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High quality, low cost healthcare for the masses through a profitable business model

Aravind Eye care is the largest and the most productive eye care system in the world. It provides the best quality at extremely low costs. Even today, 60% of its patients are treated for free. But, the system is profitable.

Photo of Srinivasan Sankaranarayanan
19 13

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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. .

Aravind Eye Care, started in 1976 by its visionary founder Dr. G. Venkataswamy, aims to eradicate unwanted blindness in India and across the globe. It has grown from a 11 bed venture to become a 4000 bed eye care service provider.

McDonald’s model

Dr.V, as he is fondly known, wanted to emulate the McDonald's model for providing high quality eye care to the masses. In McDonalds, all its employees are trained similarly and hence, the same level of service and quality is achieved in all of its outlets across the globe. This is what Dr. V wished to achieve.

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.

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.

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.

In order to provide high quality eye care for the poor, many other complementary divisions had to be set up.

The Aravind Eye Care System comprises of

  • · Base Hospitals - 5 till date
  • · AuroLab - Manufacturing of intraocular lenses (used in Cataract     operations), and other commonly needed requirements
  • · Training Centre - To train technicians and other skilled staff
  • · Research Centre
  • · Outreach program - To educate the masses about the importance of eyecare
  • · IT service - To develop IT competences that are used by Aravind
  • · Eye bank
  • · Aravind managed Eye Care Services –4 similar organisations which Aravind manages
  • · Community ophthalmology – Aravind provides consultancy and training to other hospitals and eye care systems around the world.

Quality

The quality of eye care provided by Aravind is world class. Dr V strongly believed that being world class does not deem as a luxury. All the patients (absolutely no divide whatsoever between paying and non-paying patients) receive truly world class treatment.

Innovation

Initially the intraocular lenses were imported at about $ 200 apiece. But, Aurolabs innovated using indigenous resources to manufacture the same lenses for about $ 5 apiece. The quality is truly world class and as a result, the lenses manufactured at Aurolabs are exported to 120 countries and has a global share of 7.8%

But, the larger innovation is the business model on its own. Aravind Eye care has proved how social business can have tremendous impact on the masses and still prove to be profitable.

How this can help Caldas?

Well, in a number of ways. Dr V asserts that this system can be replicated to deal with healthcare functions similar to eye care. Pregnancy is one of the potential functions this model can be used for.

Albeit, Aravind Eye Care is quite huge now, we must forget that it started with 11 beds in a rented space. A similar model at Caldas must be started on a small scale before the system becomes sustainable and self-supporting.

Other info

Find here the links for numerous highly reliable Case Studies of Aravind Eye Care 



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Photo of Krassimira

Srini, I came across this article today: The Economist mentions Aravind as an innovative company in the developing world that the developed world can learn from....http://www.economist.com/node/18833589

Photo of Srinivasan

Thanks for pulling up this one Krassimira, Nice article. And, Aravind are truly innovative indeed! Bringing down the price of lenses from $200 to $5 is frugal innovation at its best!

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