Dr. Devi Shetty of Narayana Hrudayalaya: Delivering Quality Cardiac Care to the Masses
| Case Code: LDEN108 Case Length: 14 Pages Period: 2001 - 2016 Pub Date: 2016 Teaching Note: Available |
Price: Rs.500 Organization : Narayana Hrudayalaya Industry: Healthcare Countries : India Themes: Social Entrepreneurship in Healthcare |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
In September 2015, Devi Shetty (Shetty), Founder Chairman of Narayana Hrudayalaya (NH), a hospital chain that stood apart in the Indian healthcare market by providing affordable quality healthcare to the masses, announced his intention to go in for a public issue. The announcement attracted widespread interest in the media. Questions were raised about the reasons for the public issue since Shetty had been running his hospital chain successfully for fifteen years, achieving his social mission of providing treatment to any patient who walked into the hospital irrespective of his/her ability to pay for the treatment. There was concern that the pressure of shareholder expectations and quarterly results would distract Shetty from his social goals.
NH was established in the year 2001 in Bangalore with a 225-bed hospital that primarily provided cardiac care. By 2015, it had grown into a chain of 57 facilities with 5,600 operational beds – 56 facilities in India and one in the Cayman Islands. In 2015, NH had operational revenue (standalone) of INR 13,075 million with a profit of INR 289 million, treating patients from 25 countries. Shetty, who had pioneered several innovations to bring down the cost of treatment and the way in which the treatments were funded, had plans to establish facilities with 30,000 beds by 2020.
Shetty had several firsts to his credit including operating on a 9-day-old baby. By 2015, he had performed more than 4,000 pediatric heart surgeries. He received several awards for his work in providing affordable healthcare. These included the Padma Bhushan – the third highest civilian award given by the Government of India – in 2012, Indian of the Year by CNN-IBN in 2010, the Social Entrepreneurship Award by CII in 2005, and the Ernst & Young Entrepreneur of the Year Award in 2003.
It remained to be seen whether Shetty would be able to continue his social mission of providing quality healthcare at an affordable cost to everyone who needed treatment even after NH became a public listed company, subject to the pressures of the stock market and shareholders.
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