Narayana Hrudayalaya

Topics: Hospital, Health insurance, Devi Prasad Shetty Pages: 5 (1509 words) Published: November 22, 2012
Q1 &2
Would you describe this heart hospital as successful? Explain why. If successful, what were the elements that made it successful? If not yet successful, what else should NH be doing?

“A dream of making quality healthcare available to the masses worldwide”

Narayana Hrudayalaya was established by Dr. Devi Prasad Shetty in 2001 with this mission. Its main focus was to provide affordable cardiac care to the masses. It has followed a hybrid strategy of attracting paying patients by virtue of its reputation for high quality combined with a relentless focus on lowering its costs of operations whenever possible. In 2004, the proportion of patients who paid NH's full price to those that cannot afford to pay was about 60:40. Following this strategy, they priced their general ward patients for OHS at Rs. 110000. This charge is the lowest in the country where the average cost of OHS in a private hospital is Rs. 250000. At the upper end, patients who opted for executive wards paid Rs 140000 - Rs 195000 for private rooms instead of general wards. To add to it, they offered the Karuna Hrudaya package for financially constrained patients at Rs. 65000 per OHS. For patients who could not even afford this, they helped arrange funds through the Narayana Hrudayalaya Trust's general corpus or by seeking external donations. The treatment across all the packages was the exactly identical. Since their inception, the number of in patients and out patients as well as catheterization and surgeries has constantly increased as shown in the below table:

Total%age Growth (YoY)Total%age Growth (YoY)Total%age Growth (YoY)Total%age Growth (YoY) Apr 01 - Mar 024242-9875-2116-1842-
Apr 02 - Mar 03722670%1086310%336759%274249%
Apr 03 - Mar 041026242%1538242%477742%357030%
Apr 01 - Mar 04-142%-56%-126%-94%

This has helped them achieve a breakeven of Rs. 90000 for OHS. By performing tests and operations in large numbers, they are able to achieve economies of scale and thereby reducing their costs. Following this wal-martisation of health care, with which they performed almost 8 times the surgeries and cathetarisation compared to other Indian hospitals. They have managed to perform more CABG surgeries a year, have morenumber of cardiac surgeons and greater average surgeries per surgeon than even few of the top ranked US hospitals. NH boasted of a 1.27% mortality rate and 1% infection rate in CABG procedures as against 1.2% and 1% in US respectively which further emphasises the quality of treatment being provided by NH.

Further they have also reduced their costs for buying medical supplies and equipments by bulk ordering for their AHF hospital at Kolkota and NH at Bangalore together. This has increased their bargaining power enabling them to get discounts of 30%-35% in their purchases. They have also used new technologies like digital x rays and comprehensive hospital management to improve their efficiencies and reduce costs. They have also adopted newer medicines like Biocon’s cardio-diabetes products which offer similar health benefits at much cheaper costs as compared to other similar medications further decreasing their overall costs. By keeping the administration team lean, NH also avoided the usual problem of corruption that plagued corporate hospitals. With the help of careful planning and internal financial controls to gauge the ability to fund below cost surgeries, NH has been able to optimise the number of subsidized surgeries to be performed. In order to further achieve their goal to reach the bottom of the pyramid, they have also effectively used telemedicine techniques with the help of a large number of general practitioners providing teleconsultation to the patients who would not have received the treatment otherwise. The fully equipped Mobile Cardiac Diagnostic Lab increased their penetration in the rural areas to ensure that best...
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