The Henry Ford of Heart Surgery

An excellent article on Heart Surgery.

The Henry Ford of Heart Surgery

Dr. Shetty at Narayana Hrudayalaya Hospital in India is able to drive the cost of heart surgery down to just $2,000 on average. In the US, the same procedure cost between $20,000 and $100,000 depending on complexity. By economies of scale, Dr. Shetty managed to drive cost down without compromising on the quality of procedure. He has 1,000 beds hospitals compared to 160-beds (on average) in the US. His Cardiac surgeons performed more than double cardiac surgeries than cardiac surgeons has performed in the US.

The more surgeries performed by doctors, the more experience they gain and better they are. Also with more number of patients, surgeons can specialize in a particular area. The mortality number also supports that quality has been better at Dr. Shetty's hospitals, and even better when adjusted for patient conditions.

Profit at Dr. Shetty's hospital was 7.7% after tax compared to on average profit after tax in the US, which has been 6.9%. As mentioned in the article, Dr' Shetty is planning to take number of total beds from 3,000 to 30,000 and will continue to reduce cost by bypassing medical equipment sellers and directly purchasing from suppliers.