DEVI SHETTY

India,

Dr. Devi Shetty is a serial social entrepreneur who has enabled millions of low-income people to access quality health care. He is currently establishing the foundations to realize the grandest of his visions: “health cities” that will transform the way health care is delivered and accessed in India and other developing countries. Eventually, he will be remembered not for the thousands of babies’ lives he saved but for severing that unfortunate umbilical cord linking quality health care to affluence.

This profile below was prepared when Devi Shetty was elected to the Ashoka Fellowship in 2009.

INTRODUCTION

Dr. Devi Shetty is a serial social entrepreneur who has enabled millions of low-income people to access quality health care. He is currently establishing the foundations to realize the grandest of his visions: “health cities” that will transform the way health care is delivered and accessed in India and other developing countries. Eventually, he will be remembered not for the thousands of babies’ lives he saved but for severing that unfortunate umbilical cord linking quality health care to affluence.




THE NEW IDEA

Devi believes the only way to achieve equity in healthcare access is by creating massive economies of scale in healthcare delivery. After many years of starting large, renowned hospitals, he applied his economies of scale model to create the broadest telemedicine network in Asia and a large-scale insurance program for poor farmers to help India’s rural poor overcome barriers of distance and affordability. Across all his institutions, Dr. Shetty employs large numbers of rural women, using healthcare as a means of empowerment and promoting economic development. He has also initiated a scholarship program for talented students to attend medical school, increasing the pool of doctors who will treat the millions of India’s untreated poor.

In 2001, Dr. Shetty took everything he had learned from his previous endeavors and founded the Narayana Hrudayalaya (NH) heart-hospital in Bangalore, where his team of surgeons performs more surgeries daily than any other hospital worldwide. Narayana Hrudayalaya (“God’s Compassionate Home”) employs a range of mechanisms to achieve its mission to never turn away a patient for lack of funds. Their strategy is based on the central operating principle of providing the lowest cost possible for the highest level of quality.

NH performs approximately 32 open heart surgeries a day, almost eight times the average at other Indian hospitals, and the highest in the world. Yet, the heart hospital is merely the fulcrum of the rapidly developing Narayana Health City in Bangalore. This campus will consist of eight other hospitals and research institutes, ranging from a 1000-bed cancer hospital to a 500-bed eye hospital to institutes for neuroscience and thrombosis. The Narayana Health City is mirrored in Kolkata by the Rabindranath Tagore Insitute of Cardiac Sciences, and other such health cities are in the planning stage. While the global medical field moves towards five-star boutique hospitals, Dr. Shetty’s health cities are focused on the millions of poor people who can not otherwise afford treatment.




THE PROBLEM

Heart disease is particularly endemic in India, where a genetic trait renders Indians three times more vulnerable than Americans or Europeans. While the average age for a heart attack in London is 65, in India it is 45 years. One in four Indians gets a heart attack before retirement and about 25 percent of all heart-disease deaths happen to those under the age of 40. As a result of this higher prevalence, the Indian subcontinent alone accounts for 45 percent of coronary artery disease worldwide.

In the face of such high demand, India’s healthcare system faces great difficulties in serving people’s needs. On average, there is one doctor per 2000 people, 70 percent of which live in urban areas. Thus, access to care is determined by the convenience and affordability of travel. Even when people can get to a hospital, 50 percent of patients seeking cardiac care at a district hospital before 2001 would die before they could get specialist help.

Like many other countries, cost is the biggest barrier to medical treatment in India. Of the 22.5 million Indians in need of heart surgery annually, less than 3.5 percent can afford it. The ripple effects are enormous: when a poor family loses its primary breadwinner, the whole family is made destitute. In other words, affordability of healthcare is a pre-requisite for emerging out of poverty. But less than 15 percent of Indians have access to health insurance, including the 2 percent that can afford private insurance.

Furthermore, led by developed economies, the trend in healthcare has been moving away from large hospitals to smaller clinics that provide a more tailored and unique experience, in addition to a stronger focus on new technologies, vaccines, and “wonder drugs”. While it is an exciting time in global healthcare since most diseases are curable, treatment remains prohibitively expensive, excluding most poor people from the healthcare system. In fact, 100 years after the first heart surgery, only 8 percent of the world’s population can afford one.

The most critical need today is accessibility, and yet there are not enough players working to create a sustainable infrastructure to deliver simple, affordable treatments to large numbers of people. Despite advances in healthcare, the scale of the problem has far outstripped the scale of the solutions.




THE STRATEGY

Devi co-founded the Asia Heart Foundation (AHF) with his long-time collaborator, Dr. Alok Roy in 1989. When they established the Rabindranath Tagore Institute of Cardiac Sciences, Devi and his team quickly realized that other services needed to be offered to treat heart-related illnesses, so they also built a kidney hospital and a trauma care center. The economies of scale that resulted from this concentration of resources became the core principle of Devi’s reform efforts.

To reach rural areas, AHF created one of the world’s largest chains of telemedicine-serviced coronary care units (CCU), called the Integrated Telecardiology and Telehealth Project (ITTP). Patients no longer need to reach the district hospital, but instead, they go to their nearest CCU, where local doctors consult with specialists at headquarters in Kolkata and Bangalore to determine treatment. When establishing the system, they found that India’s weak telecommunications infrastructure was a major obstacle to success, so Devi persuaded the Indian Space Research Organization to offer state-of-the-art satellite communication pro-bono to the project. Although some CCUs are in the most remote parts of India, the ITTP had treated over 11,000 patients by 2004, and the death rate had dropped from 50 percent to 5 percent.

Working with the government of the state of Karnataka, Devi also launched the Yeshaswini Health Scheme in 2003, focusing largely on poor farmers. The idea centers around persuading poor people that they should spend a small amount on health insurance in addition essentials like rice and kerosene. Subscribing farmers belong to a state cooperative in which five rupees a month get cardholders access to free treatment costing up to 100,000 rupees at 150 hospitals in 29 districts of the state proved very successful as over 23,000 people underwent free surgeries in the first three months alone.

Like Devi’s other innovations, the key to the insurance program is scale: The more people who subscribe, the cheaper it is for everyone, making healthcare accessible for all. Yeshaswini’s success has attracted global attention because masses of people contributing towards health insurance reduces the strain on government resources (which, in turn, lessens the taxpayer burden), and lowers the cost of healthcare for the middle and upper classes. As a result, efforts are on at Harvard and other leading institutions to learn how to replicate it elsewhere, particularly in Africa.

Devi’s model also significantly reduces the cost of doctors’ salaries, and one of his biggest accomplishments has been to persuade highly-skilled surgeons to work at his hospitals for less money than they could make at smaller clinics or in other countries. The volume of surgeries each doctor performs at NH reduces the unit cost of an operation significantly, and consequently, staff salaries account for 22 percent of expenses, compared to 60 percent in the west. Devi hopes that the hospitals’ reputation, the doctors’ autonomy, and most importantly NH’s focus on poor communities will keep attracting the best surgeons to their fold.

For all the success in reducing the cost of surgery, $1,200 is still much too high for most poor Indians to pay. This is where NH’s sliding scale payment model comes in, based on the model developed at the Tagore Institute. Each patient pays what they can afford, so poor patients pay whatever they can and rich patients can sometimes pay as much as $2,600 for a $1,200 operation. NH manages to attract rich patients because of its reputation for top-notch care. As of March 2004, these patients contributed over 60 percent of heart-surgery revenues (thus significantly subsidizing poorer patients) and a further 12 percent of patients were covered through the Yeshaswini insurance scheme. With the hospital also attracting philanthropic giving, the overall NH finance model – cost-cutting mechanisms, economies of scale, sliding-scale payments, and donations – actually ends up making a profit, with margins around four percent. These are ploughed back in to further subsidize the cost of treating the rural poor, allowing NH to continue realizing its mission to never turn a patient away for lack of funds.

Although recruitment of highly-skilled surgeons ensures quality is kept high at NH and the Tagore Institute, it only scratches the surface of the gap between demand and supply of doctors. To address this issue, the Tagore Institute launched Udayer Pathe (“towards dawn”), a program that identifies talented rural students at the seventh grade and supports them financially through their high school and medical educations. They also cover the child’s living expenses, which effectively results in the child becoming an earning member of the household at a very young age. When the student becomes a doctor, his/her family will receive free medical treatment at all AHF-affiliated institutions. They currently have 385 students participating in the program.

Devi’s vision for healthcare is expansive enough to also view it as an opportunity for economic development, as evidenced by the training of AHF trains village women to operate the ECG machines. Regardless of education and background, he has found that these women become better than many cardiologists at conducting the ECG test because interacting with the machine is the only thing they do, making them very skilled in that technique. For the women themselves, the job is tremendously empowering, which has direct benefits to their families and communities. Employed women are empowered women and nation-builders, and they comprise 94 percent of Devi’s employees.

In addition to Bangalore and Kolkata, Dr. Shetty is in the early stages of establishing ‘health cities’ on the outskirts of three other large Indian cities. He has acquired 200 acres of land for these campuses. He is also working with Harvard Business School faculty, amongst others, to develop a way to institutionalize NH’s model, both inside and outside India. AHF is also building 16 primary health care centers in the Amethi district of the state of Uttar Pradesh, covering approximately 2.5 million people.




THE PERSON

The seeds of Dr. Shetty’s sensitivity to the cost of healthcare were sown early on in his career. In India, because students enroll in medical school straight after high school, they begin dealing with life and death issues at a very young age. Since the rich go to private hospitals, and only poor people go to teaching hospitals, his interactions with patients as a medical student taught him a great deal about the economic situation of his country and how it effected people’s health. As he was rarely asked about the details of diseases or treatments, and rather about how much it would cost, he became inspired to transform the Indian healthcare system.

His social entrepreneurship notwithstanding, Devi is a world-famous pediatric heart surgeon in his own right. In 1990, he became the first doctor in India to perform neo-natal open-heart surgery on a nine-day-old baby, launching the practice of pediatric heart surgery in India. He also performed Asia’s first dynamic cardio myoplasty operation to strengthen a weak heart muscle. He has performed over 20,000 major heart surgeries and has built four of the largest heart hospitals in India.

Devi’s accomplishments have been covered in magazines ranging from India Today and Reader’s Digest to Business Week and Forbes Asia. His views on preventing heart disease through exercise and diet are frequently quoted in popular media, and not surprisingly, he has won numerous awards for his contributions to medicine and health care, including the Karnataka Ratna award (2001), the Ernst & Young Entrepreneur of the Year Award (2003), the Padma Shri Award (2004), and the Schwab Social Entrepreneur of the Year Award (2005).