A Facebook post of a friend led me to this article in The Wall Street Journal titled The Henry Ford of Heart Surgery. And through this and subsequent googling I discovered the man behind the name Dr. Devi Shetty, a name I have heard a hundred times amongst friends and family in India.
Whenever heart disease and its remedies are discussed in India this name inevitably pops up and I knew that Dr. Shetty is a famous heart surgeon who started in a hospital in Calcutta, became Mother Teresa’s doctor and then founded a couple of his own hospitals in Calcutta and Bangalore. But what I did not know are the following:
- His Narayana Hrudayalaya hospital in Bangalore charges around $2,000 for open-heart surgery. The same operation costs around $5,000 in other Indian private hospitals and anything between $20,000 and $100,000 in the U.S.
- Almost a third of Narayana’s patients are covered by a farmers’ insurance plan started by Dr. Shetty in partnership with the state government of Karnataka. This insurance costs just $3 a year per person and pays $1,200 for each cardiac surgery, which is lower by $300 from the hospital’s break-even cost of $1500 per operation.
- 3,174 cardiac bypass surgeries were performed in Narayana in 2008 – a huge number, compared to the 1,367 in the renowned Cleveland Clinic, U.S.A. 2,777 operations were performed on children – Children’s Hospital Boston performed only 1,026.
- But quality does not suffer. Narayana’s mortality rate within 30 days of coronary artery bypass graft surgery, a common procedure, is around 1.4%. The U.S. average in 2008 for the same procedure was 1.9%.
- And they still make profits! Narayana Hrudayalaya Private Ltd., which runs the hospitals, reports a 7.7% profit after taxes. This is slightly higher than the 6.9% average for a U.S. hospital.
Astounding! And all of this is possible thanks to one man’s vision and private enterprise!
Before Devi Shetty, it was considered impossible to drive down costs to such levels; even now, no one has been able to replicate this. Top-flight management researchers want to understand how Shetty does it. “The mortality rate in Narayana Hrudyalaya is much lower than in New York State for similar kinds of heart disease,” says University of Michigan’s C.K. Prahalad. The hospital has been discussed extensively in his 2004 bestseller, The Fortune at the Bottom of the Pyramid. It has also become a case study at Harvard Business School. Adds Kokila P. Doshi, professor of Economics at University of San Diego’s business school, “Till now the trend was that government serves the poor. Shetty has shown that private enterprise can serve the poor profitably.”
The WSJ article reports that a couple of Mother Teresa’s pictures adorn the walls of Dr. Shetty’s office. One of them has the following words,
Hands that serve are more sacred than lips that pray.
Additional Link:
Forbes India Slideshow – Day in the life of Devi Shetty
(Photo courtesy Narayana Hospitals)
(Thanks PD for the WSJ link!)
