Aravind Eye Hospital Who are they? Problem they address:  history of the company: Awards and recognitions: Financial Model: Screening model: Sponsors: Low costs high volume operational efficiency, standards, and controls: Expansion of business model Investors: A role model for care for other emerging markets? my thoughts: Technology partners...Google?

 

 

    see also Kookyplan links:  Investing in socially good projects ,  making technology affordable ,  and opportunities with consumers of low income

 

 

Aravind Eye Hospital

 

 "With vision to remove needless eye blindness in India, Dr. Govindappa Venkataswamy started Aravind in 1976 as an 11-bed eye clinic in an old temple-city. Today it is the largest and most productive eye care facility in the world. Taking its compassionate services to the doorstep of rural India, Aravind's stunningly effective strategies vaulted barriers of distance, poverty and ignorance to create a self-sustaining system that now treats over 1.7 million patients each year, two-thirds of them, for free."

 

 

Who are they?

 

The Aravind Eye Hospital is a company that offers sustainable eye care from India.  It is headquartered in Madurai.  they were founded in 1976 to address the enormous problem of Cataract blindness in Southern India.   the problem is that this type of blindness is mostly preventable, but is not done so due to extreme poverty.  

 

Today, Aravind is more than an eye hospital. It is a social organisation committed to the goal of elimination of needless blindness through comprehensive eye care services.It is also an international training centre for ophthalmic professionals and trainees who come from within India and around the world . It is an institute for research that contributes to the development of eye care and to train health-related and managerial personnel in the development and implementation of efficient and sustainable eye care programmes. Aravind also is a manufacturer of world class ophthalmic products available at affordable costs.  see more from wikipedia

 

Over 30 years, Aravind has treated over 2.4 million poor Indians. Aravind is a financially-viable healthcare system in India

 

 

Problem they address: 

In india there are only 10,000 trained ophthalmologists for a population of 1 billion people.  Not enough to go around.  So, must work faster!  they must be more productive to meet the demands of the people.    Aravind pioneered a system that allows doctors to do a "high volume" business.  (its a work in progress)

 

 

history of the company:

see link here.  Aravind Eye Hospitals began in 1976 with just 11 beds. Today, in addition to the hospital in Madurai, there are four other Aravind Eye Hospitals in Theni, Tirunelveli Coimbatore, and Pondicherry with a combined total of nearly 3,590 beds.

 

Awards and recognitions:

• A role model for many hospitals and subject of study in many business schools
• A Hospital to which the Google co-founder and president (Products), Larry Page, flew down to look at the overall view of its functions.
• The only examination centre of the Royal College of Ophthalmology, United Kingdom, in the country
• Designated by the World Health Organisation as a collaborating centre for prevention of blindness
• read more here

 

 

 

 

 

 

 

Financial Model:

 

there are 5 Aravind Eye hospital in South India.  they are all self sustaining, and see 1.4 million patients per year, and perform over 200,000 surgeries per year

 

2/3 of their services are free

 

Every patient that can pay, pays for two that can not.

 

But, because there are sooo many paying customers...they are able to not only offer free services to the others, but also fund all operations, and expansion

 

Why do people pay (if the same service is offered for free)?  see my thoughts below...

 

 

 

Screening model:

they use screening "eye camps" in the local community where they evaluate, and then transport people back to the hospital.  these camps are funded and organized, promoted by local business leaders

 

 

Sponsors:

local business leaders in the various villages sponsor an "eye camp", paying for advertising, busing, food, transport, etc.

 

why do they do so?  prestige and good-will in the local communities.

 

 

Low costs

the majority of the medical staff are recruited locally, and then trained.   there are about a 100 girls from local villages per year that are trained.    Employees must share with the "dream" of the hospital.   In addition, there are 4 highly trained paramedics supporting each surgeon. 

 

 

high volume

the surgeons average 2000 surgeries per year , versus a national average of 220.  Doctors are not paid at Aravind based on the # of surgeries.  The benefits of "training" are the major selling points to attracting surgeons.  By working with more patients per year, "the better the training can be".

 

 

operational efficiency, standards, and controls:

They brought a rigorous systems approach to identifying and overcoming the obstacles to cataracts surgery.  The hallmarks of the Aravind model are quality care and productivity at prices that everyone can afford. A core principle of the Aravind System is that the hospital must provide services to the rich and poor alike, yet be financially self-supporting. This principle is achieved through high quality, large volume care and a well-organised system.  At Aravind Eye Hospitals great stress is placed on maximum utilisation of resources.  With less than 1% of the country's ophthalmic manpower, Aravind accounts for 5% of the ophthalmic surgeries performed nationwide. The hospitals have well-equipped specialty clinics with comprehensive support facilities.2,313,398 outpatient visits were handled and 270,444 surgeries were performed at the Aravind Eye Hospitals in 2006. Two-third of the outpatient visits and three-fourth of the surgeries were serviced to the poor, free of cost.

 

 

Expansion of business model

they expanded into lens production...making a factory to produce parts at a cheaper price (compared to imports). back then, lenses cost $200 for imports, which were not affordable in emerging markets.  So, they created their own method, and reduced the price to about $5 a piece.   they now Export these products to over 85 countries around the world.

 

Funding came partly from outside

 

 

Investors:

 

One of the hospital’s investors is the Acumen Fund, the non-profit venture fund that invests in companies delivering critical goods and services to developing countries.

 

 

 

A role model for care for other emerging markets?

 

the "McDonald's" model for expansion?  the founders goal was to put in place procedures, and mechanisms to deliver eye care as a franchise to all of the worlds poor.

 

my thoughts:

Its an interesting model, but one that might be difficult to replicate in developed nations where labor is more expensive.  In poor areas in Africa, Latin America and Asia, it has potential.

 

The model seems to work well if you can get doctors to do many, many surgeries per month, and if you have a massive population.  There must be enough revenue from the paid service to cover the free services. 

 

Also, in order to allow people to pay if they please, there must be an incentive to pay, and the cost of paying cant be that much more expensive.  In India, the conditions of the free clinic might not pass Western standards.  In India, the people that can pay, would do so in order to have a bed and a private room, and to have air conditioning, etc.   The key is to build an incentive to get people to want to pay if they can, but not to have the free conditions too bad that people don't want to go to the service.  In India, the absolute poverty sets a standard where people may not mind sleeping together in the same room, on the floor, in a very hot room, with minimal supplies.  But, it might be difficult to maintain this cheap cost base in other countries.

 

Another issue besides getting doctors to work cheaper and faster, is to find enough support and screening staff to work at low cost or volunteer.  In India, they recruit from the local villages where pay expectations are very low, and they offer them a professional career with prestige and a lifetime of service.

 

 

Technology partners...Google?

 

see link here

 

After browsing through the hospital's portal on comprehensive eye care management, he said Mr. Page assured that Google Foundation would assist the hospital in its distance education programmes. "The focus would be on extending quality eye care to rural areas using IT. We will also work together on health projects benefiting the poor," he added. Google.org executive director Larry Brilliant, who had a long association with the hospital founder, G. Venkataswamy, was part of the team.