17 December 2014 – by Nur Hamurcu, Sahil Sharma and Willy Ling, &samhoud consultancy Asia
Narayana Health Hospitals in India shifts paradigms to do well and to do good in health care
Nur Hamurcu and Sahil Sharma from &samhoud Asia met the group CEO of NH Hospitals, mr. Ashutosh Raghuvanshi and talked about the paradigm shift that NH is creating in the field of healthcare globally.
One day I had a mother walk into my office with her 3 yearold daughter. Her daughter was suffering from heart issues and after her check-up, the reports indicated that she needed a cardiac surgery. I spoke to her and explained the conditionof her daughter and why the surgery was necessary to save her life. The mother’s first question to me was not about her concern of her daughter’s health nor how dangerous the procedure would be, but instead… “How much will it cost?”
Imagine a world where quality healthcare is affordable for the masses. Imagine a world where health, the most precious and priceless ‘commodity’, is not just for the elite, but costs as little as USD 0.30 a month. Imagine a world where social and economic status is not the deciding factor for whether health can be restored and life prolonged, but rather an individual’s passion to live. That is the world that Narayana Health Hospitals (NH) in India is creating under the united vision of “Affordable Quality Healthcare for the Masses Worldwide”.
Since the inception of NH in 1999 by Dr. Devi Prasad Shetty (Founder, Chairman of Narayana Health), NH has grown into one of India’s largest multi-specialty hospital chains. Housing 5,000 beds to date, NH has achieved a record of nearly 15,000 surgeries performed and a proud 7.7% profit margin (in comparison to the average 6.9% of American Private Hospitals). NH currently has 14 hospitals with 6,000 beds in 7 states of urban India, catering to a diverse mix of patients from both rural and urban India. NH has not been a stranger to success; Ranked #1 in “The Top Ten Innovative Companies in India” by “Fast Company” and rated among the Top 5 Cardiac Hospitals in the country by “The Week”, NH’s story has been covered by Forbes, Reader’s Digest and New Scientist, together with a documentary made by Australian broadcasting corporation and Discovery Channel. In 2005, Harvard Business School wrote a management case and it is one of the most studied & most quoted cases in management education from the healthcare industry. It was believed that it was impossible for a hospital to conduct 30 heart surgeries a day. As of 2012, NH conducts 40 heart surgeries every day. &samhoud spoke to Dr. Ashutosh Raghuvanshi (Managing Director, Vice-Chairman and Group CEO of Narayana Health) about the success of NH in the years since its inception and the leadership that has propelled and kept NH on the right path towards its vision. The foundation of these successes; change the way you think.
A differentiator of NH from other hospitals is their commitment of care and compassion to their patients. From the very beginning of your ‘journey’ into NH, your first sight is not a gate followed by cold walls which generally increases the fear and anxiety of patients. Rather, the first sight that greets you at NH is the peaceful existence of four religious places of worship within one vicinity, connected to each other by walking paths. While NH appeals and commits to high quality healthcare with care and compassion, they are also aware that many patients also need spiritual comfort, and they provide that avenue of connection between patient and creator, whether they are Hindu, Muslim, Christian or Sikh.
On a more philosophical level, one of the biggest game-changers in establishing and nurturing NH, is the very foundation of why NH was created; affordable quality healthcare for the masses worldwide. The leaders of NH did not question “Is it possible?”, but rather “It is possible, let’s see how we can do it”. Creating a hybrid model with the ‘yin & yang’ of “Doing well” (financially) & “Doing good” (socially), allowed the leaders and employees of NH to understand and also realize that contributing to societal value is possible not at the expense of financial value, but both can and should complement each other. In the first phase of their launching, NH was able to provide 300 fully functional beds for only USD 6-7 million (in comparison to the estimates of USD 25 million).
Dr. Ashutosh shared that their accomplishment was made possible because of, “Economy of scale, shared infrastructure, and expertise.” Another shift of paradigm in NH, Dr. Ashutosh mentions, is that the foundation of NH is based on one man’s passion which translated into a shared vision of NH. He believes that the very success of NH can only be achieved if the employees work together and if they are united in passion. Hence, one of the biggest challenges that NH faces is hiring the right people. Sharing about finding the right people for NH, Dr. Ashutosh said that “Almost all organizations recruit individuals on the basis of skills. Some organizations recruit for attitude, but NH hires on the first basis of ‘burning passion for societal issues’”. NH works towards finding individuals who are driven by the ‘engine’ of contributing and building a brighter future, because that is why NH exists”. One of their biggest milestones fueled by NH’s united passion, was their collaboration with the Indian government to start an insurance scheme which the poor could afford. The outcome led to the “Yeshaswini scheme”, in which the poor could afford insurance for as low as USD 0.30 a month. The total membership of the scheme is 3.4 million, and 74,000 surgeries were performed on members as of June 2012.
However with the rapid growth of NH and the aspiration to have 30,000 more beds in a ‘health-city’ within 5 years, the challenge that NH is growingly facing, is how they can continue growing without diluting their core culture. How can NH continue operational excellence and keep their employees focused, without losing that inane burning passion? Keeping employees connected and motivated by the vision and values of the organization is what Dr. Ashutosh regards as the success or failure for the future of NH. Dr. Ashutosh also shared; “While hiring for passion is important, continuous engagement with employees is also important. To begin with, rather than only hiring doctors and individuals involved in the medical field, we have started hiring young recruits from business schools. We also encourage and practice continuous engagement by pairing the younger management immediately with a mentor in the senior management and they continue to ‘shadow’ their mentors throughout their career.”
Nevertheless, NH continues to redefine the horizons of business in this apparent shift of business ’thinking’ in the recent years. Building an organization in the 21st century no longer subscribes to the classic theory of attracting and retaining employees through salary, but by inspiring and connecting employees by a united vision, driven by passion. Focusing only on financial value should no longer be the driver of growing organizations, but the ‘hybrid’ model of societal value and financial value, which is the catalyst for employee motivation and engagement.
The next horizon for NH? NH is planning on investing USD 1.029 billion in setting up a chain of 100 low-cost specialty hospitals and at least three more health cities in the country. In 5 years, NH will have 36,000 beds, and 9 of these projects will be operational in 18 months. They also have plans in establishing a medical college that will admit 200 students from poor families, nursing and paramedical institutions.
Creating a desired future where quality healthcare is affordable for the masses is no longer a dream but becoming more and more, a reality. Despite being in one of the oldest industries, NH has redefined their approach and philosophy which has now made them one of the most competitive in the industry, but also one of the largest contributors in building a brighter future through healthcare. While the challenge for many leaders today remain within their ‘roles’, a bigger question lies beyond those ‘safe boundaries’; how can I redefine my thinking and shape the world of tomorrow?
Read more about NH in our article “Creating value with a heart”