Freedom Line Blog

Today’s Wall Street Journal profiles Dr. Devi Shetty, an Indian heart surgeon finding a way to deliver quality health care at lower prices.

Dr. Shetty, who entered the limelight in the early 1990s as Mother Teresa’s cardiac surgeon, offers cutting-edge medical care in India at a fraction of what it costs elsewhere in the world. His flagship heart hospital charges $2,000, on average, for open-heart surgery, compared with hospitals in the U.S. that are paid between $20,000 and $100,000, depending on the complexity of the surgery.

The approach has transformed health care in India through a simple premise that works in other industries: economies of scale. By driving huge volumes, even of procedures as sophisticated, delicate and dangerous as heart surgery, Dr. Shetty has managed to drive down the cost of health care in his nation of one billion.

Using economies of scale also allows doctors working at Shetty’s hospital to specialize in specific types of heart ailments by conducting the procedure hundreds, if not thousands, of times. This kind of repetition reduces the risk of something going wrong during surgery, thus leading to better patient outcomes.

When discussing how to reduce costs while maintaining quality, Shetty offers an insight that stands in stark contrast to the “comprehensive” reform of health care currently being pursued by the Democratic Party in America. “What health care needs is process innovation, not product innovation.” Perhaps the best line in the whole article is Shetty’s observation about implementing real, lasting changes that will bend the health care cost curve down. “In health care you can’t do one big thing and reduce the price. We have to do 1,000 small things.” That’s the view helping thousands of poor farmers and their children get better heart health at prices they can afford.

You can read the entire article here.