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
Excerpts
Working for a Social Cause – Mother Teresa's Influence
While working in Kolkata, Shetty received a phone call one day from a person who wanted him to visit her home. Being a surgeon, Shetty naturally wondered how he could be of any assistance at someone's home. The caller, however, promised that the visit would change his life. And this turned out to be true, since that call was to treat Mother Teresa....
Healthcare and Hospital Sector in India
With a large population, India lagged behind global standards in providing quality healthcare to all her needy citizens. The total expenditure on health as a percentage of the gross domestic product was 3.8 per cent compared to a global average of 8.6 per cent. The government expenditure on health as a percentage of total expenditure on health was only 30.5 per cent in India against a global average of 57.6 per cent in 2012. That meant private expenditure constituted a high 69.5 per cent of total expenditure on health whereas the global average was 42.3 per cent....
Walmartization of Healthcare - Shetty's Innovative Approach
To bring down the cost of healthcare and make it affordable to the common man, Shetty resorted to what he called Walmartization in managing the hospitals. He applied the business principles that helped Wal-Mart 14 offer its unique 'Everyday Low Prices' to the running of his chain of hospitals. The first principle was Economy of Scale. This was based on the premise that with a large scale of operation, input costs could be challenged. 15 The Bangalore facility of NH performed around 30 cardiac surgeries every day, which was 10 per cent of the cardiac surgeries...
Focusing on Profitable Revenue Streams
Most hospitals in India concentrated on maximizing revenues from in-patients. But in addition to the revenue from in-patients, Shetty focused on maximizing revenue from out-patient treatment and investigations, which he found generated higher margins. NH treated 1.5 million out-patients annually....
The Robin Hood of Heart Care
Though all the innovative measures that Shetty had implemented had brought down the cost of a heart operation to around INR 60,000, there were still patients who could not afford even that. Those who could not pay were provided treatment free of charge through various schemes. This Shetty achieved through cross-subsidization with a unique sliding-scale payment system for treatments...
Innovations in Financing of Patient Treatment
Shetty believed that charity was not scalable. Therefore, to ensure that NH could treat a large number of patients who could not afford the charges in a sustainable manner, Shetty convinced the Karnataka Government to float a micro-health insurance scheme that provided them with the facility of a heart operation at a nominal premium of INR 5 per month....
Use of Technology to Expand Reach
Shetty made effective use of technology to expand the reach of his hospital. NH had one of the largest telemedicine networks in the world. The hospital offered 350,000 tele-consultations annually through 900 telemedicine centers spread over 60 countries including India,...
Women Empowerment
Shetty gave importance to women in his establishment since he believed that they were compassionate and dedicated and most suitable for healthcare. Of the people employed in the set- up, 94.8 per cent were women. Shetty was also of the view that whatever money a woman earned went directly...
Developing Talent - Toward Dawn Program
To address the need for doctors and also create a pipeline of doctors who were passionate about their profession, Shetty launched the 'UdayerPathe' (Toward Dawn) along with Asia Heart Foundation to identify talented rural students in West Bengal state when they were in the seventh standard...
The Personal Touch
Shetty made it a point to meet his patients and their families personally and comfort them with reassuring words. People who were given a fresh lease of life by him through the treatment considered him a god...
Charismatic Networker
Shetty’s charismatic personality and accessibility ensured that his work received widespread exposure in the media including through international media such as the BBC. As the Secretary of the Association of Health Providers, India, he had access to the Prime Minister of India, Narendra Modi. His ability to network and collaborate with many helped him expand NH’s network through a number of different partners in different locations...
Looking Ahead - Expansion Plans and Financing Growth
By 2015, Shetty had successfully expanded his network of hospitals to 57 facilities including one hospital in Cayman Islands. The hospital at Cayman Islands was set up in partnership with Ascension 40 with the aim of attracting patients from the US who could get treatment at 50 per cent of the cost they would have incurred on similar treatment in their country. He was also planning to expand to Malaysia. Shetty planned to expand the capacity of the NH network of hospitals to 30,000 beds by the year 2020....
Exhibits
Exhibit I: Trend of Revenue from Operations and Profit after Tax
Exhibit II: Important Awards Received by Dr. Devi Shetty
Exhibit III: Prominent Hospitals in India
Exhibit IV: Narayana Hrudayalaya – Cost Management
Exhibit V: Models Followed by Narayana Hrudayalaya
Exhibit VI: Preferred Sources of Funding
Exhibit VII: Sources of Funding For Healthcare Enterprises in India
Exhibit VIII: Shareholding Pattern of Narayana Hrudayalaya Limited
Buy this case study (Please select any one of the payment options)
| Price: Rs.500 |
Price: Rs.500 | PayPal (11 USD) |
