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In Calcutta, Dr. Shetty was also the personal cardiac surgeon of Mother Theresa and was able to observe firsthand her charitable work, which set the direction for his ambitions in health care. According to him, “I believe she is singularly responsible for much that I have achieved. Somehow, even though I am a scientist and do not expect to find God, meeting her was almost like an encounter with the divine.”
In 2001, Dr. Shetty founded NH in Bangalore with a generous contribution from his father-in-law, who owned a construction company, Shankaranarayana Constructions (SNC), with expertise in the construction of dams, roads, highways, and power projects. It was SNC that constructed the first phase of the hospital on 25 acres of land adjoining Bangalore’s famous Electronic City on Hosur Road. SNC offered the building on a 30-year lease to NH Private Ltd., a private company owned by Dr. Shetty and his family, which then bought equipment and medical supplies with loans backed by the family. When NH was first built, the hospital consisted of two stories housing five OTs and 280 beds. Between 2001 and 2004, internal funds were used to expand the building to six stories with 500 beds.
By 2004, the hospital was staffed by approximately 90 cardiac surgeons and cardiologists, many with extensive training and experience in top-class international institutions and several of whom had performed more than 10,000 heart surgeries individually in their careers (see Exhibit 5 for a picture of the team in surgery). Dr. Shetty himself was the first cardiac surgeon in India to conduct neonatal open-heart surgery in the country. With their vast experience, the surgeons at NH were able to achieve international standards in their procedures: NH boasted of a 1.27% mortality rate and 1% infection rate in coronary artery bypass graft (CABG) procedures, comparable with rates of 1.2% and 1%, respectively, in the United States.
Karnataka was the eighth-largest state in India and was known for its information technology and software industries, which were concentrated in its capital city, Bangalore (see Exhibit 6 for a map of India). The state had a population of approximately 53 million people, over 60% of whom were in rural areas. With an average per capita income of US$690, Karnataka was one of the more developed states in India. By 2004, the state had a network of nearly 300 hospitals and 1,300 primary health centers with over 50,000 beds.
With an estimated population of 1.03 billion in 2003 (of which approximately 400 million were under 18), India was the world’s second-most populous country after China. Its reported per capita income in 2003 was US$600 (US$2,900 per capita income on a PPP basis). [2] While economic growth was impressive since the late 1990s (India registered an average 6% gross domestic product [GDP] growth between 1999 and 2003), the distribution of income remained highly skewed. More than 250 million people lived below the poverty line, and the richest 20% were estimated to hold close to 50% of household income.
In 2003, the Indian government spent approximately 1% of its GDP on public health care (the equivalent of US$4 per person a year), which placed it at one of the lowest public health-care spending levels in the world (see Exhibit 7 for comparative health statistics). Private spending was several times higher, and the overall expenditure on health was estimated to be 5% of GDP, compared with the Asian average of 6.3%. While there had been improvements in life expectancy (from around 40 years at the time of independence in 1947 to 64 years in 2003), general indicators of health and nutrition remained poor. The National Nutrition Monitoring Bureau estimated that 85% of the Indian population and 47% of children under three years of age did not receive enough nourishment.
[2] PPP indicates purchasing power parity, which takes into account price differences across countries.
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