Innovation – Type 3 – Internal process [Case: Narayana Hrudayalaya]

The third part of our ‘ten part’ innovation series, we look at Narayana Hrudayalaya, founded by Dr. Devi Shetty. In a country where heart disease is prevalent and affordability is a challenge, Dr.Shetty’s organization is able to break the barrier of cost by innovating in the internal process. The cost advantage achieved is not by compromising the quality. After all everybody understand the value of human heart.

The word ‘process’ in most of the cases perceived as boring, procedure oriented and mundane set of procedures, thereby planting monotonous perception among professionals. On the contrary, having a robust process defined and executing around them can bring in life changing differences to organizations. Bangalore based Narayana Hrudayalaya has innovated on the very same area thereby making the cardiac healthcare affordable globally. Founded by renowned cardiologist Dr. Devi Shetty in the year 2001, this Bangalore based hospital has re-inventing the way cardiac healthcare is perceived around the globe.

In Narayana Hrudayalaya patients are charged flat $1500 (about 75000 rupees) for heart surgeries compared to $4500 (about 2,25,000 rupees) that other heart hospitals charge on average. These numbers get all the more interesting when it is compared with the US where an average heart surgery costs $45000 (about 22,50,000 rupees). Added to that Narayana Hrudayalaya has an innovative medical insurance scheme under which people who can’t afford to pay can be covered. The astonishing point to note here is low price doesn’t mean that the quality is compromised. It has amazing 95% success rate in heart surgeries and one of the well renowned hospitals for pediatric cardiac care. Ranging from Harvard business school to management guru C.K.Prahalad, has done case studies around this internal process innovation.

Narayana Hrudayalaya
Narayana Hrudayalaya

The first element of process innovation comes from what is known as ‘vertical’ approach towards specialization. Doctors here are highly specialized in cardiology, which means they can perform a specific aspect in a much better and faster than others with generic skills. This specialty helps Narayana Hrudayalaya to attract patients, motivated health-care professionals and donors. This is way different from what is popularly known as ‘multi specialty hospitals’ treating variety of diseases. If super specialization was the first element the second one is about deskilling few elements in the cardiac healthcare in such a way that is brings in drastic different in terms of time. Narayana Hrudayalaya has recruited women with high school education and trains them in taking echocardiograms of patients, which is performed by trained doctors generally. As they perform only this task day in and day out by acquiring a very specialized skill, unblocks doctors perform higher complex activities. With these innovations around internal processes, Narayana Hrudayalaya performs 23 cardiac surgeries per day compared with four to five performed by other major hospitals. This ‘high volume’ in turn helps them to grow the business by charging ‘low cost’ for their patients.

In order to have wider reach with patients, Narayana Hrudayalaya has partnered with ISRO to launch Telemedicine services. With the inception of the program, it has been implemented in the remote areas of north eastern states of Tripura, Nagaland and in south Indian state of Karnataka by connecting them using INSAT satellite. While ISRO provides the software, hardware and communication equipment as well as satellite bandwidth, the specialty hospitals provide the infrastructure, manpower and maintain the system. Thanks to this advanced technology the telemedicine network has grown into 165 hospitals.

The core idea of ‘affordable’ healthcare is made available to remote villages thanks to Narayana Hrudayala’s innovation around internal process. This innovation has resulted in overall profit margin of 19.5%, which offers viable and significant business proposition as well. This is one great example for ‘Business with a heart’.

Related links:

[Introduction to ten types of Innovation]
[Innovation – Type 1 – RangDe]
[Innovation – Type 2 – RedBus]

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