NH case

For the better understanding of the case and conscious capitalism go to the following
links

Conscious Capitalism- to be introduced 

Conscious Capitalism is a philosophy stating that businesses should serve all principal
stakeholders, including the environment. It does not minimize profit-seeking but encourages
the assimilation of all common interests into the company's business plan.

Guiding Principles of Conscious Capitalism

The basis of Conscious Capitalism is on four guiding principles.

Higher Purpose: A business that adheres to the principles of Conscious Capitalism focuses
on a purpose beyond pure profits, and in doing so, inspires and engages its stakeholders.

Stakeholder Orientation: Businesses have multiple stakeholders, including customers,

employees, suppliers, investors, and others. Some companies focus on return to their
shareholders to the exclusion of everything else. A conscious business will concentrate on the
whole business ecosystem to create and optimize value for all its stakeholders.

Conscious Leadership: Conscious leaders emphasize a "we" rather than a "me" mentality to
drive the business and work to cultivate a culture of Conscious Capitalism in the enterprise.

Conscious Culture: corporate culture is the sum of the values and principles that constitute
the social and moral fabric of a business. A conscious culture is one where the policies of
Conscious Capitalism permeate the enterprise, fostering a spirit of trust and cooperation
among all stakeholders.

https://www.youtube.com/playlist?
list=PLw4bKChGXwK9ihhMIH4UZ0HHyITra73TD

https://www.youtube.com/watch?v=C3CXhwJjnk4

https://www.youtube.com/watch?v=F-XMe-Q5NSw

https://www.youtube.com/watch?v=z5h58OpoN0o&t=11s

https://www.youtube.com/watch?v=Zu2lJoGPWDI&t=304s

The case describes the vision and strategy of a team of entrepreneurs headed by a charismatic
heart surgeon who founded Naryana Hrudalya Heart Hospital in Bangalore, India. The
purpose of the hospital is to offer health care for the masses. The interesting aspect of its
business formula was its ability to offer such complex surgeries as CABG (popularly
known as bypass surgery) for about $2,000, which was substantially less than other
similarly equipped hospitals in India.
The operations strategy at NH followed the dual principle of highest quality at the lowest cost
consistent with that quality. Founder of the hospital Dr. shetty calls his strategy as “the Wal-
Martization of health care”. NH performed approximately 19 OHS and 25 catheterization
procedures a day, almost eight times the average at other Indian hospitals. The volume of
procedures completed allowed the limit cost of surgery to be significantly decreased.
Dr. Shetty explained: while other hospitals may run two blood tests on a machine each
day, we run 500 tests a day-so our unit cost for each test is lower. And this works for all
processes. Also, because of our volumes, we are able to negotiate better deals with our
suppliers. Instead of buying expensive machines (like other hospitals), we pay the
supplier a monthly rent for packing their machines here- and the we pay them for
reagents that we buy to run the machines. And they are willing to do this because our
demand for the reagents is high enough to make up the profits for them.
Dr. Shetty further explains that careful dealing with suppliers also helped maintained low
costs. “We don’t sign long term contracts, we negotiate every purchase because prices in
India are very flexible and we don’t want to be locked in to use a supplier who suddenly
becomes expensive”.
In addition, NH embraced new technology as a way to reduce costs. Instead of performing
chest X-rays with film that cost Rs.50 and required processing, the hospital used digital X-
rays that did not incur recurrent costs. The hospital has also implemented comprehensive
hospital management software for its operations that further reduces overall costs and
increases efficiency.
NH has truly revolutionised the health care business and has record of performing more than
4000 surgeries every year and continue to provide affordable cardiac care to the masses.

Q.1. “Great companies have great purposes”- John Mackey, CEO Whole Foods Market

Reflect on the above statement and discuss the principles of conscious capitalism followed by
the founder of Naryana Hrudalya.

Q.2. How is conscious capitalism different from corporate social responsibility?

Q.3. Discuss the implications of CSR if it is implemented only as a charitable action and not
integrated in the fabric of business.

Narayana Hrudalya- Class Discussion- Social Innovation

1.Health care is not a priority, less percentage of GDP spent on- health expenditure
2. Inferior infra- govt. hospital- long waiting period—resort to private hospitals
3. Govt. sector shortcomings---------private sector expanding
4. Middle class- better health insurance (private)
5. Budget 2021- 1.2 %----2.5 % of GDP- due to COVID
6. Conflict of interest- when doctors are incentivised by pharma companies