A couple of little lessons from a hospital chain in India - probably the world’s cheapest first class hospitals.

To American eyes, Narayana’s prices look as if they must be missing at least one zero, even as outcomes for patients meet or exceed international benchmarks. Surgery for head and neck cancers starts at $700. Endoscopy is $14; a lung transplant, $7,000. Even a heart transplant will set a patient back only about $11,000. Narayana is dirt cheap even by Indian standards, with the investment bank Jefferies estimating that it can profitably offer some major surgeries for as little as half what domestic rivals charge.

Those are prices that would make the NHS blush too and as the above shows it’s not just about lower prices for skilled labour in India. This chain is doing something different:

In the mid-1990s, Shetty began experimenting with a business school concept alternately called upskilling or task-shifting. The idea is for everyone involved in a complex process to work only at the top of his qualification, leaving simpler tasks to lower-paid workers. In a hospital, this might mean that the costliest staff—experienced surgeons—enter the operating theater only to complete the most difficult part of a procedure, leaving everything else to junior doctors or well-trained nurses. Then they move to the next theater to perform the same task again.

The division and specialisation of labour taken a step or three further forward.

By working at this pace, the average Narayana surgeon performs as many as six times more procedures annually than an American counterpart.

Hmm.

The Shettys see further savings coming not from any single reform, but from thousands of little tweaks at every stage of treatment.

And that’s how productivity advances. Not grandiose leaps into the future but shavings at the edges but at every edge.

The big question being, well, how do we get this concentration upon doing things cheaper - because cheaper means it is possible to do more - into our own health care system?

The answer being that we need to copy the incentive structure this chain operates under. It’s working in a market and trying to make a profit while doing so. Even as government takes over more of the financing it is still working in that market which provides those incentives.

Hey, perhaps we should try it?