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A profitable social business to provide standardised/mass customised healthcare for the masses

This concept aims to build a profitable social business which will provide standarised/mass customised healthcare for the masses. The concept aims to use the McDonald's model where employees are trained in the same way to provide the same quality and service across the globe.

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Aravind eye care system does not run like the typical hospital. It can be more likened to a production facility. But, make no mistake, the care and quality of eye care provided is world class.

Business model

To start with, the most crucial aspect of Aravind is that they treat both paying and non-paying patients. Funds from the paying patients along with donations pay for more than 60% of the non-paying patients.

                                          Hub and spoke model 

Aravind also strongly believes that all the patients needing eye care do not necessarily come to the main hospitals. Patients are screened through numerous eye camps, patients who require spectacles or other small treatments are provided with the same, on the same day at the camp. Patients who require surgeries or other treatments are taken to the base hospitals by Aravind (Free transport); they are operated on the next day and are discharged in a day or two.

We can use Simon Morfit's concept of integrating market days and healthcare. http://bit.ly/kDrplR People can come to the markets but can just drop by to have their eyes checked. People needing further treatment can be sent to the base hospitals if needed.

The concept of free transport is very crucial. There is a financial implication for the patient seeking eye care far away from their villages. He/she has to spend on transport, miscellaneous expenses like food, etc and then loss due to lost wages. This problem is amplified as the patient needs to be accompanied by a family member through the process. Aravind estimates that a patient is subjected to a cost of INR 350 in seeking eye care. But, when these expenses are met by Aravind, it works out to be much cheaper, thereby saving about INR 220 for the patient.

                                                   Workforce

Doctors are employed as residents. As they perform only specific tasks like surgeries, they do more of what they do best. Each doctor performs 2600 surgeries a year.

Nurses are the lifeline of the system. They are recruited from nearby villages and trained in house. 900 of them are trained every year and 99% of the trained nurses stay within the system.

Ophthalmic assistants are the people who perform the skill based but routine tasks, for which doctors are not required. These assistants are also trained in house.

Since Aravind only focuses on eye care, they are specialised. They buy the best equipments and since they perform specific tasks, they are run continuously to minimise down time. This ultimately helps Aravind achieve economies of scale.

How do you envision this idea making money?

The main reason behind Aravind's success is that it has created a social business model which is self sufficient and sustaining. The 40% of the paying patients have been sufficient to pay for themselves and the other 60% of patients being treated free of cost. It is a win-win situation for everyone in the value chain. The patients who pay get world class treatment at very low costs. Aravind has been profitable for years and finally thousands of poor patients get quality healthcare, which they cannot afford for free. Another indicator of the model's success is that it has grown from a 11 bed venture to become a 4000 bed eye care service provider. http://www.aravind.org/downloads/reports/AnnualReport910.pdf

How does this idea create social impact, particularly around improving health?

Being visually impaired has many implications on the people's economic and social status. In India, 200 million people have visual impairment, but most of this impairment can be easily cured through simple surgeries. In most cases, only a prescription glass is sufficient to cure them. But, only 7-8% of these people have been reached in India. The case in India is no different to other developing countries. I reckon any model that has had an impact in India can be replicated in other developed countries as well.

How does this idea add social value at every step of the process?

Being a social business providing healthcare, this concept positively impacts the healthcare system as well as providing financial benefits to the society.

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DeletedUser

Sustainable levels of internal development in a business model that serves to generate social benefit, while remaining focussed in such a way as to realize economies of scale? Yeah, that sounds like a plan. I can think of another example of this, operating without the same level of social welfare: The Shouldice clinic, which business grad students all over the United States get to read about in all of it's HBR case study glory.
I suppose I intend this as encouragement to Architecture Commons. This model can work for other medical needs.

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DeletedUser

Thanks for picking up The Shouldice Clinic. I looked up the internet about it but couldnt get my hands on the HBR doc though.

But, isn't surgeries different to curing malaria?

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