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.
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