Doctor slashes the cost of surgeries for India’s poor

BANGALORE, India — The average heart surgeon in America performs about 2,000 operations by the end of a 30-year career, according to Dr. Devi Prasad Shetty.

“We have surgeons who have done more than 2,000 surgeries and who are only in their 30s,” boasted the 62-year-old founder of Narayana Health Systems, a for-profit chain of 32 hospitals (and growing) across India. Shetty says he lost track of his own tally when it exceeded 15,000.

“That was some years ago,” he laughed.

Productivity, efficiency and volume on a massive scale have been the hallmark of the Narayana approach, which has been likened to that of Henry Ford and Walmart. It has brought the cost of the typical operation down to about $1,200. That might seem astonishing in America, where the comparable cost could approach or exceed $100,000, albeit mostly covered by insurance.

However, even $1,200 is still well beyond the reach of most heart patients in India, where hundreds of millions of citizens earn less than $2 a day.

So the challenge for Narayana has been as much financial as surgical and one innovation — called micro insurance — has been key to the chain’s growth.

Partnering with farmer cooperatives, which almost all rural residents are eligible to belong to, they created Yeshasvini (“success without obstacles” in the ancient Sankrit language), a so-called catastrophic health insurance plan. It does not cover routine health care but will kick in for a long list of major surgical procedures. In about a decade some 10 million people, paying an average premium of just 11 cents a month, have enrolled in and around Karnataka state, where Narayana is headquartered. The company says more than 100,000 have received surgeries of various types. About a quarter of Narayana’s annual revenues come from the Yeshasvini program.

So if sophisticated surgery can be made widely accessible why not basic health care, in a country with some of the world’s highest rates of maternal and infant mortality? According to a 2010 United Nations report, a woman dies in childbirth every 10 minutes.

Shetty said he believes it’s a lack of political will. Health care is usually a big influence over voting behavior in aging societies. That’s not the case in India, where the median age of the population is just 27 (37 in the U.S., 41 in France). He also blames the undue political influence of professional societies, which have remained steadfastly exclusive and made it difficult for doctors and nurses to operate particularly in rural India where the need is vast, he said.

Many of the same influences are at play in developed countries and especially the United States, and it’s one reason that costs are escalating out of control, Shetty said.

Photo by Rakesh Nagar for the PBS NewsHour

Photo by Rakesh Nagar for the PBS NewsHour

To prove that the Narayana approach can work in developed world settings, in 2013, the chain opened a new 140-bed hospital in the Cayman Islands, a 90-minute flight from Miami. The facility is phase one of a planned multispecialty “health city” and has received Joint Commission for the Accreditation of Hospitals (JCAH) certification that’s the gold standard in the U.S. Even in its ramp-up phase, Shetty said costs at the Cayman facility are a half of what you’d find in Miami. That could start to attract American patients in the future but more immediately lure the well heeled from the Caribbean region, whose only option has been to go further north.

Missouri-based Ascension Health, the largest Catholic heath care provider in the U.S., is an operational partner in the Cayman venture, though the medical staff are transplants from India, one critical ingredient in the cost savings. As an example, he said the typical Indian surgeon in Cayman is vastly experienced in a much wider array of procedures than his or her American counterpart is ever allowed to become.

“If (the medical staff) were managed an American enterprise, he said, there would be one full-time cardiac surgeon, one full-time pediatric cardiac surgeon, one vascular surgeon and one thoracic surgeon,” he said, in our interview in his office in Bangalore.

“So you have to pay the salaries of four people, whereas we are able to manage with just one person.”

In any social enterprise but especially a social one, Shetty said, the starting point should never be what it costs you. It should be “what the client can pay.”

We’ll have more about the hospital network on Wednesday’s PBS NewsHour.