New Model for Low-Cost High-Quality Healthcare: The Cayman Islands?
New documentary features Health City Cayman Islands, founded by the man the Wall Street Journal calls the "Henry Ford of Healthcare"
New medical center systematizes processes that help its Indian parent company perform more open heart surgeries per year than Cleveland Clinic and Mayo Clinic combined, for USD $1,400 each
Example offers insights for countries worldwide struggling with soaring medical costs
GRAND CAYMAN, Cayman Islands, Oct. 28, 2014 /PRNewswire/ -- Health City Cayman Islands, a new, high-tech hospital in the Caribbean, is increasingly seen as a model for US health systems struggling to remain profitable in the face of razor-thin margins and declining reimbursement. Less than two hours by air from Miami, the planned 2,000-bed facility expects to attract American patients with high-deductible health plans seeking less expensive high-quality care.
Dr. Devi Prasad Shetty, chairman of Narayana Health and founder of Health City Cayman Islands.
Dale Sanders, Senior Vice President, Health Catalyst and former technology leader for the National Health System of the Cayman Islands, where he assisted in the development of Health City.
Dr. Devi Prasad Shetty, chairman of Narayana Health and founder of Health City Cayman Islands, counseling a patient’s mother in his office.
Health City Cayman Islands, a pioneering low-cost high-quality hospital planned for 2,000 beds that aims to attract patients from across the Caribbean and Eastern US.
The brainchild of famed heart surgeon Dr. Devi Prasad Shetty, who was Mother Teresa's personal physician, Health City replicates the model that enables Narayana's average cardiac hospital to perform thousands of heart surgeries per year for less than USD $1,400 per case – about 2 percent of the average cost for heart surgery in the US.
Narayana's secret is a laser focus on efficiency, enabled by high volume. All providers are employees and they are all focused on productivity, improving processes, and speeding patient throughput. With high volume comes pricing power, and Narayana has taken an aggressive approach to every component in the supply chain with the goal of eventually providing basic heart surgery for $800 per patient.
"Henry Ford proved that the commoditization of a product makes it cheaper, makes it better and makes it more efficient," said Dr. Shetty. "I strongly believe that we have to commoditize the delivery of healthcare, and that is the model that Health City represents for the world."
All Narayana providers are employees and they are invested in increasing productivity, streamlining processes, and improving patient care. High volume drives cost savings, and Narayana has taken an aggressive approach to every component in the supply chain, which enables it to provide basic heart surgery for a fraction of the cost in the United States.
US Healthcare Providers Watching Carefully Health City is a joint venture between Narayana Health and Ascension Health, one of the largest US healthcare providers, which has said it is interested in learning from the Narayana model. But Ascension is not the only US health system interested in what's happening in the Cayman Islands.
Robert Pearl, MD, CEO of the (Kaiser) Permanente Medical Group, the largest US medical group, wrote recently in Forbes that Health City "has American health care providers watching closely, and anxiously." Dr. Pearl concluded that "the operational approaches in Dr. Shetty's hospital are about 10 years ahead of those used in the typical US hospital."
"Innovators like Toyota and Amazon consistently disrupt the leading organizations in their markets," said Dale Sanders, former chief information officer of the National Health System of the Cayman Islands, now a senior executive of Health Catalyst, a Salt Lake City-based healthcare IT company. "Anyone that doesn't believe that healthcare is being disrupted outside the boundaries of the US is not watching what's happening in the Cayman Islands, and they're not watching what's happening in India. If you don't believe that's happening, you're going to miss out on the opportunity to participate in this next wave and you may become disrupted yourself."
Clear Pricing + Data + Process Health City's innovations begin at the ground level. Construction of the current 108-bed facility took less than 12 months and cost USD $420,000 per bed, about one-third the US average of $1.5 million to $2 million, despite the relatively high cost of real estate in the Cayman Islands.
Real-time performance metrics are constantly available for administrators across the medical center. Analytics technology called iKare monitors lab results and clinical findings to predict potentially significant medical problems. Clinical teams are timed on their speed of response, with a particular focus on eliminating delays in treatment. Narayana Hospitals' average time to an appropriate response is just seven minutes, significantly less than the average US hospital.
Eschewing the profit-center approach of US hospitals, in which key departments such as the operating room bill patients separately, Health City has only one profit center – the hospital. That arrangement aligns incentives to cut cost from every process. And to further simplify costs, the medical center provides an all-inclusive flat rate for every procedure covering every service.
"We're one of the few hospitals in the world to publish our prices as a bundled flat rate," said Chandy Abraham, MD, Health City's Facility and Medical Director. "And that's what you'll pay, nothing more. You get one bill and you'll never get another bill. It's a model that gets a lot of attention when we talk with other healthcare providers."
A large provider of charitable care, Narayana Health gives its executives a daily profit/loss statement so they can see exactly how much care they can give away to patients.
"We're never going to match India and their costs," said Health City Director Gene Thompson, referring to Narayana Health. "But we feel we can show that in a high-cost destination we can provide high-quality low-cost healthcare if we think outside of the box. It's about saving lives and providing the highest quality healthcare to the most people at an affordable price, because humanity deserves it."
Dr. Shetty added, "We're all living in a global village. Healthcare has to be available to everyone on this planet, with dignity. We know it can be solved and I'm convinced it's going to happen in our own lifetimes."
About Health City Cayman Islands Health City Cayman Islands, the vision of famed heart surgeon and humanitarian Dr. Devi Shetty, is supported by two major healthcare organizations, Narayana Health and the US-U.S.-based Ascension, and the Cayman Islands government. The facility provides compassionate, high-quality, affordable healthcare services for all in a world-class, comfortable, patient-centered environment. Offering healthcare to international, regional and local patients, Health City Cayman Islands delivers excellence in adult and pediatric cardiology, cardiac surgery, medical oncology, orthopedics, pediatric endocrinology, endorinology, and pulmonology. For further information, visit www.healthcity.ky.
About Narayana Health Narayana Health is among India's largest healthcare service providers and also one of the world's most economical. From a humble beginning of a 225-bed hospital in 2001, Narayana Health group of hospitals has grown to become a 6900 beds healthcare conglomerate with 26 hospitals across 16 cities in India and a hospital in the Caribbean at Grand Cayman, North America. Accessibility strengthens as Narayana Health relentlessly continues to expand. For more information visit www.narayanahealth.org
About Health Catalyst Health Catalyst is a mission-driven data warehousing and analytics company that helps healthcare organizations of all sizes perform the clinical, financial, and operational reporting and analysis needed for population health and accountable care. Our proven enterprise data warehouse (EDW) and analytics platform help improve quality, add efficiency and lower costs in support of more than 30 million patients for organizations ranging from the largest US health system to forward-thinking physician practices. Faster and more agile than data warehouses from other industries, the Health Catalyst Late-Binding™ EDW has been heralded by KLAS as a "newer and more effective way to approach EDW." For more information, visit www.healthcatalyst.com, and follow us on Twitter, LinkedIn and Facebook.
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