Name: Jay Kariya Roll No: 2310215 Section – C

Narayana Hrudayalaya
Case Summary:

Narayana Hrudayalaya is a large hospital chain in India founded by cardiac surgeon Dr. Devi
Shetty. The case study examines how Narayana Hrudayalaya has pioneered a unique business
model to deliver high-quality healthcare, especially cardiac care, at very affordable prices to
masses across India.

Through process innovations, redesigning medical staff roles, frugal engineering of medical
equipment, centralized procurement strategies, and locating hospitals in low-cost areas,
Narayana Hrudayalaya has dramatically driven down the cost of procedures like open-heart
surgeries to levels that make world-class treatment accessible to India's low and middle-income
populations.

The case highlights Narayana Hrudayalaya's high-volume "assembly-line" approach to complex

surgeries, task-shifting among medical staff, and aggressive cost control measures. It also covers
their preventive health screening camps that build a steady pipeline of patients needing
affordable treatment.

Key Learnings:

1) General Model of Managing Operations:

Some key elements of their operational model include:
• High-Volume: They performed very high volumes of specific procedures, especially
cardiac surgeries, to leverage economies of scale. Their hospitals were designed like
assembly lines with dedicated operating rooms for each type of surgery.
• Standardization: Medical processes were standardized and optimized through protocols
to increase efficiency and consistency. This allowed them to maintain quality while
driving down costs.
• Task-Shifting: Certain tasks were shifted from expensive specialists to trained non-
physician staff where possible to reduce dependence on high-cost human resources.
• Centralized Procurement: All equipment, consumables and supplies were procured
centrally by negotiating hard for bulk discounts from suppliers.
• Frugal Innovation: They manufactured low-cost versions of expensive medical
equipment and consumables in-house using frugal engineering principles.
• Low-Cost Locations: Hospitals were in low-cost areas away from major cities to reduce
real estate and overhead expenses.
• Preventive Screening: They conducted widespread health camps to screen for
conditions and build a pipeline of patients requiring affordable treatment.

2) Operations Strategy (Cost, quality, Flexibility, Speed Delivery)

• Cost:
- The high-volume approach allowed them to leverage economies of scale.
- Standardizing processes increased efficiency and consistency.
- Task-shifting reduced dependence on expensive specialists.
- Centralized bulk purchasing of supplies/equipment provided negotiating power.
 - In-house manufacturing of low-cost medical equipment versions through frugal
innovation.
- Locating hospitals away from major cities reduced real estate and overhead costs.
• Quality:
- Despite the low-cost focus, they maintained high quality standards and clinical
outcomes comparable to premium hospitals.
- Process standardization and optimized protocols ensured consistent quality.
- They attracted and retained skilled medical professionals.
• Flexibility:
- Their model allowed them to ramp up volumes rapidly for specific procedures based
on demand.
- The assembly-line approach with dedicated ORs for each procedure type provided
flexibility.
• Speed of Delivery:
- Optimized processes and the high-volume approach enabled faster patient
throughput times.
- Preventive screening camps built a ready pipeline of patients requiring treatment.

3) Lean Thinking:
• Focus on maximizing patient flow and throughput.
• Continuous process improvement and standardization
- They standardized medical processes through protocols to increase efficiency and
consistency of care delivery.
- This allowed them to maintain quality while reducing waste and costs.
• Prevent defects at source through staff training.
- Intensive training programs for nurses and doctors to prevent errors/complications
E.g. 1 year training for nurses including 6 months in critical care
• Just-in-time inventory management
- Indicated use of just-in-time practices to minimize inventory buffers.
- Frequent deliveries from suppliers based on demand to optimize inventory turnover.
• Line balancing through task-shifting.
- Shifted certain tasks from expensive specialists to trained non-physician staff where
possible.
- This prevented bottlenecks from over-reliance on specialist resources.
• Lean layout and flow
- Described use of an "assembly line" model with dedicated operating rooms for each
procedure type
- Allows for continuous flow and efficiency in moving patients through the process.
• Visual management
- Use of preventive screening camps to build a pipeline of patients requiring surgery.
- This provided visibility into future demand for better planning and scheduling.