July 19, 2020

UNLEASHING MARKET FORCES:

The World's Cheapest Hospital Has to Get Even CheaperCancer surgery for $700, a heart bypass for $2,000. Pretty good, but under India's new health-care system, it's not good enough. (Ari Altstedter, March 26, 2019, Bloomberg Businessweek)

In the mid-1990s, Shetty began experimenting with a business school concept alternately called upskilling or task-shifting. The idea is for everyone involved in a complex process to work only at the top of his qualification, leaving simpler tasks to lower-paid workers. In a hospital, this might mean that the costliest staff--experienced surgeons--enter the operating theater only to complete the most difficult part of a procedure, leaving everything else to junior doctors or well-trained nurses. Then they move to the next theater to perform the same task again.

In 2000, Shetty secured a $20 million investment from his father-in-law, the owner of a successful construction business, to create the first Narayana hospital, which would put assembly line surgery into action. (Narayana was the benefactor's middle name.) Initially focused solely on cardiac procedures, Shetty gradually expanded Narayana's remit to include most major operations and set up regional hospitals that could feed patients with complex conditions into its two largest facilities: the Bangalore flagship and another in Kolkata. Within a decade the company had a national network and, in 2014, even opened in the Cayman Islands, in part to attract medical tourists from the U.S. Two years later, Narayana Health went public in Mumbai; it's been continuously profitable since.

"Everyone does as much as they can," Ashwinikumar Kudari, a senior gastrointestinal surgeon, says toward the end of a busy day at the Bangalore hospital. He's just removed two malignant tumors the size of golf balls from a middle-aged woman's intestines--the seventh surgery he's performed or supervised since morning. A compact man with a trim mustache and a wry smile, Kudari is soon on the move again, checking in briefly on a gallstone removal next door before dashing up a spiral staircase to another operating theater. There, he takes over from a colleague who's struggling to locate a particularly tricky fistula. "Our margins are low on one surgery, but because we do so many in a day, we can make enough," he remarks after the elusive fistula--the longest he's ever seen--is found, running from the man's anus to above his groin. By working at this pace, the average Narayana surgeon performs as many as six times more procedures annually than an American counterpart.

Shetty's philosophy of thrift is everywhere. The surgical gowns are procured from a local company for about a third of the cost of international suppliers. The tubes that carry blood to heart-and-lung machines are sterilized and reused after each surgery; in the West, they're thrown away. The machines themselves, along with devices such as CT and MRI scanners, are used well past their warranties, kept running by a team of in-house mechanics. The operating rooms, pieces of real estate so expensive that many hospitals bill for their use by the minute, are also part of the assembly line. Whereas preparing a U.S. surgical theater for the next patient can take 30 minutes or more, Narayana has gotten the process down to less than 15, in part by keeping turnaround teams with fresh instruments, drapes, and other supplies on immediate standby, ready to roll the moment a room is available. Even patients' families are part of the upskilling model. Narayana trains them to bathe patients and change bandages in the hospital, as they'll do when they get home. This allows paid staff to focus on more challenging work. Through all these methods and more, Narayana has been able to get the retail cost of a heart bypass, its most common operation, down to $2,000, about 98 percent less than the U.S. average.

It's all a far cry from the high-touch treatment Westerners expect, but Shetty is adamant that none of the practices compromise safety. Sterilizing and reusing clamps and tubing is permitted under the standards of the Joint Commission, a U.S.-based body that vets and accredits hospitals worldwide, including Narayana's cardiac hub. Involving properly instructed family members in the simplest care tasks isn't unheard of in Europe and North America, and some studies suggest it may improve patients' prospects. (Unlike busy nurses, relatives have just one person to focus on.)

The data appear to back Shetty up. In part because its huge volumes help surgeons quickly develop proficiency, the chain's mortality rates are comparable to or lower than those in the developed world, at least for some procedures. About 1.4 percent of Narayana patients die within 30 days following a heart bypass, according to the Commonwealth Fund, which studies public health, compared with 1.9 percent in the U.S. Narayana also outperforms Western systems in results for valve replacements and heart-attack treatment, the group found.



Posted by at July 19, 2020 12:00 AM

  

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