The company envisions that through health insurance, it can establish a seamlessly integrated healthcare ecosystem where clinics, pharmacies, online healthcare services, and the hospital chain will collaborate cohesively.
Narayana Health, renowned for its '˜Walmart model' approach to healthcare, is branching out into the health insurance sector to provide more affordable treatment options for patients. The move comes as the healthcare chain faces increased infrastructure and service costs.
Narayana Health, formerly known as Narayana Hrudayalaya and later renamed Narayana Healthcare in 2012, is famous for applying mass production techniques to healthcare, capitalising on economies of scale. However, the rising cost of infrastructure and services has limited their ability to reduce healthcare costs further through process optimisation and efficiency improvements.
Viren Shetty, the executive vice-chairman at Narayana Health and son of the company's chairman, Devi Shetty, emphasised the challenges they face in maintaining affordability while dealing with escalating costs. The COVID-19 pandemic, in particular, has seen a 50% increase in infrastructure costs, making further cost reductions challenging without compromising the quality of care.
Narayana Health has decided to enter the health insurance sector to address this issue. Currently, health insurance penetration in India remains low, but the industry has witnessed significant changes in customer attitudes following the pandemic.
Viren Shetty said, "Health insurance is something that will be the most significant determinant of how people will pay for healthcare in the future." He stressed the importance of planning for healthcare expenses through insurance, given that healthcare events are often emergencies, unlike planned purchases like homes or vehicles.
Narayana Health has applied for a license from the Insurance Regulatory and Development Authority of India (IRDAI) to establish Narayana Health Insurance Company, which will manage its foray into the health insurance market.
Headquartered in Bengaluru, Narayana Health Group claims to be the second-largest healthcare provider in India in terms of operational bed count. From its inception as a 225-bed heart hospital in 2000, the group has expanded to 21 hospitals, four heart centres, 18 primary care facilities across India, and an international hospital in the Cayman Islands, boasting over 6,800 operational beds.
Viren Shetty envisions an integrated approach where health insurance, clinics, pharmacies, online care, and hospitals work seamlessly to provide a comprehensive healthcare experience for patients. While the company currently does not plan to launch standalone pharmacies, they intend to build infrastructure closer to their patients, starting with a pilot program in Bengaluru.
Narayana Health's expansion into health insurance also coincides with a rebranding effort and a new corporate logo. Viren Shetty hopes that investing in preventive care will help individuals avoid more significant healthcare costs and encourage a shift in focus from blaming private hospitals for high healthcare expenses to taking personal responsibility for health and prevention.
He stressed the need for people to "get serious about their health and start taking the concept of prevention seriously" to combat the risk factors associated with cardiac issues and other health problems.
Narayana Health's entry into the health insurance sector reflects the growing importance of insurance in healthcare financing and the company's commitment to maintaining the quality of care while managing rising healthcare costs in India.