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Case Analysis of Health City

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Tahmina Akter
I.D. 18-092

Health City Cayman Islands


Cayman Islands were a British Overseas Territory in the western
Caribbean Sea.
Consisted of three islands: Grand Cayman, Cayman Brac, and Little
Cayman,
Total population of approximately 50,000.
GDP per capita -US$ 58,000 (the 14th highest in the world and the
highest in the Caribbean.)
Tourism and financial services together represented 75% of the
countrys GDP.

Health City Cayman Islands (HCCI)


HCCI was the outcome of Dr. Shettys vision of bringing affordable
healthcare model to the western hemisphere.
The first phase of HCCI, a 104-bed hospital located at the East End of
the Grand Cayman Island, was developed jointly by NH and
Ascension.

Health City Cayman Islands (HCCI)


Dr. Shetty was aware that the Cayman Governments role was critical in establishing the health city and
specifically sought help with nine items.
Point 1: cap the amount of insurance claims related to non-economic losses in medical malpractice cases
Point 2: recognize medical qualifications from India and approve Indian doctors and nurses to practice in
Cayman
Point 3: issue work permits for HCCI staff from India so that they can come and work
Point 4: support the Health City in Cayman initiative in principle as it will bring large economic opportunity
to Cayman
Point 5: allow HCCI to set up a large scale medical school to train nurses and doctors
Point 6: permit HCCI to build a large assisted living community
Point 7: help HCCI to obtain land at reasonable costs for the project
Point 8: Airways will work with HCCI to provide cheap fares and new flights to bring patients to Cayman
Point 9: will upgrade the airport to accommodate the increase in arrivals.

Tanveer Ahmed
I.D. 18-160

Health City Cayman Islands (HCCI)


The HCCI agreement includes:
Exempted from all tax liability for a period of 25 years irrespective of
any changes to tax laws.
Not pay any customs duty (22.5%) on the first $800 million of
medical equipment and medical supplies brought to Cayman.
The Government agreed to a new medical tourism visa for the
international patients for a visit within 48-72 hours.

Health City Cayman Islands (HCCI)


HCCI would improve:
access to healthcare for Caymanians and perhaps for the 38
million inhabitants of the Caribbean.
existing hospitals had limited capability to deliver tertiary care;
HCCI would have extended capability.
more time were required for treatment in abroad after a long visa
process, HCCI would give access for treatment at NH Bangalore at
a short time.
Costs for treatment at abroad was expensive; costs at NH Bangalore
would be low and attractive for the less affluent people in the
Caribbean.

Md. Muhasinur Rahman


I.D. 18-128

Narayana Health
30% shareholder of HCCI.
was founded in 2001 by Dr. Devi Shetty in Bangalore, India.
grew rapidly to house 500 beds, 10 operating theatres, two
cardiac labs, and its own blood and valve banks.

Competencies of NH
Weekly Cardiac
Surgery
Mortality rate
Infection rate

NH
10-12

US Hospitals
2-4

1.27%
1%

1.2%
1%

efficiencies in procurement and utilization of expensive medical devices,


all equipment critical to patient care was readily available,
Multi- tasking job allocation,

routine tasks were done by less experienced, lower-qualified staff which ensures the
efficiency,
Its strong reputation, expertise in hospital operations, relationship with suppliers, and
access to other specialists reduce cost and increase efficiency.

Ananna Zaman
I.D. 18-188

Contd
NH partnered with Indias largest construction company in 2012 to develop the
200-bed super-specialty Mysore Hospital at a cost of $6 Million in eight months;
similar hospitals in India cost $25 Million and took two years to construct.
The construction cost was reduced by:
Making it a single-storied structure using prefabricated material and sheet
metal roofs.
By using layout and large windows for natural lighting and
ventilation which minimized electricity and air-conditioning
usage.
By constructing the waiting areas outside in the
landscaped greenery.
By using low-cost tiles and seating instead of marbles and
high-end furniture.

Contd
However no compromise was made when it came to medical and critical
equipment.
Rapid increase in the volume of cardiac surgeries at the NH Bangalore hospital by
2013.
Volume of surgeries also increased in other hospitals of the world.
Hospital subsidized procedures based on earnings from paying patients and
donations for helping poor patients who cant afford to pay.
In 2013 about 37% of the patients paid below the $1,600 breakeven cost for
CABG.

Contd
NH completed most of the CABG procedures within US $2000 for the poor patients
whereas the standard price is US $3000.
The NH CABG price was lower compared to the average price of US$5,000 at other
Indian private hospitals.
Similar CABG surgeries in the US for insured patients costs up to US$80,000.
NH offered private rooms instead of general ward, varied between US$3,500$4,000 at
Higher end packages .
According to Dr. Shetty, The clinical care is same for all patients; patients paying
more to get non-medical amenities like private rooms

Amit Adhikary
I.D. 18-104

Ascension Health

Ascension Health was formed in 1999


When the four provinces of the Daughters of Charity of
St. Vincent de Paul and the Sisters of St. Joseph of
Nazareth, Mich. brought their health systems together
The belief that collaborating and working together at
their combined scale would lead to synergies.
Benefit areas- business partners, international
initiatives, asset base optimization, adoption of
innovations

Ascension
on January 1, 2012, a parent organization called
Ascension was created.
Ascension Health became a subsidiary of Ascension and
continued to focus on serving patients.
Ascensions other subsidiaries provided services like
medical equipment management, treasury
management, resource and supply management,
venture capital investing, and physician practice
management.

Contd
During 2013, Ascension earned $400 million in income
from operations on total operating revenue of $17
billion.
At this point Ascension Health managed around 19,000
beds at over 110 hospitals and employed more than
155,000 associates in more than 1,900 sites of care in
23 US states and the District of Columbia.

Asif Abdullah
I.D. 18-070

HCCI Setting Up the 104-bed Hospital


Construction of the HCCI hospital started in February 2013, designed by a
US architect in collaboration with an architectural firm from the Cayman
Islands.
The 107,000-square-foot building was built through a joint-venture
consisting of a Caymanian construction company and one based in the US.
The construction effort took only a year due to long hours at the site by
adopting innovative construction practices like using modular prefabricated bathrooms and using solar energy and implement Sea Water Air
Conditioning (SWAC)

The decision to construct a dedicated oxygen generation plant for


procuring oxygen for clinical purposes.
A mobile technology based healthcare product, iKare System,
already in use, was implemented at HCCI and the algorithmbased smart technology product accessed real time clinical data
to assist doctors diagnoses.
NH spent a total $7 million on medical equipment for HCCI
versus an estimated $20 million minimum had they procured
from the US.

Md. Osman Goni


I.D. 18-156

From April to July, 2013, a group of 9618 doctors, 30 nurses, 26


paramedical technicians and 22 administration staffwere selected
in India based on prior experience and interviews.
HCCI salaries were higher compared to Indian salaries but lower
than corresponding US salaries.
The non-physician staff attended a soft skill development
program that focused on cultural sensitivity, language and
communication, accent neutralization, interpersonal skills etc.

The 104-bed HCCI hospital, focused on cardiology, cardiac


surgery and orthopedics, had four operating theaters, one
catheterization lab, one hybrid lab, a 17-bed intensive care unit and
its own blood bank
Support a maximum of 4 cardiac surgeries, 15 cath-lab procedures
and 10 orthopedic procedures per day
In the beginning the hospital planned to see approximately 60
outpatients a day which was anticipated to increase to 350 patients
by 2017, 750 patients by 2021 and 1,000 patients in 2025.

Abu Jafor
I.D. 18-020

What should the HCCI rates be given the limited flexibility in increasing
prices post the initial agreement with insurance companies?

Cost of procedures in US (in 000$)

CABG procedure

Uninsured

Medicare

Commercial Insurance

120

58

80

$58,000 Medicare rate is not applicable to most of the


US citizen, as it is offered to only people who are eligible
to receive social security and it is not applicable outside
US.

In that case the minimum cost in the US is $80,000.


So the $50,000 rate is reasonable.

Waseque Uddin Ahmed


I.D. 18-048

Would Dr. Shettys model successfully


transfer out of India?

Md. Ziaur Rahman


I.D. 18-062

Would Dr. Shettys model successfully


transfer out of India?

M. A. Ahad Khandoker
18-072

The Basic Model - Higher Quality at


Lower Cost
In this model the physicians,
Employees earning attractive fixed salaries
Work long hours
Surgeons usually do an average of 1012 cardiac surgeries a week
compared to a weekly average of 2-4 surgeries by a typical surgeon in
the US.

The model of Dr. Shetty


Use surgical skills to serve the poor
Economies of scale
Efficiency in procurement & utilization
Manage risk related med-device reuse
Multitasking leads to better care

Can it be successful in other places?


Allow hospitals to serve the poor
Allow natural lighting & ventialation
Reduce electricity usage& AC
Works irrespective of financial state of economy
Walmartization-Providng best product at low cost
Superior treatment at lower cost
Relevant to both both developed & developing countries

Can it be successful in other places?


Higher cost doesnt necessarily mean better healthcare, as US being one
of the most developed countries, spends more than 17% of its GDP in
healthcare, and still has a poorer mortality rate than many countries. Dr.
Shettys logic or vision is just that, Wal-Martization meaning
providing the best product at lowest possible cost. they made no
compromise with the Medical equipment, employees skills, treatment
etc., the only compromise was the fancy service, unnecessary separate
rooms, assigning single job etc.

Asadujjaman
18-032

Success of the model in the


developed world...
In developed countries people can afford to pay more for
getting more non-medical facilities to increase their comfort.
But the high satisfactory level of medical care will be same for
each patient wherever he or she comes from.

Success of the model in the


developed world...
The possible Non-medical changes:
Highly specialized tasks can be done by many specialized
and skilled persons
Focus on multitasking can be reduced
Number of private rooms can be increased

Success of the model in the


developed world...
The possible Non-medical changes:
Better fire security, flashier construction and more elevators
can drive up costs.
Intensive focus on minimizing electricity and air-conditioning
usage can be minimized.

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