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Aravind Eye Hospital Case Study Answers

Aravind Eye Hospital

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Introduction
Established in 1976 with the mission to eliminating needless blindness, Aravind is the largest and most productive eye care facility in the world. The brainchild of Dr. Venkataswamy, Aravind Eye Hospital provided free eye care and surgery to millions of needy patients apart from regular patients. Currently, there were 3 Aravind Eye Care hospitals across the state of Tamil Nadu – at Madurai, Tirunelveli and Theni. A new facility at Coimbatore was also under consideration. Since its inception, the Aravind group of hospitals had screened 3.65 million patients and performed some 335,000 cataract operations nearly 70% of which were done free of charge.
Operations
Aravind Eye Hospital adopted a unique model in order to try and achieve its vision of eradicating blindness in India.
Eye Care Delivery Model
The hospital ran 2 different kinds of hospitals – the main hospital and the free hospital.
Main Hospital
The Main Hospital functioned like a regular ophthalmology hospital. All patients admitted here paid for the hospital’s services apart from a few complicated cases which were brought over from the Free Hospital for diagnosis and treatment. The hospital provided different kinds of rooms class A, B and C, each with somewhat different levels of privacy and facilities and consequently different price levels. Treatments performed in the main hospital varied from simple treatments to extremely complex surgeries like retina detachment repair. The cataract surgeries done at the main hospital were primarily the ECCE cataract surgeries that required an operating microscope and were also more expensive since it required an IOL lens.
Free Hospital
The Free Hospital provided free eye treatment to the poorer section of the society free of charge. Patients brought in from eye camps were brought here for treatment. The patients in the Free Hospital were not provided a bed but were provided with choir mats and a small pillow. The hospital primarily provided ICCE type of cataract surgery with an ECCE recommended only when the ICCE could not be carried out due to medical reasons.
Eye Camps
The eye camps were the most important means through which Aravind was able to reach the masses. These camps were conducted in rural and semi-urban areas with the help of the local community with either a local business enterprise or a social service organization taking the lead role in organizing the event. Public announcements, newspaper advertisements, and other material were distributed to publicize the camp and increase participation in and around the town in which the camp was being held 2-3 weeks in advance.

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At the camp, the patients were screened and those found suitable for surgery were prepared for the same by making them go through blood pressure and urine sugar test.
Operating Process
Aravind’s key strength was its innovative operation procedure. They had created a process similar to that of an assembly line which helped them ensure that their turnaround time was very low. This ensured that the surgeons were able to carry about a significantly larger number of surgeries in a day than normal. In order to ensure that the surgeon’s time was not wasted batches of 20 patients each were prepared for surgery by the nurses in the hospital. Once this was done the patients were operated upon by skilled surgeons who after completing the surgery moved to the next operating table where there was a second support team waiting with the patient ready to be operated upon. This procedure resulted in a tremendous amount of efficiency with a team of 5 surgeons and 15 nurses in the Free Hospital being able to operate on about 150 cases in 5 hours.
IOL Factory
Intraocular lenses which were an integral part of the ECCE surgery were imported from the United States. In order to bring down costs, Aravind set up an IOL plant, Aurolab which they hoped would help them achieve the goal of providing IOL surgeries to all its patients free of cost.
Weaknesses in the Delivery Model
Through eye camps and the free hospital, Aravind had been able to reach a majority of the population in Tamil Nadu. The number of beds had increased from 10 in 1976 to 1224 in 1992. However, though the company seems to be heading tirelessly towards its vision of eradicating blindness from India there are some issues that need to be looked into.
• Transportation: Even though the company has been able to reach a large market through eye camps, it still required the selected patients to come down to the hospital for surgery. This resulted in a drop in the number of patients accepting surgery since many had constraints which did not allow them to stay away from home for long periods.
• Irregular Patient Inflow: One of the biggest problems with Aravind’s eye care delivery model was that the inflow of patients was irregular being much larger immediately after an eye camp and being much lesser at other times. What this meant was that at some times the hospital was overcrowded while it others it operated much below is capacity. This can be observed from Exhibit 8 where we can see that the average occupancy was much below the capacity on most days even though the case clearly states that the hospital was often overcrowded.
• Scalability: The delivery model adopted by Aravind was not very scalable. This was because since the patients were required to come to the hospital for treatment the camp could not be conducted at a location which was very far from the hospitals that they had in 4 cities of Tamil Nadu.
Apart from this the organization was, almost entirely, family run. This meant that the organization could not grow rapidly since it was always constrained for good managers. Aravind Eye also had lower salaries as compared to the other private hospitals while it had longer and more strenuous working hours compared to the rest. This is a concern since they may not be able to retain the best talent with them. This also put a constraint on their medical staff which they may not be able to grow at a rapid pace for the want of motivated and dedicated people.
Recommendations
In order to solve the key issues that Aravind faces the following measures can be taken:
• Local Eye Care Centres: Aravind can start eye care centers where basic eye treatment and check-ups would be provided. The advantage of having these centers would be that it would distribute the workload which is currently concentrated at the 4 hospitals. A center would be located in each of the camp regions and would contain only the most basic equipment and an ophthalmologist. Since ICCE operations do not require much equipment these centers can be used to perform these operations. Follow-up tests could also be done through these centers thereby removing the need for patients to travel back to the main hospital again. The advantage of this scheme would be two fold. First, since many of the regular treatments would be taken from the hospitals’ plate the congestion in the hospitals as well as the workload on doctors would decrease. Apart from this, since the centers would be located closer to their homes travelling to and from the eye center would become more convenient which would increase the acceptance rate amongst patients.
• Franchising: In order to spread its reach Aravind can look to collaborate with other hospitals wherein some patients with simple requirements can be treated. This would again reduce the burden on the hospitals. The partner hospital would also benefit from this since Aravind’s doctors would provide training to the doctors of the other hospital.



Introduction

Go where the need is greatest, provide the necessary treatments for free, and reap the benefits. Sound strange or unconventional to you? Some would consider this business model unrealistic or boarder-line impossible, but Aravind Eye Care Systems is living proof that an organization run on selflessness and spiritual aspiration can be immensely successful. Dr. G. Venkataswamy founded Aravind in 1976 as an 11-bed clinic in Madurai, India with high ambitions and impeccable foresight. A sustainable, thriving social enterprise, Aravind is dedicated to curing individuals who are “needlessly blind” and providing affordable eye care to all. Though blindness is a seemingly small issue in comparison to the world’s major crises of food, clean water, sanitation, and education, Dr. V recognized eye sight as a critical problem because of its impact on overall loss of global productivity ($47 billion/year)1. He aimed to help as many afflicted individuals as possible, and this spirit of service and endless dedication to social impact translated into an unprecedented business structure and culture.

I. Motivated by Social Impact

Upon reviewing and analyzing this case in terms of the SEI Framework, motivation clearly presents itself as one of the most important and influential elements in Aravind’s success as a social enterprise. Dr. V’s attitude and spiritual inspiration formed a rare cultural ethos that is not easily replicated outside of the organization. Because of the close-knit internal structure of Aravind, it is obvious that Dr. V’s values would be instilled in family members and other employees. Dr. V sums up his belief in something greater than himself and its effect on the success of his organization: “When you begin doing the work you are meant to do, unexpected resources will find you.”2

Religion and spirituality are the cornerstones for Dr. V’s dedication to social change and selfless action. He was enamored with and inspired by Sri Aurobindo and the Mother, two Indian philosophers, and begun his days with readings of their work. Dr. V applied his spirituality to his enterprise in a way that was not overbearing, but still managed to deeply penetrate the core of Aravind’s work culture with its positive attitude. His vision for Aravind came from the principle of mindfulness: stepping back from conditioned reactions, biases, and the unwholesome internal movements of anger, jealousy, and impatience.3

Because many Americans do not possess the same values and religious fervor as Indian people do, it would be difficult to identically replicate the Aravind model in the United States. Though there are individuals who are willing to work for a lower wage with the knowledge that they are contributing to a worldly cause, several problems arise that would inhibit progress and sustainability. First, it would be challenging to find enough dedicated employees; there are not nearly enough Americans willing to sacrifice the hefty salaries they could earn elsewhere to work at a lower-paying social enterprise. In addition, if Aravind-US did find individuals worthy of staffing, managers would have difficulty implementing the unique culture that is so crucial to Aravind-India’s success. Americans do not have the religious motivation and mindset of Dr. V and the Indian people, and this will most definitely be a disadvantage. Though Aravind’s business model of affordable health care might be successful in the states, the culture of the organization could not be replicated.

II. Business Model

Aravind’s business model is the other key element to their status as a social enterprise. Reflecting a strong desire for global impact, it is what sets Aravind apart from other eye-care facilities throughout India and the world. Dr. V structured his company with an emphasis on quality and quantity. Though the two are often perceived as mutually exclusive, he proved that it is possible and beneficial to strive for both. Low-cost and high-volume, Aravind operates in a “hospital-as-a-factory” format. Dr. V is often quoted comparing his organization’s method of service to that of McDonald’s and constantly worked to increase Aravind’s number of patients and turnover rate. He claimed that this operating system was beneficial for several reasons: streamlined work-flow increased efficiency, which meant less waiting time for patients; task repetition created competence, which meant better clinical outcomes and less complications; employment of skilled paraprofessionals allowed doctors time to conduct more surgeries, which reduced prices and increased the number of surgeries performed.4

In addition to their efficient, factory-style operational methods, Aravind also boasts success in the financial aspect of their business model. Innovative, generous, and fair, Dr. V structured patient fees into four categories: free, minimal payment, regular, and premium. Individuals can choose between these and will receive the same quality care no matter which option they pick. This is an unconventional model, but it has proven successful in increasing the market of potential clients and therefore the organization’s total income. Aravind makes eye-surgery accessible to the masses– the people who desperately need attention but lack the money and transportation to obtain standard hospital care. Stellar eye-care provided at no cost aligns perfectly with Dr. V’s values and motivation for social impact. Also consistent with Aravind’s strict values and uncompromising selfless nature is their refusal to accept donations. All employee wages, facilities, equipment, etc. are funded entirely from within. This financial business model qualifies Aravind as a social enterprise, not a non-profit organization or philanthropic charity.

Aravind is able to earn patient trust and satisfaction through their efficiency, pricing options, and welcoming environment; because of this loyalty, previous patients often become Aravind’s best advertisers. These individuals are usually found through the Aravind community-outreach program. To ensure maximum impact, Aravind conducts outreach operations that dispatch teams of doctors and nurses to rural communities to screen patients. These are people who are too poor to afford to pay for the trip into the city to seek treatment at one of Aravind’s hospitals, or are unaware of the opportunities that exist for them there. The camps reduce the level of fear and uncertainty associated with hospitals, cities, and eye-surgery. These eye-camps are reaching individuals who may not have sought out eye-care, and this broadening the potential market for Aravind.

III. Innovation

The business model that Aravind has set in place places a high value on innovation, especially in the areas of fee structure and factory-like operations. Dr. V’s organization promotes innovative exploration to advance the eye-care field, exemplified in the creation of the Dr. G. Venkataswamy Eye Research Institute. Aravind is also responsible for making IOLs (intraocular lenses) available to the masses– lenses that were initially believed to be too expensive to incorporate in Indian eye-surgery. Through innovative and forward thinking, Dr. V sought out a solution to this problem. Importing lenses was far too expensive, so he decided that Aravind would manufacture their own. Thus Aurolab was created– a manufacturer of high-quality ophthalmic products at affordable prices. By introducing high quality IOLs for the low end of the market, Aurolab increased the market size and mainstreamed IOL surgery.5 Aurolab later entered the field of ophthalmic pharmaceuticals and become India’s first nonprofit drug company.6

In addition to eye-surgery related innovations, Aravind founded an international training and consulting institute called LAICO (Lions Aravind Institute of Community Ophthalmology).

LAICO has consulted for 60 hospitals in 29 countries and 213 hospitals in India.7 Aravind also has a school to train paraprofessionals, some of whom later become part of the Aravind team, as well as postgraduate programs. Auro iTech was set in place in recent years to provide information technology services and help keep Aravind paced with the global, technological world.

IV. Sustainability

Aravind’s continued innovation and improvement protect the organization from the dangers of stagnation, ensuring financial sustainability. The genius of their fee structure and constant expansion guarantees continued financial growth; thus far Aravind has quadrupled its growth every decade.8

Dr. V was insistent on development– increasing the number of hospitals, community out-reach programs, employees, and patients– and through this operational method Aravind will remain financially stable for years to come.

Aravind has proved to be operationally sustainable as well as financially, as demonstrated by their successful navigation through generational leadership transitions and the continued relevance of their service.

V. Measure and Evaluation of Impact

Transparency is very important at Aravind; in fact, doctors and department heads in particular are motivated by the numbers and actively seek out statistics detailing the success of their efforts. Aravind now sees more than 2.5 million patients per year and performs more than 300,000 surgeries.9 It is important to note that the emphasis is not placed on the financial statistics, only the number of people cured and lives positively impacted.

If one does analyze Aravind’s financial statistics, they would see that the company continues to increase their yearly profit and patient inflow. The fee structure that Aravind has in place is working quite well: 47% of patients choose to pay regular or premium prices, while 26% opt for minimal and 27% for free treatment for cataract surgery.10 These numbers reflect that the majority of patients are willing to pay for surgery, balancing out the cost of the free services Aravind provides.

VI. Replication and Scale

In its 36 years of existence, Aravind has grown to include several eye hospitals, community outreach clinics, local eye-care centers, an IOL and ophthalmic pharmaceutical manufacturing plant, educational and training programs, and a research foundation. It is clear that the Aravind model is replicable and scalable because Dr. V successfully formed five additional hospitals, modeled after his original start-up in Madurai. The LAICO consulting group has taught Aravind’s techniques to other businesses around the globe as well. Though Aravind’s business model has been implemented in other locations– including a U.S. version in California– I don’t believe that their approach to healthcare would be as effective in America. Our selfish and greedy tendencies would result in the majority opting for free healthcare even if they could afford to pay the regular or premium price. However, a U.S.-Aravind would drastically increase the number of people served and provide accessible healthcare to those who currently have unreasonably high copays.

Conclusion and Recommendations

In numerous business case studies done on this social enterprise, Aravind’s business model is typically sighted and praised as the key to their success. Though I do agree that Aravind’s innovative business model played a major role in shaping the operations and financials of the organization, I feel that the model itself is driven by motivation for social change. This element is essential to creating a unique and non-replicable culture but is rarely referenced or given sufficient credit. It is the combination of Aravind’s business model and motivation for social impact that make this organization a high-performance social enterprise.

Note: Though I credit Aravind’s business model for a large portion of their success, this model was not formally designed or written down as a business plan upon the foundation of the organization. So it is in fact the model or design, not the plan, that I am referring to.

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