Frugal innovation: Devi Shetty’s Narayana Hrudayalaya to conduct heart surgeries at world’s cheapest rates

Narayana Hrudayalaya, a pioneer in low-cost cardiac care, is building a chain of hospitals that will carry out heart surgeries at the cheapest rates in the world, buttressing India’s reputation as the Meccafor frugal innovation.

A series of design and operational advancements, ranging from construction techniques to post-operative care, will mean that an open heart surgery can be performed for as low as Rs 65,000, or about one-fourth the cost in a corporate hospital.

The Bangalore-based healthcare provider aims to reach 100 towns with a population of 500,000 to one million in the next seven years. The first multi-specialty hospitalat Mysore – in which the government of Karnataka has a 26% stake – will start operations this week.

Over the years, India has proven its expertise in creating world-class products and services at low cost, gaining from economies of scale. Tata Motors’ small car Nano, the Aravind Eye Care System, Jaipur Footprosthetic as well as Narayana Hrudayalaya hospital in Bangalore have been hailed as examples of frugal innovation.

The 200-bed, 1.5-lakh-square-foot Narayana Hrudayalaya hospital, set up with an investment of about Rs 45 crore – 80% cheaper than similar multi-specialty facilities – is built on a nine-acre plot. To begin with, the hospital, which has nine operation theatres, will have 23 doctors and about 40 nurses. “Charity is not sustainable, there has to be a business model,” said Devi Prasad Shetty, cardiac surgeon and founder of Narayana Hrudayalaya. “Innovations have to be affordable; a magic pill will not do.”

Right from design and construction, Narayana Hrudayalaya has sought new ways to cut costs. It has kept the design compact, reduced empty spaces and used prefabricated structures. Also, instead of marbles and expensive furniture, the hospital has used simple tiles and low-cost seating, reducing the cost per bed to Rs 12-18 lakh, compared with Rs 60-80 lakh at other corporate hospitals.

“This is the lowest that is humanly possible; we have cut every bit of flab in the system,” said Viren Prasad Shetty, 28, senior vice-president for strategy and planning at Narayana Hrudayalaya Hospitals.

He is the son of Devi Shetty and an alumnus of Stanford Graduate School of Business.