Opinion Walmart-ising healthcare

The wards inside are vast,each housing a nursing station and 50 or so beds separated only by curtains. There is no air conditioning in the hospital,except in the treatment rooms. Many of the patients who come to the hospital are rural folk or those covered by government-sponsored insurance,who are not used to air-conditioning anyway. The high ceilings and the tiled roof keep the wards cool while ample cross-ventilation helps circulate the air. The low-rise strategy helped the chain save on expensive foundation-laying and the need to instal lifts.

Going further on the cost saving,the hospital has roped in patients themselves. A programme has been designed to train patients’ relatives in the basics of patient management — periodically checking the pulse and temperature,giving medication on time,dressing the surgical wounds. That brings down the nursing staff requirement. It is a win-win for patients too. In contrast to hospitals that hand relatives a bagful of medicine and a series of instructions upon discharge,family members here are equipped to manage the patients once they are sent home. Predictably,the prices for surgeries in Mysore are much lower than in the Bangalore hospital.

In a country where millions cannot afford quality healthcare,the Narayana Health Mysore unit seems the way forward. “It is the only healthcare model sustainable in our situation,” says Devi Shetty,chairman of Narayana Health. The cardiologist says,“Patients are charged Rs 7 lakh for a heart surgery in Indian metros,which is absurd. How can this be sustainable? The future is for all to see.”

Shetty,for long a pioneer of cheap,innovative healthcare,has been described as the Henry Ford of Indian healthcare. His hospital chain has been recognised for “Walmart-ising” healthcare. By applying economies of scale to drastically bring down costs,Shetty has created a no-frills hospital chain whose quality is comparable to international standards. The cardiac surgeon,once a doctor-on-call for Mother Teresa in Kolkata,is on a mission to pummel down heart surgery costs to a third of its current price — below Rs 50,000,which would make it more affordable to a big chunk of Indians.

Shetty’s Narayana Health has grown into a chain of 17 hospitals across India,with 13,000 beds. Its showpiece is the Narayana Health City in the suburbs of Bangalore,just a short distance from the city’s high-tech nerve centre,Electronics City. The complex has specialised hospitals for cardiac treatments,eye surgeries,orthopaedics and cancer. In the main block is a lobby that can sometimes resemble a busy airport departure lounge,and patients throng here from every cranny of India,neighbouring countries and even Africa. About two-thirds of these patients pay the full charge and the rest receive a discount. The poorest receive highly subsidised treatments or are funded by charities.

The model has been years in the making. For instance,at the heart hospital where Shetty himself is immersed in surgeries,the operation theatres work six days a week and are packed from dawn to dusk. The chain adheres to the principles of mass production and the doctors follow a routine that shocks their Western medical practitioners. “But how can troops at war go home at five?” Shetty counters,dismissing the critics. The surgical procedures resemble a production line and the operating theatre has streamlined work processes. First,the staff ready the patient for the surgery. Junior surgeons make the incision and open up the chest while the senior surgeons appear only for the crucial part of the procedure in the OTs.

Shetty’s initial plan was to build hospitals identical to the Mysore model in a dozen smaller Indian towns where rural populations too can be served. However,the plan has hit a snag. “India simply does not have enough trained specialists. We have to first fix our higher medical education challenge to facilitate a healthcare revolution,” he says.

Clever strategies have gone a long way in making Narayana Health the world’s most economical healthcare service provider. Shetty himself is a tough negotiator when it comes to striking deals with equipment and consumables manufacturers,even convincing multinationals like GE Healthcare to supply medical equipment on his terms — on a pay-per-use basis rather than through outright purchase.

How the hospital chain moved away from the surgical scrubs to a one-time-use set made of imported material is a story in itself. The supplier of the scrubs,a global firm which has monopoly of the market,would not negotiate below Rs 5,000 per set. The hospital chain offered half that amount and when negotiations failed,Shetty went to a local clothing entrepreneur,got him to import the material and make the scrubs locally. The volumes were sizeable. The local entrepreneur was happy enough with the hospital chain’s long-term contract that he finalised the supply at Rs 900 a set. The entrepreneur is now contemplating exporting the scrubs to overseas markets.

saritha.rai@expressindia.com