Rarely does the medical community throw up surgeons who are as skilled with the scalpel as with formulating business ideas. That is the thought on my mind as I walk into Devi Prasad Shetty’s home in Koramangala, Bangalore, on a Sunday morning. Work meetings at home are a strict no-no for Shetty. But I insisted. It would be a rare glimpse into the life of a doctor who admittedly obsesses about healthcare and cares for little else. Eventually, Shetty relented, and now he welcomes me into his house, dressed casually, without his signature suspenders.
We settle down in his spacious, tastefully done living room and Shetty, chairman of the Narayana Hrudayalaya Pvt. Ltd (NHPL) group of hospitals, immediately begins talking about—what else—an angiogram. Specifically, the first angiogram at NHPL’s new 300-bed hospital in Jamshedpur, Jharkhand, scheduled to take place the next morning. Shetty talks about this surgical procedure with enough glee to put off some people. But once you realize that NHPL’s flagship hospital in Bangalore performs the largest number of cardiac surgeries in the world, things make more sense.
Kill bill: Shetty wants to roll out healthcare insurance which will cost patients just Rs60 a year. Jayachandran / Mint
This is a man who really likes surgeries. Especially when they cost the patient as little as possible. Harvard Business School once referred to NHPL’s model as the “Wal-Martization of healthcare”.
Shetty’s ongoing, massive hospital-building plan could, if successful, transform healthcare in India. In the next five-seven years, NHPL plans to have 30,000 beds across the country, including in cities such as Ahmedabad, Jaipur and Bhubaneswar. And less than two weeks after our meeting, phase I of the mammoth 1,500-bed Mazumdar-Shaw Cancer Hospital would become operational at Anekal, a Bangalore suburb. Besides the new hospital—one of the world’s largest dedicated to cancer treatment—the suburb also houses NHPL and Biocon Ltd, a biotechnology company founded by Kiran Mazumdar-Shaw. Shaw is a partner in Shetty’s venture, having invested her personal wealth in NHPL—last year NHPL divested a 25% stake in the company to American International Group, Inc. and JPMorgan for Rs400 crore, thereby valuing the company at around Rs1,600 crore.
But don’t let those numbers fool you. Shetty’s and NHPL’s focus is firmly on the bottom of the pyramid— servicing the poorer sections of society without compromising on quality. Shetty does this through a combination of scale when it comes to hospitals, and ultra-cheap health insurance schemes for his patients.
Six years ago, Shetty started Yeshaswini, a micro health insurance scheme in Karnakata with a monthly premium of Rs5-7, which has insured at least 10 million people. Now, the state government wants to pay the premium for all below poverty line (BPL) cardholders.
“We are helping 8-10 state governments to put the health insurance structure in place,” Shetty says, confident that eventually it’ll be the government, assisted by insurance companies, that will pay. Corporate-style, profit-driven health insurance, as in the US particularly, won’t work: “If (US President Barack) Obama does not have health insurance today, he can’t pay for his cardiac surgery.”
As we throw about these statistics—the world’s biggest hospitals, cheapest procedures, inexpensive insurance—I wonder aloud if these initiatives could indeed change Indian healthcare.
Shetty smiles reassuringly and proclaims, “India will become the world’s first country where healthcare will be dissociated from bank balance.” He envisions a future where everyone, irrespective of net worth or income, will have access to world-class healthcare.
But how can he be so incorrigibly optimistic about a country which currently has moribund public healthcare tethered to a frail health insurance system? Shetty reminds me how, in 2001, while discussing NHPL’s then new telemedicine programme, we had spoken about micro insurance. At the time, my then editor and I had discounted it as a “crazy” scheme. Today, eight years later, state governments are clamouring to implement Yeshaswini.
While talking about his past successes, future plans—and especially NHPL’s valuations—it becomes clear that Shetty has managed to function as an astute businessman without letting go of the surgeon inside.
After he graduated in medicine, Shetty’s career took him through a circuit of hospitals in London, Kolkata and Bangalore before he set up NHPL. The busy social entrepreneur continues to be an immensely productive doctor, however. Every day, Shetty says, he operates on at least two patients and then offers consultations to another 60-100 (some in person, and many more through NHPL’s extensive telemedicine network that reaches 56 cities in Africa and South Asia).
On the business front, Shetty’s next project is a smart card-based system to pay health insurance premium, in paltry amounts, all round the year. His aim is to make any life-saving procedure accessible to patients.
But paramount on his list of to-dos is expansion of the hospital chain. He explains that unless there are big hospital chains that work with thin margins, such as Wal-Mart, the cost of healthcare won’t come down. “The biggest hospital group in India (he doesn’t want to name it) has a turnover of about Rs800 crore. Perhaps less than what Maruti spare parts dealers gross in a year,” he says.
Shetty plans to apply the same mantra of scale to umbilical cord blood banking—umbilical cords are a rich source of the stem cells that could revolutionize treatments in a few years— bringing down the cost from the current Rs60,000-1 lakh to less than Rs20,000 for standard storage of 20-odd years. “Unless you have the size, you can’t challenge price,” Shetty explains.
Setting up a bed in a corporate hospital, he says, costs Rs45-50 lakh, whereas his hospitals spends Rs15-18 lakh. The economies of scale have another advantage—they provide doctors with ethical and intellectual space: “Most doctors in big corporate hospitals earn their pay (meaning, their remuneration is linked largely to the number of procedures they do), but in our hospitals, doctors are employees; they do more surgeries only out of choice or hospital need.”
It’s hard not to believe that NHPL and its growing network is not about a hospital magnate rolling out his juggernaut. “It’s really sad if that is the perception,” he rues. “I have a great team of 40-50 surgeons, some of them have been with me for over 25 years, but they are faceless.” Most medical professionals, after reaching a level of excellence, acquire a degree of eccentricity which thrives in special environments: “We try to give them that; our attrition rate is zero.”
As the tall timepiece in the corner strikes 11am, I make a move, darting a quick glance at some figurines of gods (which are also a fixture in all NHPL hospitals). Are you religious? I ask.
“I am spiritual. I believe in cosmic power, I can pray to any God.”
Curriculum Vitae | Devi Prasad Shetty
Born: 8 May 1953
Education: Kasturba Medical College, Mangalore
Current Designation: Chairman and senior consultant cardiac surgeon, Narayana Hrudayalaya Pvt. Ltd
Work Profile: After working at Guys Hospital in London for six years, Shetty returned to India and joined the BM Birla Heart Research Centre in Kolkata. He moved to the Manipal Hospital in Bangalore in 1997 before setting up Narayana Hrudayalaya in 2000
By Heart: Interests are healthcare, mainly surgery, reads books on business tycoons who have influenced global business. His favourite businessman is Pierre S. Du Pont, one-time scion of business conglomerate DuPont, who also helped reform General Motors when it faced bankruptcy in the 1920s. Shetty buys his books from Amazon
Prize Winner: Shetty has won several awards, including the Karnataka Ratna award in 2001, the Ernst and Young Entrepreneur of the Year in 2003 and the Padma Shri for medicine in 2004