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Narayana Hrudayalaya Hospital- Cardiac Care for the poor

Submitted By Tonmoy Purkaystha (103) Vaidya Vinit Vasant (104) Venkataramana G (108) Vipin Jamwal (111) Vishal Gupta (112) Manoj Jindal (114)

Narayana Hrudayalaya (NH)

Better known as.. WALMARTIZATION of Healthcare in India Robin hood of Healthcare The Henry Ford of Heart Surgery

Brief Overview
First of its kind heart hospital in India Founded in 2001 by Dr. Devi Prasad Shetty Provide affordable cardiac care to the masses Unique business model to subsidize procedures performed for the poor from the surplus revenue generated Benevolent thoughts of Dr Shetty were ignited while he was treating Mother Teresa Relentless focus on lowering operational costs wherever possible Vision to create Health city with multiple specialties within geographical proximity to further bring costs down

Healthcare in India
Lowest public healthcare spending levels in the world@ 1% of the GDP Access to healthcare limited by inconvenient and expensive travel Understaffed and under equipped public hospitals Less than 14% supported by health insurance Actual no. of physicians 0.5 per 1000 with 70% of doctors located in urban areas Emerging as medical tourism destination India requires 2.4 million heart surgeries a year, although only 60,000 heart surgeries were performed 25% of heart attacks occurred amongst under 40 population

Service Landscape @ NH
10 fully commissioned operation theatres, 2 catheterization labs, blood and valve banks Circular chapel at hospital entrance Unity of human faith Pediatric intensive therapy unit with 50 beds in addition to 500 beds Mix of general and executive wards 90 cardiac surgeons and cardiologists with experience in top class international institutions Leverage on technology to its advantage Concept of Telemedicine & Mobile Cardiac Diagnostic Lab

Wal-Martization of Health care

Drive unit costs lower through high level of capacity utilization and productivity Identified Manpower & Equipment as the 2 major cost driver in healthcare industry Negotiate better deals with suppliers due to huge volumes Lean administrative team Leasing of expensive medical equipment Cartels with pharmaceutical companies Monitoring funds / cash flow on daily basis

Wal-Martization of Health care

500 blood tests a day per machine 30-35% discounts on medical supplies No. of procedures performed at NH almost 8 times the average at other Indian hospitals Increase in efficiency with use of hospital management software for its operations Staff salaries only 22% of revenues due to fixed salary structure

Pricing model @ NH
PROCEDURE Break Even Cost at NH Price (General ward) Price (Karuna Hrudaya package) Average price at other private Indian Hospitals
















* all prices in INR

A joint venture of ISRO, Asia Heart foundation, Narayana Hrudayalaya and various state governments To provide cardiac care to the rural poor 9 coronary care units setup across India NH trained the general practitioners at CCUs to perform checks on patients and administer treatment Largest telemedicine network in India to offer free service To become self sustaining for few rupees per patient when done at large scale Technology gives the rich what they already have but it gives the poor what they can never dream of having Telemedicine Trans Telephonic ECG Network Digital X-ray a Joint Venture with Texas Instrument

Mobile Cardiac Diagnostic Lab

Outreach camps for cardiac diagnosis and care Completely equipped buses with three doctors, 1 cardiologist, and two technicians Screening of 400 people a day in each camp

Yeshasvini Scheme
A comprehensive Health Insurance Scheme, which was introduced by Dr Shetty in Karnataka, with the help of its State Govt A premium of Rs. 5 will be collected from each member per month Designed to cater the health care service to the 1.7 mn poor farmers of Karnataka Access to 150 hospitals in 29 districts for any treatment upto Rs. 100,000 Poor people in isolation are weak but together they are very strong Only 8% of policy holders required medical procedures Dr. Shettys dream to cure worlds poor at less than $1 a day Successfully emulated by many states including Andhra Pradesh, Gujarat, etc.

Yeshasvini Micro Health Insurance

Unless you address the problem of paying, capacity building hospitals is not going to solve the health problem High interest rate

35% occupancy
Rural indebtedness is mainly because of health problems


Training the next Generation

To enable higher proportion of the population to have access to cardiac care Training program for pediatric cardiac surgery 19 post graduate programs for doctors and medical staff First diploma in cardiology in collaboration with IGNOU Lowering cost of access to treatment with more doctors able to offer treatment to patients Also co-ordinated training of nurses in cardiac care NH also housed college for nursing


NH in 2011
Proposed Institute of Gastroenterology

Narayana Nethralaya

Proposed Institute of Neuroscience

Narayana Thrombosis Research Institute

Proposed Women & Childrens Hospital

Group Learning from Case

Group Learning
1. Mission, vision, and strategy of a team of entrepreneurs 2. Unique dimensions of scaling up in the model
1. High volume, low cost model

3. 4. 5. 6.

Price discrimination by service providers Cross-Subsidization Organizational innovation Knowledge development

High-quality/ Low-cost
Henry Ford of Heart Surgery
This combination requires supporting organizational innovation. NH Heart Hospital, has developed an efficient turnover of operating rooms and cardiac catheterization facilities, allowing for much higher volumes of services with only moderate investment in capital equipment. What health care needs is process innovation, not product innovation."

High volume, low cost

Henry Ford of Heart Surgery
The sheer volume of procedures conducted gives NH considerable negotiating power with suppliers.
Machines are leased as opposed to bought out-right and reagents are continuously purchased for each of these machines. NHs demand for reagents is so high, that suppliers offer the Hospital excellent lease rates as the profit is made up for with the reagents. NH refuses to sign long-term contracts and instead negotiates each deal individually. In order to avoid corruption, NHs administrative team is kept extremely lean.

Lower Operating Costs

Wal-Martization of health care
Costs are minimized by choosing cheaper alternatives whenever possible (e.g., using digital x-rays as opposed to xrays with film). Adopting a high quality, low cost approach to heart disease
Eight times more procedures per day than the average at other Indian hospitals. NH runs approximately 500 blood tests a day while many other hospitals run two.

Working with other hospitals to achieve better bargaining power is another strategy used

Lower Operating Costs

Wal-Martization of health care
NH has also developed relationships with pharmaceutical companies, which provides the Hospital with drugs that are much cheaper than the market rate. At the core of NHs financial success is the fact that only 22% of revenue is spent on staff and doctor salaries as compared to 60% in the West. It is important to note that NH doctors and staff are not paid less overall, but rather work more hours.

Price Discrimination
Adopted the practice of price discrimination (differential pricing) to target multiple segments of the ever-changing Indian population Deployed a "multi-tariff" system for the provision of standard services, charging higher fees for comparable services to higher-income segments of the patient base. Tiered pricing model is one of the cornerstones of the Care business model, allowing the organization to provide services either with minimal margins or below full cost (but above variable cost)

Robin Hood of Modern India
The mix of paying and non-paying patients has always been sufficient to support the viability of NH. Target multiple segments of the ever-changing Indian population The surgeries are performed at subsidized rates for people with low income and free in some cases. The daily accounting system allows them to know the extent of subsidization that can be given each day.

Longevity and Expansion

NH has been operating since 2001 with the help of initial capital funding from Asia Heart Foundation, but they are looking for ways to make their model sustainable. They are considering adding revenue generating projects and attracting investors. Further building on the success of a low cost, high quality model, Expanded low cost model to other areas of health care beyond cardiac care.

Training Physicians and Nurses/ Improving Staff Quality

NH runs their own postgraduate programs. The primary intention of this educational initiative was to encourage more graduating doctors to specialize in cardiology. Beyond training physicians, NH also provides programs for nurses. As a means of encouraging potential students from remote areas, NH was able secure bank loans to cover the training costs and living expenses. In return, these new nurses would work at NH during their course and for up to two years afterwards to pay off their debt.

Knowledge Development
Having high-tech, efficient machinery on-site has allowed NH to seamlessly run numerous tests each day. Finding efficiencies in the way patients are treated and diagnosed is pivotal to maintaining high patient volumes. There is also a daily accounting system that accounts for all revenue and costs for the day, including prorated salaries and medical supplies. All daily financial information is provided to scheduling doctors. As a result, they are able to assess how many belowcost surgeries can be performed on any given day.

Most of the things worth doing in the world had been declared impossible before they were done.