Dr Devi Shetty – A heart surgeon with a mission

He is called the Henry Ford of heart surgery business for democratizing heart care in India. He heads the world’s largest and also the cheapest heart care institute. He has proved that a low cost health care model can also be profitable.

His brainchild Narayana Hrudayalaya, is the first of its kind health city in India. In the campus of Narayana Hrudayalaya, it has the world’s largest heart and cancer hospitals, a specialty hospital for all the plastic reconstructive surgery, an institute for organ transplant, a hospital and also training and research institutes.

Devi Shetty: The Henry Ford of Indian heart care business

Every day 3,000 people make it to Narayana Hrudayalaya and none of them are turned away, even if they cannot pay for treatment. In fact, the hospital does 50 to 60 free surgeries a week. The reason behind the hospital and its services being Dr Devi Shetty; the man who found it with just one mission – quality healthcare for all delivered with dignity.

Dr Devi Shetty’s Narayana Hrudayalaya has a striking simplicity in its business model. The pediatric cardiac unit, for instance, is the largest facility in the world. At any point of time, it handles 50 to 60 cases, probably, the number of cases that other hospitals would handle in a year. Following the simple economies of scale logic; a cardiac surgery that would normally cost Rs 3 lakh to Rs 6 lakh, in any other hospital is done here for a mere Rs 60,000 to a Rs 1.5 lakh.

Muralidharan Nair of E&Y says, “At no cost, high volume model will give me very different operating leverage on man, machine and material. Across the chain, whether it is materials (drugs and consumables), whether it is medical consumables, whether it is purchase of capital equipment (large high value medical equipments) whether it is in terms of ability to exploit your human resources better, high volume model will give me very different operating leverage.”

In simpler words, 200 doctors in this cardiac hospital comduct surgeries that they have mastered. It is therefore, no surprise that Dr Devi Shetty’s Narayana Hrudayalaya has a success rate which is 95% better than the best hospitals in the world.

In an interview with CNBC-TV18’s Shereen Bhan, Dr Devi Shetty, Chairman of Narayana Hrudayalaya speaks about his unique invention of a factory model for heart care in India and the successful ‘Wal-mart-ising’ in healthcare industry.

Here is a verbatim transcript of the exclusive interview with Dr Devi Shetty on CNBC-TV18. Also watch the accompanying videos for the full interview.

Q: When you hear people say that you are the Henry Ford of the healthcare industry, you’re the operating machine, the man who sort of invented the factory model for heart care in India; how does it make you feel?

A: In a way, I feel happy about it. India requires 2.5 million heart surgeries a year. However, less than 90,000 of the privileged people undergo heart operations and the others die. Hence, we have to look at some other model like this.

Q: In the process of building Narayana Hrudayalaya, you have done three other heart hospitals. What was the vision that drew you to start Narayana Hrudayalaya ten years ago?

A: There is only one purpose to democratize hi-tech healthcare. We want every man, women and child in this country who require a heart surgery to be able to undergo the treatment with dignity. Even if I do free heart surgeries I wouldn’t be able to do as many as needed. Therefore, unless, you adopt the business principles, you can never bring healthcare to everyone.

Q: People say that if you peruse wholesale volumes, you may give up on quality. What do you have to say on this?

A: All over the world, it is proved that a surgeon who is doing three operations in a day is better than a surgeon who is doing three operations in a month. If you want better results, you have to depend on the volume. This is not like any other business; it is a business wherein you have to keep on doing in large numbers.

Q: CK Prahalad has said several things bout business model – how you go after skills not credentials, how you can leverage human resources and about how you leverage financial resources. But how do you bring down the average cost of heart surgery from USD 10,000 to USD 20,000 in the US, down to USD 2,000 now at your hospital?

A: Our target is to do a heart operation for USD 800 and in 5 years we will reach there. How do we accomplish this cost reduction? When all the other hospitals are doing about two to three heart surgeries in a day, we do about 35 heart surgeries in a day. Last year, we implanted the largest number of heart valves in the world. Every heart valve maker in America wants to sell his valve to us. Hence, we obviously control the price.


Photos taken by NASA Astronaut Douglas Wheelock from ISS

by NASA Astronaut Douglas H. Wheelock

Aurora Borealis in the distance on this beautiful night over ... on Twitpic


A Physicist Turns the City Into an Equation

In essence, they arrive at the sensible conclusion that cities are valuable because they facilitate human interactions, as people crammed into a few square miles exchange ideas and start collaborations. “If you ask people why they move to the city, they always give the same reasons,” West says. “They’ve come to get a job or follow their friends or to be at the center of a scene. That’s why we pay the high rent. Cities are all about the people, not the infrastructure.”

According to the data, whenever a city doubles in size, every measure of economic activity, from construction spending to the amount of bank deposits, increases by approximately 15 percent per capita. It doesn’t matter how big the city is; the law remains the same.

After a city doubles in size, it also experiences a 15 percent per capita increase in violent crimes, traffic and AIDS cases. (Of course, these trends are only true in general. Some cities can bend the equations with additional cops or strict pollution regulations.) “What this tells you is that you can’t get the economic growth without a parallel growth in the spread of things we don’t want,” Bettencourt says. “When you double the population, everything that’s related to the social network goes up by the same percentage.”

The historian Lewis Mumford described the rise of the megalopolis as “the last stage in the classical cycle of civilization,” which would end with “complete disruption and downfall.” In his more pessimistic moods, West seems to agree: he knows that nothing can trend upward forever. In fact, West sees human history as defined by this constant tension between expansion and scarcity, between the relentless growth made possible by cities and the limited resources that hold our growth back. “The only thing that stops the superlinear equations is when we run out of something we need,” West says. “And so the growth slows down. If nothing else changes, the system will eventually start to collapse.”

How do we avoid this bleak fate? Constant innovation. After a resource is exhausted, we are forced to exploit a new resource, if only to sustain our superlinear growth. West cites a long list of breakthroughs to illustrate this historical pattern, from the discovery of the steam engine to the invention of the Internet. “These major innovations completely changed the way society operates,” West says. “It’s like we’re on the edge of a cliff, about to run out of something, and then we find a new way of creating wealth. That means we can start to climb again.”

But the escape is only temporary, as every innovation eventually leads to new shortages. We clear-cut forests, and so we turn to oil; once we exhaust our fossil-fuel reserves, we’ll start driving electric cars, at least until we run out of lithium. This helps explain why West describes cities as the only solution to the problem of cities. Although urbanization has generated a seemingly impossible amount of economic growth, it has also inspired the innovations that allow the growth to continue.


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