Lessons from the ‘Henry Ford of healthcare’

It is impossible not to be impressed by Devi Shetty, heart surgeon and the “the Henry Ford of healthcare”.

We can be impressed by his surgical skill and his refusal to turn away the poor. But perhaps even more impressive is his entrepreneurship and his vision of making healthcare affordable for everybody. As he points out, a century after heart surgery was developed only 10 per cent of the world’s population can afford it.

India needs 2.5 million heart operations a year, and yet there are only 90,000. Most need is unmet.

Shetty has managed to reduce the cost of heart surgery dramatically. The average price for open heart surgery in Shetty’s hospital, Narayana Hrudayalaya Hospital, is around $2,000, whereas it is $5,000 in the average private hospital in India and $20,000 to $100,000 in a US hospital.

At the same time his family-owned business is making higher profits than the average American hospital.

Shetty is clear that “charity is not scalable” and that good healthcare depends on good business.

How has Shetty done all this and can developed countries learn from his achievements?

The question of whether he can achieve something similar in a developed country has become real because of his plan to build a hospital in the Cayman Islands, which are an hour’s flight from Miami.

Scale, standardisation and staffing

Scale is perhaps the main reason why Shetty has managed to reduce costs so dramatically. He has built a health city with thousands of beds that operates at near capacity, and it is well established with complex surgery that high volume means better outcomes. And better outcomes mean lower costs because patients do not need so long in intensive care and do not need to have further operations.

“Present a medical case to 200 doctors, and you are likely to get 300 different answers.“

Shetty’s vision is to build more health cities, moving his group from 5,000 to 30,000 beds. One consequence of scale is that the group can use its purchasing power to drive hard bargains with suppliers and encourage new suppliers.

Shetty galvanised a medical audience in England earlier this year by telling them that England should have three centres doing heart surgery, not 22.

Standardisation is the next part of the answer. Present a medical case to 200 doctors, and you are likely to get 300 different answers to the patient’s problems. Healthcare is famous for huge variation in what is done, the outcomes, and the costs.

Shetty is driving out that variation. He concentrates on improving processes and has reduced the rate of bed sores, a common complication in most hospitals, to zero. Now he wants to do the same for hospital infections.

Technology is also important. “In five years’ time,” Shetty told the Health Services Journal, “a computer will make more accurate diagnoses than doctors. In 10 years’ time it will be mandatory for a doctor to get a second opinion from a computer before starting treatment.”

Another part of the puzzle is using staff efficiently. When Shetty spoke to a group in London by video he showed them a painting on his office wall and asked them to admire what must have been painted by a famous artist. In fact it was painted by a trained elephant.

The World Health Organisation estimates that the global shortage of health workers is four million, but Shetty thinks it is eight million. He sees a future of many more doctors and health workers but trained to do particular jobs in standardised systems. 

A new vision for global healthcare

How can all this be paid for?

In the Narayana Hrudayalaya Hospital some 40 per cent of patients can pay for their care, while 60 per cent pay less with 20 per cent paying almost nothing. The rich pay a premium for single rooms and other benefits, and Shetty operates a Robin Hood business model.

He also runs a micro-insurance scheme and – despite his criticisms of the charitable model – encourages philanthropists to pay for surgery for the poor.

“Resistance to change in health systems seems to be greater than in almost any other sector.”

Shetty’s vision for governments is that they should run insurance programmes not provide care. Some of Shetty’s model – scale, standardisation, more technology, and more efficient use of staff  – is undoubtedly transferable to wealthy countries, but the resistance to change in health systems seems to be greater than in almost any other sector.

Shetty may have his influence not by encouraging the incumbents to change but rather by bringing competition to their doorsteps – as he plans to do in the Cayman Islands. It is in the developing world where Shetty may have most influence – because the health system is currently so underdeveloped.

But I have to say that Shetty has a very different vision from that currently prevailing in global health.

The current vision is much less about hospitals, specialists, doctors, and treatment and much more about public health, primary care, community health workers, and prevention.

Even in the poor world it is heart disease, diabetes, cancer, and chronic respiratory disease that are causing the biggest problems, and these are conditions that can largely be prevented with simple measures. Not everything can be prevented, however, and there will always be a need for hospitals and complex treatments.

The challenge is to get the balance right, which is not the case in rich countries where treatment has tended to trump prevention, and a fusion of Shetty’s vision and the current global health vision could mean affordable healthcare for everybody in developing countries.

Richard Smith is the director of the UnitedHealth Chronic Disease Initiative, a programme with the National Heart, Lung, and Blood Institute that has created 11 centres in low and middle income countries that work to counter chronic disease. From 1979 to 2004, he worked at the BMJ and was the editor of the journal and chief executive of the BMJ Publishing Group from 1991 until 2004.

An adjunct professor at Imperial College Institute of Global Health Innovation and a visiting professor at Warwick Medical School, he is chair of Patients Know Best (a startup that is using information technology to enhance the clinician-patient relationship), chair of the Oversight Committee of the Cochrane Library, and a member of the boards of the UK Research Integrity Office, C3 Collaborating for Health, and Children’s HeartLink.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.