ARAVIND EYE HOSPITAL

Introduction

In 1976, Dr. G. Venkataswamy, or Dr. V. retired from performing eye surgery in Government Hospital in
South India and decided to devote his remaining years to eliminate needless blindness among Indian
populations. He established an 11-bed hospital with six beds reserved for patients who could not pay and
give for those who would pay modest rates. He persuaded his siblings to join him in mortgaging their houses,
pooling their savings and pawning their jewels to build it.

Today, the Aravind Eye Care System is a network of hospitals, clinics, community outreach efforts,
factories, and research and training institutes in South India that has treated 65 million patients and has
performed 7.8 million surgeries. Its surgeons are 5 times more productive than the industry standard. In 2017
to 2018 the group performed 60% of the total volume of surgeries performed by the entire NHS, at one
hundredth of the cost, and less than half the rate of complications.

Aravind established its first overseas venture in Nigeria, with a partnership with the Tulsi Chanrai Group and
celebrated its 2 year anniversary in January 2020.

Beginning

The problem of avoidable blindness rapidly escalating remained a major cause of concern in the Indian
healthcare scenario. In a developing country like India, the Government alone cannot meet the health needs
of all owing to a number of challenges like growing population, inadequate infrastructure, low per capita
income, aging population, diseases in epidemic proportions and illiteracy.

Realizing this, Dr. Venkataswamy wished to establish an alternate health care model that could supplement
the efforts of the Government and also be self-supporting. Following his retirement at age 58 in 1976, he
established the GOVEL Trust under which Aravind Eye Hospitals were founded.

The hospitals are named after Sri Aurobindo, one of the 20th century‘s most revered spiritual leaders. In
essence, Sri Aurobindo‘s teachings insist on transcendence into a heightened state of consciousness and
becoming better instruments for the divine force to work through.

In an eleven bed hospital manned by 4 medical officers, Dr.V saw the potential for what is today, one of the
largest facilities in the world for eye care. Over the years, this organisation has evolved into a sophisticated
system dedicated to compassionate service for sight.

Aravind Model

Aravind, with its mission to ‗eliminate ‗Needless blindness‘, provides large volume, high quality and
affordable care. 50% of its patients receive services either free of cost or at steeply subsidised rate, yet the
organisation remains financially self-sustainable. Much importance is given to equity – ensuring that all
patients are accorded the same high quality care and service, regardless of their economic status. A critical
component of Aravind‘s model is the high patient volume, which brings with it the benefits of economies of
scale. Aravind‘s unique assembly-line approach increases productivity tenfold. Over 4.5 lakh eye surgeries
or procedures are performed a year at Aravind, making it the largest eye care provider in the world. Since its
inception, Aravind has handled more than 6 crore ( 65 Million) outpatient visits and performed more than 78
lakh (7.8 million) surgeries. The Aravind Eye Care System now serves as a model for India, and the rest of
the world.
Value Proposition & Customer:

Twelve million people are blind in India, the vast majority of them from cataracts, which tend to strike
people in India before 60 — earlier than in the West. Blindness robs a poor person of his livelihood and with
it, his sense of self-worth; it is often a fatal disease. A blind person, the Indian saying goes, is ―a mouth with
no hands.‖

Aravind Eye Care, the largest and most productive eye care facility in the world, offers free eye care and
surgery to 50% of its patients. Therefore, they run two different kinds of hospitals – the Main Hospital and
the Free Hospital. The Free Hospital focuses on offering basic but quality service for people in need: No bed
is provided to the patients but a small pillow and a coir mat.

The Main Hospital functions like a regular ophthalmology hospital. All patients admitted here pay for the
hospital‘s services. The hospital offers different classes of rooms with different levels of privacy and
comfort. Treatment performed in the Main Hospital varies from simple treatments to extremely complex
surgeries like Retina detachment repair.

Mission & Core Values:

Established in 1976, Dr. Venkataswamy started Aravind Eye Hospital with the mission to eliminate needless
blindness. By adopting an efficient operation procedure like a fast-food chain assembly line, Aravind
manages to keep its cost low without compromising the quality. A majority of its services is done free of
charge.

Value Formation & Core Activities

―Achieving scale and improving productivity has enabled us to keep costs down and treat hundreds of
thousands of patients each year. It has allowed us to give back to society, to the communities.‖ Dr
Srinivasan, Director of Projects, Aravind Eye Care System (source: McKinsey ―Driving down the cost of
high-quality care—Lessons from the Aravind Eye Care System‖)

Aravind does 60% more eye surgeries than the UK National Health System, at one-thousandth of the cost.
Efficient operation procedures and a high volume of patients enable this.

The hospitals operate like an assembly line with a minimum turnaround time. (No-Frill Business Model).
This ensures the surgeons to be able to carry out a significantly larger number of surgeries than is possible
normally. Batches of patients would be prepared before surgery and bandaged afterwards by Aravind-trained
nurses. After completed surgery, surgeons immediately move to the next operating table where a second
support team is waiting with the patient ready to be operated. This results in tremendous efficiency. Aravind
doctors can do more than 2,000 surgeries a year, while the average at other Indian hospitals is around 300.

To support the high volume, Aravind reaches the masses through eye camps, which take place in rural and
semi-urban areas. At the camp, patients are screened and those found suitable for surgery are prepared.
Another major factor that bring down costs significantly is that Aravind has its own factory producing
intraocular lenses.

Revenue Model

―Aravind is not just a health success, it is a financial success. Many health non-profits in developing
countries rely on government help or donations, but Aravind‘s core services are sustainable.‖ NY times
Opinioator: A Hospital Network with a Vision.

Efficient operation procedures and a high volume of patients enable Aravind to generate a high EBITDA.

The revenue generated from the Main Hospital enables the Free Hospital to provide free eye treatment to the
poorer section of the society. Patients are brought in from eye camps for free treatment. (Get one – give one
business model)

Patients at the Main Hospital can choose between different classes of rooms, with different levels of privacy
and facilities and consequently different price levels. (Add on business model)

Organisation

Efficiency resulting from the innovation operation procedure is definitely a key strength of Aravind Eye
Care. In addition, ―it is not leadership in the sense of organizing and making it work. It‘s leadership that
comes from empathizing with the community,‖ Dr. Venkataswamy said in an interview with the NY Times.
―Never restrict demand. Build your capacity to meet the demand.‖

The Aravind Eye Care network includes a network of eye care facilities, a postgraduate institute, a
management training and consulting institute, an ophthalmic manufacturing unit, a research institute, and eye
banks. Its eye care facilities include 14 eye hospitals, 6 outpatient eye examination centers, and 80 primary
care facilities.

Challenges

Transportation

Transportation is a problem for some of the selected patients from eye camps. They may not be able to travel
to the hospital for surgery or to stay away from home for long periods, hence lead to a drop in the number of
patients accepting surgery.

Irregular patient flow

The flow of patients would be much larger immediately after an eye camp and being much less at other
times. The hospital was overcrowded while it operated much below is capacity at other times.

Scalability

Patients are required to come to the hospital for treatment. The camp could not be conducted at a location
that was very far from the hospitals.
Positive Impact

 Reduce number of blindness among poor population

 Enable longer economic productivity in poor regions by improving health condition (vision).
 Lower the cost of lenses production
 Highly scalable model that can be expanded to other regions and countries.

Aravind Today

What started off as an 11-bed hospital has now become the conglomerate, Aravind Eye Care System. Today,
Aravind operates a growing network of eye care facilities, a postgraduate institute, a management training
and consulting institute, an ophthalmic manufacturing unit, a research institute and eye banks. Aravind‘s eye
care facilities include 14 eye hospitals, 6 outpatient eye examination centres and 91 primary eye care
facilities in South India.