Narayana Health – Treating Health as a Social Cause


Author – Bishakha Halder


The memories of the conversation I overheard just don’t seem to get out of my mind. Her eyes seem to have spoken all the pain she has been going through at such a tender age. But she was helpless. This girl had to become a prostitute just to support her family and raise money for her father’s heart surgery.  I was in a state of disbelief!

We claim India is a rapidly growing nation that is almost at par with other developed countries in terms of infrastructure development; then why does someone lose their childhood and live such a painful life. Today, a heart surgery seems to be creating a hole in the pocket of every middle class person. Then, just think what happens to the bottom of the pyramid!

This thought had nagged an eminent cardiologist Dr. Devi Shetty who thought about combining cost effectiveness and high quality healthcare, thus reducing the exorbitant cost of cardiac surgery. This thought gave birth to what is now known as Narayana Health, a multi-specialty hospital chain based in Bengaluru. In 1990s, Dr. Devi Shetty was working as a leading cardiac surgeon at Birla Hospital in Kolkata. During his tenure he saw that most of the heart patients he met were in acute need of a surgery but only 5% turned out. The reason being high costs associated with surgery and after care. It was a matter of fact at that time that affordability and quality did go hand in hand. For those seeking affordability, they had government hospitals but had to compromise on quality and for those seeking quality they had private hospitals to take care of them. Dr. Shetty had to come up with a model that would be economical yet provide highest quality.

With this mission, Narayana Health started its journey in 2000 with the opening of Narayana Hrudayalaya, a sprawling super-speciality hospital with 280 beds. Over the next 13 years, Narayana Health saw a tremendous growth reaching to 6,500 beds across 16 cities employing 13,000 people and 1,500 doctors. Dr. Shetty’s ideal “economies of cost” model could be achieved by having a commitment for purpose for its employees. He selected doctors and nurses who would align to the vision of Narayana Health. He used innovative marketing schemes like micro-insurance and telemedicine to attract large number of patients.

In order to increase upon the quality he harmonized Henry ford’s mass production process. This helped to increase quality as the doctor performed the same medical procedure repeatedly thus improving upon his skills and reducing mistakes. He leveraged his talent in optimising surgical procedures by making the doctors operate in teams. Each team had junior doctors, trainees, specialist, nurses and paramedical staff. Dr. Shetty calculated various bottle necks and assigned different work to different group members according to their experience levels. He found out that grafting, which takes about takes about 1 hour is the most essential part and is performed by a senior doctor. Rest of the procedures can be performed by the junior doctors and trainees. Pre operation procedures are performed by the nurse and paramedics. The supremacy of this procedure is that the senior doctor is left free to perform maximum number of operations.

To reduce equipment costs, Narayana Health takes them on lease, thereby keeping the capital costs as low as possible. An in house hub has been setup to meet the inventory levels and the central buying centre has been set up to take care of all the purchases.  Narayana Health has also invested a lot of brain on information technology; it has set up an ERP on cloud rather than setting up data centres. An SMS facility has also been developed, sending messages about previous day’s revenue and expenses. This helps the management to decide on various issues. A business intelligent system, depending on 30 parameters helps to keep track of the quality of service and helps in improving efficiency. It tracks the financial performance and clinical outcome of the doctor.

All of these efforts have helped to bring down the cost of surgery to Rs. 90,000 and as well keep the morality rate and infection rate as low as 1%. With Narayana Health, even the bottom of pyramid can think of cardiac surgeries without losing anything. He was successful in providing a cost effective and quality health care with such low, rather almost zero morality rates.

Apart from all these efforts to bring affordable healthcare to the needy, Narayana Health, has ingrained CSR in its DNA since it is modelled as a Social Enterprise rather than a corporate company. This is clearly evident in Dr. Devi Shetty’s crusade to initiate ‘Yashaswini’, a pioneering scheme launched in collaboration with the Karnataka government to enable farmers and their families to avail of free medical facilities for serious ailments at hospitals across the state. This is India’s first self-funded micro-insurance scheme, which has benefited poor farmers across the state.

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