By Julien Bouissou, Le Monde, BANGALORE
Dr. Devi Shetty in Bangalore created a low-cost hospital franchise, offering open-heart surgeries for only $2,000, compared to a minimum of $20,000 in the U.S. and Europe. The Narayana Hrudayalaya group has 14 hospitals in 11 Indian cities, and performs 12% of all heart operations in this country of a billion inhabitants. “A century after the first heart operation, only 10% of patients worldwide can afford it. Lives are lost because of the hefty price tags on these operations. It’s a crime,” complains Shetty, who was Mother Teresa’s doctor. But behind his well-rehearsed speech —one of the reasons why he is known as the “Messiah of the poor”— there is an acute businessman. His group makes $250 million in revenue, and a profit margin most American hospitals can only dream of. The reason behind these unbeatable prices is not compassion for the poor but rather a keen sense of management.
In his hospital, Shetty rationalizes every task, from surgical scrubs in the locker room to the nurse handing the instruments to the surgeon in the operating room. A century ago, Henry Ford chose the same method to assemble cars for a lower cost and in record time. What worked for Ford also works for surgery: the time has come for assembly-line operations. The Bangalore hospital’s 29 surgeons operate 70 hours a week. Each one of them is specialized in two or three types of operations, so that they can work faster. “The more a surgeon operates, the better he becomes,” Shetty explains.
As he operates patients the same way one would assemble cars, Shetty applies methods inspired by Toyota: “They invented quality groups. Now, in my hospital too, I want nurses to be able to tell the surgeon if he needs to change his gloves because they are dirty.”
Unlike the U.S., wages are not the hospital’s main expense. The most expensive post is medicine and disposable materials. So Shetty asked himself a question: who in the world knows the best way to buy? His answer: Wal-Mart. To learn how to reduce inventory and handling costs by implementing Just in Time ordering (JIT), the hospital’s managers read all the manuals and bestsellers written on Wal-Mart.
In the near future, temperature curves and medical charts will be replaced by electronic tablets, connected to a main computer, where skilled nurses will be able to follow the patients’ progress. Technology also solved another problem: Previously, patients needed to be examined closely by a doctor. Now, in most cases it can be done through a Skype consultation. In Narayana Hrudayalaya hospitals, more than 53,000 patients have been healed thanks to e-medicine services. “Computer-aided diagnosis will be a norm in the next five years,” Shetty affirms.
Shetty wants to reinvent the hospital, in the way the Indian carmaker Tata revolutionized cars by building the world’s cheapest automobile- the Nano. A 300-bed hospital is about to be built in Mysore, a city 150 kilometers from Bangalore. It will have only one floor, to avoid the expense of installing elevators—the latter will be replaced by passageways. The hospital won’t be air-conditioned because it contributes to the spread of nosocomial diseases; there will be a natural ventilation system instead. The building will be built in record time for only 6 million dollars. All together, Shetty’s group plans to invest 830 million euros in the construction of 100 low-cost hospitals in India, and three “medical towns” with a capacity of 30,000 beds.
Following heart surgery, eye operations and cancer treatments are about to make an entrance into medical Fordism. Next to his cardiology clinic, Shetty has built a hospital specialized in oncology, as well as ophthalmologic, orthopedic and dental clinics. It is like a huge supermarket, where golf carts take patients from one specialty to another.
The low-cost hospital model now interests other countries. The Narayana Hrudayalaya group has invested in a new hospital in the Cayman Islands. Others are expected to follow suit in Ethiopia and European Eastern countries. “I’m going to countries in which Indian doctors are authorized to practice medicine,” Shetty explains.
The Narayana Hrudayalaya empire was built on the ruins of the public health system. In state-owned hospitals, there aren’t enough doctors, and patients often wait months before being operated. Public health expenses represent only 1.4% of the Indian GNP—less than in Bangladesh or Nepal. Private hospitals are often the only solution, even for very poor people.
In Narayana Hrudayalaya hospitals, the wealthy and the poor have the right to the same treatment. Patients arrive either in luxury cars with drivers or by foot, sometimes wearing only a loincloth. This is Shetty’s revolutionary idea: a private hospital which doesn’t only cater to the wealthy. His hospital is now part of a case study taught in Harvard Business School.
