Since its chain of hospitals opened over a decade ago, Narayana Health (NH) has successfully provided tertiary care in India at affordable prices. Dr. Shetty, Chairman of NH, desired to establish a hospital to demonstrate the NH model to the US so that the model could be adopted worldwide. As a result, when the Cayman Islands Government was interested in developing the island as a medical tourism destination during 2008-2009, Dr. Shetty agreed to develop Health City Cayman Islands (HCCI), a 2,000-bed hospital complex on Grand Cayman Island housing several super-specialty hospitals. NH and Ascension, the largest non-profit hospital system in the US, developed HCCI's first phase, which includes a 104-bed hospital focused on cardiac care and orthopedics. After being inaugurated in February 2014, there were still questions regarding pricing for procedures and the associated patient segment and volume. Further, HCCI's senior management realized that the NH model developed in India required some adaptation to Cayman's new climate and were willing to experiment in the coming months.
Tarun Khanna and Budhaditya Gupta
Harvard Business Review (714510-PDF-ENG)
May 06, 2014
Case questions answered:
- Is the success of the Health City Cayman Islands project important? Important to whom and why?
- Why did each of the stakeholders get involved in the HCCI initiative? Should there be alignment between the stakeholders on pricing and adaptation decisions?
- Will the learning at HCCI be transferable to the US context? If not, how should Ascension respond?
- How likely is it that the stakeholders will continue to be aligned in the long-term expansion of the project?
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Health City Cayman Islands Case Answers
Is the success of the Health City Cayman Islands project important? Important to whom and why?
The Health City Cayman Islands (HCCI) model could potentially disrupt U.S. health care. With the zero copays, deductibles, free travel for the patient, and a chaperone for 1-2 weeks, insurers would save on a lot of money. American doctors who visited HCCI noted that it could disrupt the expensive U.S. system and encourage it to innovate.
Health care providers in the U.S. should pay attention to HCCI so that they can learn how to provide high-quality care while dramatically lowering costs. They can also open identical near-shore facilities for treating patients and serve as a laboratory for process innovations. U.S. health care providers can’t afford to ignore experiments like HCCI.
Further, the bundled approach in the Health City Cayman Islands model focuses on outcomes, reduces waste, and provides a quicker pathway to patient recovery, which would be beneficial for all. In terms of stakeholders on the island itself, there were many benefits and lucrative opportunities arising from the HCCI project for all.
The HCCI project is of great significance to the locals in the Cayman Islands as it would lead to the immediate creation of employment opportunities. Not only this, but additional revenue from the project in millions of dollars is also expected for the hotel, restaurant, retail, and transportation businesses and for the government in terms of visa fees, work permit fees, and the duties earned on the import of non-medical supplies.
Even the local medical practitioners saw it as a lucrative opportunity as they could sense the possibility of future collaborations. Furthermore, the Health City Cayman Islands staff would also be beneficial and important for the local youth as it would allow them to identify new role models and vail of the HCCI medical college to pursue careers in healthcare.
Why did each of the stakeholders get involved in the HCCI initiative? Should there be alignment between the stakeholders on pricing and adaptation decisions?
To make this minimal expense great dream a reality, Health City Cayman Islands took on a few imaginative measures to reduce expenses.
For one, it utilized open and narrow…
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