Operations Strategy of Narayana Hrudayalaya

Objective: Provide High Quality Services at Low costs

Strategy Used: “Wal-Martization of Health Care”

 Benefits by volume of Operations done.

 Negotiations with suppliers as NH deals with high volume Operations.
 Hiring machines instead of purchasing them.
 Buying Reagents from the supplier of machines (Hired)
 NH negotiates with every supplier as prices are flexible in India. NH never makes a long term
contract with any supplier as they may become expensive at any moment.
 Lean Administrative Staff to avoid corruption.
 Discounts on medical care (the largest cost component) as there is communication between the
purchasing departments of Calcutta and Narayana Hrudayalaya Hospitals. They (along with two
other smaller units under the banner of AHF) have approximately 10% of cardiac-care market in
India.
 NH has also embraced technology in the following ways:
a. By using Digital X-Rays instead of Chest X-Rays (film cost-Rs.50), they availed the benefit
of minimizing recurrent costs.
b. Using a Comprehensive Management Software for its Operations, which helped to
minimize inventory costs and allowed quicker processing of tests, which in turn helped
the hospital in increasing its efficiency and lower overall costs.
 Core cost for a hospital being Staff Salaries (House Surgeons), NH’s cost of Staff salary is only
22% compared to 60% of the Hospital’s revenue in the west.
 NH opted for daily monitoring of Funds available with them, so that no Non-Paying customer
would be sent back because of Lack of funds. In order to properly check this funds on a daily
basis NH used a different method by checking the Financial matters daily rather than a usual
Postmortem Analysis (Financial Reports).