Narayana Hrudayalaya Hospitals: A Globally Sustainable Model?

Authors: Colby Jackson, Tyler Wigington, and Haley Chamberlain

IBUS 489India Business Environment Dr. Julian Gaspar

April 2, 2 !"

Narayana Hrudayalaya Hospitals

TABLE OF CONTENTS
Topic a!e

Introdu#tion$ %edi#al tourism and &o' it &as impa#ted India(s e#onom) " Basi# *a#+,round on t&e -. .ospital s)stem / 0&e -ara)ana .ruda)ala)a p&ilosop&) and *usiness plan 1 0elemedi#ine and its impa#t on ,lo*al &ealt&#are ! .o' t&e -. .ospital s)stem &as *een so su##ess2ul !! 3ur personal e4perien#es tourin, t&e -. .ospital in Ban,alore !" Di22eren#es *et'een t&e &ealt&#are s)stems o2 India and t&e United States !/ 5otential issues 'it& implementation in t&e United States !6 7on#lusion$ t&e 2uture o2 -. and t&e impa#t o2 e4pansion into t&e 7ari**ean 3

!9 8or+s 7ited 2!

"ntroduction: Medical touris# and $o% it $as i#pacted "ndia&s econo#y Medical tourism is the practice of tra eling abroad in search of high! "uality, lo#!cost medical care$ The primary reason that Americans #ould be inclined to head across the Atlantic %cean and se eral continents simply for healthcare is that it sa es money&and a lot of it$ 'or e(ample, a bilateral hip replacement that could set you back as much as )*+,+++ in the ,nited -tates can cost less than ).+,+++ in /ndia, including fi e!star hotel accommodations and airfare$ 0 belo#$ TABLE ': A(E)AGE rocedure 1hinoplasty 3iposuction 4per area5 6uttock 3ift Hip 1esurfacing 9nee 1eplacement 4per knee5 -pinal 'usion CT -can 6ypass -urgery Coronary Angioplasty Hysterectomy 1oot Canal )<.,+++ );++!)0,+++ )0:+,+++ )7;,+++ ).+,+++ ):7+!)8<+ )*,<++ )2++ )*,7++ )2,8++ ):,*++ );7!)0;7 )OCE*+)E COSTS "N +,S, AN* "N*"Arice A.era!e "ndia )0,*++ )*++ )0,8++ )*,+++ );,<++ rice 'urther cost comparisons are sho#n in Table

A.era!e +,S,

)2,+++!)0.,+++ ).,+++!)0+,+++ )7,+++!)*,+++ ).7,+++ ).+,+++!):7,+++

=These a erage costs are from a number of sources and include surgeon, anesthesiology, and operating room fees, but hospital stays are not included$ Actual costs may ary depending on a ariety of factors$

Although the concept of medical tourism may be relati ely ne# to Americans, there is e idence that it has been practiced for hundreds and e en thousands of years$ According to >r$ Monica -il eira Cyrino, a classics professor, ancient 1omans are often called the #orld?s first tourists because they #ould tra el o er .++ miles to the olcanic regions of Mount @esu ius, #here it #as said that the mountain?s #arm, sulfurous hot springs #ere good for healing$ 'urthermore, hospitals #ere often found only in maAor

metropolitan centers, so people li ing in the outlying rural areas #ere forced to tra el many miles to recei e medical care$ % er the past fe# decades,

medical tourism has been gro#ing in popularity$ /t o#es much of its popularity in the last fe# decades to the ad ent of the /nternet and impro ements in telecommunications and transportation$ Ad ertising,

media and #ord of mouth ha e also contributed to the industry gro#th$ Many Americans are a erse to the idea of going o erseas for maAor surgery, especially those #ho lack much tra el e(perience, but there are also many Americans #ho ha e already taken ad antage of the more affordable medical treatment abroad$ A study by the Associated Chambers of Commerce and /ndustry of /ndia 4A--%CHAM5 reported that 87+,+++ people tra eled to /ndia for medical purposes in .+00$ These tra elers must obtain a Medical 4M5 @isa, #hich is alid for up to one year, #hereas the

normal Tourist @isa is alid for only 08+ days$ Whether a person is in need of a face!lift, hip replacement, spinal surgery or cardiac care, the necessary care can be recei ed in a number of 6

the countries that offer first!class medical care at Third World prices$ Among these countries, /ndia is considered to be a pioneer of the medical tourism industry$ /t is the most popular tourist destination for medical procedures, and it has earned a reputation for its mastery and inno ation for cardiac procedures, Aoint!replacement surgery, and the ne#er hip!resurfacing procedures, although it is lesser kno#n for its cosmetic procedures$ Although the procedures performed are much cheaper, studies by the Medical Tourism Association 4MTA5 ha e sho#n that medical tourism in /ndia alone currently generates ). billion per year and is gro#ing at an annual rate of :+B$ 3arge in estments by pri ate sector business are e(pected to

contribute significantly to the de elopment of /ndia?s hospital industry, #hich already comprises about 8+B of the total healthcare market, based on a report by consultancy 1NC%-$ 'urthermore, according to 'itch, a rating

agency, the /ndian healthcare sector is estimated to reach )0++ billion by .+07$ As demand for specialiCed and "uality healthcare facilities increases

and medical tourism continues to gain popularity, there are clear indications that healthcare is going to be a maAor sector that stimulates economic gro#th and contributes to employment in /ndia for years to come$

Basic bac/!round on t$e NH Hospital syste# 0$istory1 procedures o22ered1 statistics3 /ndia is unmatched #hen it comes it healthcare cost, and the presence

of the Narayana Hrudayalaya 4NH5 Hospital system is a maAor reason for that$ Narayana Hrudayalaya #as founded in the year .+++ by the reno#ned cardiac surgeon, >r$ >e i -hetty, under the support of Asian Heart 'oundation$ /ts first health city #as set up in the outskirts of 6engaluru, and

it #as actually financed by >r$ -hetty?s father!in!la#$ /nterestingly enough, JD Morgan and Dine6ridge /n estments 4formerly A/E /n estments5 each hold a 0.$7B stake in NH HospitalsF 9iran MaCumdar!-ha#, the managing director of a biotechnology firm, o#ns a .$7B stake 4hence the NH MaCumdar!-ha# Cancer Center5F and the remainder of the company 4;.$7B5 is still o#ned by >r$ -hetty and his family$ NH Hospitals are no# head"uartered in 6engaluru, /ndia, and the 6angalore cardiac unit, #hich #e pediatric heart hospitals$ isited, is one of the #orld?s largest

NH performs appro(imately .2 open!heart

surgeries and :7 catheteriCation procedures a day, placing them far ahead of any other hospital #orld#ide$ treatments in a #ide array Apart from cardiology, NH Hospitals offer of specialties, including neurosurgery,

gastroenterology, general surgery, dental, urology, transplants, medical imaging, and radiology$ Their facilities also house blood banks and

laboratories, and they ha e integrated technologies to accommodate the gro#ing field of telemedicine$ They system is currently comprised of 07

hospitals and multiple dental clinics and diagnostic centers, not to mention the se en hospitals currently being constructed, including one in the Caribbean$

Just because NH offers lo#!cost procedures at a high

olume doesn?t

mean the "uality of care is compromised$ /n fact, the hospitalGs mortality rate of around .B and hospital!ac"uired infection rate of .$8 per 0+++ /C, days are comparable to the best hospitals across the #orld$

T$e Narayana Hrudayalaya p$ilosop$y and business plan Narayana Hrudayalaya literally translates to HEod?s compassionate homeI in -anskrit, and there couldn?t be a more fitting name for this hospital system$ At NH, they stri e to pro ide holistic, timely patient care and continually update technology, all the #hile enhancing customer

relationships$ The

ision for NH is to pro ide Haffordable "uality healthcare

for the masses #orld#ideI, and although they are relati ely ne# to the healthcare field, they ha e already made significant ad ances to#ards accomplishing their ision$ /t?s a real fairytale story: one day in the 0**+?s, >r$ -hetty #as interrupted in the middle of surgery by a phone call #hich re"uested he make a home isit that #ould potentially transform his life$ Although he

protested initially, he e entually did make his first house call&into Mother Theresa?s personal home$ /nspired by the legendary nun?s #ork #ith the

poor, he made it his goal to deli er care based on need, not #ealth$ -ince then, NH has re olutioniCed healthcare, and it doesn?t appear to be stopping any time soon$

NH follo#s the inno ati e concept of Hhealth cityI, #hich means they are aiming to create one geographic place for all healthcare needs$ Ho#e er, NH is not alone in its presence in the medical tourism industry$ Notably,

>ubai has recently completed its highly anticipated >ubai Healthcare City, #hich is the largest medical center bet#een Jurope and -outheast Asia, and it #as designed #ith international patients in mind$ >espite helping so many poor patients, NH Hospital is kno#n for being so efficient that it actually has a higher profit margin 4;$;B after ta(5 than most pri ate hospitals in America 4K<$*B5$ -o #hat is their secretL /t?s simple really&economies of scale$ As of

.+0., NH Hospital had ;,+++ beds, and if you factor in all the large NH hospitals currently being built across /ndia, the total comes to :+,+++ beds$ Just for comparison, the largest hospital center in the ,nited -tates, the Ne# Mork DresbyterianNWeill Cornell Medical Center has .,.:< beds$ %ne reason that NH Hospitals are able to accommodate so many more beds is due to the open layout of the floors, #hereas in the ,$-$, patients e(pect to ha e their o#n room during their hospital stay$ 6y creating such large economies of scale #ith a high olume of

patients, it is able to bargain do#n the cost of supplies to the hospitals, #hich generally are an enormous e(pense for healthcare pro iders$ Moreo er, healthcare is much more affordable abroad because malpractice insurance, land, construction, medical #ages, prescription medication, and cost of li ing are cheaper than in the ,nited -tates$ 10

>r$ -hetty recogniCed that contrary to popular belief, the healthcare industry needs more process inno ation than product inno ation$ All of the Hmagic pillsI and technology #on?t help a patient if he or she cannot afford it$ This idea in itself isn?t necessarily groundbreaking, but the fact that >r$

-hetty #as able to apply this HWal!mart ApproachI of accessibility, "uality, and affordability to a field as comple( and costly as cardiac care is really remarkable$ 'urthermore, NH has a no el pay structure that is independent of the comple(ity of a procedure or the length of hospitaliCation, unlike that of the ,nited -tates$ All patients simply pay a flat rate of ):,+++ for surgery$ >r$ -hettyGs instructions are clear: nobody #ho comes to Narayana Hrudayalaya #ill be denied treatment due to a lack of funds$ :+B of the patients seen at NH are co ered under a micro!insurance plan called Meshas ini, #hich reimburses NH at about )0,.++ a surgery$ Meshas ini is run by an

independent trust in association #ith the 9arnataka state go ernment$ About 07B of the patients are not co ered by Meshas ini and cannot afford the hospital?s regular charges, so they are offered a concessional rate, #hich depends on the patients? financial capacity$ This concessional rate is funded by the hospital?s charitable trust and indi idual donors$ Another .+B of

patients #ant 4and can afford5 better personal amenities, such as an upgraded pri ate room, so they pay a premium of )2,+++!)7,+++$ allo#s NH to offset the losses incurred from treating the poor$ This

/n effect,

patients #ho pay discounted rates are compensated by those #ho opt for

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e(tra perks, usually foreigners because the slightly higher price is still considered a great bargain$ Another #ay NH sets itself apart is through its uni"ue accounting practice of e aluating profit and loss accounts on a daily basis$ According to >r$ 1aghu anshi, the CJ% of NH, HWhen you look at financials at the end of the month, you?re doing a postmortem$ When you look at them daily, you can do somethingI$ This practice allo#s them to accurately determine ho# much concession they can afford on the follo#ing day #ithout ad ersely impacting profitability$ /f they are running lo# on funds, they can schedule more Hlu(ury surgeriesI to keep them out of the red$ >r$ -hetty further challenged standard industry practices #ith his method of compensating doctors$ /nstead of paying his surgeons per

surgery, he pays his staff physicians a fi(ed, albeit fair, salary$ Ho#e er, he did re"uire the doctors to perform more surgeries than they #ould ha e done pre iously #hich both brings do#n costs and allo#s the physicians to gain in aluable e(perience$ This is one of the core sa ing areas of NH$ >r$ -hetty also #as gi en an ad antage from the starting line, since his father!in!la# built the first hospital for him, #hich kept costs minimal$ He maintains these cheap construction costs by closely monitoring all future proAects$ %ther general hospital e(penses are also cut because of the sheer number of patients seen$ /t?s basic supply and demand&as olume

increases, per unit costs decrease, and high -hetty to dri e a hard bargain #ith

olumes of patients enable >r$

endors #hen it comes to negotiating 12

prices for e erything from surgical glo es to ad anced medical e"uipment$ The hospital?s olume coupled #ith >r$ -hetty?s credibility makes for a

formidable opponent in a negotiation setting$

Tele#edicine and its i#pact on !lobal $ealt$care Telemedicine is, according to the NH Hospitals? #ebsite, an Hinno ati e concept that circum ents geography and the non!a ailability of trained medical personnel to offer immediate medical treatment and kno#ledge long distance$I remote Telemedicine is practiced through the connection bet#een centers e"uipped #ith #eb!conferencingNtelemedical

health

capabilities and larger, mostly urban hospital systems$ Jssentially, a patient #ill go to a nearby health center, consult #ith a doctor through the /nternet, get a diagnosis, and either recei e a prescription or set up a #ay to physically tra el to the hospital for more ad anced medical treatment andNor surgery$ NH Hospitals, one of the leading e(perts in this gro#ing industry, effecti ely connects nearly three hundred remote health centers to roughly thirty maAor hospitals$ While its focus is primarily in /ndia, it also helps to connect patients in Malaysia, TanCania, Nigeria, 6urundi, Oambia, and 6angladesh$ To date, the hospital system has treated o er 7+,+++ patients through telemedicine$ /n /ndia, nearly ;7B of /ndians li e in rural illages, #hile more than

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;7B of /ndian medical doctors li e in more urbaniCed areas and maAor cities$ There is a clear disconnect here, and >r$ -hettyNNH Hospitals ha e set out to bridge the gap #ith telemedicine$ Droponents of telemedicine, including @iAay Eo indaraAan, a professor at >artmouth, belie e that telemedicine #ill thri e in /ndia based on a number of reasons, including a shortage of doctors in the rural areas 4as mentioned earlier5, a high patient olume, and a

#idespread a ailability of mobile net#orks in the country itself$ As technology and #ireless capabilities continue to become more ad anced and intuiti e, telemedicine #ill be able to impact e en more people than it already has$ Already, >r$ -hetty and his team ha e been able to treat people in rural areas of /ndia #ithout actually meeting them$ He has also done initial Htele!consultationsI and then helped coordinate for people, specifically cardiac patients, to get to 6angalore so that he can perform surgery on them, often free of charge or hea ily discounted$ /n the not!so! distant future, >r$ -hetty, NH Hospitals, and other telemedicine ad ocates, may e en be able to perform most surgeries remotely, seeing as the technology already e(ists but is too e(pensi e, such as the da @inci -urgical -ystem in the ,nited -tates$

Ho% t$e NH Hospital syste# $as been so success2ul 'rom the beginning, >r$ -hetty has set out to Hbuild a successful company #hich PaimsQ to bring do#n the cost and make PhealthcareQ

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affordable and thereby, also be attracti e for banks to lend to and in estors to in est in$I He also has aimed to impro e the standard of healthcare a ailable to the common man, in order to help /ndia?s progress on a national and global scale$ ,ltimately, >r$ -hetty?s ision has been for the NH Hospital chain to be a Hreliable, safe, and lo#!cost healthcare pro ider across the globe,I and that ision has remained the same since the hospital?s inception$ /n addition to maintaining a strong and consistent ision, >r$ -hetty

has surrounded himself #ith kno#ledgeable people to help #ith e ery aspect of the hospital system$ 'or e(ample, the CJ%, >r$ 1aghu anshi, is a cardiac surgeon by training and the C%%, >r$ 3loyd NaCareth, has a lot of e(perience managing hospitals$ And of course, >r$ -hetty, himself a practicing cardiac surgeon, has e(perience and the medical field and in non!profit #ork, ha ing founded the Asia Heart 'oundation in 0**;$ >r$ -hetty and the NH Hospital system ha e successfully in ol ed themsel es in arious areas of the medical #orld$ The system reaches into

many different areas besides cardiac surgery, including cancer treatment, dentistry, academic research, telemedicine, training programs, and e en public policy related to treatment of the underpri ileged in /ndia$ This

di ersity and clear focus on impro ing healthcare in /ndia and the #orld, as a #hole, has greatly contributed to the system?s success$ 'inally, >r$ -hetty and NH Hospitals ha e used inno ation as a dri er for their success and contribution to healthcare$ -imply, NH Hospitals has disco ered ho# to best deli er #hat is currently a ailable, instead of 15

searching for Ha magic pill, a ne#

accine, or a faster scanner$I /t has also

been incredibly inno ati e in terms of funding$ >r$ -hetty, along #ith the hospital system, actually created the concept of micro!health insurance, in #hich underpri ileged /ndian people pay a small premium per month for surgeryNmedical co erage$ /n >r$ -hetty?s #ords, HP/ndiaQ #ill become the first country in the #orld to dissociate health care from affluence$I

Our personal e4periences tourin! t$e NH Hospital in Ban!alore @isiting NH Hospital in 6angalore #as the highlight of the trip for us$ The hospital took us to a place on the other side of the globe that is doing things better than #e see at home$ The hospital continued to impress us as #e mo ed throughout the facilities$ %ur #onder and a#e led us to seek more in!depth information and ser ed as inspiration for this research paper$ When #e first arri ed, #e #ere thinking, H-o, this is itLI We had heard about the hospital and #ere a#are of the amaCing #ork it #as doing, so #e #ere e(pecting something that looked impressi e$ /nstead, #e #alked into a building #ith dirty #alls and o erly cro#ded #ait rooms$ Compared to our e(periences #ith hospitals back home, e erything Aust seemed disorganiCed$ An enduring memory for us #as #hen #e noticed that the #alls #ere Aust co ered in dirt$ /t #as so foreign to us coming from a home of pristine, #hite #ashed, and sterile offices$ As #e mo ed through the different areas of the hospital, #e realiCed that this e(terior dirt #as more a sign of success than a

16

mark of bad operations$ We recogniCed ho# the patients being operated on #ere themsel es dirty$ Many li ed on the streets or in remote illages and

probably hadn?t taken a sho#er in days or #eeks$ The hospital simply had a difficult time staying clean because the people in #ere themsel es dirty$ This isible sign sho#ed me that the hospital #as in fact doing something totally uni"ue$ The more #e #alked around, the more impressed #e became$ There #as constant acti ity and endless hall#ays #ith patients being ser ed$ When #e got to see an actual pediatric intensi e care unit, it truly emphasiCed Aust ho# different their approach is$ 'or starters, #e #ere allo#ed in$ With all of the H/DAA regulations and hospital security, this is really unheard of in the ,nited -tates, yet the NH staff #elcomed us into a highly sensiti e area #ith minimal sterility measures taken$ We simply pulled on shoe co ers and bibs and moseyed on in to the cardiac reco ery floor$ As mentioned earlier, the most drastic difference #as the open layout of the floor, #ith Aust ro#s and ro#s of beds ersus indi idual rooms, #hich enabled the doctors and nursing staff to mo e s#iftly bet#een patients and to respond "uickly to any change in ital signs$ J erything about the NH Hospital system, do#n to the bed

arrangements, is streamlined and efficient$ /t #as #hen #e #alked out of the first building that #e again realiCed Aust ho# uni"ue this hospital is$ We thought #e #ere done #ith the tour, but it turned out #e had only seen the first building in the Hhealth cityI$ As #e #alked around the corner, the guide pointed out all of the buildings and ho# 17

each ser ed a uni"ue set of health needs$ The e(perience #as reminiscent of #alking around the campus of ARM, if only medical issues rather than degrees di ided campus buildings$ We only entered one more building, but that in itself #as a sho# of the rest of the comple($ This building #as ery similar to the first, #ith throngs of people and grungy #alls$ This housed long!term patients though and #e could see rooms #here patients stayed$ These rooms #ere "uite similar to #hat one #ould find in an American hospital, Aust #ithout T@s$ We ha e al#ays kno#n that medicine is a ery

complicated and tangled system, but seeing NH Hospital firsthand sho#ed us that despite the complications, there is still room for inno ation and impro ement$

*i22erences bet%een t$e $ealt$ care syste#s o2 "ndia and t$e +nited States The ,nited -tates healthcare system is categoriCed by a disparate mi( of policies, pro iders, insurers, regulators, and locations$ /t is plagued by

o erspending and fre"uently gi es less than ideal results$ /t has no central go erning agency and contains little integration or coordination$ The system is technology!dri en and focused mainly on e(pensi e acute care$ Compared to the rest of the #orld, it has high costs and une"ual access for a erage outcome$ Much of the complication comes from the system of medical payment$

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3ooking around the globe, there are four basic systems of paying for health care: The 6ismark Model, The 6e eridge Model, the National Health /nsurance Model, and the %ut!of!Docket Model$ /n the ,nited -tates, our system operates as a combination of all four$ The 6ismark Model is a system in #hich health insurance is Aointly funded by employers and employees$ The idea behind insurance is that you spread risk and decrease prices for e eryone$ /nsurance companies are still able to pro ide differentiated ser ices and pro ide for indi idual needs$ /n countries such as Eermany and Japan, insurance companies operate in a non!profit fashion and must pro ide co erage to anyone$ The ,nited -tates has an insurance!based system as the primary method of health co erage$ 1oughly 77B of Americans recei e health insurance through their employer 4Census5 and are free to use it as specified by the plan$ This system has e ol ed o er time but it is no# an e(pectation that an employee carries health insurance$ /nsurance companies pro ide care but also seek to ma(imiCe profits$ This creates a medical en ironment that often cares more about money being spent than effecti eness of ser ices$ The %ut!of!Docket Model says you pay for #hat you get$ An indi idual has to directly pay for any ser ice they #ant to recei e$ This is incredibly e(pensi e and pre ents most people from getting re"uired health ser ice$ /n the ,$-$, appro(imately 0+B of the population had no insurance$ These

people either ha e a Aob #ith no insurance co erage 4most part!time Aobs offer no assistance5, ha e been denied co erage because of a pree(isting 19

condition, can afford insurance but choose not to purchase, or "ualify for aid but don?t kno# it$ Health costs for these people are either absorbed by the system or often pro ided by charity$ The National Health /nsurance Model uses pri ate!sector pro iders that are paid for by national health insurance$ J ery citiCen is enrolled in the

go ernment insurance policy$ CitiCens are limited in the ser ices they can recei e, but ha e e erything paid for$ This system is seen in Medicare and Medicaid$ Medicare co ers health care for citiCens o er <7 and Medicaid 6oth of these systems ha e seen

pro ides payment for poor citiCens$

soaring cost increases and decreased acceptance in recent years$ The Affordable Care Act dramatically e(panded Medicaid and sought to pro ide co erage to more citiCens$ Currently, appro(imately :+B of the population recei es public health co erage$ The 6e eridge Model treats health care like any other public ser ice 4schools, police, fire departments, libraries5$ The system is entirely managed by the go ernment and there are no pri ate pro iders$ CitiCens ne er pay a bill and the go ernment is the only payer$ This system pro ides cost controls because the go ernment can mandate prices$ This is ho# the ,nited -tates pro ides co erage for go ernment officials and military eterans$ The

T1/CA1J system for eterans is managed entirely by go ernment and it sets prices for ser ices$ ,sing this frame#ork, /ndia #ould operate primarily at the %ut!of! Docket le el, #ith amounts of go ernment co erage and indi idual 20

insurance$ The go ernment runs health hospitals and ser ices at multiple le els, but these pro iders are notorious for inefficiency and poor results$ The ,nited -tates system is notorious for large amounts of spending that do not necessarily result in better co erage$ /n .++*, Health Care spending #as 0<$.B of E>D 40st in the #orld5 compared to <$0B in /ndia 487th in #orld5$ >espite this spending, #e are passed by many countries in life e(pectancy and general health standing$ >espite all these negati es, the ,nited -tates is a hotbed for high!tech inno ation$ The medical imaging and de ice fields are rife #ith inno ation and recei e large amounts of money in grants$ These industries constantly pro ide ne# technology for doctors to #ork #ith$ Datients that ha e access to care often recei e cutting!edge treatment$ skyrocket ho#e er, and ne# technology This causes prices to al#ays better$ As

isn?t

demonstrated by other countries, technology is not going to sa e the industry$

otential issues %it$ i#ple#entation in t$e +nited States /f you #ere to take an NH hospital from /ndia and Aust transport it directly to the ,nited -tates, it #ould most surely fail$ %ur system right no# Aust #ould not be able to support the operations of the hospital$ NH operates on a system that is totally foreign to the #ay hospitals in operate in the states$ These differences fall on many lines but deal primarily #ith doctor

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#orkload and patient payment$ %ne of the things that make NH so effecti e is the amount of #ork that each indi idual doctor does$ At NH more than :+ surgeries #ill be performed each day and doctors #ill perform thousands in a career$ This allo#s costs to decrease and e(perience to increase o er time$ NH constantly uses its

e"uipment and recoups in estments "uicker$ /n the ,$-$ system, doctors typically perform much more comple( surgeries and are more sparing #ith their time$ A heart hospital #ill typically perform 0!: surgeries in a day$

Caution, standards, and ad anced techni"ues all make the process more complicated$ The ,$-$ also lacks the ast numbers of heart surgeons

re"uired to operate on such a large scale$ The Association of American Medical Colleges reported in .++* that by .+.7 the demand for cardiac surgeons could rise by 2<B and supply fall by .0B 41euters5$ A shortage of doctors #ould make operating at such large scale ery difficult$ /ndia has a

uni"ue ad antage of a huge population comparati e to the ,-, so they #ill naturally ha e more surgeons$ Dayment is the second and biggest issue in implementation$ NH #orks in /ndia because it relies entirely on out!of!pocket payment$ /t re"uires rich patients to pay more and is able to pro ide cheap or free care to those #ho can?t afford$ This is #orked out on an indi idual basis and insurance has no role$ /n the ,nited -tates, ho#e er, insurance plays a massi e role$ With more than 7+B of the population ha ing pri ate insurance and another :7B on public health assistance, people are not ready to operate outside of 22

insurance companies$ NH #ould not be able to achie e the scale it desires because it #ould lose all of the middle class Americans #ho could help subsidiCe the costs$ /t #ould be ery difficult to #ean Americans off of the

current system$ That said, if NH could hypothetically pro ide a )7,+++ out! of!pocket surgery 4.$7( the cost of in /ndia5 it could possibly still be cheaper than getting the surgery on insurance$ While it?s difficult to generaliCe costs, heart surgery can cost as much as )0++,+++ to ).++,+++$ With insurance, costs #ill typically decrease to some#here bet#een )0,7++ and )0+,+++ 4CNN5$ 3astly, #hile NH does pro ide care and some attention to its patients, it primarily operates in an assembly line fashion$ Datients are mo ed in as

"uickly as possible, seated in cro#ded #aiting rooms, operated on #hilst surrounded by people, and gi en little face!to!face doctor interaction$ /n the ,$-$, patients e(pect face time #ith doctors and to be treated as if their condition is a higher priority that that of other patients$ 6asically, Americans ha e higher standards for care and attention$ As a result, this #ould re"uire an adaptation of NH operations, #hich may undermine the #hole concept of efficiency and care!for!all upon #hich the NH system is built$

Conclusion: T$e 2uture o2 NH and i#pact o2 e4pansion into t$e Caribbean Ei en our e(perience at the NH Hospital and our research, it appears

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that >r$ -hetty and the hospital system ha e a bright future ahead of them$ They ha e figured out ho# to offer high! olume, "uality healthcare to underser ed indi iduals at a lo# cost$ As a result, >r$ -hetty and NH are no# in the process of e(panding globally, specifically into the Caribbean$ >r$ -hetty and NH brokered a deal #ith Ascension Health Alliance of the ,-A to build a ). billion, .+++!bed health center in the Cayman /slands$ The facility #ill include a hospital, uni ersity, and assisted!li ing facility$ While >r$ -hetty #ants to help underser ed indi iduals, he is primarily targeting American patients and insurance companies seeking huge cost reductions$ While the market currently does not support this system,

patients are able to pay out!of!pocket$ American insurance companies may be offering medical tourism as an option in the near future, #hich #ould most certainly stimulate business for /ndia and NH hospitals$ /f the insurance companies do choose to follo# this route, it #ill open doors for continued success in the global market$ /ncenti e models may include #ai ed

deductibles and co!pay or a cash incenti e to ha e procedures done abroad$ /deally, he #ill dra# 7+B of the Cayman patients from the ,nited -tates$ -er ices pro ided #ill include open!heartNbypass surgery, angioplasty, heart! al e replacement, cancer treatment, bone!marro# transplant, nuclear medicine, organ transplant, and orthopedics$ The first building, #ith 02+ beds, #ill open in %ctober of .+0:$ While the entire future of NH Hospitals? ne# enture is not completely set in stone, there is strong reason to belie e that >r$ -hetty #ill deli er another success 24

#ith his hospital in the Caribbean$

>r$ -hetty?s inno ati e approach to

pro iding high! olume, lo#!cost healthcare #ill surely ha e profound effects on the future of the industry and the #orld$

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5or/s Cited
SAscension Health Alliance /n ests in Cayman Medical Tourism DroAect$S 7ari**ean -e's Di,ital$ .7 ++2 .+0.: n$ page$ Web$ 0 Apr$ .+0:$ 6achi, -anAit$ HTelemedicine in 1ural /ndia$I 5los %edi#ine :$: 4.++<5: e8.$ A#ademi# Sear#& 7omplete, Web$ .8 Mar$ .+0:$ SCan Telemedicine Alle iate /ndia?s Health Care DroblemsLS 7an 0elemedi#ine Alleviate India(s .ealt& 7are 5ro*lems9 : India ;no'led,e<8&arton $ Wharton -chool, 8 March .+0.$ Th$ .8 Mar$ .+0:$ >eNa as, Carmen$ S/ncome, Do erty, and Health /nsurance Co erage in the ,nited -tates: .+0+$S 7ensus.,ov$ N$p$, -ept$ .+00$ Web$ .< Mar$ .+0:$ Jonas, -te en, 1aymond 3$ Eoldsteen, and 9aren Eoldsteen$ Jonas= Introdu#tion to t&e U.S. .ealt& 7are S)stem$ Ne# Mork: -pringer Dub$, .+0:$ Drint$ 9apur, Mallika$ S/n Dursuit of the )8++ Heart -urgery$S 7--$ N$p$, +< Apr$ .+00$ Web$ .* Mar$ .+0:$ Marsek, Datrick W$, and 'rances -harpe$ 0&e 7omplete Idiot=s Guide to %edi#al 0ourism$ Ne# Mork: Alpha, .++*$ Drint$ Meera, -$ SNarayana Hrudayalaya: 'rom the Heart$S Smart 7E3$ +0 ++8 .+0.: n$ page$ Web$ 0 Apr$ .+0:$ SNarayana Hrudayalaya: A Model for Accessible, Affordable Health CareLS -ara)ana .ruda)ala)a$ A %odel 2or A##essi*le, A22orda*le .ealt& 7are9 : India ;no'led,e<8&arton $ Wharton -chool, 0 July .+0+$ Web$ .< Mar$ .+0:$ %rganiCation, World Health$ STotal J(penditure on Health as B of E>D -tatistics$S -ation%aster.#om$ Nation Master, n$d$ Web$ +0 Apr$ .+0:$ 1obbins, -hurna$ SCayman /sles target Americans for medical tourism$S >euters PEeorge To#n, Cayman /slandsQ .: ++: .+00, n$ pag$ Web$ 0 Apr$ .+0:$ -alter, Chuck$ SNarayana Hrudayalaya Hospitals: 'or 6ringing Medical Care to the

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Masses$S ?ast 7ompan)$ N$p$, n$d$ Web$ .+ Mar$ .+0:$ -hetty, >e i$ S/ndia can sho# the #ay on health$S E#onomist$ .0 +00 .+0.: n$ page$ Web$ 0 Apr$ .+0:$ -hi, 3eiyu, and >ouglas A$ -ingh$ Essentials o2 t&e US .ealt& 7are S)stem$ -udbury, MA: Jones and 6artlett, .++7$ Drint$ S,$-$ 'acing -e ere -hortage of Heart -urgeons$S >euters.#om$ N$p$, .; July .++*$ Web$ .* Mar$ .+0:$

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