First Common Purpose Dishaa Venture - Final report

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Heart surgery at $1,000 (USD)‘do more with less for more’

Venture

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Common Purpose would like to thank PwC for their support in producing this report.

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This report provides an outline of the Common Purpose Dishaa Venture and the outcomes of the inaugural Dishaa held in Pune, India in 2011.

Dishaa aims to foster communication amongst diverse leaders in the UK and India and build shared approaches to current, real and complex problems. The first Dishaa focused on the need to drive affordable heart surgery in both the UK and India.

In India much of the population are unable to afford heart surgery and currently only a small proportion undergo much needed surgery. Similarly, in the UK the need to drive down costs, collaborate internationally and share lessons learned is paramount at a time when the National Health Service (NHS) requires cost efficiency.

The Dishaa group investigated solutions to and wider implications of the challenge through research and collaborative development of innovative models whilst identifying the major cost factors involved. The teams devised strategies to reduce the cost of heart surgery. This report outlines four key sections:

Government driven investment 1. in the health sectorUsing technology to deliver a 2. patient centred systemOperational efficiency 3. Prevention and awareness 4.

Through iteration and review with experts including Dr Devi Shetty, a cardiac surgeon at Narayana Hrudayalaya Hospital in Bangalore, India, models were refined into potentially feasible options as presented in this report.

Preface

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Challenges and Opportunities in India

Challenges

India is a country of 1.2 billion people•Public spending in healthcare only 1 per •cent of Gross Domestic Product (GDP) Lack of proper governance and •accountability in implementing healthcare initiativesTriple burden of disease•0.7 beds per 1,000 people compared •to a global average of 2.6Poor quality infrastructure•Access issues in small cities and •rural India Millions of people in need of •heart surgery

Opportunities

About half a million qualified doctors •State-of-the-art infrastructure in big •cities that attracts patients from across the worldProfessionals like Dr. Shetty who have •managed to reduce cost of heart surgery to $2,000 (equivalent cost in the UK $10,000-40,000) c.7- 8 per cent GDP growth•For the UK and India to work together •to up-skill the medical workforce

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Contents

Background and approach

Government driven investment in the health sector

Using technology to deliver a patient centred system

Operational efficiency

Prevention and awareness

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Current situation in India concerns •many millions of people who do not have access to basic healthcare While GDP of the country has grown seven fold over the last two decades, the quality of healthcare infrastructure continues to remain substandard

One subset of this wider healthcare •infrastructure issue is heart surgery Being genetically three times more susceptible to heart diseases, millions of Indians require heart surgery but only a small proportion currently undergo operations

The main barriers for accessing the •necessary surgery is cost – the price of surgery is unaffordable for a large section of the population in India and access to surgery is limited for those in rural India The current healthcare system is poorly equipped in providing initial local screening and delivering primary cardiac care to those who need it Two-thirds of India’s population live in rural regions, yet the majority of doctors and surgeons work in city hospitals

Similarly, the UK has lessons to learn •at a time of review of the National Health Service where cost efficiency is paramount

The proposals enabled opportunities •to lower the price of heart surgery by reducing long term cardiac healthcare costs, increasing access and improving care especially for those who cannot afford private healthcare insurance.

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Successful applicants had leadership expertise rather than having a specialist healthcare knowledge

Participants were from a diverse background of applicants from India and the UK

Each participant interviewed a range of stakeholders and undertook research as pre-immersion tasks

Some participants had direct relevant background in the Health sector (i.e. doctors/NHS professional, financiers and not-for-profit sector professionals)

Based on the U-Theory model of innovation by The Presencing Institute and led by Common Purpose facilitators

Innovation and enthusiasm was brought to the challenge

Participants immersed in the problem through site visits and presentation

Question and answer sessions were held with experts in the field of cardiac care

Participants in groups presented findings to experts on different areas of the health value chain

A variety of perspectives were received from a range of stakeholders and feedback shared

Models refined and consolidated based on feedback received from experts

Consultation and focussed discussions with experts

A creative process of review and iteration of models

Stakeholder interviews and research

Case clinics and consultations

Immersion week in Pune, India

Model refinement and consolidation


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Budgetary constraint•Accountability of implementing healthcare •initiatives with state governments Lack of coherent strategy and initiatives •

Access and infrastructure issues•Affordability •Awareness of preventive techniques •

Limited capital •Lack of incentives and lack of profit to invest outside big cities•Shortage of human capital•Increasing inflation and cost •

No incentive for equipment manufacturers to set-up •base in the countryQuality of education and training infrastructure in India•

Government

Patients

Private sector

Other

Background and approachA clear need for changeKey Challenges

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Government driven investment in the health sector

Proposal

Establish around 600 district level multi-specialty hospitals in India

Use Public Private Partnership (PPP) model to setup and procure hospitals from the private sector with state funding in form of provision of land and upfront capital/annuity payments

Appoint a nodal agency under the central government to procure these hospitals from the private sector

To supplement the existing budgetary funding, levy a cess on unhealthy foods

Provide incentives and incubation facilities, funding for medical equipment and disposables, manufacturers to reduce costs and develop products specific to Indian markets

Supplement the above initiatives by (discussed in subsequent chapters): Using technology to deliver a patient centred system Improving operational efficiencyPrevention and awareness

Overall results in improved access and increased volumes that help drive costs down.

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There are current c.650 district level Government hospitals in India but according to Government’s own report (i):

Hospital buildings are either very old •and in dilapidated conditions or are not maintained properlyA typical district hospital lacks •modern diagnostics and therapeutic equipment, proper emergency services, intensive care units, essential pharmaceuticals and supplies, referral support and resourcesThere is a lack of trained and qualified •staff for hospital management and for the management of other ancillary and supportive services viz. medical records, central sterilization department, laundry, housekeeping, dietary and management of nursing services

There is lack of community •participation and ownership, management and accountability of district hospitals through hospital management committees District hospitals have come under •constantly increasing pressure on utilisation as a result of rapid growth in population; which is evident from overall population to bed ratio of 0.7 beds per 1,000 people compared to a global average of 2.6.

(i) Indian Public Health Standards (IPHS for 101 to 200 bedded District Hospitals guidelines January 2007)

1. Government driven investment in the health sectorIt is not that India does not have hospitals

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Government to grant concessions/•enter into PPP arrangements with the private sector to build hospitals (i)

These hospitals would provide •treatment at concessional rates to less economically developed sections of the society

Government to provide land and •upfront capital based on feasibility of individual hospitals and ability to generate revenue from private sector

Key aim of these hospitals would be •to deliver a quality of service which is fair and responsive to patients’ needs, and improvements in the health and well being of the population

Hospital would also have attached •medical college for training new doctors and nursing staff

Government could also use this PPP •model to upgrade existing hospitals

These hospitals would also be linked •to a wider network of medical professionals, and primary healthcare centres and villages via mobile networks and mobile hospitals.

(i) Concessional rates to be set by the procurement agency/independent regulator based on geographical location and income levels of the population

2. Government driven investment in the health sectorProposal: Combination of state funding and cross subsidisation used to fund these hospitals

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3. Government driven investment in the health sectorNodal agency at the Central Government responsible for procurement and overseeing operations

An agency under the Ministry of Health is to be assigned the task •of procurement of these hospitals from the private sector There is precedent for success of this model in other sectors •(i.e. in road building)

Contractual structure to be based on the existing model concession •agreement (i) and consultative process with the industryEffectiveness of performance indicators and their monitoring to be •at the heart of the contract

Existing large private sector hospital operators, not-for-profit trusts •(both national and international) with requisite financial strengths

Existing large private sector hospital operators, not-for-profit trust •(both national and international) with requisite financial strengths

Performance and tariff charged by these hospitals to be monitored •by an independent regulator Cost transparency and defined rate of return to ensure that the •private sector operator does not overcharge

Implementation agency

Contractual structure and performance indicators

Qualification criteria

Qualification criteria for operator

Regulator

Aspects Description

(i) Model concession agreement is similar to SOPC 4 documentation in the UK

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3.Government driven investment in the health sectorFinancial feasibility and likely interest from the private sector for such projects

Operational Models that suggest the feasibility of such hospitals:

(i) Framework for Public Private Delivery in Healthcare (A submission to the Government of India)

200 bed multi-speciality hospital at an estimated cost of c.INR (Indian Rupee) 850m (c.£11m)

Government funding 40 per cent (including cost of land)

33 per cent of the beds used for treating less economically developed sections of society and the remaining 67 per cent for private patients, Central Government Health Scheme, Employees State Insurance Scheme and other Central Government and State Government beneficiaries

Low cost hospital with c.INR150m (c.£2.2m) investment

Government contribution in terms of free land and balance funded by the private sector at a rate of return of 10 per cent

Hospital uses Dr. Devi Shetty’s innovative model of delivering quality healthcare at low cost

Hospital target at 30 surgeries a day compared to existing [3] surgeries per day

Confederation of Indian Industry (CII) Model (i)

Low-cost Hospital Model

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Financial feasibility analysis revealed •that the new hospitals will require significant Government funding

Existing budgetary resources are •unlikely to be sufficient to meet the capital requirements for these new hospitals. Existing Government hospitals and facilities are unlikely to accept a reduction in their existing budgets. Hence, there is a clear need for alternative funding sources

An alternative funding source •could be established through a hypothecated tax/cess on unhealthy food and drinks: Similar tax levied on automobile fuel (e.g. diesel/petrol) has been successfully used to modernise the road infrastructure in India

Tax would hit the poorest in Indian •society least as they were less likely to spend money on and afford fizzy drinks, high-fat processed food, etc.

A high level modelling indicates that •the Government could collect c.£40 billion (INR 3200 billion) from a 5 per cent tax on sweets, snacks, alcohol and cigarettes in India over a 25-year period

In addition to funding healthcare •infrastructure (through building hospitals and IT health infrastructure), the tax generated would also be used to find incubators that would support the development of medical devices and disposables at an affordable price.

4. Government driven investment in the health sectorHypothecated tax/cess to be used for funding Government healthcare initiatives

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Medical devices and equipment are •important components of the overall medical cost structure Most of the medical equipment/•devices that are sold in the Indian market are developed for the Western markets and tend to be expensive

There are only a few devices that •are made specifically for the Indian/emerging market

Discussions with stakeholders •suggested that: Although India has one of the highest prevalence rates for cardio-vascular, diabetes, ophthalmology, respiratory, and other major diseases, device therapy usage rates are <1 per cent of those in Western markets 75 per cent of the patients are not referred on to the implanting physicians due to economic constraints which are often misunderstood by referring physicians

Hence there is a clear need for the •Government to facilitate investment in this sector by providing seed capital and incubator facility in collaboration with the private sector

It is proposed that a portion of •hypothecated tax/cess should be used for the development of medical devices for the Indian market

Lower costs of devices would •help increase access by the wider population and reduce the overall costs of medical care.

5. Government driven investment in the health sectorReducing cost of medical devices

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5. Government driven investment in the health sectorDedicated healthcare fund to assist in new product development

(i) Incubator to operate like any other venture capital fund and derive return on capital when products are commercialised through the sale of equity. Government share of profit to be re-invested whilst the private sector would be free to cash out (subject to minimum investment in the fund)

Government to allocate USD 1 billion capital to the fund over a 5-year period

Fund to setup incubators in partnership with the private sector and contribute up to 50 per cent of seed capital (maximum cap USD 10 million)

Incubator to provide capital on a commercial basis (i) and other forms of support (where required) to companies engaged in research and development of medical equipment and devices.

Contribution from Government of India

“Research and Development and Incubator fund” for Healthcare

INCUBATOR

- Concept Development- Prototyping

- Product Development

Private sector companies/fund

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pany

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pany

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pany

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pany

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pany

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pany

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Using technology to deliver a patient centred system

According to the latest census report •published in 2011 nearly 70 per cent of Indian population lives in villages

The proposal is to reach the rural •section of the population using mobile technology with re-designed medical training to increase use and distribution of specialist knowledge This solution is based on adapting and using existing innovations which are already being used in India more widely Early diagnosis of at risk patients e.g. diabetes is undertaken in some areas for 15 rupees but coverage is very limited. Results are stored in sporadic patient databases Existing 108 PPP ambulance services are starting to operate in some pilot areas but at a cost Technology such as SMSOne and VSN network and 108 are already seeds of innovation in existence

The solution also leverages on the •existing primary healthcare centres, together with current and new district hospitals

The vision is of a patient centric •whole system approach using mobile technology with re-designed medical training to increase use and distribution of specialist knowledge.

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Using technology to deliver a patient centred systemProposal

(i) Aadhaar is a 12-digit unique number will issued to all residents in India

Every village to have a medical •nurse specifically trained to administer basic treatment Medical nurse could be government employee (existing healthcare worker) or part of the community (representative of a not-for-profit organisation, self help group etc.)

This nurse would be connected •to doctors at primary health care centre and district hospitals via mobile network/devices and equipped with devices to conduct diagnostic tests remotely The medical records of patients are centrally stored based on the Unique Identification Number - Aadhaar (i)

Local primary care may come •and do further assessment, and in conjunction with the remote experts (at the district hospital) decide whether surgery is needed

For minor/less complex surgeries, a •field hospital (Mobile Cardio Unit, MCU) is used to go out to where it is required and deliver mobile operation theatres to undertake surgery Aftercare of the patients takes place in an area of the mobile operation theatre and then the family can take ownership, just as they would in hospital

If visit to hospital needed, transport •issues are overcome by use of mobile ambulance, equipped with diagnostic unit to undertake any further testing in advance of arrival at hospital Patient arrival to the hospital is coordinated with minimal administrative formalities as patient records are centrally stored

Local nurse supports family •members in care of patient, and undertakes aftercare.

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Operational efficiencyFour Forces Model

Myth Operational efficiency

= higher number of operations

FactOperational efficiency

= accuracy in heart surgeries

4 FORCES MODEL

24 X 365

Talent Stock and Flow

Knowledge RepositoryFiltering

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24 x 365

This proposal creates a teaching •hospital which ensures the use of most of its operating theatres for 24 hours a day instead of current 10-12 hours Higher volume of surgeries with more •patients treatedReduce the capital cost per surgery•Greater economies of scale •and bargaining power when purchasing disposablesReduction in costs per •operation for specialised staff due to flexible scheduling.

Talent Stock and flow

Creating local employment and trade •opportunities by setting up small scale industries for the production of low cost disposables for the hospital and for exportEncourage Student/doctor •exchange opportunitiesIncreased employment opportunities •for medical staff.

Filtering and Process Innovation - to expand the reach from treating 60,000 people to the 2.4 million requiring heart surgeries in India.

It is proposed that specialist trained •staff, some with clinical backgrounds, undertake a screening of patients in order to establish the ‘level’ of intervention requiredIt will allow for prioritisation •the treatments Provide care to non urgent treatment •at the basic care health units (GP surgery in UK)Access of the cardiac care to those “who •need it” rather then “who can afford it”Increased awareness to the public •about the cardiac problems.

Knowledge repository

Highly focused, specialised medical •training for both UK and Indian trainee surgeons and support staff by exposure to more and varied cases Possibilities to replicate this model on •a smaller scale across smaller cities and rural areas in India or in the UK.

Operational efficiency

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The prototype involved a staged •approach with a simple diagnostic checklist being used by a community outreach worker living in the vicinity; the patient would then be referred onto a Stage Two Diagnosis via a more detailed consultation with a nurse practitioner by mobile phone. If further diagnostic tests were required, these would be delivered via a Diagnostics and Treatment Vehicle. At this point the patient would either be treated locally if possible, or referred onto an acute cardiac centre for surgery if necessary.

By introducing an early intervention •model, patients could be treated when their cardiac conditions are less acute; potentially with a less invasive procedure. The impact would be a lower overall cost over a 2.4 million patient population

Enabling early diagnoses and if •necessary delivery of certain procedures closer to the patients’ homes through the use of a mobile treatment approach.

Operational efficiencyInnovations and benefits of proposal

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State of Play - UK

Over 750,000 people are living •with heart failureNo cure •

ONE in THREE people die from •heart-related diseasesEvery SIX Minutes, someone dies •from a heart attackEvery FOUR minutes, someone •suffers from a stroke

At least 80 per cent of premature •deaths could be avoided.

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State of Play - India

South Asians are genetically •THREE times more susceptible to cardiovascular conditions 70 per cent of India’s 1.2 billion population lives in the rural regions 80 per cent of hospitals are in cities

Lifestyle changes, urbanisation, lack •of exercise and diets are causing swift increases in non-communicable diseases (NCDs)

Just over half of India’s deaths are •from NCDs

India also has the world’s largest •diabetic population.

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Barriers - India

Gross mistrust by the public on the •state healthcare system Massive absenteeism in the public health service Substantial knowledge gaps across both the public and private sectors; including many unqualified practitioners “Knowing-Doing” gap resulting in revolving doors and readmissions

Governance in the state •healthcare system The Indian magazine Tehelka recently reported that much of the $18 billion (USD) in federal health transfer payments to Uttar Pradesh, India’s largest state, are unaccounted for

In a detailed study of deaths in rural •Andhra Pradesh only 50 per cent of those who died had been to a hospital only 20 per cent died in a hospital – suggesting possible premature mortality

Access to Generic Drugs • India is the world’s biggest supplier of low-cost generic drugs < 20 per cent of patients with cardiovascular diseases using secondary prevention drugs

Distribution and Lack of care•Transportation and Infrastructure•Gender discrimination •

A misguided belief that pricing equals affordability equals access.

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What Now?

Reduced state spending on drugs in •the last decade:

Rajasthan, Haryana, Karnataka and Madhya Pradesh too followed suit during the same period 2-3 per cent spent on drugs by states like Jharkhand and Punjab

All of the above perpetuates the •vicious spiral of poverty trap and disparate clinical outcomes.

Kerala

Tamil Nadu

Maharashtra

17%

15.3%

11.3%

12.5%

12.2%

5.2%

Percentage Public Healthcare Expenditure on Drugs

2001 2010

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What Next?

Increase in Government budget for •the promotion, prevention, screening, management and control of NCDs

Reduce common NCD risk factors •using a range of options via: legislation, regulation and fiscal measures

New Delhi Call for Action on •combating NCDs in India initiative Starting a $275m pilot project this year for prevention and treatment of cancer, diabetes and stroke The programme covers 150 million people in 100 of India’s least accessible districts Aims to screen 150 million people for hypertension and diabetes by 2012.

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Prevention and awarenessWhat can you do?

* British Heart Foundation

Private sector firms are developing •remote medical diagnostic tools that can monitor everything from heart activity and temperature to blood pressure

Self care*• Watch your weight Eat healthily Get active Don’t smoke Take your meds

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Conclusion

The four day Venture, supported by the governments of both countries, brought together leaders from all sectors to explore how to push heart operation costs down to $1,000 (USD).

Participants engaged in a innovation process which resulted in the four key sections outlined in this report:

Government driven investment 1. in the health sectorUsing technology to deliver a 2. patient centred systemOperational efficiency 3. Prevention and awareness 4.

There is scope to further develop aspects of the information presented in this report and further contribute to cost effectiveness.

The Dishaa Venture continues to energise relations from both the UK and India and participants continue to gather to explore an annual challenge.

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The first Dishaa Participants

Richard Alderson Unltd IndiaRamnath Ballala The Karuna TrustHeather Barrett The Open UniversityPekham Basu Resource Centre on Intervention on Violence Against Women at the Tata Institute of Social SciencesRakesh Bhutoria Standard Chartered BankKatherine Bryant Groundwork UKAndre Campbell Enfuse Youth LtdAlison Dixey British Red Cross Parmod Garg RBSRaj Gilda Lend-A-Hand India Susie Hargreaves The Society of Dyers and ColouristsMeera Harish Titan Industries LimitedLynn Henni The Scottish GovernmentVanessa Jardine Greater Manchester PoliceRupa Jha BBC World Service Sanjeev Khaira UBM IndiaRuchi Khemka Sevayatra Edutrips Pvt. LtdDaniel Knight Bank of America Merril Lynch Seema MalhotraHarry Miskin Bell Pottinger Sans Frontieres Rishi Pathania Tata Chemicals LtdNitin Premchandani PwCLouise Quy PwCBalraj Rai NHS West Midlands Strategic Health AuthorityGanesh Ram PwCVandana Saxena Poria Get Through Guides Pvt. LtdTripti Singh Tata Management Training CentrePrabhat Sinha Sightsavers David Spencer Association of Chief Police Officers Vishal Talreja Dream A Dream Claire Tulloch UBM Conferences EuropeSaud Usmani Bharat Petroleum Corp LtdSreeja Vazhakode Nair Mayflower Media House,Rosie Walford Big Stretch Limited Louise Warde Hunter Action for Children Oliver Wilkinson PwCWilliam Wong 3become1Premchand Yadav Sanchar InfoTech Pvt Ltd.

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First Common Purpose Dishaa Venture - Final report