars with regards to case study approach: Yin (2003),
Stake (1995) and Merriam (1998). Each of them has defined a “case” in their own terminology. Although,
Yin (2003)’s study is more recognized among case study research work, I have followed Stake (1995)’s
approach. The primary reason being Yin (2003) has “positivism” as its core belief which simply means that
“if one assumes a positivist approach to your study, then it is your belief that you are independent of your
research and your research can be purely objective. Independent means that you maintain minimal interaction
with your research participants when carrying out your research.” (Wilson, 2010), which is simply not true in
this thesis. Table below indicates the specifics of the case with regards to Stake’s (1995) approach.

DIMENSION OF INTEREST ROBERT STAKE’S ART OF CASE STUDY RESEARCH

“1995”
1. CORE BELIEF Constructivism (non-determinism) – here
Constructivism refers to ‘an approach to learning that
holds that people actively construct or make their own
knowledge and that reality is determined by the
experiences of the learner’ (Elliott et al., 2000, p. 256).
As the Case is of a newly set up private super-specialty
Hospital Venkateshwara, inferences are based on
observer standpoint of view.
2. DEFINING CASE AND CASE STUDY Case is “a specific, a complex, functioning thing,” more
specifically “an integrated system” which “has a
boundary and working parts” and purposive (in social
sciences and human services) (p. 2). Going by the
definition of complexity provided in section 1.3,
Venkateshwara is a complex system involving
interplay between different components. Although
abstract, but the case has a subjective boundary.
Qualitative case study is a “study of the particularity
and complexity of a single case, coming to understand
its activity within important circumstances” (p. xi).
3. DEFINING CHARACTERISTIC - Holistic (considering the interrelationship
between the phenomenon and its contexts);
- Empirical (basing the study on their
observations in the field);
- Interpretive (resting upon their intuition and
see research basically as a researcher-subject
interaction);

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 - Emphatic (reflecting the vicarious
experiences of the subjects in an emic
perspective).
4. CASE STUDY DESIGN Main motive is that case study design be flexible.
There should be one strict research question. Also,
since data is collected via human sources and personal
subjective physical observation of the site a qualitative
case study researcher requires “Knowing what leads to
significant understanding, recognizing good sources of
data, and consciously and unconsciously testing out
the veracity of their eyes and robustness of their
interpretations. It requires sensitivity and skepticism”
(Stake, 1995, p. 50).
5. DATA ANALYSIS Both the methods of data analysis mentioned by Stake
(1995) are utilized: Categorical and Direct
interpretation. Further data validation is performed
via triangulation method.

Table 5 : Single case study parameters (Stake, 1995), modified and adapted from Yazan (2015).

3.3 CASE DESCRIPTION

Venkateshwara is a multi-specialty hospital opened in 2016. It is situated in Dwarka, New Delhi, India.
According to their official website they have the latest medical technology and committed medical
practitioners who are motivated to provide ethical medical treatment. The Hospital was established by
the Venkateshwara Group. The V.H Group is a $2 billion Indian enterprise that mainly consists of poultry-
related businesses such as packaged foods, animal vaccines, human and animal pharmaceuticals, and
healthcare products.

The healthcare organization’s vision is to position themselves in the lead role on the global healthcare
map. Their mission is to achieve global excellence in healthcare with evidence based ethical clinical
practices utilizing a team of highly skilled professionals and cutting-edge technology. Their core values as
an organization are ethical healthcare, trust, integrity, compassion, equality, innovation, social
responsibility, human dignity, and medical transparency.

Key Features –

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  First super-super-specialty Hospital to have invested in their technological services by
having medical furniture such as fully customizable beds and in room services ordered
from Paramount Japan.
 A key service which differentiates them from other Hospitals in the region is its
introduction of cash less treatments for IPD patients using insurance policy.
 It has dedicated international service department to improve its medical tourism and
service international patients better.
 Current infrastructural capacity includes 325 beds (refer to section 2.4.1, definition of a
multi-specialty hospital), 100 ICU beds and 10 modular operation theatres.

The Venkateshwara hospital being a multi-specialty hospital as opposed to normal general hospital has
specialized centers which deliver technical treatments pertaining to different parts of the body.
Venkateshwara has total of 14 centers, table below contains information for the most availed services by
patients from the top eight centers. The table also provides division of services based on ancillary and
technical services. The reason for breaking down the services within department was in accordance to the
crossover and mutation phenomenon of the NK model. Since a large hospital shares services across its
centers, such as nurses rendering their servicers to more than two departments and financial department
aiding all the departments, an understanding of the services across departments becomes an interesting
explorative stance.

DEPARTMENT FUNCTION TECHNICAL ANCILLIARY

SERVICE SERVICE
1. Critical Care Critical care is a discipline that deals primarily with Bedside Bronchoscopy, Isolation cubicles,
human reactions to situations that endanger life. Bedside Renal customized nursing
The Critical Care Physician (Intensivist) is someone replacement therapy, care, focused
who has the requisite experience and expertise in Positive negative air rehabilitation, and
identifying and treating patients who are critically pressure flows early mobilization.
ill. Within reasonable standards the main goal is
to save as many lives as possible.

To order to meet the highest expectations,

Venkateshwara as a dedicated healthcare
organisation seek to provide patients with
comprehensive treatment by including doctors
from various specialties, as might be considered
appropriate for specific patients.
2. Cardio Thoracic The Cardio Thoracic and Vascular Surgery Centre Intravascular laser After surgery
and Vascular in the Venkateshwara hospital boasts of highly machine, rehabilitation centre,
surgery skilled professionals, seasoned and internationally transephagageal nurse and
trained cardiovascular surgeons and cardiac Echocardiography. physiotherapy
anesthesiologists, who bring unrivaled knowledge

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 and standard of surgical care to Venkateshwara
Hospital. They are well versed in dealing with all
aspects of problems of the coronary, valvular,
congenital and other hands. They also have
experience in the management of Aortic, Vascular,
and Thoracic diseases.
3. Dental Sciences Venkateshwara Dental Excellence Center is a Laser dentistry, Invisible Preventive dentistry,
modern state-of-the-art dental facility that houses braces, digital Scanner acute emergency
the perfect mix of high-end technology with a & CAD CAM dental services,
team of trained and experienced doctors to meet aesthetic dentistry,
all your dental needs. We at Venkateshwara have digital dentistry
a team of highly qualified doctors who have
worked in different fields of modern dentistry and
have studied. As the technology is rapidly
progressing, they are also updating ourselves and
improving ourselves to keep them on track.
4. Gastroenterology At the Gastroenterology & Hepatology Clinic, the Advanced endoscopic Pharmacy
& Hepatology organization specialize in the surgical treatment of imaging (Narrow band
gastrointestinal diseases using ethical and patient imaging &
friendly recommendations based on proof. They chromoendoscopy),
are fitted with state-of-the-art equipment and Capsule Endoscopy,
carry out virtually all major GI, Hepatobiliary and Gastroscopy and
Pancreatic operations, as well as an extensive Colonoscopy
Bariatric Surgery program.

5. Liver Transplant, The Liver Transplant Centre, GI Surgery & GI Surgery of small Post-Surgery
GI Surgery & GI Oncology offers intensive surgical treatment for intestines, Colon rehabilitation
Oncology intestinal Gastro diseases. The healthcare Cancer, Gall Bladder programme
organization has personnel who have considerable Cancer
expertise in cancer surgery affecting the whole
digestive tract such as the Esophagus, Uterus,
Colon and Rectum. The department is highly
trained in Minimal Access Surgery and frequently
offers laparoscopic surgery for various intestinal
gastro diseases including Esophagus, Stomach,
Colon and Rectum cancers
6. Haemato Medical An integral part of Venkateshwar Cancer Centre, Chemotherapy for all Dedicated Staff for
Oncology & Bone Dwarka, is the Haemato-Medical Oncology and Haematological & all Chemo mixing &
Marrow Bone Marrow Transplant Centre. Department 's solid Tumors in delivery to the patient
Transplant main mission and aim is to provide compassionate Paediatrics & Adult, Chemotherapy, 24x7
advance care in Haemato-Medical Oncology to all Malignancies through Excellence Blood
patients as well as provide world-class service. PICC Lines, Hickman’s Bank,
Their endeavor is to achieve excellence in basic Catheter and Radiodiagnostics &
research and treatment of cancer through Chemoport Onco Pathology Lab
multidisciplinary collaboration with oncology of Immunotherapy and support available for
surgery and radiation. Evidence-based treatment Targeted Therapy all Oncology Services
is their focus undertaking as per recent
assessment.
7. Pulmonology & The Pulmonology and Sleep Medicine Center with Fiber Optic Outdoor and Indoor
Sleep Medicine the entire spectrum of respiratory diseases Bronchoscopy – BAL, Services (The
involving the Lungs, Airways, Mediastinum, Pleura, TBNA, TBLB, department provides
Diaphragm, and Chest Wall. Disorders that Endobronchial Biopsy, outdoor services
indirectly affect the breathing, such as Tracheobronchial daily), Smoking
Neuromuscular Disorders and Sleep Disorders are Stenting, Balloon Cessation Therapy, 6-
handled in this centre. Dilatation, BPF Closure, Minute Walk Test
Electrocautery, Argon
Plasma Coagulation,
Laser Ablation etc.

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 8. Surgical & Gynae Surgery is the primary treatment of choice in Breast Preserving Pharmacy, post-
Oncology many early-stage Cancers. Removal of tumour by Surgery & Radical surgery rehabilitation
surgery is a fast and the most effective way to Mastectomy for Breast
eradicate the disease. Our Surgical Oncologists are Cancers
highly experienced and trained for difficult Cancer Oral Cancer Surgeries
surgeries. They play a vital role in every sphere of Head & Neck Cancer
Cancer Care, from diagnosing, staging, treatment Surgeries (Thyroid,
following up and supportive care. To start Parathyroid, Laryngeal
treatment itself our surgeons access the tumour and other Cancers)
directly by FNAC or under image guidance Needle Craniofacial Surgeries
Biopsy for Tissue Diagnosis.

Table 6 : Department based breakdown of ancillary and technical services.

What is so special about this case? Why should this case be taken into consideration to explore service-
based innovation?

Though mentioned briefly in introduction section, it is important to list down the unique case component
which are interesting to understand practically –

➢ Firstly, the hospital was opened in 2016, with 70 % of its total capacity, in present its at its full
organisation capacity. Compared to other large hospitals such as Max and Fortis which have been
in the same area much before Venkateshwara, the newness of the organisation becomes perfect
to assess its service innovation capability and challenges. Not rooted in traditional methods, the
method of delivery of services are fresh in nature and thus empirical data shall reflect newer
challenges and additionally its competitive stance in heavily hospital dominant area of New Delhi.
➢ Furthermore, a private organisation was taking into consideration to test out the burnout
syndrome (more specifical, ethical vs economical conundrum, section 1.2). In comparison to
government hospital in the same region such AIIMS and Safdarjung, the supplier of the services,
primarily specialised physician needs to continuously provide highly technical services such as
specialised operations etc at consistently high success rate to compete with other hospitals
providing the same services. New ways of service delivery such as high emphasis on telemedicine
because of Corona epidemic as forced doctors to adapt to new ways of offering services. Long
work hours coupled knowledge curve of service innovation takes a toll on healthcare providers
(Maslach et al., 2001).

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3.4 RESEARCH CHOICE: Semi-structure Interview

The standardized open-ended interview is highly structured in terms of the wording of the questions.
Participants always ask the same questions, but the questions are written down to open the answers (Gall,
Gall and Borg, 2003). This openness allows participants to provide as much information as they like and
as a follow-up allows the researcher to ask experimental questions. Standardized open ended interviews
are probably the most popular form of interviewing used in research studies due to the nature of the
open-ended questions, allowing participants to fully express their views and experiences. If one were to
identify weaknesses with open-ended interviews, the difficulty of coding the data would probably be
identified (Creswell et al., 2007). Since open-ended semi-structured interviews requireparticipants to
express their answers in a detailed manner, it may cause hindrance to the researcher to researchers to be
able to extract similar themes or codes from interview transcripts they would with less open-ended
responses. Although the data provided by participants are rich and thick with qualitative data, sifting
through the narrative responses can be a more cumbersome process for the researcher to reflect an
overall perspective of all interview responses fully and accurately through the coding process. However,
this reduces researcher biases within the study, according to (Gall, Gall, and Borg, 2003). The reason I
chose this type of interview specifically for my thesis because, firstly no formalized research has been
performed on integration of service -based innovation with healthcare systems thus the topic still has
open ended potential, thus as a researcher I lack the necessary data to create a formalized interview
process with close ended questions. Secondly, since I am exploring the processes-based innovation and
not answering “why” or “when” but instead “What” therefore, exploration of emergent themes will aid
me in formalizing my findings.

The interview contained 15 questions each, broken down into 3 sections of 5 questions each. The first set
of questions was there to gather general information. The second set of five questions was based on
previous knowledge and on the spot improvisation to set the questions according to the respondent’s
profession and body language at that instance. Third set of five questions were there to explore and
extract expert opinions on related concepts. Interviews were not recorded due to privacy concerns.

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3.4.1 PREPARATION FOR THE INTERVIEW

The most useful tip with the interview process is probably that of preparing an interview. This process can
help to make or break the process and can either alleviate or exacerbate the problematic circumstances
that might occur once the research is carried out. McNamara (2009) suggests the importance of the
preparation phase to maintain an unambiguous focus on how interviews are to be constructed to
maximize the benefit of the proposed research study. Chenail (2009) offers several pre-interview exercises
along these lines that researchers can use to improve their instrumentality and address potential biases.
According to McNamara (2009) the eight guidelines followed were:

➢ A setting was chosen for the interview to be conducted face to face. Since the interviewees were
all present within the hospital premises the room for conducting the interview varied. Important
points considered were that each room had a sufficient space and a quite ambient for voice clarity.

➢ Purpose of the interview was explained beforehand to the interviewee to help them make them
comfortable to express their opinions freely.

➢ I addressed the terms of confidentiality. To avoid legal hassle, the names of the respondents will
be kept anonymous. Also, since hospital has a sensitive, vulnerable, and high-risk workplace, I was
specifically requested by the authority to not disclose personal information of the respondents.
Therefore, the priority was given to their professional expertise.

➢ Format of the interview was explained. A total of 15 questions were asked to each respondent.

➢ Indication of the duration of interview was discussed. Since the study was conducted during a
global pandemic each professional had limited amount of time to hand out. Doctors and
management were keen on being informed about the duration of the interview. The consumer
(patients) of the service were open to discussion beyond the allotted time. Nevertheless, each
respondent was cooperative and provided detailed answers.

➢ As a follow up, few respondents inquired about the research topic to be better able to assist in
the outcome. This proved to be crucial as it set it direction of the interview and streamlined the
discussion.

➢ Respondents were encouraged to ask questions before hand to address any of their queries.

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 ➢ Questions were written beforehand in a particular order depending on the type of the
respondent.

Selecting participants

The importance of selecting the appropriate candidates for interviews is discussed by Creswell (2007). He
claims the researcher should use one of the different types of sampling strategies such as criterion- based
sampling or critical case sampling (among many others) to get qualified candidates to provide the study
with the most credible information. Creswell also suggests the importance of getting participants willing
to share information or "their story" openly and honestly (p. 133). In a comfortable environment, where
participants do not feel restricted or uncomfortable to share information, it may be easier to conduct
interviews with participants.

As pointed out earlier the participants based on prior judgment by the researcher on their significance to
the research questions and the research objectives at hand. I, as the researcher, had to shift through the
theory and then discuss with the hospital top management to select the right participants. After much
deliberation, the interview was conducted in three parts to incorporate three different viewpoints to
incorporate a holistic view of the research at hand.

1. Managerial perspective:

The first set of respondents included the management of Venkateshwara hospital. These are the actors
which are not connected directly with the receiving of delivery side of the service but act as the crucial
pillar in deciding on building, implementing, offering an innovation framework within the organization
(Lega et al., 2013). Their decisions directly impact the working of pathways of service delivery. Therefore,
their views become an obvious choice as primary empirics.

S.NO POSITION (LEVEL OF LANGUAGE DURATION / INTENDED OUTCOME FOR THE

EXPERTISE: HIGH) PLACE RESEARCH
1. Associate Technology English 25 mins / Face Purpose for selection of the participant
and Innovation Adviser to Face / was mainly for three reasons. Firstly,
Hospital Lobby respondent specializes in research and
development department of the
hospital. Secondly, it made sense to

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 gather conceptual knowledge of
working of a complex healthcare system
and integration of technology. Thirdly,
concept of assimilation defined
previously in literature section is
touched upon in the questions. Fourthly,
the respondent had extensive
experience working with two top
hospitals in New Delhi before joining
Venkateshwara thus providing key
points when it came to competitive
advantage.
2. Logistics & Business English/Hindi 30 mins / face to The respondent for chosen primarily
manager for face / because of three reasons. Firstly, as a
international patients respondent’s business manager, the respondent has
office insights into the ever-changing dynamics
of inflow and outflow in international
patients. Secondly, the research
parameter includes services which are
employed by healthcare organization to
better the existing service and
understand service innovation from the
point of practical implementation.
Thirdly, medical tourism being on the
rise, serves a key vantage point for the
hospital in bettering its service
innovation capability.
3. Senior IT service English 27 mins / face The respondent was taken into
consultant to face / consideration for three factors. Firstly,
respondent’s as mentioned in the theoretical section,
demarcation definition of service
office
innovation is addition of a new service,
with relation to technological services.
Secondly, digital service innovation is a
key aspect of healthcare thus this will
bring new insights into technological
advancements needed to understand
need for service-based innovation in
healthcare. Thirdly, a existing
framework defined in the theoretical
section can be modified by looking
within the adoption of technology
services such as telemedicine and
electronic health records.

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 4. Innovation Cell – Senior English/ 29 mins / face to A key distinction with respondent 1’s
consultant Hindi face / Third floor position is respondents handling of
common area external affairs of innovation. The
respondent takes parts in international
medical conferences to learn new ways
of service delivery.
5. Business consultant English / 34 mins / face to Having interacted with the respondent
Hindi face / before personally, I believed his insights
Respondent’s of value-based care and ancillary
office services would enable to understand the
challenges the hospital faces when
narrowing down on a service innovation
framework.
6. Lead innovation Adviser English / 30 mins / face to The respondent jobs are to provide
Hindi face / ground strategic advise to establish and place
floor office hospital and an private entity as a
dominant organization within the area.
The respondent is responsible for
evaluating resource allocation towards
bettering services such as
transportation, nurse association and
front desk services.

Table 7 : Description of managerial respondents.

2. Direct service providers perspective:

The second group of interviewees consisted of direct service providers. These are the actors which deliver
and carry out services directly towards the patients. They are in direct contact with consumers. They look
after the primary need of the consumer, which is improvement of their health. Senior Physicians carry out
numerous services such consultancy, technical services such as surgery, critical treatments, post-
operative care, pre-operative diagnosis, and consultancy. Then comes the ancillary provider of services
such as nurses, physiotherapists, psychiatrist, and nutritionists. They insights into service innovation and
their feedback is incorporated into a service innovation framework.

S.NO POSITION LANGUAGE DURATION/ PLACE INTENDED OUTCOME FOR THE

RESEARCH
7. Senior Physician English 30 mins / face to face The respondent was responsible for
– Head of / lobby carrying out highly specialised technical

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 bariatric services such as surgeries and does
department consultancy for both IPD and OPD patients.
8. Nurse English / 25 mins / face to face Nurses carry out ancillary services. The
Hindi / 4th floor common respondent in this case is responsible for
room IPD patients and their pre- and post-
operative care. Respondent renders service
to both doctors and patients and carries
out official services such as paperwork
when necessary.
9. Physician – English 28 mins / face to face The respondent works in critical care and
Critical care / 3rd floor office thus deals with high risk and intense
situations. The respondent has to deliver
the services at an efficient, well calculated
and effective manner to save patients lives.
Thus, inquiring about upgradation of
services and gaining insights into areas of
development form the respondent in
understanding the situation becomes an
interesting exploration point.
10. Primary English 30 mins / face to face The respondent for selected for three
Physiotherapist / 1st floor lobby reason, firstly because being an ancillary
service provider, the intricacies of
integration of service with other services
becomes easier to follow and understand.
Secondly because hands on information is
provided relating to billing and cost
incurred by patients which is a challenge as
propose in the introduction of the thesis.
Thirdly, physiotherapist provides a non-
technical perspective which makes it easier
to follow and understand the nuances of
service-based innovation.

Table 8 : Description of direct service provider respondents

3. Consumer perspective – Receiver of the service – Patient – IPD and OPD:

Here IPD is referred to as hospital inpatient care (admitted in the hospital, due to surgery or other critical
condition) and OPD refers to hospital outpatient care (not admitted, mainly come for diagnosis). Finally,
the third group comprised of the consumer of the services. Naturally, patient feedback, satisfaction and
quality of services is better assessed by inuring from the direct receivers of the service.

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 S. NO POSITION LANGUAGE DURATION/PLACE INTENDED OUTCOME FOR
THE RESEARCH
11. International Patient English 35 mins / face to face / An international patient was
– Zimbabwe international waiting room chosen to understand the
challenges of services, to gain
insights into billing of services
and to understand the reason
behind choosing one hospital
over the other in the locality.
12. Domestic patient – Hindi 34 mins / face to face / The respondent being admitted
Renal therapy – IPD patients’ room in the hospital after surgery was
provided with services. Having
availed both doctors and
nurses’ services, respondent
was selected for the insights
into what to improve and how
can they improve it.

Table 9 : Description of service receiving respondents.

3.5 IMPLEMENTATION OF TRIANGULATION METHOD

In this thesis primary data is collected via semi-structured interviews and physical observation of
Venkateshwara Hospital and secondary data is collected via official websites, data from research papers
and Venkateshwara Medical brochures. To analyze the data and narrow down the possibilities I knew a
method needed to be taken into consideration which would provide rigor, authenticity and credibility to
the case and the outcome. Thus, triangulation method was adopted.

In a basic context the word “triangulation” means observation of a phenomenon from two or three points
of observation (Flick et al., 2004, pg 178). Triangulation method has been used by researchers as a method
for validation by combing different analytical approaches. To ensure validation of research, I have
followed Denzin’s (1978) approach whose three key points are applied in this field of study. Firstly, he
stated that triangulated data is derived from different sources, places, and time. This is applied here as
the study has been done over a period of 6 months, data has been collected from different sources.

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Secondly, he mentioned the importance of Investigator triangulation which is used of different observers
and interviewees to balance out the subjective bias of the individuals in the interviews. Again, I have made
sure by choosing respondents who have significant professional range. The third aspect is triangulation of
theories “Approaching data with multiple perspectives…. various theoretical points are placed side by side
to assess their utility and power” (Denzin, 1978).

Although it is good way to ensure data analysis and validation, it does have its limitations which need to
be mentioned. “Extreme eclecticism” is one such limitations, which states that if more than one method
is used to analyze the proponents then, it becomes troublesome to gain the “whole picture” as different
method have different perspectives leading to different observations. Thus, one tweak which is made to
the earlier provided definition of triangulation is that it could be strategy for gaining deep knowledge and
justifying the outcome based on the researcher’s ideas (Denzin & Lincoln 1994a). Within the thesis
parameter the triangulation method is used extensively in empirical finding session to validate practical
empirics with theoretical concepts.

Within Method Triangulation

There are different ways of triangulation for example there is investigator triangulation, between-method
triangulation, triangulation of theories etc. I have consciously chosen within method triangulation which
focuses more on episodic interviews (Flick, 1996). The main fundamental is to systematically unite the
methodological approach of semi-structure interviews and proposed narrative utilizing strengths of each.
For example, when asking respondents of service innovation, I put forth “So how do you see service
innovation being implemented in the hospital?”, note that the question opens a narrative style. Its serves
two-fold purpose, firstly it allowed to clarify various subjective issues which the interviewee will put forth
and secondly it will allow a complementary perspective which is interviewers own process perspective
thus changing the wording of order of the question to gain more out of the respondent.

3.6 PILOT TESTING

In addition to within method triangulation, implementation of a pilot test is implemented as it is another

important element in the preparation of the interview. The pilot test assisted in determining whether
there are shortcomings, limitations or other weaknesses within the interview design and allowed it to

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make necessary revisions before the final interview was carried out (Kvale, 2008). According to Kvale
(2008), a pilot test should be carried out with participants with similar interests to those participating in
the study implemented. The pilot test also helps are searcher refine research issues that are discussed in
the next section. I conducted mock interview with 3 additional members. The reason was to see reaction
towards the questions, relative ease while answering them and more so allowed me to revise the question
order.

3.7 RELIABILITY

The reliability measures if another researcher can replicate the study. This is challenging for qualitative
research because the settings can be hard to replicate exactly (Bryman et al., 2011) as many variables are
unique for each case. This study is based on a qualitative single case specific study and therefore there
are many variables affecting the outcome. This means differences will occur irrespective of how a new
study is conducted. Although this study has a structure presented with keywords for literature review and
an interview guideline along with a framework for analysis, all of which provides fair reliability and
considering the context I believe another researcher would receive similar results if our study were to be
replicated. But having said that, to ensure reliability, professional background of the respondents was
checked, and conceptual theories were cross verified from different journals. Nevertheless, reliability
factor is more inclined towards quantitative research and it is highly unprecedented to achieve similar
results in a explorative qualitative study owing to highly different subjective realities.

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 DATA ANALYSIS

This section of the thesis puts forth analysis of primary data using combination of thematic coding and
discourse analysis. It further relates theoretical aspects with primary empirics.

4.1 THEMATIC ANALYSIS

The concept of "theme" is used as a descriptive element in the analysis, providing a tool that organized a
collection of repeating suggestions, narratives, and statements from respondents. It contains codes with
a common point of reference and a high degree of generality that unifies ideas about the topic of
investigation. Within literature, it is regarded as a thread of fundamental meaning discovered indirectly
at the discursive stage, as well as elements of participants' subjective understandings. To obtain a holistic
view of data and reveal a trend in the participants' narratives, each theme may have some subthemes as
subdivisions (Ayres et al., 2003; Lopez & Willis, 2004).I have adopted two-part approach to code semi-
structured interview. The first being thematic analysis and second being discourse analysis. Thematic
coding is used to categorize and codify the transcripts of the interview is best characterized by the
researcher's phases. The technique was created from those outlined in grounded theory literature (Glaser
& Strauss, 1967) and other qualitative information analysis sources (Bryman et al., 1988). The basic
assumption taken in the said process is that interviews follow a semi-structured approach, secondly the
interviews have been transcribed and thirdly professional range of respondents vary.

The second part of the coding process adopted was discourse content analysis, “In discourse analysis,
interview data are analyzed at a macro sociologic level, as social texts. Discourse analysis is an approach
that surpasses the dichotomy between subjective meanings and objective reality, as well as the dichotomy
between user-centered and system-centered research” (Talja, 1999). Applied here, it refers to knowledge
from respondent which can be applied to larger practices and societal reality. This has been adopted
primarily because, respondents have related their own knowledge regarding the said research enquiry at
two levels: micro and macro level. For example, respondent 2, has discussed the phenomenon of
challenges to service innovation to international at length within the local context of Delhi and naturally
extended his comparison to other countries because of his own experiences and knowledge. Following

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on, discourse analysis is also adapted because respondents had been given the freedom to some extent
generalize their opinions and viewpoints.

The basic ideology which I implemented during semi-structured interview was to allow the interview to
take its natural course as contrary to structured interview where regardless of the answer the next
sections are asked in a monotonous way. Semi-structured interview allowed to have a meaningful and
insightful discussion with each respondent, in the process treating each interview as a unique perspective.
As, each respondent was treated as a unique individual thus same logical structure of questioning cannot
be used, semi-structured interview process enabled to take uncertainty into consideration and use
beneficially to the explorative outlook of the research. The fig 6 represents is a conceptual representation
of the thought process behind generation of theme and subthemes using Burnard’s (1991) stages of
analysis of an interview.

Figure 4 : Ten stage interview analysis, adapted from Burnard (1991).

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STAGE 1 –INITIAL PHASE – Notes and Initial coded constructs

Stage 1 consisted of reading the transcripts freely with an open mind, the main idea was to extract ideas
though immersion. Immersion was accomplished by reading transcripts carefully and making a list of
important, recurring ideas and key issues in data. In this case I approached transcripts from three different
points of view, the managerial, ancillary providers, and the consumers. Depending on the questions asked
to these three major groups I managed to identify incidents or statements, that were unique, interesting,
or contradictory from their perspective. For example, Respondent 1 talked extensively of effective
integration of telemedicine and Respondent 2 elaborated on challenges on acquiring more international
patients. A pattern between respondent’s answers seemed to emerge.

An important note as the interviewer was that I be cautious not to be too affected by my own position,
as this might result in the loss of vital information. Nevertheless, primary themes were developed by
staying close to research question and based on the data and contemplating potential interpretations and
how they work together (Hunter et al., 2002).

STAGE 2 – INITIAL PHASE – Reflexive Note Making

The first step allowed preliminary code generation for all the interviews, the main goal as the researcher
was to look for explicit mention of barriers by the respondents. No direct questions were asked about the
service innovation challenges or framework itself, but the respondents were guided towards mentioning
the barriers themselves. The methodology followed was to group questions and analyze answers based
on similar professional backgrounds. For example, respondent 11 and 12 were grouped together and their
answers were analyzed with key statements highlighted.

A key part of this phase was additional note making, both mentally as physically using a small notepad.
The purpose behind this was to take pointers from the respondent’s body language, subtle nuances in
speech to be able to penetrate deeper into respondent’s practical as well as professional experience. For
instance, question 7 asked to respondent 3, had an ethical cue of adoption of new digital services. The
phrasing of question was changed from respondent 2 to 3 upon noticing the level of positive inclination
to provide an elaborate answer. Also, since the employment years of the respondents varied, a note was
made to ask questions based on their level of expertise.

STAGE 3 – Removing fillers

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The third step was performed simultaneously with first two stages. The purpose was to eliminate phrases
which did not provide substantial linkage with the theory or the research purpose. This was a key stage
particularly for respondent 11 and 12 as the interview lasted longer than others since a few filler questions
were added as prompts to make the patients more comfortable when specifically asked about sensitive
information such as billing hassles and their overall satisfaction. A dominant theme which emerged from
the first 3 stages were the effective integration of digital service within the system. Feedbacks from
patients, doctor’s expertise and management’s concerns highlighted need for a framework which
incorporated easy to use e-health and mobile health (M-health services) to overcome challenges such as
efficient billing system, choice of ancillary service providers and learning tutorials for nurses to use
telehealth to serve patients needs in times of pandemic.

STAGE 4 –Constructing main Themes.

In stage 4, themes were emerged when a group of phrases were being replicated in a patterned manner
and in multiple situations by respondents. Using intellectual judgment, comparison was done between
recurring, highlighted and theoretically prominent themes. The identification of main themes was
accomplished by putting propositions to the test (Section 2.6.2) and asking questions about similarities
and differences between codes. The more times the same phrases with the same intent appears in a text,
the more likely it is to be considered a pattern, but the formation of a theme based on the number of
repetitions was ultimately left to both abstract and theoretical discretion. While the frequency in which a
theme appears in the data may affect its relevance, it should have captured something significant in
relation to the overall research issue.

STAGE 5- Sub-themes primary & secondary

Although most qualitative approaches require interaction with established literature prior to data
collection, to establish sub-themes I delayed in-depth literature review until after most data collection
was completed to avoid prejudice and preconceived notions (Dunne, 2011). It allowed themes to arise
spontaneously from empirical evidence during study, free from the constraints of existing theoretical
structures and hypotheses. As a result, I had to set aside certain theories regarding service-based
innovation to perform abductive analysis and establish themes (utilizing abduction style of research, refer
to section 3.2), even though this was challenging as being a researcher I was aware of the theoretical
knowledge of the study under investigation.

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This was clinical in the data collection period during interviews as it aided in the explorative nature of the
study. Due to the COVID-19 pandemic, hospitals were at the frontline, taking in more patients than ever
and delivering new and varying services at an unprecedented rate owing to the growth of patients in later
half 2020. For example, doctors and nurses discussed the challenges to deliver services during times of
pandemic, also the managerial respondents discussed the pressure faced by the system to keep up with
the demand of beds, ventilators, and a robust, efficient service innovation framework to incorporate the
new system. This was not implicitly mentioned by previous scholars in their service-based frameworks.
Hence the sub-themes reflected new insights to better adapt of well-rounded framework.

STAGE 6 –Elimination of research bias

To ensure own bias into research based on pre-conceived theories on service innovation and to bring
invoke feedback loop of self-reflection of the emergent themes and data analysis the concept of
immersion and distancing was used. Tinker & Armstrong (2008), state that to identify theme and evaluate
and analyze the precision of the coding process, researchers must paradoxically both immerse themselves
in the data and separate themselves from the data. For a valid representation of participants' opinions, it
is essential to stay close to the results.

It could, however, prevent researchers from taking a comprehensive approach to data analysis and limit
their ability to be comprehensive in their data analysis. Distancing oneself from data for a period and/or
reading the study from an "outsider viewpoint" will alleviate analytical stress. This can help to stimulate
and enhance data analysis by helping the researcher to retain a sense of self-criticism of his or her own
analysis process and look at the phenomenon from a different perspective (Seal et al., 2007).

STAGE 7 – Finalization of theme

The final stepped involved listing down of main themes and sub themes. These themes reflect a well-
balanced combination of theoretical and practical knowledge; as such their importance is inclusive of their
determining factor upon the research question.

4.2 THEME GENERATION

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The themes were generated manually to include, in the process I had to allow myself as a researcher and
an observer to have creative freedom to interpret data. Software and algorithm based thematic coding
was avoided (example NVivosoftware) was taken out as Welsh (2002) rightfully pointed out that “In terms
of addressing issues of validity and reliability in thematic ideas that emerge during the data analysis
process is clearly dependent on fluid and creative way in which these themes emerge and are interpreted
by the researcher”. An important here is that, instead of using codes, specific phrases from the
respondents are used to reflect the themes, as it is, literature is ambiguous when it comes to using terms
such as “code”, “phrases” or “theme” to reflect the basic unit of code. Vaismoradi et al., (2013), re-iterates
the same “Data corpus, data item, data extract, code, and theme in thematic analysis are equivalent in
content analysis to the unit of analysis, meaning unit, condensed meaning unit, code, and
category/theme, respectively.” Additionally, three major basic factors which were taken into
consideration were:

➢ Label – The interviews were divided into different labels. The first labelling was based on
profession, the second was duration of the interview and the third richness of data (Subjective
viewpoint of researcher).

➢ Inclination – Different respondents have different level of expertise. When the interviews were
conducted there were certain variables which were out of control of both the interviewee and
interviewer. For instance, the mood or the interest level of the respondent on the day of
interviewee, the influence of the surroundings on the participants behavior. For example,
Respondent 7 being a Dr. had to be available for emergency calls. Since the interviews were
mostly taken during job hours, it meant that there could have been technicalities.

➢ Word importance and count – The other important aspect of theme generation was how often
was the concept mentioned by the interviewee and in what context. Perspective of the researcher
influenced the relative importance of phrases.

4.2.1 FIRST SET OF THEMES

The over-arching theme was developed using the primary and the secondary themes. From the
researcher’s perspective the underlying theme was to select phrases pertaining to healthcare and digital
services. Table below lists the themes with coded phrases and theoretical prompts for the questions.

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Furthermore, upon analyzing of the themes it was revealed there was a co-relation between secondary
sub-themes and cross-integration between primary and secondary sub themes. For example, the need for
remote diagnose as key service innovation especially given the pandemic times was described as a “need”
based service by respondent 3. Co-relation between secondary sub-theme “types of telemedicine” and
“healthcare is a need-based system” was there as, respondent 11 and respondent 6 stated the terms
together under the same theoretical bracket with a similar intent.

Over- Sub-Theme Sub-theme Coded Excerpts Theoretical prompts

Arching (Primary) (Secondary)
Theme
Integration of Virtual delivery Respondent 3 – “..before the Foundation of 3
Telemedicine of treatment modern electronic health questions were based
record (EHR) doctors owned on barrier to adopting
the medical information found telemedicine service by
in the chart of a patient”, Tanriverdi & Lacono
Respondent 11 - “Choosing (1998) (Section 2.3.3)
Types of physicians, applying for Managerial
Telemedicine appointments and receiving respondents had a
medical advice also involves reflected a similar
several phone calls and visits
theme.
in person.”
Patient Nk Kauffman model
Digitization Respondent 1 – “Telemedicine
Challenge of Information (2.6.2), determining
Of is one area which has been
Remote storage total number of
healthcare successful in inducing a keen
Diagnosis digital services
interest in the private sector.”
Modern Respondent 8 - “notable Theme particularly
Electronic examples of active dominant between
Health Records telemedicine services in India service providers.
(M-HER) include mammography Patient respondent’s
services at the Sri Ganga Ram adamant about billing
Hospital in Delhi.”
services.
Respondent 7- “telemedicine
Efficient Billing Ancillary providers
services fall under the joint
System such as physio and
authority of the Ministry of
Health and Family Welfare and nurses relied heavily
the Information Technology upon effective
Department.” patient information
Respondent 5 - “hospital is a handling
Need of “need” based system, whereas Section 2.2.2 –
Effective Use of other industries are “want” emotional burnout
technological based industries. This typically
challenge and ethical
services means that for us our
customers are priority as is it a
services
Adoption of
Healthcare is a high-risk sector.” As expected,
New
“need” based Respondent 2 – “Since we are managerial
Technology
system. relatively new hospital opened respondents

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 about 6 years ago, we must
engage our marketing services
to a greater extent. By this I
mean we set up camps in
countries we wish to visit.”
Table 10 : First set of major and sub-themes.
repeated phrases and
statements reflected
the secondary
themes. Primary sub-
themes were finally
labelled and
established after
considering the
theory on patient
satisfaction

4.2.2 SECOND SET OF THEMES

Table below contains second set of coded data drawn from primary data outlining primary and secondary
sub-themes converging to the over-arching theme. The underlying focus for theme generation was to
understand service care and delivery majorly from respondents belonging to group 2 and 3. This will
highlight the role of patient in co-creating innovation in services, while addressing the need for value-
based care.

Over-Arching Sub – Theme Sub – Theme Coded Excerpts Theoretical prompts

Theme (Primary) (Secondary)
Focus on patient Respondent 5 – “emerging Patient involvement as
wellbeing healthcare model that many lead user and cp-
Patient health care insurers, creator of value
involvement in pharmaceutical and service emerged from 10
service providers as well as the foundational premise
innovation government are attempting for service system by
process to adopt as a way of Spohrer et al (section
‘service reducing health costs and 2.1.2).
creation “User Feedback and enhancing patient safety.” Respondents 4, 6, and
Involvement” – Focus groups Respondent 1 - “Value- 11 elaborated on
new offering based treatment (VBC) theme of patient role in
and effective focuses monetary service innovation
upgradation compensation by the patient framework
on the quality of service”. Respondent 10 and 12
Respondent 12 - “While elaborated on
Cost-Effective other businesses have innovation in ancillary
recognized that their service
Alternatives
patients can be a powerful
source of new ideas and
developments, healthcare

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 Need for providers tend to be Respondent 3 and 7
reliable avoiding such an approach elaborated
ancillary Free standing almost instinctively.” extensively on service
service diagnostic Respondent 7 - “Once asked focusing on
services to do a routine practice of
innovation preventive care
hand washing during patient
treatment we fought back
elaborated
and pushed back when we
were supposed to follow
electronic medical records.”
Respondent 6 – “I feel value-
based care is one model
Opting for value- which could really bring
based care over benefit not only to us as an
fee for service organisation but also to
care patients and other
stakeholders who are
involved in the process.”
Respondent 3 - “Value-
Lahariya (2017)
based models of treatment
(section 2.5.2),
Focus on focus on helping patients
Value Based heal quicker from illnesses focused on mohalla
Care preventive care clinics. 2 Questions
and surplus for and accidents and
preventing chronic illness in were directed
healthcare
the first place. towards respondent
Respondent 11– “My take 7 and 2 towards 11 to
on this will be from the know relative ease
perspective of that a patient. and beneficiary
I have closely seen the services of multi-
challenges some of these
specialty care over
patient faces.
locally owned clinics.
Respondent 12 – “As a
consumer of value, the Themes and phrases
customer influences his / her reflecting better
wellbeing and quality of life service integration of
in a way and to a degree multi-specialty and
important to health care”. shifting to value-
Respondent 7 – “Value is based care.
created in the reconstruction
of the process of value
development and in the
interaction between the
provider and the client”.

Table 11 : Second set of major and sub-themes.

4.2.3THIRD SET OF THEMES

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Third set of themes generated encompassed complexity aspect of the system. Sub-themes primary and
secondary reflect challenges and components of complexity based on abstract and tangible aspects.

Over- Sub – Theme Sub- Theme Coded Excerpts Theoretical prompts

Arching (Primary) (Secondary)
Theme
Respondent 5 – “…we have Questions based on NK
Emotional kept the departments separate Kauffman model to
Innovating burnout as it primarily helps us for two explore level of
Service services when reasons.it allows us to keep the complexity of services
innovation encountering Approaching a billing system separate, this Managerial
framework unprecedented large-scale makes it easy for the patients to respondents,
taking challenge – role pandemic follow.” especially the newer
complexity of leadership situation Respondent 11 – “I had a choice employee emphasizes
of the of few private hospitals, but I strongly about being
organization. chose Venkateshwara for my prepared for
into account treatment due to extended challenges such as
services apart from medical.” COVID-19 by
Respondent 12 – “Nurses constantly improving
sometimes become ineffective services
in providing the emotional Respondents 11 and
support.” 12 emphasised about
Respondent 3 – “. For the importance of
Geographical innovative service to have a receiving service from
factor in beneficial impact in the nurses and physio with
building a healthcare sector, all preferably more
robust stakeholders need to be compassion and care
framework involved, including government,
Competitive innovators, patients and
nature of healthcare providers.”
private Respondent 1 – “A system
healthcare approach demands that we look Windrum & Garcia-
at health care as a whole Goni (2008) (section
system, with all its 2.3) mentioned
Attracting interdependence and considering service
international complexity, moving the innovation from
patients emphasis from the patient to outside in perspective,
the organization.” thus doctors and
“……This pushes one to step physiotherapist were
away from a philosophy of guilt asked to validate this
towards an approach to the theory.
processes.”
Respondent 6 – “Manager here Direct service
Providing clarity are more robust and flexible providers provided
to healthcare because in India managers insights regarding
service require dexterity required to providing knowledge
providers such run a company here. If you can about
as nurses and run a company in India, you can
physiotherapist do that anywhere.”
regarding their
role.

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 Interrelatedness Respondent 4 - “…. It is not that
between Cross Indian managers are somehow
services integration of more innovative than
services elsewhere. But, with a lot of red
between tape, they work in a dynamic,
departments often volatile environment.”
Respondent 10 – “. The
innovative therapies that come
out of physiology help people
tackle a wide variety of health
issues. It is important to note,
however, that physiology is not
only beneficial to those with a
health problem, but also useful
to healthy individuals who want
to develop their endurance

Table 12 : Third set of major and sub-themes.

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 RESULT

This section formally addresses and answers the research question “What is the need for service-based
innovation framework for a multi-specialty Hospital”. First, a service innovation framework fit for a
complex organization based on NK Kauffman model of innovation complexity and the primary empirical
data is described. Later, the contextual need for service innovation is answered. Finally, need for a service
innovation framework is answered. These results are further discussed in the thematic format as
aforementioned in the data analysis section.

5.1 ASSESSING FRAMEWORK THROUGH COMPARISON

Clearly the key difference between healthcare and other sector is the nature of complex services offered
to its customers. Any services offered (such as automobile repair or food retail industry) can be complex
but not life-threatening or potentially lifelong. Healthcare is both complex and complicated (Berry, 2019).
When deciding on a service innovation framework, there are various factors which need to be taken into
consideration. Current evaluation of the business model and new service development approach. It is
interesting to note that, there are many parallels which can be drawn and discussed between
Venkateshwara and Nephrocare (Privately owned health organization,), which is in Gurugram, NCR region.
Nephrocare specialized in kidney dialysis treatments. It is located across 35 countries with over 980
dialysis centers. The organization main aim is to provide healthcare systems with innovative delivery
approach and in the process provide high quality, affordable and sustainable care for renal patients. The
center opened in Gurugram is recent and shares the same local region of business with Venkateshwara.

Nephrocare had conceptualized service innovation as merely technology-based and its main aim until a
few years ago was to boost efficiency and cost performance of medical services. The unconventional,
more recent one which they have shifted to is service-centric innovation thus reconsidering how medical
care is delivered. In comparison Venkateshwara hospital has adopted a new approach to the growth and
delivery of care focused on strategic priorities aimed at continually enhancing both medical and related
care. This has been possible thanks to a significant resource reconfiguration that aims to respond to a ever
growing patient needs in a novel way. In this context, the renewed approach to services is focused on
growing exposure to the needs and requirements of patients with a probable approach to provide

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common and novel services. In addition, the patient is actively interested in the treatment process that
goes beyond his / her mental, psychosocial, and situational participation.

Upon being inferred about service influenced logic on healthcare, respondent 9 (Senior Physician) Stated
that “Well healthcare is a complex setting with many interrelated components. In our hospital we have
different actors doing different acts but somehow each of them depends on the other. In the hospital also
we treat consumer feedback and regularly track their progress. The logic behind this is of value co-creation
with the users (Patients) interacting with the management to generate new viable solutions.” This seems
to be preferred approach when shifting to a service - oriented innovation approach. Like Nephrocare
previous approach, Venkateshwara depended on a product-based innovation approach. Where majority
of new ways of healthcare delivery systems were brought in through periodic adoption of new technology.
A technical approach may work in the future, but the crux of service innovation will lie in Venkateshwara
co value creation approach. Senior health physician put forth the idea that -

“Outside innovators are telling doctors what they want or need to boost patient care in the new medical
entrepreneurship environment. They then attempt to create goods without getting a lot of first-hand
experience facing the doctor’s problems. Although this will give us some ideas, experience of first-hand will
make it much more effective. Just imagine how much smoother things would have went if we had planned
the Amazing electronic medical record instead of being tested in beta”.

On a similar note, respondent 5 (Ancillary service provider) said that -

“Since we are a relatively new organisation. We have confided to what works best for us. We have kept
the departments separate as it primarily helps us for two reasons. Firstly, it allows us to keep the billing
system separate; this makes it easy for the patients to follow.”

It can be inferred that the current scheme of innovation relies on department-to-department expertise
which each department not knowing what the other is doing. This approach has its benefits, it makes
billing for the patients easier and provides better accountability. But to stay ahead of the curve and
overcome barriers and challenges in the long run. Venkateshwara must lean towards a stable service-
oriented approach.

In a policy brief report on service innovation published in WHO weekly (2018), Ellen Nolte pointed out
that an introduction of service innovation is not a one - time event but a process. Adoption,

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implementation, scaling up and diffusion should be the pillars on which Venkateshwara establish their
service model. Each stage is complex and not linear, it is dynamic in nature.

Few innovations in the management and distribution of the services Are easier to incorporate, manage
and deliver than some others. Also, on other occasions It can be difficult to introduce seemingly simple
technologies. For example, if a new digital service is introduced it may pose major technical or regulatory
concerns. This invokes a need to adopt creativity within the context of delivery methods, planned users
and stakeholders concerned, and the wider context within which It is implemented. For instance, the
nephrology department of Venkateshwara thought out of the box and re-configured the way they
delivered their services to the patients. Department Introduced “Continuous Renal Replacement Therapy”
(CRRT) complimentary with “Plasmapheresis”. In addition, outpatient dialysis facilities and preventive
nephrology was introduced to move towards value co-creation approach which takes into consideration
reduced patient fee and in turn better patient satisfaction.

Another important factors which come into play is management of an organization. It defines how
individuals under it perform; top management needs to be inclusive and role modelled. Senior Manager
(Respondent 5) at Venkateshwara spoke about management style -

“Manager here are more robust and flexible because in India managers require dexterity required to run
a company here. If you can run a company in India, you can do that anywhere. It is not that Indian
managers are somehow more innovative than elsewhere. But, with a lot of red tape, they work in a
dynamic, often volatile environment. As manager we hold the key to describe the work culture. They must
therefore be able to move rapidly with a constantly changing and evolving policy environment, poor quality
infrastructure that reduces the smooth flow of physical and financial resources, corruption, bureaucratic
processes that raise transaction costs-all obstacles to business in India. Thus, innovation can be bred
though an innovative culture.”

A recent study of the 40 U.S. health organization revealed that 32 had established an executive position
of chief innovation manager with the top leader deciding which service to be innovated (Jain and
Schulman, 2018). Depending on how the role is played out and structured—and the individual
performance of the person in the role—this can be a positive step. In retrospect, such a step can also
backfire because service innovation is the responsibility of everyone in the organization and cannot be
delegated to managers at the top or to specific department.

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5.2 NEED OF SERVICE INNOVATION FRAMEWORK

Since there were three main defining perspectives which elaborated and provided key insights into the
service delivery domain of the Venkateshwara hospital, this heading is divided into three major sections.
The need for service-based innovation framework is answered from three perspectives. Also, these are
the key stakeholders within a multi-specialty hospital. Firstly, there is the managerial perspective,
respondents 1 to 6 belonged to this category. The individual actors within this category deliver indirect
services towards the patients, which include logistical services such as billing, transportation in case of
international patients, technical services such as telemedicine and remote diagnosis. Also, this group of
stakeholders is directly responsible for implementation, overhaul, and re-evaluation of the service
innovation framework through constant analysis of the technical, cultural, geographical variables at any
given moment of time. Secondly, there is the perspective of direct service providers. Respondents 7 – 10
belonged to this category, these actors provide direct service for the patients, these include ancillary
providers and primary care providers. Thirdly, the perspective of needing service innovation framework
from the consumers need is addressed, these are the patients.

A keynote here is that the need for the service innovation framework is put forth keeping in mind the
themes and sub-themes generated. The themes generated are placed as and when the themes emerged
during the data analysis, as such their order of placement within the table is not based in a particular order
of relative significance. Although the result section arranges the components on the answer on a simple
logic. Firstly, the number of times the respondents answered in alignment with the question and secondly
the intensity of the insight. The first qualification is objective and the second is subjective since it requires
the researcher’s presence of mind and observation of the subtle hints given by the respondent such body
language and “off the record” insights.

5.2.1 UNDERSTANDING NEED: MANAGERIAL PERSPECTIVE

Consider the following scenario to better understand the effect of a healthcare management on hospital
operations: A manager in charge of the hospital's cancer unit notices that nurses seem to be
overworked. The manager (respondent 6, in case of Venkateshwara) then changes the unit's operational
structure for the day and redefines the positions of medical assistants, ensuring that nurses have the time

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they need to care for patients, ensuring that people who call in talk to a live person rather than an
automated machine, and improving overall patient satisfaction. This is only one example of how a
healthcare management can boost a hospital's service delivering capacity. As such the managements play
a crucial role in the service innovation framework for the hospital which includes –

 The managements aim is to manage and accommodate needs of stakeholders (refer to section
5.3.3) and direct them toward an efficient service innovation framework. Professionals with
personal interests in hospital policy and operations include physicians, insurance providers,
technology manufacturers, patient advocates, and so forth.
 Consider the policy changes - With new federal legislation requiring strict enforcement, policy
affecting service innovation is constantly changing. Managers must not only be aware of policy
changes, but also explain them to employees and put them into practice in the hospital. These
refer to the government policies.

Within the context of healthcare, innovation simply means bettering of an existing service through
practical implementation of ideas which provide a positive outcome for the patients. Also, simply put a
framework means a system of beliefs or rules around which an organization decides to move forward with
its innovative ideas. Now, a private hospital is a commercial entity, meaning its works on the foundational
premise of monetary profits. Therefore, service innovation for the management means cost-containment,
while bettering their services without compromising their ethical duty to provide their patients with
quality services (Merali, 2005). Hence the first need to innovate services and include it in a robust
framework should be to better the patient safety and to mitigate risks associated with it (refer to
introduction, paragraph 5).

5.2.2.1 IMPROVING OVERALL PATIENT SAFETY

Healthcare organization has a legal and moral responsibility to provide high-quality patient care and to
strive to improve it constantly. Managers are in a unique position to impose policies, programs, processes,
and organizational cultures. As a result, many have suggested that healthcare management play a critical
and visible role in patient safety and quality of care, and that it is one of their top priorities when

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innovating their service (Kizer, 2001; Berwick, 2007). Thus, a proper service-based innovation reduces
unwanted risks and provides efficient, timely and quality services to its consumers the patients. The choice
of patient safety as the most urgent requirement for service innovation were reflected by respondents 2,
3, 4 and 6. While respondent 1 and 5 elaborated on requiring a framework-based approach to service
innovation to make better sense of constant feedback for qualitative purposes.

5.2.2.2 IMPROVING FEEDBACK INTEGRATION

The management is constantly provided with information through data analytics and via verbal
communication of frontline service providers. The information is regarding patient safety, ways to
improve non-technical services and cost containment of services. Collecting and collating information,
analyzing quality information to forge improvements using metrics such as incident reports and infection
rates, using patient satisfaction surveys, taking appropriate measures based on adverse events or patterns
highlighted becomes a key imperative for the service innovation framework (Bradley et al., 2003). The
respondents did not elaborate on what improvements were made because of data confidentiality clause,
but they highlighted the importance of the having a framework which would enable them to change
policy/practice, preparation, and effective collaboration between care providers better service the
patients. Through empirical findings it can be concluded that having a framework is useful in general, as
Venkateshwara was able to conduct performance evaluation practices which resulted in substantially
higher patient satisfaction, a must to stay competitive for a private organization.

5.2.2.3 PROVIDING ENHANCED PATIENT EXPERIENCE

From the managerial perspective innovation in services is needed to better the patient experience, a
satisfied patient is a satisfied consumer. Managerial respondent 4, 5 and service receiving respondents 11
and 12 were in clear agreement when integration of patient’s feedback enabled a new service system in
Venakteshwara called the “emergency service system”. From the managerial stakeholder, competitive
advantage is a positive fallout of a high patient satisfaction as result of service innovation. Primary
empirics also points out that respondent 11 chose Venkateshwara over MAX and Fortis hospital due to
“word of mouth” of a previous consumer of the same service.

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5.2.2.4 TACKLING UNPREDECENTED CHALLENGES

No one has been hit harder the healthcare industry during the pandemic. Covid-19 has been an
unprecedented ongoing challenge for multi-specialty hospitals. Managerial respondents 2,3, 5 and 6
defined the need for a framework which is flexible, adaptive, and cost efficient. Due to the pandemic quick
thinking and flexible approach is what kept Venkateshwara afloat during the crisis. Primary empirics point
out that upgradation, expansion, efficient integration of ancillary services was at an all-time for the
organization. Diagnostic services for rapid testing, over-time effort by nurses and doctors were needed
on the regular.

Addition to this, a new component was added to the framework, namely incentive driven approach
towards primary care providers (Respondent 6, 8 and 9 were in strong agreement, respondent 5 and 2
confirmed and elaborated). To achieve organizational success and provide excellent patient care,
Venkateswara needed skilled personnel, especially nurses. With the current global nursing crisis, it
becomes rather tough to ask nurses to work overtime.

Since nurses are one of the most important aspects of the health-care industry. Their diligent and vigilant
services are critical for the treatment and rehabilitation of patients. That is only possible if they are
satisfied with the overall role and in the process shown honest and ethical commitment (Kengatharan and
Kunatilakam, 2020). The hospital management had to ensure that the nurses have the best working
conditions possible, so that the health and care of patients is not jeopardized in any way. If the COVID-19
situation is at its height at the beginning of 2020, qualified and trained medical personnel are unaffected.
To keep their medical staff, including nurses, hospitals, especially those in the private sector need to
provide monetary incentives such as overtime bonus to overcome "emotional burnout“ (indicated by
respondent 8, 9, 10 , section 2.2.1).

5.2.2 UNDERSTANDING NEED: PROVIDER PERSPECTIVE

Direct service providers consist of frontline clinical workers, consisting of doctors, nurses, and
physiotherapist in this case. The play a key role in affecting the healthcare services. Their perspective
becomes important with the addition to patient feedback their own feedback is considered by the
management to incorporate the services. Also, as the nature of services delivered by them to the

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consumers is “essentially needed” by the patients, their own understanding become important.
Respondents 6 to 10 belonged to this category.

5.2.2.1 WORK STRESS MANAGEMENT

Even under normal circumstances, healthcare professionals face higher levels of job stress than the
general population, stress in primary care providers is both physical and mental health issues. Work-
related stress is a common factor among those who commit suicide, and healthcare workers have a higher
risk of suicide than other occupational categories (Galbraith et al., 2020).

Healthcare providers are working at an even higher stress level during acute health emergencies,
rendering working life much more difficult than normal. When a pandemic strike, the number of patients
who need treatment skyrockets, putting a strain on both healthcare services and staff. Furthermore,
doctors perceive a higher risk to themselves because of their proximity to the sickest patients, which adds
to their tension. The lack of personal protective equipment (PPE) that can occur during a pandemic adds
to the tension (strong response from respondent 7 and 10).

Due to lack of properly placed measures to ensure the safety of the doctors and nurses, the respondents
were in favor of implementing digital services within the framework during the pandemic. Use of
telemedicine, M- health apps (Mobile health apps) such as Arogya Setu launched by the government
provided relief to overburdened workers (Strong insights from respondents 6 and 9). They allowed the
nurses and doctors to stay at a safer distance and still be able to deliver medical services. In additional a
new hospital management system was set in place as technical service in response to sort patient
information, which took off stress from the nurses who were relying on older system which did not
incorporate the new variable. Venkateshwara have incorporated digital services such as electronic health
records (EHR), digital imaging, e-prescription services, and enterprise resource planning systems.

5.2.2.2 EFFICENT HEALTHCARE DELIVERY

A service-based innovation leads to an efficient healthcare delivery network. This is crucial for service
providers. Respondent 8, 9 and 10 were in strong agreement to shift resources to better a service

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innovation delivery model. Venkateshwara has total of 14 departments, each located on a different floor.
Each floor has administrative reception responsible for IPD patients daily ancillary services such checking
if the physiotherapist is on time and the nurses are where they are supposed to be.

Working towards a service framework allows the hospital for smoother engagement of services across
departments. This is turn leads to better time management and an overall increase in quality of service
(as stated by respondent 10) for both the patients the service providers.

5.2.3 UNDERSTANDING NEED: SERVICE RECIEVERS

Patients understand their own needs better than anyone. Simply because their main motive as a
consumer is not that they “want” the medical service but rather they “need” it. Needing the service puts
them into a more positively driven state to better their health.

5.2.3.1 COST EFFECTIVE BILLING

Respondents 11 and 12 both agreed that billing was their major concern as they were not covered
insurance and were paying directly for the nature of the services. Venkateshwara were able to investigate
previous feedbacks from the patients through which they allowed the patients to choose payments for
individual services. This was further reflected by integration of value-based care system in two
departments which focused on holistic healing of the patient and provided a billing for services which
reflected in patient’s satisfaction.

5.2.3.2 BENEFIT OF SERVICE PERSONALISATION

Delhi contains a wide socio-economic stratum of patients. A service-based innovation as opposed to a

product-based innovation is hugely beneficial for a service driven industry of healthcare.

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Primary empirics suggested that Venkateshwara’s focus on service innovation allowed them to
personalize and customize their services according to the needs of patients. International patient
(Respondent 11) benefited from tailored service package which included ambulance service, hotel stay
and medical services according to the information provided. Therefore, a service-based innovation
framework allows customization of intangible elements.

5.3 SERVICE INNOVATION FRAMEWORK MODEL: Venkateshwara

Previous academic studies and research from 2012 onwards have depicted a clear growth of varied
designs and frameworks for service innovation models in healthcare (Vogler et al, 2018). These models
take into consideration the initial phase of implementation but lack sustained process innovation over a
longer period. Venkateshwara being a newer health establishment as compared to its competitors in the
same region (MAX Hospital and Fortis) needs an improved delivery services with sustained resources and
step by step innovative process to counter pitfalls.

Greenhalgh et al., (2008) proposed a model which incorporates different components and their individual
complexities to configure a service model approach with sustainability at its core. This model works for
health organizations encompassing wide range of medical services and medical departments.

➢ The first pillar is to have a well-defined organization structure which is adaptive and flexible while
upholding essential decision-making skills.

➢ The second pillar is proper management and leadership which advocates necessary service
innovation as a continuous process in the system.

➢ The third pillar is to have cross functional involvement of individual staff such as nurse, caretakers,
and physicians from different departments in early stages of implementation process. Clear cut
direction and information of new changes should be passed down to individuals about their roles.
For example, if remote diagnosis service is implemented. Technicians, physicians, and nurses
should be informed and briefed about their part in the process.

➢ The fourth pillar is to have sustained funding for the innovation process. Venkateshwara is a
privately owned organization. In India certain incentives are provided for educational and health
institutions by the government. Sustained funding should be pre-planned.

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 ➢ Effective intra-organizational communication should be the next pillar to sustain and implement
the changes.

➢ Finally, regular feedback from patients is implemented back into the innovation cycle to better
the service innovation.

A vital aspect which needs to be taken into consideration is improved medical services towards
international patients. India attracts a huge number of international patients every year, due to lower
costs and more effective treatment services. Respondent 2 (Business manager for international patients)
reasoned that

“Firstly because of cost reason, some figures showed that healthcare costs in India start at about one-
tenth of the price of comparable care in the United States or the United Kingdom. Alternative medicine,
cartilage-marrow transplant, cardiovascular bypass, eye surgery and hip replacement are the most
common treatments pursued by medical tourists in India. Secondly, the government has abolished travel
restrictions on tourist visas that imposed a two-month period between consecutive stays for people from
Gulf nations that is likely to increase medical tourism. “

On another occasion I was having an informal discussion with the director of Venkateshwara Hospital who
stated that

“We want to be recognized as a top choice for international patients, our medical tourism is at par with
the competitors but to gain a stronghold in the New Delhi Region we have to attract a lot more
international patient.”

Venkateshwara attracts international patients every year with currently 60 being admitted in IPD and 40
treated via OPD, they are providing services such as appointment scheduling, visa assistance, free
language interpretation, international Newspaper and internet access in the room, Ambulance pickup
from the airport, Post treatment follow up, Pre-treatment opinion and hotel reservations. Service
innovation model needs to be inclusive of international patients. Their needs are different from those of
domestic patients. Language and payment barrier are the top concern for both the health institute and
the foreign patient. These services are the basic go-to services, which are overlooked. A health eco-system
such as Venkateshwara spends not only on technological services and ancillary service but also on
hospitality service which are a necessity when it comes to international patients.

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A multi-layer organisation such as Venkateshwara has many actors and stakeholders. The management’s
main concern is that of leading a privately owned organisation to attract better opportunities and be
profitable at end of the fiscal year. On the other end of the spectrum patients have their own needs.
However, in the long, a satisfied customer is the best guarantee for a profitable future. Thus, needs of the
patients should always be a top priority for a health organisation. In fact, what is needed is a true patient-
centeredness which takes into consideration both the aspects, what is the matter with the patient and
what really matters to the patient (Barry & Edgman-Levitan, 2012). As an additional step Venkateshwara
can incorporate the voice of the patient into the collective conversation and start starting each
management meeting with stories of both positive and negative patient experiences. Additionally, a
dedicated advisory board for patients can be formed (that may include family members of patients).

Figure 5 : Continuous and embedded service innovation implementation approach, Greenhalgh (2008).

Nk Kaufmann model’s approach towards service innovation -

Approaching the service innovation from three different dimensions, we have the supplier side
dimension, the customer side dimension, and the geographical dimension.

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 Figure 6 : Variations in service innovation due to supply side, customer side and geographical variables.

 Supply Side dimension – Service innovation as described by Chae (2011), is an evolutionary

process which is unpredictable, local, high interaction between components and continuously
self-innovating. More so, in Venkateshwara service innovation can begin, evolve, adapt from the
supply side. The supply side are stakeholders which are involved in providing direct and indirect
services. The figure denotes 8 types of possible combinations for three dimensions to interact to
create service innovation. Primary care providers and the management denote the supply side.
 Customer side – The patients are the customers. The services are needed by the consumers.
 Geographical dimension- This dimension is responsible for services which are influenced by
institutional and geographical variable. For Venkateshwara these are services integrated by the IT
cell, laws and regulation of the state, language, cultural and social values of the location itself. For
example, in Delhi, international patients get services based on language, background etc which is
not possible in a smaller non-metro city.

All the managerial respondents wanted to strive to move in more dominant position in the competitive
environment. They wanted to have a longer more sustainable framework on which they can rely on. Based

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on the primary empirics and the nature of competition it is suggested that Venkateshwara in addition a
continuous and adaptive service model should move towards either move toward corner 2 or corner 7.

Corner 2 – Mutation/Mutation/Crossover

Corner 2 denotes a technique that employs fewer changes on the supply and consumer sides, but large
leaps in the geographic dimension. This strategy provides a safer bet for Venkateshwara being a new
institute. the service is tailored for larger consumer groups and markets since it was first introduced on a
small scale through the engagement of a service provider and a key customer or customer groups in a
country. Another possibility is to recombine current supply-side and customer-side components for new
geographic/institutional contexts. The fitness landscape of a highly complex system such as a multi-
specialty hospital has a high N value therefore the value of K which determines the peak will be high. The
resulting landscape would be highly rugged. Based on the model this makes it risky for them to have a
safer jump thus reducing chances of a better service innovation. This corner only considers geographical
variations. If they were to add an outsourced diagnostic testing server for rapid testing for Covid – 19, it
will an external innovation but will keep the internal dimensions at the same “N” reducing the ruggedness
of the landscape.

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 DISCUSSION

The section discusses the results in an elaborative manner with respondents’ insights. The section follows
the numbering of themes and sub-theme as generated in the data analysis section.

6.1 INTEGRATING DIGITAL SERVICE INNOVATION

Digitization can be referred to as integration of IT within the hospital organization. Modern focus on
healthcare digitization has shifted beyond the possible disruptive impact of technologies such as
electronic health records to a view of the future in which IT allows medicine practice and delivery to be
increasingly customized (Glaser et al., 2008), in much the same way as goods and services are tailored to
the needs and desires of customers in commercial organizations (Awad & Krishnan, 2006). Question was
raised regarding the current application of digital services specifically towards managerial respondent 3
to which he stated -

“We are currently eyeing A 4D ultrasound machine, it will have an X-matrix technology, I-scan, Auto scan,
Smart Exam plus panoramic imaging. Then we will be buying a linear accelerator from Elekta. It has free
beam for short delivery. These additional machineries will aid in addressing the influx of international
patients. The services which they offer will reduce cost and time in for pre-operative diagnosis.

Aggarwal & Selen, published their finding on the positive affect of digital service integration in healthcare
back in 2009 (Section, 2.3.2). Managerial respondent 6 confirmed, being the lead innovation adviser
stated -

“Over the last two years we have diverted our monetary resources from traditional service such as
transportation, chemist, and marketing towards bettering digital services such as introduction of our stay-
at-home diagnostic application, we have invested heavily upon effected data handling techniques. This
has paid us off in the long run.

However, the direct supplier of services had a contrasting opinion on a business framework which relied
heavily on digital services. According to respondent 7 –

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“I believe integration of technology has certainly helped the doctor perform highly complicated surgeries
better but introducing new mobile based application for diagnostics especially in case of pre-operative
diagnosis of the patient is not a good idea in terms of the getting accurate information. Not only this
endangers confidential patient information, but patient might not be comfortable especially traditional
older generation.”

On being enquired about patient information acquisition Respondent 4 mentioned -

“In the hospital our main concern is accurate information delivery to the patients and full privacy of
sensitive data. This is a relatively simple example of the use of data in healthcare and why it is important
to capture and use that data correctly.”

Thus, it comes as no surprise that just like any other super-specialty hospital for Venkateshwara too,
privacy of patient information is the utmost priority. This also indicates the vulnerable nature of
Healthcare which differs vastly from other industries when it comes to data collection. The main factors
to be considered when integrating digital service innovation within a multi-specialty hospital are firstly,
being aware of the complexity and range of threats associated with the disclosure of confidential health
information. Secondly, the emotional quality associated with individuals’ medical condition (Trumbo et
al., 2007).

Respondent 4 further mentions that,

“We’ve always had data, but we didn’t call it “data.” Instead, we called it “patient charts,” “lab results,”
“X-ray results,” etc. Like any other surgeon, I can attest to the fact that ICUs and Operating Rooms were
some of the most data-intensive places around before the development of sophisticated monitoring
systems and EMRs. But now the context is different, and things are more complicated. We have technology
that can-do powerful analytics, showing us opportunities for decreasing costs or reducing variation in
care.”

As digitization progresses as a service innovation in healthcare, efficient information handling, distribution

and analysis become of paramount importance. As healthcare is gradually digitized, the prospect of
technical advancements facilitating changes will necessarily be balanced off against any potential negative
consequences. There is much value to be realized in drug discovery, medical research, and public health
policy if consumers are willing to allow the electronic storage and manipulation of their health information
(Lunshof et al.,2008). Service innovation in the form of digital advancements is needed to not only

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improve the communication channels between patients and physicians but to provide efficient, reliable,
and safe data collection for healthcare professionals. Being a comparatively new organization as
compared to MAX and Fortis, integration of digital services brings their unique challenges when further
divided between departments (section 3.3) but can also aid in other technical and ancillary processes
within the departments.

6.1.2 TELEMEDICINE AS A DIGITAL SERVICE

Telemedicine is a sub-set of broad range of digital services within healthcare. Telemedicine is the delivery
of health-related resources and knowledge through electronic information and telecommunications
technologies4 It enables long-distance patient and clinician connections, treatment, guidance,
notifications, education, intervention, monitoring and remote admissions (Shaw, 2009). Telehealth is
often used as a synonym or is used in a more restricted context to describe remote clinical service. In the
last few years has witnessed a noticeable surge in implementation of telehealth technology in rural areas
of Delhi by government hospitals to overcome barriers lack of transport, lack of mobility, reduced
resources, and shortage of staff.

Respondent 1, emphasized the need for adopting telemedicine services by privately owned multi-
specialty hospitals to benefit OPD patients,

“Telemedicine is one area which has been successful in inducing a keen interest in the private sector and
making them takes an active part in managing public health. Some of today's major telemedicine players
in the Indian private sector include Narayana Hrudayalaya, Apollo Telemedicine Enterprises, Asia Heart
Foundation, Escorts Heart Institute, Amrita Institute of Medical Sciences, and Aravind Eye Care. They
operate with help from central and state governments, and organizations such as ISRO that provide them
with correct and upgraded technology”.

Given the wide-reaching impact of telemedicine, it has become a staple in healthcare organizations.
Telemedicine has its fair share of benefits which include “improved access to information; provision of
care not previously deliverable; improved access to services and increasing care delivery; improved

4
hrsa. 2020. Telehealth Programs. [ONLINE] Available at: https://www.hrsa.gov/rural-health/telehealth. [Accessed
6 May 2020].

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professional education; quality control of screening programs and reduced health-care costs” (Hjelm,
2005). Respondent 1, also pointed out that primary care givers such as doctors and nurses have to be able
to deliver accurate service -

“WHO recommends a doctor-population ratio of 1:1000 while India's actual doctor-population ratio is just
0.62:1000. New physician training is time-consuming and costly; thus, the patient-to-patient ratio can be
expected to remain small for a long time to come. In the country, telemedicine services fall under the joint
authority of the Ministry of Health and Family Welfare and the Information Technology Department.”

Despite having practically proved benefits, telemedicine has its disadvantages as well. The potential
disadvantages of telemedicine as innovative service can be breakdown in the relationship between health
care practitioners and patients, breakdown in physical comforting factor of face-to-face interacting
between health care professional and inaccurate transfer of sensitive information due to technical errors
(Hjelm, 2005). Re-iterating previously stated fact, healthcare is a vulnerable industry where emotions and
risk are at an all-time high, complexity not only of the system but the nature of information might become
a huge hindrance in delivering accurate treatment especially during a critical situation.

Respondent 9, a critical care physician, provided an instance for the same –

“During the pandemic we are receiving patients at an alarming rate, patients are dropping to the
emergency section throughout the night, telemedicine might not be the best option to procure exact
information of health or treat patients. Critical care requires physical presence of patients.”

He further added that,

“All health care practitioners have the ethical and legal obligations they are responsible for. Although
these standards that differ from country to country, they serve to give the community confidence that the
expertise, skills, and behaviors set by the relevant professional body can be trusted by the health
professionals, therefore it becomes my responsibility to save, heal and protect the patients as soon as
possible, thus personally in my department I would not depend on telemedicine.”

Although, theoretically previous researchers have outlined the benefits of telemedicine, but practically
the evidence deviates.

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6.1.2 REMOTE DIAGNOSIS AS A SERVICE

Distinct aspect of digitization as a service innovation includes the concept of remote diagnosis. Previously,
Kuo et al., (2014) defined service innovation as – “A new way of business thinking to reform relatively
conservative and inflexible operational procedures and processes, which can transform organizations to
better meet the needs of their markets”. Going by the definition remote diagnosis as a service can allow
a healthcare organization to expand their customer based by providing new flexible approach. Patients
who live in remote places or simply far from a healthcare provider can be easily treated and administered
the appropriate diagnosis and in some cases treatment.

Respondent 1, on being asked “the different service-based innovation necessary in hospital setting?”
replied, “What I have learned from experience is that hospital is a “need” based system, whereas other
industries are “want” based industries. This typically means that for us our customers are priority as is it a
high-risk sector. What we need in this sector are more technology and innovation which is user driven. As
of now our biggest challenge is remote diagnosis.”

Venkateshwara Hospital has a large account of international patients, respondent 2, who is currently
working as business manager for international patients, estimated that -

“there are currently 60 international patients admitted. Out of which 40 are OPD (outpatient department)
and rest are IPD. Our IPD patients are admitted on 7th and 8th floor. We currently have maximum patients
from African continent such as Nigeria, Ethiopia. We recently had a patient admitted from Sweden, who
was an IPD and underwent a weight loss surgery. Then we have OPD patients from Sri-Lanka and few
European countries too”.

Among the many services such as scheduling, visa assistance, free language interpretation, international
Newspaper and internet access in the room, ambulance pickup from the airport, post treatment follow
up, pre-treatment opinion and hotel reservations provided to international patients it can be assessed
that remote diagnosis and telemedicine are still used inefficiently. The reason can be linked to healthcare
not being an early adopter of technology, respondent 3 raised this concern -

“We have never been early adopters when it comes to technology and culture historically has always put
more emphasis on conformity and reproducibility than on creativity and novelty. We have become a risk-
averse culture to a large degree that adopts tested programs and innovations even at the cost of being

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late to the table and failing to reap possible early adopter benefits. That is one of the reasons why
technology-led product innovation in Indian healthcare is virtually non-existent.”

If that were the case, it would have been beneficial for Venkateshwara to devote more time in addressing
the factors in adoption phase of new services and implement in into a sustainable framework. Though
given the “high-risk” scenario of the healthcare organisation especially within India, it becomes more
complex to integrate new technical based service innovation. Most notable study and model were
proposed by Georgi & Stefan (2009), in their book “Telemedicine, Techniques and Applications” described
a model which implemented remote monitoring system using Bluetooth and GPRS technology.

Figure 7 : Functioning Scheme of remote health monitory system (Grashchew & Rakawsky, 2009).

The basic principle functioning of the above concept lies in understanding of real time data transmission
via on-board flash memory with real time analysis via automatic diagnostic program. Evidently, this
technique was developed a decade ago, since then medical technology has grown leaps and bounds.
Surprisingly, Respondent 3, referred to wireless and Bluetooth remote applications and monitoring as
Medical Internet of things (MIOT) and how they could be implemented as new services in the present
time-

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“I would like to see the applicability of Internet of medical things, or Healthcare IoT, refers to a digital
network of medical devices and software applications capable of interacting with various healthcare IT
systems. As an example, this can be thought of as simple as someone wearing a FitBit to monitor his or
her steps; the step count is tabulated on an iPhone via Bluetooth technology, and then that data can be
shared with a physician to provide input via Wi-Fi connectivity and automatic reporting data, and that
data can also be sent to your closest friends and relatives. This concept can be also applied to our hospital.
Recently we had new equipment brought in for radiation oncology department. Therefore, we can connect
Bluetooth devices.”

6.1.3 ADOPTION OF NEW TECHNICAL SERVICES

Evidently and not surprisingly, last five decades have seen technology revolutionize healthcare. The
technology's primary purpose is to boost the quality of care (Gerhardus, 2003). Biomedical engineering
research has contributed to the development of new diagnostic and therapeutic technologies (Bharti &
Hasnain, 2002). More so, in clinics and surgery, diagnostic practices and procedural functions rely on
modern instruments, tools and laboratory equipment. Adopting new technological services such as
telemedicine is a facilitator for several multi-hospitals to achieve sustainable profitability.

The implementation technological innovation is often equated with service innovation in the literature
(Djellal&Gallouj, 2007). Multispecialty hospitals have been the primary consumers of this form of
technology for decades. When it comes to adoption of new technology-based innovations a key barrier
which comes into play is the organization barrier. Even if new technical service-based innovation is
adopted which provides the primary stakeholders (Patients) a digital platform to avail choices in food,
service and type of therapies (Section 2.3.2.1), the management needs to not only integrate the services
but also justify their resource allocation the same to be able to measure the impact on the patients care.

Respondent 2 when asked “what are challenges/barrier to adopt new innovative technology in the
hospital?” stated -

“Management of the hospital find themselves, in a challenging predicament regarding this: they must
demonstrate how the technical breakthrough they intend to introduce will have a measurable impact on

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patients' health in relation to the cost. However, in many cases, the data required to make this decision is
lacking.

Respondent 9 (Physician) on being asked the same questions wanted Doctors to be involved in building
the innovation framework, advising the management to take inputs from primary care givers to better
serve the patients.

“The participation of physicians can accelerate the creation and adoption of high-impact technologies,
primarily for niche areas e.g., pediatric surgery or global health diagnostics which are traditionally ignored
by the medical device industry. I was following up on article on google recently and found out that Stanford
Medical School has a long tradition of such "physician-driven scientific innovation" and brings together
science, engineering, and business students to regularly produce novel biomedical technologies through
its Bio design research program.”

As such, new Service Innovations provide hospitals with a major differentiating advantage over industry
rivals, this allows rapid testing, with help of new technology making healthcare services cheaper, safer,
and quicker (Tabak and Jain, 2000). Managerial stakeholders need to find a balance their expenditure on
acquiring and adopting new services and return on their investments.

Managerial respondent 8 stated that –“Budgets are typically distributed to hospitals based on expenses
from the previous year, rather than clinical satisfaction of patients. There is almost no structural
motivation for us to pursue a technical breakthrough that improves patient outcomes or lowers
intervention costs if we are not able to recover the costs. We have employed several new rehabilitation
treatments, for example, have the effect of increasing existing health costs while the results will only be
felt in 5, 10, or even 15 years. Hospitals whose goal is to offer healthcare to anyone who walks through
their doors while staying within their budget's constraints are encouraged to fulfill these urgent needs at
the lowest possible cost, without regard for the future. Investment in technical advances, which are more
costly in the short term but produce better long-term performance, is not prioritized in budget funding.”

6.2 NOVEL SERVICE CREATION: USER INVOLVEMENT

The premise of user involvement in service innovation is motivated by the beneficiary effect on the service
innovation process within the healthcare sector. Research indicates the positive impact of user

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participation in service innovation on new service efficiency (Carbonell et al., 2009). Likewise, another
research based on the same parameter in the service driven industries shows that the partnership with
users leads to increased, but not radical innovative developments (Ordanini & Parasuraman, 2011).

Respondent 9 upon being asked if “patients being the user can be part of the innovation process”, replied
that “New innovative ideas can easily be brought to surface via patients. It is extremely difficult for large
organizations to remain creative”. Upon further investigation it was found that Venkateshwara takes
feedback from patients with utmost seriousness. They believe to introduce quality care and better the
healthcare delivery services, patient involvement into the process becomes a necessity to better tackle
the challenges. This has proved beneficial to them as they were able to create a new type of service called
the emergency service system.

6.2.1 PATIENT INVOLVEMENT IN SERVICE CO-CREATION

“No matter what service innovation is, and whether or not service R&D is formalized, the point of view
and interest of the customer against the end customer must be taken into account in the innovation
cycle.” (Gustafsson & Johnson, 2003), the statement holds true for Venkateshwara too. Systems approach
is based on the fundamental knowledge of creating innovative service by addressing the organisation as
a unified system rather than addressing the individual components to reduce the clinical stress on the
primary care givers (refer to section 2.6.2). Additionally, a service system itself is based on the
foundational premise of the consumer being the co-creator of value (refer to Section 2.1.2). Thus, when
addressing the research question, it becomes fundamentally important to take into consideration the
patient’s feedback, analysing their needs and consequently involving them into the service innovation
process.

Respondent 10 stated that - “Well it really depends in the context, but yes, we at the hospital constantly
take their feedback and incorporate it to better our services and management. One of the key benefits of
this is their perspective.”

Though feedback is a good way to consider the patient needs to create and better services what needs to
be addressed are the finer details of services. Thus, it becomes integral to understand the latent (subtle)
needs of the patients. One of the ways is to have open communication strategies in place, including

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interviews or focus groups with the patients (Witell et al., 2011). This strategy was implanted in
Venkateshwara as pointed out by managerial respondent 6 –

“As of now, each department has their own way involving the patients, we take regular feedbacks after
the procedure. Also, at times we conduct focus group sessions to understand their perspective. We are
surprised at times to find out problems which did not exist previously.”

Taking regular feedbacks from both IPD and OPD patients and conducting focus groups certainly worked
for Venkateshwara. They were able to implement a new service called the “emergency service system”,
this is an integrated structure that organizes staff, facilities, and equipment to provide reliable, organized,
and timely health and safety services to victims of sudden illness or injury. The aim of this service is to
provide prompt treatment to victims of sudden and life-threatening accidents especially to efficiently
administer services to elderly patients affected or having systems of COVID-19.

In addition to the “emergency service system”, nephrology department of the Venkateshwara hospital
benefited from co-creating value in services by involving the patients. Respondent 9, “I work primarily in
critical car, but my medical background is in renal studies, our nephrology department Introduced
“Continuous Renal Replacement Therapy” (CRRT) complimentary with “Plasmapheresis”. In addition,
outpatient dialysis facilities and preventive nephrology was introduced to prevent patient hassle and
reduce their time and our effort in transportation and complication of cases which can be solved in an
easier way. We accomplished this by having weekly panel discussion with our doctors and 3 IPD patients
who volunteered to be a part of it.”

6.2.2 NEED FOR ANCILLARY SERVICES INNOVATION

Ancillary services are the backbone of a hospital. These services range from diagnostic, therapeutic to
custodial services (Refer to section 2.3.1). It is safe to assume that diagnostic services of the hospitals are
upgraded at a regular, being technical these services are constantly made better via procurement of
medical equipment’s and adding new services such as remote diagnosis and telemovie. What is lacking is

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the innovation of the intangible aspects of custodial and therapeutic services. If healing is the main role
for a hospital, then the intangible aspects such as emotional intelligence of nurses and other service
delivery professional such as physiotherapist and nutrition become imperative at least from the patient’s
perspective.

IPD patient, respondent 12, who underwent coronary bypass surgery, and is availing post recovery
services, suggested that the nurse and daily physiotherapist to be not so mechanical in their approach –

“I underwent the surgery one week back, it took me two days to walk and another 4 days to be able to
start eating proper food again. I feel that nurse who changed my dressing was very mechanical in her
approach, she could have done it in a more compassionate way. Plus, the physiotherapist often keeps
looking at his watch when the time is up. Being in physical agony, I at least want to be felt more fit
emotionally and need to feel more secure.”

Probably, what is required is innovation in the emotional intelligence of the ancillary care providers to
enhance service, which may result in an increased perceived patient satisfaction, a necessary requirement
for competitive edge. Accepting EI as an upgradable component within the framework is the first step
towards addressing the holistic healing of the patient (Section 1.2, third problem). EI should be a necessary
practice for the healthcare sector on the contrary, only few organisations are concentrating on improving
and inspiring EI skills, according to a recent global report by Harvard Business Review Analytic Services.
However, the survey also found that businesses that prioritize EI have a lot to show for their efforts. They
are the Perceptive organizations, and they show higher levels of efficiency and employee engagement
than organizations that under-invest in or neglect EI. This advantage provides them with a competitive
advantage in terms of innovation due to increased consumer satisfaction and profitability. Also, in the
research report by Harvard business review (2019), titled “driving innovation and business success
through the power of emotional intelligence”, a high EI was a necessary pursuit for the high-risk sectors
such as healthcare. A well cultivated EI within the hospital not only benefits smoother delivery of the
services but given the high-pressure situation a much stable platform for various ancillary service
providers to engage in an effective manner.

Thus, innovating EI capabilities not only provide Venkateshwara with a competitive advantage, but the
nurses and the patients will also benefit. A study conducted by Hefferman et al. (2010), with 135 nurses
as the respondents denoted a positive co-relation between emotional intelligence of the nurses and the

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positive impact it would have on the patients. The primary aim was to determine the level of co-relation
between self-compassion and emotional intelligence.

6.2.3 SHIFTING TO VALUE BASED CARE

When we mention a service-based innovation framework a key factor which is considered from patient
perspective is the billing system. This becomes a major concern especially in a Metro city (Delhi), where
there is great disparity between cost of treatment of private and public healthcare systems. This was
further exposed during the pandemic. As the pandemic spread, so did the requests for the
Delhi government to rein in the increasing costs of healthcare in private hospitals, which account for most
of the medical care. Even though 85.9% of India's rural population and 80.9 percent of its urban population
lack health insurance, India has twice as many private hospitals as public hospitals—an approximate 43,
487 versus 25, 7781 (Kapoor et al., 2020). Treatment at public medical facilities is free, but the standard
of treatment varies significantly between metro and non-metro city, and covid-19 has demonstrated the
government's lack of expenditure in terms of equipment, facilities, and personnel.

Managerial respondent 3 believes that “We want to make healthcare proactive rather than reactive,
preventing issues from occurring in the first place. Overall wellbeing, care quality, and preventive
screenings are all important factors in achieving positive healthcare outcomes. For this we are trying to if
not fully but in our own way adopt a value-based care system instead a fee-based system. Simply put,
value-based treatment is the concept of enhancing patient satisfaction and outcomes. A collection of
improvements in the way a patient receives treatment is required to achieve this aim “

Increased healthcare spending, excess healthcare expenses due to unnecessary and ineffective facilities,
and uncoordinated treatment have all contributed to the need for value-based care. Both factors, along
with rising patient preferences, have paved the way for value-based healthcare, in which reimbursement
is based on clinical results and service quality (Porter, 2009).

This approach is aimed towards treating the healthcare setting as a unique sector which needed to be
treated differently and thus doctors, patients and theoretical scholars have begun to realise and see the
patient as more than a generic economical consumer. Currently, Venkateshwara hospital has the fee for
service system, which as opposed to the value-based care is the traditional healthcare model. In the value-

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based care model as opposed to the fee-based system, the fees incurred by the patient is based on every
service availed and not on the result of the treatment itself.

On further investigation about adoption of the value-based model, senior bariatric doctor remarked –
“Yes, I agree that especially in private healthcare our diagnostic services plus surgeries often cost a lot for
the patients, but it is not up to me to change the system, the order needs to come from the top
management.I believe for them it creates a conflict of interest because it rewards the hospital for a higher
number of appointments, treatments, examinations, medication, and so on, which may or may not be in
line with patient health and wellness.”

This takes us back to the “ethical vs economical conundrum” (third problem statement), on one hand it
does make sense that if the change of the model in the fee service is introduced it may dip the return of
investments for Venkateswara. Being a newer establishment with a total 14 departments fully
functioning, a major overhaul might not work for now. But from the patient’s perspective it will help the
organisation in the long run.

6.3 SERVICE INNOVATION IN A COMPLEX SYSTEM

Service innovation is a complicated phenomenon if broken down into smaller components. Within the
hospital setting service may have many implications with various methods of delivery. Managerial
respondents in discussed and gave insights into taking in consideration the complexity of the system to
not only avoid overhead costs when integrating new services but also identify how addition or subtraction
of each service within the setting affects the overall framework.

Venkateshwara is super-specialty hospital, seamless integration of different actors and their activities is
happening behind the screen at any given instance. In the scientific literature, the word "complexity" is
frequently used to describe tasks or processes varying from complicated to intractable, with a general
sense of being "not simple." As stated by a Nobel laureate and co-founder of the Santa Fe Institute,
"several different measures will be needed to capture all intuitive ideas about what complexity implies
and its opposite, simple (kannampallil et al, 2011). One of the essential effects of system complexity is on
its "computational complexity." In other words, when operating inside or on such systems, there is a cost
involved – in terms of cognitive, technical, temporal, or physical resources needed or spent. Previous
researchers have approached complexity through whole systems approach (Boon et al, 2007) or through

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a more technical oriented approach taking fundamentals of engineering into consideration (Tien and
Goldschmidt-Clermont, 2009).

6.3.1 INTER-RELATEDNESS BETWEEN SERVICES

Interrelatedness in this context reflects the effect of components of the system on one another.
Complexity is generally in this sense: it increases with the number of components in a system, the number
of relationships between them, and the complexity of those relations. This latter notion of uniqueness
reflects the belief that the expansion of a structure by pure repetition or basic transformation of
relationships and components does not contribute significantly towards its complexity. To identify a
service innovation framework in a multi-specialty hospital, understanding the interplay of components
becomes important. The figure below places the major healthcare centers in Delhi on the complexity
graph. It also suggests the non-linear way of how services interact with each other. The analysis is also
done from the managerial perspective where the variable is the computational cost of four types of
combination.

 Nephrocare,  Venkateshwara,
 Dr. Lal pathlabs  AIIMS,
 Mohalla or  MAX,
community clinics  FORTIS

Figure 8 : Degree of complexity of a system based on no. of components and their interrelatedness (Kannampalli et
al, 2011).

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Simple System – Low interrelatedness and few components

In this first category kannampallil, described them as simple, with low computational costs, making them
under various circumstances easy to understand, explain, forecast, and administer. Additionally, these
structures are readily decomposable and, in most circumstances, exhibit near-linear behavior. For
instance, in Venkateshwara, if the system had few components such as a heart surgeon and a
management employee with low degree of interrelatedness between them and provided the situational
setting is of a surgical procedure. Of course, this does not happen in hospital setting due to surgery being
a complex service. However, one example could be a physician (component) noting down information on
the electronic medical record form their handwritten notes. Thus, depicting a linear relationship. The
advantage of a simple system is cost effectiveness and time efficiency.

In the sense that they contain many components, healthcare organizations become complicated, but
there are few relationships between those components. This only adds computational costs to the extent
that it is necessary to consider more system components. These systems can be defined, projected, and
controlled as such, but at a linearly higher computational cost compared to simple systems. I visited the
hospital several times to not only collect the primary data but also observational data. A noteworthy
observation was too able see the cross integration between the different departments. Not stated
theoretically but observationally, interrelationship between services was evident, for instance the post-
operative nurse for respondent 12 was working on the guidelines of the notes provided by the daily
physiotherapist and the primary doctor to initiate smoother recovery process.

Relatively complex – Low components and high interrelatedness

These systems require considerable computational costs and are quite complex. The relatively small
number of components makes them more descriptive, but substantially more difficult to predict or
handle. High interrelatedness leads to less decomposability within the system. Instead of decomposing
them into usable subcomponents, we may probably research those structures as "whole" (due to their
relatively limited number of components). Nephrocare is an example of such system. Usually, privately
owned healthcare clinics specializing in a specific health area fall under this category. Delhi has specialized
Eye clinics (Om opticians), only diagnostic service private firms (Dr. Lal path labs).

Complex – Many components and high interrelatedness

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These systems are difficult to explain and much more difficult to predict or control, due to the high inter
relationship between their large numbers of components. The systems have high computational costs.
Super-speciality Hospitals in New Delhi fall under this category (AIIMS, Safdurjung). Venkateshwara
hospital has 14 specialised health departments with large number of integrated professionals such as
physicians, nurses, insurance agents, investors, local patients, international patients, human resources,
medical students, public representatives, top management, R&D department who work parallelly on
varied tasks at any given moment. Complex healthcare systems bring forth numerous challenges when
implementing new services or upgrading existing services. Thus, when designing a robust service
innovation framework, it becomes necessary to consider the varied scales of implementation as pointed
out by respondent 1 and 3.

The services are also divided by the departments in a multi-specialty hospital. Following Berry’s (2006)
matrix of four types of service innovation, table below divides the core services of Venkateshwara into: -

1. Type Of benefit – Core or Delivery

A core service is service which is new and overtakes an existing service, while delivery service is
changes to an existing service.
2. Type of Service – Separable or inseparable
A separable service can exist without the need of physical presence of the provider.
Centre/Service Type of Type of Service Challenge/ Service Integration in the
Benefit innovation framework
1. Critical Care – Core Inseparable Level – micro, within By Adhering to an
Focused the system effective patient-
rehabilitation, Introducing remote centered orientation
Customized diagnosis for nursing and identifying unique
nursing care care patient / physician
relationship services.
2. Department Core Separable and Level – Macro Integrating
cardiovascular inseparable Needs continuous renewed approach to
and Dental operational service. Establishing
sciences – innovation. This will direct relationship
dental services, allow the department with patient in order
preventive to adapt and change to ensure updated
dentistry, accordingly services and in line
physiotherapy with their needs.
3. Surgical and Delivery Inseparable – Creating a Implementing an
Gynae require both the comfortable informative
Oncology patient and the environment for infrastructure capable of
- Post-surgery caretakers to be patients and their capturing and processing
rehabilitation present families to meet post data for real-time
operation treatment. Establishing
relationships with
stakeholders beyond
healthcare systems

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 Ecosystem for the
creation of creative
programmes that
incorporate leisure and
medical needs.
4. Haemato Core and Separable and Bringing in remote Defining a new method
Medical delivery inseparable diagnostic services, to resource integration.
Oncology & providing efficient
Bone Marrow treatment, cutting
Transplant down cost on rehab
- Lab support, by “deskilling”
blood donation
support, and
pharmacy
services
Table 13 : Department wise service division and challenges upon integration into a framework.

6.3.2 COMPETITION IN PRIVATE HEALTHCARE

Venkateshwara faces competition from established hospitals such as AIIMS, Fortis and Max. To be able to
strategically position themselves into a top tier hospital, they have already shifted their product driven
innovative approach towards a service driven innovation approach.

Respondent 8, the lead project innovation adviser, remarked – “Although product-centric hospitals may
recognize the shift to service intensive innovation today, many are unsure how to best manage the process
in practice. Given that an increased service orientation frequently entails a significant change to a new
strategic path, a new organizational structure, and new skills, that complexity is understandable.
Hospitals must develop dynamic skills to constantly develop new services and understand the fundamental
business logic of service provision. Max in Saket and Fortis in Vasant Kunj are concerned about service
innovation and its related dynamic capabilities, with some analysts citing them as key drivers of long-term
high success. Understanding these skills is a critical first phase in reaping the rewards of potential service
innovation; without it, a hospital risks being stuck in activities that have diminishing returns.”

Respondent 2, business manager for international patients broke down their competitive factors into
segments and emphasises on certain factors which provided them with advantages and disadvantages in
terms of attracting both nation and international patients. Respondent also highlighted, marketing
services of the hospital to attract. Total four key components were identified with inputs from respondent
11 and respondent 7.

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 ❖ Pricing – In Venkateshwara, deliveries were often priced as all-inclusive 'packages,' which included
health treatment, hotel accommodations, medications, and examinations. Standard and
caesarean deliveries, as well as general wards and private quarters, had different package prices.
Patients with high-risk risks, such as hypertension, have higher rates. The respondents did not
disclose the pricing estimates due to confidentiality clause but were conscious in pricing their
services at a lower rate than their competitive counterparts.
❖ Location – The geographical location of the hospital plays a key role in attracting both national
and international patients. According to respondent 5 –
“Our hospital is location at the centre of the city, there are schools, universities and entertainment
centres all around. The hospital is accessible by metro and has good interconnectivity of roads. For
international travellers, the hotels are nearby and since this is the capital of the country it provides
more facilities than other areas.”
❖ Medical infrastructure–This includes the technical treatments related to the procedure. High
skilled surgeries, pre- and post-operative care, diagnostic services are at par with the international
level for the hospital according to respondent 9.
❖ Competing in delivery of services - The service delivery and introducing and enhancing new service
model is a fertile ground for competition for the private hospitals. As suppliers bid for contracts
from purchasers, delivery rivalry guarantees some advantages, primarily in terms of cost and
quality. According to respondent 3 –
“This is a quality-improvement rivalry rather than a price competition. All the top hospitals in Delhi
have highly qualified care providers. In Venkateshwara, physicians have complete control over the
delivery of hospital services and treatment-related products, as well as the choice of hospital. In
this situation where each hospital has highly skilled workers, we have to compete for patients by
attempting to attract doctors, but the competition for hospital services is heavily influenced by the
hospital's location, quality as judged by physicians, and facilities.”
Furthermore, privately owned providers can receive public funds and compete with publicly
owned providers. In this case, competitors empower customers by giving them fixed rates on non-
priced elements of care. In this case, customers have a preference of the service they will prefer
for the same type of treatment. Also, even though the company is not competing, health systems
will provide consumers with options.

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6.3.3 SERVICE INNOVATION CHALLENGES

Given its ability to cut costs and/or improve productivity, many technologies services are never completely
utilized. "Modern service organization" (e.g. private hospitals) are "among the lagging firms in
implementing technical advances, working procedures and operational developments," according to
Salter & Tether (2013). One reason they suggest is that "these organization function in a locked system
where innovation is difficult" (Salter & Tether, 2006). In addition to this adoption of new service
innovation within healthcare system brings forth risks associated with it. Healthcare is not an early
adopter of technical services, this includes Venkateshwara Hospital mainly because of not being sure of
the bugs and flaws of the new service. The other crucial factor is the complexity of the organization which
hinders it ability to adopt new service delivery systems. Even if it manages to successfully implement the
service, sustaining it becomes cumbersome. In Venkateshwara, primary physicians and often raise
regulatory issues if professional practice is compromised, especially when adopting digital health services
such as Electronic Patient Information handling which raises privacy issues.

Article "Bringing outside innovation into Health Care" (Barson et al., 2018) Highlights the fact that "health
care organizations are investing heavily in existing Infrastructure, Technology, Process and Management
Approach to adapt to changes.' He draws on common examples such as "electronic health records,
telemedicine and Lean Management" and points out that "all these measures rely on individuals for both
initial and long-term implementation" (Barson et al., 2018). The reality is that there are many different
stakeholders in healthcare organizations, including shareholders (private vs. public), administrators,
personnel (e.g. physicians and nurses) and regulators. Being a comparatively new hospital Venkateshwara
has to be careful when juggling interest and needs of each stakeholder when it comes it adopting service
innovation.

From the perspective of the management, owners either want to minimize (public) costs and/or maximize
(private) profits, and therefore prioritize aspects related to maximize cost containment and increase
organizational profitability. Because they fund the bill for most hospitalized patients, insurance providers
also fall under this category (applicable) mainly to private healthcare countries. Respondent 10 mentioned
third part insurance brokers who pay on the behalf of patients for then the main idea is that they –

"pay for the treatment of the sick and not for the enhancement of the health condition of individuals,"

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and therefore, value the reduction of costs rather than efficiency. This was also implied by Respondent 9
who stated that –

“A lack of reliable data on the real cost and feasibility of medical procedures or even preventive initiatives
is one of the main obstacles to innovation. Healthcare regulators, especially private insurers, are clearly
interested in obtaining better results and lower rates, and the latter have increasingly gathered data on
outcomes over the last decade.”

The other barrier which comes into play is the one between the management of the hospital and primary
care givers. When it comes to service innovation and bettering the existing services through new digital
methods as remote diagnosis, both the actors have often conflicting interests. The phenomenon can be
stated as them “facing inconsistent or conflicting external stakeholder expectations” (Lega et al, 2013).
Expertise of management and physicians are different, thus if a new delivery care method is suggested by
the doctor based on their knowledge field, does not necessarily meant it will be implemented by
management.

Ancillary care providers such as nurses, physiotherapists and pharmacy owners must take into
consideration the ethical approach when it comes to treatment of patients. Respondent 9 (Senior Doctor)
mentions the need for cultural and personal integrity in the healthcare system. Barson et al., (2013)
suggested that healthcare private institutes have a long tradition of sticking to the tried and tested
formula. Thus, for a healthcare organization to adopt new technology they need be open and accepting
of new innovative tools.

Venkateshwara is large healthcare institute with different stakeholders bringing forward their own unique
set of challenges. Each has their own need and often at conflict with each other, therefore all parties need
to collaborate and have a strong sense of unity when it comes to adopting new technological advances to
overcome complex interests of the players (Herzinger, 2006). This becomes more than crucial during
challenging times of the pandemic.

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 CONLUSION

There is dearth of studies when it comes to service-based innovation within healthcare organisations.
Majority of the previous studies particularly within healthcare have focused on a product-based approach
to innovation. Understood theoretically they seem feasible but applied practically they are not cost
effective and are dependent highly on R&D technology, rendering them time consuming and ineffective
for resource constraint private organisation. The thesis is the first of its kind to explore service-based
innovation within a private multi-speciality hospital in India. The thesis integrates the concept of “complex
systems” which has been overlooked by previous researchers.

When applied to a sector as critical and crucial as healthcare the need of service-based innovation
becomes apparent. Healthcare is a “need” based sector, meaning the services rendered are often a
necessity for the consumers. Thereafter, making the nature of services highly emotional, vulnerable and
places a high risk on both the service providers and receivers. What large multi-speciality hospitals need
to focus is on reduced costs of services, efficient service pathways and effective ancillary service
integration. An attempt has been made to categorize and label definitions of service innovations as and
when they have occurred within the literature. Within healthcare service innovation can be labelled as
incremental or radical depending on the overall impact on the system. Service innovations definitions are
categorized under assimilation, demarcation, and synthesis, which allows in establishing services by
Venkateshwara hospital as novel innovation. A hierarchical structing is provided to concepts pertaining to
service system. Service science is broad management field which contains service innovation based on
service dominant logic which considers services are intangible, perishable and its value co-created by the
consumer and the provider. The study uses Kauffmans NK model fitness landscape to assess the conditions
under which a multi-speciality hospital can make a jump towards a more robust service innovation
framework.

Finding indicate that Venkateshwara hospital is highly complex adaptive system with high degree of
interrelatedness between various components. Services provided by ancillary providers, management
and primary care providers are interdependent on each other and cross integrated between different
departments. Highly competitive nature of private healthcare in New Delhi and a wide socio-cultural
demorahia of consumers suggest a need for practical service innovation framework. It is suggested that
Venkateshwara opt for Greenhalgh’s (2008), eight pillar service innovation approach which takes into
consideration the needs of the stakeholders and dynamic nature of the healthcare sector.

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The primary empirics of the research collected via 12 respondents were divided into three groups to get
a well-rounded approach towards the explorative phenomenon at hand. Primary empirical findings
suggest that from the managerial perspective, the management of the hospital has ethical duty to best
serve the patients. In doing so they can create a satisfied consumer which invariably leads to a positive
“word of mouth”, a win-win for a private hospital and the consumer of the services in this case. From the
management’s perspective, service innovation framework is needed to provide better and safer services
to the patients. Secondly, introduction of services is required which can gather, collect, and better analyse
the patient feedback to better innovate the services. Thirdly, and most importantly, a robust framework
enables a hospital to better unforeseen challenge. During the COVID-19 pandemic, services were required
to be upscaled, needed to be delivered at a rapid rate without compromising the quality.

Service providers include physicians, nurses, and physiotherapists. These provide direct services to the
patients and are the most integral part of the hospital system. From their perspective, reducing work
stress management is the utmost need of a robust framework of service-based innovation which takes
into consideration their own needs and employs measures for their safety. Delivering services during
pandemic has not been easy pursuit for them, with disease airborne and spreading at a rapid rate
particularly within Delhi, they want digital services to be engaged within the framework. Digital services
as telemedicine, Virtual diagnosis through Zoom based calls and use of mobile based apps, keeps them at
a safer distance.

The study included two service recipients, an international patient (OPD) and domestic patient (IPD). For
both, shifting to value-based care system is an invaluable innovation from a fee-based system. Therefore,
a service innovation framework is needed to provide consumer with an efficient billing system. The billing
service need to be segregated, with distinction between the ancillary services. Service innovation as
opposed to product driven innovation provides patients with customised service plans, since the nature
of services are completely unique towards the patients. They require effective personalisation and
customisation to understand the problem of the patient better.

Moving forward it is suggested that Venkateshwara as a private organisation focus of approaching services
from the primary care givers perspective, since they are the ones on the front line in the current pandemic
situation, also it is suggested that services be provided at a reduced cost. If seen contextually the concept
of “jugaad”, a frugal, flexible innovation approach which is gradually being applied to healthcare delivery
in many provinces of India can come in handy for Venkateshwara. The Hindi term “jugaad” combines
improvisation with pragmatism to obtain more from less as a substitute to current services to aid those

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strata of consumers which cannot otherwise not have access to it, given that healthcare is basic right of
human (Prabhu and Jain, 2015). The approach to jugaad begins with a deep understanding of the resource
constraints and barriers to the conventional and seeks out unconventional solutions to overcome these
(Berry, 2019). Although, Nephrocare shares few key commonalities of service innovation paradigm with
Venkateshwara but what makes it distinct is the geographical factor. Nephrocare is a foreign health
organisation with franchisees all over the including one in Gurugram, India. While Venkateshwara is a
standalone private health organisation. Nephrocare were able to outsource third party services such as
diagnostics, extra bed providers and sanitisation services. With this they delivered crucial services in times
of need, which over time will lead to increased patient satisfaction.

In correspondence with the jugaad approach, a crucial factor which needs to be into consideration is to
find a balance between the alignment between “high-tech and high-touch services”. As an emotionally
complex, high risk industry, health care services rely heavily on the human "touch." This implies that digital
technology may provide efficient and safer services, but physical care aspect cannot be overlooked for a
complete holistic healing. Surgeries, routine check-ups, and aided physical therapy still require the
delicate human touch. A rapid service innovation process will still need to be coupled with emotional
support and understanding the vulnerability of the procedures for an evolved health system particularly
so in times of global pandemic.

The study is bound by its limitations too. Firstly, since the primary empirics are taken from one multi-
speciality, generalisation of the phenomenon is not possible on a larger scale. The result might be wary
from one health organisation to another. The study was time bound as such a larger quantifiable data
could be gathered to get an approximate of patient satisfaction on each service delivered. This also leads
to further research possibilities. The same study could be applied to government funded multi-hospitals
to see the difference between the “economical vs ethical” paradox. Since the primary care providers have
more job security compared with their private counterparts, exploring service innovation from their
perspective might be interesting. Also, the research question can be altered, and application-based study
can be progressed taking a viable system approach within the healthcare.

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