LA CAMA DE FLECHAS

Narayana Health (NH) is a private hospital chain founded by Dr. Devi Shetty in 2000. It provides quality healthcare at an affordable price and is considered a social business for profit. It serves over 80,000 patients yearly and employs over 16,000 workers.158 _NH

operates on the mission to serve the population who cannot afford medical service without compromising in quality. To support this mission, NH has established a business model with the principal of presenting high-quality service to attract full-price paying patients. The paying patients would then subsidize the specific treatments and surgeries for the ones who cannot afford it.159 _{Initially, Narayana health started as one single}

hospital in India with 225 beds. It has now become one of the most renowned hospital chains due to its efficient business model, skilled doctors, sustainable vision, utilization of resources and leverage to the economies of scale.160_{. NH now operates in 30 specialties}

which includes departments such as Cardiology and Cardiac Surgery, Cancer Care, Neurology, Orthopedics, and Gastroenterology. NH has an international geographical reach as it has now established a hospital in Cayman Islands.161

Success Strategies

The core values for NH are represented by the acronym "iCare": “Innovation and efficiency, Compassionate care, Accountability, Respect for all, and Excellence as a culture.”162 _{Along with these values and their philanthropic ideology, NH pursued success}

in the health care through high volumes, clinical potency, sustainable financing and with the utilization of artificial intelligence.

157 _{Cf. Rajappa 2018.}

158 _{Cf. Dr. Raghuvanshi n.d.}

159 _{Cf. Kothandaraman and Mookerjee 2007, p. 5.} 160 _{Cf. Narayana Health 2013.}

161 _{Cf. Narayana Hrudayala Limited n.d.} 162 _{Narayana Hrudayala Limited n.d.}

36

High Volume Efficiency

One of the reasons NH is successful is because of its placement advantage. India produces one of the largest number of doctors, nurses and medical technicians in the world. They are also able to produce in extremely high volumes, thus being able to cross subsidize the costs of their patients.163 _{NH focuses on cardiac care and connects to patients through}

telemedicine facilities. This increases surgeon productivity and brings the cost down per- patient. There is also a proper utilization of capital equipment as the infrastructures and machines are employed to the maximum.164

Clinical Quality

The hospital does not compromise on quality of the surgeries and treatments offered. NH hospitals have an average quality compared to the Unites States average quality.165

Moreover, NH performed better surgeries than the average of high industrialized country hospitals.166 _{The high quality approach in health care with low pricing is a successful}

strategy adopted by NH. This led to the continuous growth of NH in the past years. NH has globally benchmarked its quality-driven health care services model.167

Artificial Intelligence (AI)

Narayana Health makes use of AI and uses it to provide high efficiency and advanced analytics in its lab results, forecasting and various other sectors. This is relatively a new form of data storage and communication in the health care sector; especially in India. Ari Altstedter (2019) states that NH employs about 70 programmers and product specialists who intend to handle everything that happens at Narayana hospitals. They help with admission forms, payments, scheduling, pharmacy dispensations, and document the usage of a hospital supplies. The system will record it, along with data on outcomes and complications which is alter endlessly combined through the numbers for unnecessary costs, devising ways to stamp them out.168

163 _{Cf. Narayana Health 2013.}

164 _{Cf. Ramdorai and Herstatt 2015, p. 55.} 165 _{Cf. Govindarajan and Trimble 2012.} 166 _{Cf. Kothandaraman and Mookerjee 2007.} 167 _{Cf. Narayana Hrudayala Limited n.d.} 168 _{Cf. Altstedter 2019.}

37 Type of Innovation

Process Innovation

Following an optimized internal process innovation, Narayana Health proceeds on a factory style approach to health care. The lean manufacturing process helps the hospital chain to produce in bulk, thus avoiding construction cost.169 _{Dr. Shetty utilizes simple}

economies of scale to offer quality healthcare at affordable prices. Technological assistance such as the use of broadband enables remote diagnosis and teleconsultations, real-time access to medical data across the group, and optimization of management efficiency thanks to a cloud-based enterprise resource planning (ERP) system.170 _NH

offers a micro insurance scheme in partnership with the state government with a new model innovation process. This covers the surgeries performed in the hospitals of Karnataka, India.171

Financial Sustainability

NH revenues come mainly from its health care operations, with cash-paying patients accounting for 40 percent, patients registered under government/ micro-insurance schemes 30 percent, privately-insured patient 30 percent, and services to hospitals outside the network less than one percent.172 _{NH offers a broad range of quality health}

care at low cost. They cross subsidize the cost of their patients. Medical treatment and surgeries are available at different price levels. In addition, NH remains financially stable through utilizing technology innovation. NH has partnered with TriMedx, who service equipment beyond its usual lifespan. This helps in reduction of long-term capital expenses.173

Challenges and Problems

NH has a strong purchasing power for medical supplies due to its massive patient volumes. Nevertheless, there might be other hospitals and clinics following Narayana’s business model in the near future. Thus, they need to continuously innovate in their processing as it is the major core of their business model. A major challenge for NH for is

169 _{Cf. Dr. Raghuvanshi n.d.} 170 _{Cf. Dr. Raghuvanshi n.d.}

171 _{Cf. Ramdorai and Herstatt 2015, p. 73} 172 _{Cf. Dr. Raghuvanshi n.d.}

38 to bring down the cost as it can predict many competitors arising in the health care industry.

5.8 Tata Swach