CK Prahalad on Health Care

All the U.S. business schools starting to do research in India want to study Indian health care. Why do they (including your center) want to study Indian health care when everybody knows how inadequate and inefficient this health care system is?

Health care, like everything else in India, is a paradox. Overall, health care in India is pitiable. But we have islands of world class. The Aravind Eye Hospital in Madurai, in Tamil Nadu, treats the largest number of eye cases in the world: 200,000 surgeries and 1.2 million outpatients in a year. Their outcomes are better than any large system, including Britain’s National Health System, but their cost is one-hundredth that of large systems (OK?). So here is a health care delivery model, a patient acquisition model, and a capital- and volume-intensive model that is extremely profitable.

Are you also looking at Bangalore-based Narayana Hrudalaya, which is one of the largest heart hospitals in the world, as a model?

Yes. Has anyone asked why Narayana Hrudalaya is so cost-effective? Do people know that its chairman, Dr. Devi Shetty, uses high school graduates as echo-cardiology technicians? Can you tell the world that you do not need an M.D. to read an ECG; you don’t need this credential? You need skill building, and you can create skills to read ECGs with high school men and women. Dr. Shetty has made a lot of innovations in building teams: he has put world-class skilled doctors with high school graduates or even school dropout , and he has trained nurses in-house. Nobody in the world believes me when I say this. We want to study this.

But these are only pockets of quality health care? What about the rest of India?

These pockets will change the way delivery is done, and one day, in spite of the government, health care will improve. Kiran Majumdar Shaw [chairman of the largest Indian biotech company, the Biocon group] and Dr Devi Shetty have come together to introduce a one-rupee drug for the poor, with no brands. [Biocon, which is also the largest producer of cholesterol reducing drug called statins in India, procures various generic drugs from Indian drug manufacturers and packages, and distributes to the patients directly at a discounted price under the Biocon generic brand. The onus of quality lies on Biocon.]

Aren’t all these developments changing the rules of the game? You have a system of micro health insurance, acquisition of care using tele-cardiology, world-class patient care in large hospitals, medication and subsequent care at one rupee a day. You put all this together. Is that a good delivery model?

Do you think this kind of delivery model works in India because we do not have a stringent agency like the U.S. Food and Drug Administration (FDA) overseeing the health care system?

No, I don’t think so. I think we are inventing something and we better take credit for it. We have the second-largest number of FDA-certified pharmaceutical companies in the world, and more and more American companies are coming here for clinical trials.

In other words, there are two views of India—one, nothing works; two, there are nuggets. I am looking at nuggets.

http://www.spectrum.ieee.org/WEBONLY/wonews/jul05/0705nprah.html

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