Narayana Hrudayalaya Hospitals

A pathway to affordable healthcare

When Mother Teresa suffered a heart attack in 1984, she received treatment at the BM Birla Hospital in Kolkata from Dr. Devi Shetty. It seems fair to say that Dr. Shetty is a doctor like no other.

Part surgeon and part entrepreneur, he is the recipient of numerous awards for innovation from Ernst & Young, the Schwab Foundation and the Economist magazine. The Wall Street Journal has described Dr. Shetty as ‘the Henry Ford of Heart Surgery’. In 2001 he built a massive cardiac centre outside Bangalore, aiming to bring down the cost of heart surgery to make it affordable to the poor as well as the rich. His mission is not simply to fix hearts but to fix the healthcare industry: “There is something fundamentally wrong with the way healthcare is delivered. Less than 10% of the world’s population can afford heart surgery. More than 90% of the world’s population can’t afford a heart operation, brain operation and other forms of essential, life-saving surgery. If the solution is not affordable, it is not a solution.”

In the space of little over a decade, Dr. Shetty’s hospital has grown into a network of health centres called Narayana Hrudayalaya. In the next seven years, the business expects to have 30,000 beds across India, Africa and Asia and aims to bring the cost of heart surgery down to a fraction of its current cost through greater economies of scale. There’s something potentially alarming about this idea. Conventional wisdom suggests that a trade-off exists between quality and quantity. Higher prices and lower volumes signal better service. Lower prices and higher volumes imply that corners are being cut, which doesn’t sound like a good idea when it comes to heart surgery. But Dr. Shetty doesn’t believe in conventional wisdom. He knows better than that.

“The best way to reduce the cost of healthcare is by aiming for the highest quality. When you aim for quality, patients go home very fast, they are happy with the outcome and your cost goes down. Across the world the incidence of bedsores following heart operations is about 8%. For the last half-year we have been continuously having an occurrence of 0%. This is an example of how process change can impact the outcome. We have simple targets. Today we are able to do a major heart operation for $1,600 and break even. Our aim to do the same operation for $800 and everyone is working towards that.”

But Dr. Shetty’s definition of quality isn’t limited to hard measures of cost, bedsore incidence, mortality or morbidity. His definition of quality extends beyond successful operations. He prefers to think of his patients as customers and he is relentless in his pursuit of customer satisfaction. “In this hospital we celebrate complaint. We encourage people to complain because when people complain, you know that something is not right and you can fix it. We have a system where everybody is encouraged to have acompany-managed mobile phone on speed dial. So people can call that number and complain. And we used to get a few hundred complaints every day from various parts of the hospital. Now we have reduced it to about 100-150 complaints per day. And these complaints are registered and analysed and feedback is given. The intention is to constantly address the complaints. But we celebrate the complaints. We don’t grumble about the complaints. You want to get better? Encourage people to complain.”

Dr. Shetty is keen to point out that the feasibility of his business model relies upon a happy, motivated workforce. Happy employees matter as much as happy customers. At Narayana Hrudayalaya, motivation is about far more than money.

“The doctors are not scientists. They are artists. Outstanding doctors who have excelled in their area of interest tend to be very eccentric. We are able to understand them because we are one among them. So to that extent attracting and retaining talent is not that difficult. Nobody, unless they are eccentric, would be able to dedicate themselves to this profession, to be able to become an outstanding doctor. These kind of doctors, their wants and needs are totally different and to retain them, you have to give them something more. Money is not going to attract them. They are constantly looking for challenges, to do something different. So you have to create an environment where creative people can work and excel.

“But most of the people working in this hospital are not doctors, they are nurses, electricians and other employees. They general come from a lower economic background. They understand the value for low cost healthcare makes a difference. It is not difficult to motivate the people to work hard and excel in this industry because we are dealing with human life. We never refuse a patient. So they are very supportive because it is there to help their kind. Our employees know when their family members need any healthcare intervention; they can afford to come to our hospital. That is the difference. There is a sense of belonging. Once our employees have the feeling that this is their hospital, their entire attitude towards the customer changes. So it is very important that our employees are happy and that they believe in the mission for which the hospital was built.”

Narayana Hrudayalaya’s ability to continue to decrease the cost of healthcare depends on its ability to achieve scale, which in turn places heavy demands on finding and developing talent. Dr. Shetty is clear that he has an eye on the future as far as the next generation of surgeons is concerned:

“We believe that all our hospitals have to be academic institutions wherein we take the future generation of surgeons, specialists and cardiologists. It’s important because if you look across the world, institutions that are setting the standards for more than 20 years have invariably been academic institutions. We train young surgeons over a period of time. We not only train them by giving them the skills, we also develop their personalities. These surgeons are being trained by some of the best people in this business across the world. They are standing on the shoulders of giants. When these young people take over from us, we expect them to take the institution to a different level altogether because they are groomed by some of the best people in the business. So this is what we are looking at. And you can see the transformation happening.

“If you can reduce the cost of a heart operation, you can reduce the cost of anything.”  

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