Saturday, December 21, 2013

Dr. Devi Shetty and Narayana Hrudayalaya: Revolutionising Cardiac Care

Dr. Devi Shetty enjoys a special place in the health care sector in India. At a young age, he made a reputation for himself as an outstanding heart surgeon at Bangalore’s Manipal Hospital. But he is now better known for his determination to create an alternate model of healthcare more suited to the needs of India.

Action is worth more than a thousand words. Over the last decade or more, Dr. Devi Shetty has created the Narayana Hrudayalaya (NH) complex in Bangalore to experiment with, and scale up, new ideas in health management. I have seen him on television a few times, but I had the first opportunity to hear him speak on innovation at the PDMA annual conference held at IIT Madras on December 16.

There are some core principles of how to reduce the cost of healthcare that have emerged from the experience of low-cost health pioneers like Aravind Eye Hospital. These include leveraging economies of scale, and disaggregating the entire surgical process so as to focus the doctor’s time on those steps that require the doctor’s expert intervention. But cardiac care seems to be too complex and risky to apply such principles. Or, is it?

I was curious to see what Dr. Devi Shetty would have to say….

[The following paragraphs are based on Dr. Devi Shetty’s talk]

Why India needs a different model of healthcare

On the one hand, the government spends only 1.1% of India’s GDP on healthcare, and 80% of national health bills are paid “out of pocket” by patients. On the other, the country has the capacity to do only 120,000 heart surgeries a year though there may be a medical need for upto 2 million. These are some of the hard facts of the healthcare sector in India.

But, India can do better. We have the largest number of doctors, the largest number of nurses and the largest number of US FDA-approved drug units outside the US.

Dr. Shetty and NH are not content with talking about such problems. They have proactively tried to address them. Some examples of what they have been able to do, and what they hope will be possible in the future:

Affordable Cardiac Surgeries

NH has been able to bring down the cost of heart surgery to the equivalent of USD 1,400 to 1,500. But their target is to bring this down to $800. This is thanks to scale – NH already does 30 heart surgeries per day and performs the largest number of kids’ heart surgeries in the world with children from 70+ countries being treated at NH.

NH is pioneering speciality hospitals that can be built at low cost. The idea is to build very functional hospitals rather than 5-star hospitals with marble floors and central air-conditioning. NH is partnering with India’s leading construction and engineering company, Larsen & Toubro, to pioneer this concept. The target is to build a 300 bed hospital for USD 6 million in 6 months. Their first effort in this direction cost USD 7 million and took 8.5 months to build at Mysore.

Another way of reducing cost is to reduce staffing. NH has developed, in collaboration with Stanford University, a 4 hour training curriculum to help the spouse of a patient take care of him after he is released from the Intensive Care Unit (ICU).

Low Cost, but with no compromise on quality

Indian hospitals typically use linen gowns and drapes for surgery. But, globally, special surgical disposable gowns and drapes are the norm. Existing companies were willing to supply these at Rs. 5,000 per surgery against the Rs. 2,000 that NH was willing to pay. NH encouraged a local entrepreneur to take up the manufacture of these surgical essentials. Today, Amaryllis manufactures these using locally available labour and supplies them at Rs. 850 to 900 per surgery. The company is in the process of getting international quality certification that will enable it to export these as well. [Readers familiar with the Aravind Eye Hospital story would remember that Aravind did something similar in the case of intro-ocular lenses.]

In the tradition of the partha system of accounting practiced by traditional business groups in India, NH tracks every penny. Using Oracle and SAP on the cloud, the hospital compiles a daily profit and loss statement that is available by 4 pm the next day. Using a medical analogy, Dr. Devi Shetty calls this “using accounting as a diagnostic tool rather than for performing a post mortem.” I am sure the pioneers of the balanced scorecard, Kaplan and Norton, would love this characterization.

Very much like Aravind Eye Hospital, the focus is on cutting costs but not sacrificing quality in any way. One in every two hundred patients in a US hospital is killed due to errors or medical negligence. NH is developing software-based patient management in an effort to use IT to avoid this in their hospitals. NH is also developing and using simulators to train nurses for critical care facilities.

Policy and Regulatory Intervention

But Dr. Shetty is not content with improving the care within his hospitals. He is actively involved in policy and regulatory changes that will advance his vision of good quality, low-cost healthcare.

Dr. Shetty conceptualized the Yeshaswini Microhealth Insurance programme that is today a Government of Karnataka initiative to provide low cost medical insurance to farmers in the state. They pay a monthly insurance premium that is as low as Rs. 5.

Dr. Shetty is fighting what he calls “pre-conceived notions of who can do what in surgery” which add to costs but not quality. He questions the wisdom of requiring a nurse with a BSc degree to hand over instruments during a surgery, pointing to a painting made by elephants in Thailand!

Going Beyond

With the belief that doctors who come from a deprived background are more likely to change the rules, he is running a programme called Udayer Pathey in which 2,000 kids from rural West Bengal are being mentored through their schooling in the hope that they will be able to qualify for admission to medical college.

Since women are more likely to use their earnings for the welfare of the family, NH consciously tries to employ women wherever it can. At one time, 90% of their employees were women.


In his answer to a question from one of the participants, Dr. Shetty said there is no need for special inspiration to pursue his work – the fact that one woman dies every 10 minutes while giving birth to a child is inspiration enough. But for the rest of us who attended his talk, Dr. Devi Shetty should be a good inspiration to pursue affordable modes of solving Indian problems. 

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