Indian School of Business

Indian School of Business
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October 1, 2018
S. Ramnarayan | Sunita Mehta
CREATING AND SUSTAINING A SOCIAL ENTERPRISE: THE VITTALA STORY

By the evening of May 7, 2018, the financial report of Vittala International Institute of Ophthalmology
(Vittala) for the year ending 2017-18 had been finalized. Having reviewed the report, Dr. Krishna R.
Murthy, Director of Vittala, felt a surge of satisfaction that the institution founded by his father had
completed two decades of serving the eye care needs of the underprivileged in Karnataka, a state in
South India. He reflected with pride that Vittala, driven by the vision “No one shall go blind for want
of money or lack of care,” had traveled a long way since its inception. At one stage, its continued
existence had seemed doubtful, but the crisis had been overcome and the institution had been stable
for some years.
Krishna deliberated on the presentation he would soon be making to the board on the way forward
for Vittala. The pattern of revenues, expenses and number of patients had been stable for the past
three years. The expenses incurred on non-paying patients were mainly absorbed by the modest
surpluses generated from the treatment provided to paying patients. There was still a shortfall of 10-
15%, which had been met through donations. The hospital required a 70:30 ratio of paying to non-
paying patients for its operations to be financially viable. The central and state governments had
introduced new health insurance schemes to cover the poorer sections of society, but the
reimbursements under these schemes were lower than the costs Vittala incurred in treating these
patients. Thus, although the schemes would help cover more individuals, they were unlikely to
promote financial viability. Donations to Vittala were largely from individual donors; these funds were
stable at INR 7.5 to 8 million. Project funds for outreach activities were another source of income, but
the opportunities to submit project proposals arose only once in a while. Krishna felt that increasing
the number of paying patients was perhaps the only sustainable way to reach a larger number of poor
patients with unmet and undermet eye care needs. Since the institution had never resorted to actively
promoting its services to paying patients, Krishna wondered what proposals he should make to the
board to grow Vittala’s operations.
ORIGIN AND HISTORY
Krishna belonged to a family with a 100-year tradition and four generations involved in providing
dedicated ophthalmic care (See Exhibit 1). His great-grandfather, Dr. B. K. Narayan Rao (BKN), born in
Professor S. Ramnarayan and Sunita Mehta prepared this case solely as a basis for class discussion. This case is not intended to serve as an
endorsement, a source of primary data, or an illustration of effective or ineffective management. The authors would like to acknowledge
the support provided by Dr. Krishna R Murthy and Dr. Praveen R Murthy from Vittala International Institute of Ophthalmology, Bangalore,
in writing this case. This case was developed under the aegis of the Centre for Learning and Management Practice, ISB.
Copyright @ 2018 Indian School of Business. The publication may not be digitised, photocopied, or otherwise reproduced, posted or
transmitted, without the permission of the Indian School of Business.
This document is authorized for use only in Prof. Shiva Kakkar's OB-II: OSDC (BOB2BJ23-3), Term - III, BM 2023-25 at Xavier Labour Relations Institute (XLRI) from Jan 2024
to Mar 2024.
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1884, was among the pioneers who brought specialist ophthalmological services to India. After
graduating from the Royal College of Surgeons in London, BKN worked in government hospitals in
India. He was also a personal physician of the Maharaja of Mysore. After he retired, he set up Prabha1
Eye Clinic in 1940. BKN was also a dedicated medical educationist; he helped set up Mysore Medical
College in 1925 and Bangalore Medical College in 1955, of which he was the first principal. He also
embraced social causes such as widow remarriage and helped to establish orphanages.
BKN sponsored the medical education of his son-in-law H. Krishnamoorthy (HKM), who subsequently
began working in government hospitals. BKN believed in succession based on meritocracy. Krishna
stated:
“My grandfather, Dr. HKM did not automatically inherit my great-grandfather’s

practice. Dr. HKM was given temporary responsibility of Prabha Eye Clinic when Dr.
BKN had to go on an [out of town] visit. After his return, Dr. BKN assessed the quality
of care provided to the patients. He was very satisfied, and only then did he hand over
the keys of the clinic to Dr. HKM as a sign of transferring the legacy and responsibility
to the next generation.”
HKM expanded Prabha Eye Clinic and made it one of the premier eye care institutes in Karnataka. He
was a highly skilled surgeon and continued to practice at the clinic until the age of 91. Apart from his
medical contributions, HKM was also instrumental in setting up free hostels for poor students and
championed the education of girl children.
HKM’s son K. R. Murthy (KRM) earned his medical degree from England and worked there for some
years. He then returned to India and joined his father at Prabha, eventually transforming it into Prabha
Eye Clinic and Research Center. A pioneer with expertise in various sub-specialties of ophthalmology,
he also conducted eye camps in such countries as Tanzania and Sri Lanka, which had inadequate eye
care facilities.
KRM was fondly remembered by people who were closely associated with him as an extremely
hardworking individual with an abundance of positivity and patience. He believed in continuous
learning and worked at the cutting edge by taking up big challenges. Dhirubhai Sangani, a businessman
from Tanzania and a large private donor to Vittala, recollected:
“There was an old professor who had an eye problem that could have led to blindness
if left untreated. There was nobody in India who was competent to treat him. The
treatment, at that time, was only available in the United States. KRM took up the
challenge. He prepared himself thoroughly and then operated on the professor and
restored his vision. There was another case where KRM had to perform 7 or 8
operations to restore the sight of a girl whose eye had been injured due to an acid
splash. It became a personal war between the disease and Dr. KRM. He continued to
treat her till the problem was fully resolved. In all these cases, monetary
considerations were the last thing on his mind. Whether he was operating on the Vice-
President of the country or a poor farmer, he treated each person with the same love
and affection.”
1In Sanskrit, Prabha means “light” or “luminous”.
Creating and Sustaining A Social Enterprise: The Vittala Story | 2
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As a person who traveled extensively to the interiors of the country, KRM knew that people who lived
at a distance from urban centers had little or no access to medical facilities. He was passionate about
reaching out to the rural and economically underprivileged population of India. His motto became “No
one shall go blind for want of money or lack of care”.
EYE CARE FOR THE UNDERPRIVILEGED — SEARCH FOR THE RIGHT MODEL
To pursue his dream, KRM set up the Sri Keshava Trust (SKT), a public charitable trust named after the
family deity “Keshava”, in 1988. He visited rural and tribal areas across Karnataka and organized many
camps. As there was no access to secondary or tertiary care to deal with avoidable blindness in these
areas, KRM set up five small community eye hospitals where treatment was provided at a subsidized
cost. Each had an ophthalmologist who was skilled in treating cataract as cataract accounted for over
60% of avoidable blindness. However, these community hospitals became unviable when bigger
hospitals started conducting free eye camps for cataract surgeries. KRM realized that he had to rethink
his approach to effectively utilize his time and effort to provide a service to the community.
KRM found out that while most healthcare providers were involved in treating cataract, not more than
10% of the ophthalmologists in India worked on retinal problems. Diabetic retinopathy (DR), which
accounted for about 5% of avoidable blindness, remained largely unaddressed.2 Unlike cataract, DR
required long-term management with careful supervision. According to the International Diabetes
Federation, there were 72 million cases of diabetes in India in 2017, and by 2035, this number would
rise to 123 million.3 A World Health Organization (WHO) report found that more than 75% of patients
who had diabetes for more than 20 years would have some form of DR.4 The problem was worse in
small towns and rural areas where people had to travel to cities for retinal treatment. In the case of
small children, 10% of premature babies became blind due to untreated retinopathy of prematurity
(ROP).5 Given the lack of awareness among ophthalmologists and pediatricians about this disease,
many babies in India reached tertiary eye care centers with advanced ROP, and by that point, their
visual prognosis was poor. Approximately 10% of premature babies admitted in neonatal intensive
care units (NICUs) were at risk of developing ROP if it was left undiagnosed and untreated.4
Overwhelmed by these statistics, KRM asked his sons to specialize in retinal care and urged them to
look for a model to take treatment to the rural population through capability building within the
community. KRM also applied to the state government for land to set up a full-fledged facility to
provide charitable eye care, particularly in the largely neglected area of retinal treatment.
Genesis of Vittala
2 Zheng, Y., Mingguang H., & Congdon, N. (2012). The worldwide epidemic of diabetic retinopathy. Indian Journal of
Ophthalmology, 60(5), 428-431. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3491270/ on January 29,
2018.
3 International Diabetes Federation. Retrieved from https://www.idf.org/our-network/regions-members/south-east-
asia/members/94-india.html.
4 World Health Organization. (2006). Prevention of blindness from diabetes mellitus: A report of a WHO consultation in
Geneva, Switzerland, 9-11 November 2005. Retrieved from

http://apps.who.int/iris/bitstream/handle/10665/43576/924154712X_eng.pdf?sequence=1&isAllowed=y, on January 29,
2018.
5 Preventing blindness due to ROP. (2013). NPCB India (A quarterly newsletter of the National Programme for Control of
Blindness, India), April-June. Retrieved from http://npcb.nic.in/writereaddata/mainlinkfile/File312.pdf on January 29, 2018.
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In 1998, after pursuing the matter with the state government for more than a decade, Vittala was
finally allotted a plot of land in Bangalore 6 on lease for INR 5 million for 30 years. KRM laid the
foundation of Vittala International Institute of Ophthalmology, a subsidiary of SKT. Inspired by a story
in Hindu mythology about a devotee who saw God at his doorstep in the form of Lord Vittala but asked
Him to wait because he was performing some service for his elderly parents at the time, KRM named
the hospital “Vittala”. For KRM, the story signified that “devotion to patients and people comes before
devotion to God”.
KRM wanted to construct a super-specialty hospital but did not have the required funds. He promoted
the concept of “eye care for a lifetime” to generate funds. As part of his fundraising campaign, KRM
appealed to the community and even visited IT companies in the city with the proposal that a donation
of INR 5,000 would get them free consultation for the whole family for a lifetime at Vittala and Prabha
Eye Clinic. KRM invested INR 3 million from his personal funds and secured INR 3.5 million in donations
from private donors for the hospital. However, the allotted land was on hilly and rocky terrain, and
the initial funds were almost exhausted in just leveling it. He had applied for a loan of INR 30 million
from a bank, but it became clear that this sum would be grossly inadequate for the purpose. During
that period, Dhirubhai Sangani was visiting Bangalore with plans to build a small charitable eye
hospital in memory of his late mother. When he came to know of the financial crunch at Vittala,
Sangani decided that supporting KRM in stabilizing Vittala would be better than setting up another
hospital with no concrete plans for effectively running and sustaining the institution. He donated INR
25 million to Vittala. Sangani stated, “Dr. KRM was a visionary, and his passion to make eye treatment
accessible to the poor inspired me. I realized that our aspirations were aligned, and so I decided to
support Vittala”.
By 2001, Dr. KRM had built a state-of-the-art tertiary eye care hospital with the specific goals of patient
care, education and research (see Exhibit 2 for the organizational structure). During the period 2001-
03, Vittala conducted many camps to identify and treat conditions of curable blindness. Over 90% of
the treatment was provided free of cost. More than 15,000 free surgeries were performed during this
time. The state government had a scheme of providing subsidies to certain poor patients on a per case
basis, but there was a huge backlog amounting to INR 2 million due from the state government. Vittala
did not even have sufficient funds to service the bank loan. Again, Sangani came forward and pledged
his Euro bonds, and this reduced the interest burden for the next five years.
KRM realized that to have sustainable operations, it would be important to have the right balance of
paying and non-paying patients. He felt that at least 40% should be paying patients. Attracting paying
patients was a huge challenge for Vittala as it was perceived as a charitable hospital and was not a
natural choice for paying patients. Additionally, as the hospital was not on a main road, accessibility
was an issue. To enhance its visibility, the hospital conducted camps in rural areas to screen for DR.
Around 7,000 diabetic patients in rural areas were screened, and those who were diagnosed with DR
were asked to visit Vittala for free treatment. However, not more than 10% of the patients diagnosed
with DR visited the hospital. KRM realized that while Vittala provided free treatment, the patients and
their attenders had to incur the cost of travel to Bangalore, accommodation and other incidentals, as
well as loss of salary. Unlike cataract surgery, DR treatment required long-term follow-up care;
therefore, the approach had to be different. Extensive brainstorming within the family led to the
genesis of an outreach program called “Nayana,” which meant “eye” in Sanskrit. The project visualized
transporting the sophisticated equipment for treating retinal problems to different small towns across
the state in rotation so that patients could receive treatment closer to home. Such an approach had
6 Bangalore, the capital city of Indian state of Karnataka is now officially known as Bengaluru
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never been tried before, but KRM and others at Vittala felt that it would be the right way to tackle the
challenge of providing retinal eye care to the underprivileged.
Major Crisis: Just as the new and innovative outreach program Nayana was getting off the ground,
Vittala faced a serious crisis that shook it to its foundation. The bank was getting edgy because it had
given a loan to a trust that was not earning enough. More importantly, the bank realized rather late
that the government had given the land to Vittala on a 30-year lease, so the institution did not own
the land on which it had been built. In 2007, the bank started pushing KRM to clear the loan. This was
a herculean task as Vittala was able to barely service the loan. To resolve the issue, KRM decided to
transfer the loan to Prabha Eye Clinic, which was owned by the family. That assuaged the bank officials,
but Prabha ended up with an outstanding loan on its books — an amount that it had not used at all.
The second blow came from an entirely unforeseen event. KRM, the central pillar on which Vittala had
been built, passed away suddenly and unexpectedly in 2008. His three sons were all ophthalmologists,
but they were still young and not well established. KRM’s death was a huge shock and setback for the
family and for the two hospitals, Prabha and Vittala. There was a large dip in patient footfalls and
revenues.
KRM’s father HKM was 95 years old at that time. He instructed his grandsons to resume work
immediately after the cremation of his son. He emphasized that work was worship and that patient
care came before everything else. The day after KRM’s death, his sons were back at work. The moral
compass set by the earlier generations guided the personal and professional behavior of the family
members.
KRM had wanted to build a small temple for Lord Vittala in the hospital premises and had placed an
order for the idols, but work on the temple had not been completed. KRM’s first son Praveen recalled:
“A year after our father’s death, the sculptor called to report that the idols were ready.
Our mother was keen to complete the construction of the temple as it was my father’s
last wish. We decided that the sons would take on the responsibility for its
construction. When we spoke to our grandfather, he inquired about the source of
funds for the proposed temple. He emphasized that no part of the trust money should
go towards the construction of the temple, as the trust funds were only meant for
providing eye care to poor people. We assured him that we had already planned to
pay for the construction solely from the family’s resources.”
EMERGING FROM THE CRISIS
Faced with a financial and organizational crisis, KRM’s sons realized that a 100-year-old organization
and a family of ophthalmologists did not quite know how to run a sustainable institution. Sangani
provided the guidance they needed to run the family enterprise. He coached KRM’s three sons,
Praveen, Krishna and Vinay, on the art and science of reviving the institution and running a sustainable
business. He highlighted the importance of separating the two entities — Prabha and Vittala. It was
vital for Vittala to survive on its own merit. Prabha Eye Clinic was the bread and butter of the family
and should not face a threat to its existence. Prabha also had to work out a plan to settle the Vittala
bank loan, which was on its books now.
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There were extensive discussions within the family. There was the stark realization that Vittala had
been aimless in doing charity; there was little clarity on objectives and impact. Three focus areas of
charitable work were clearly delineated: (a) diabetic retinopathy and retinal surgeries; (b) retinopathy
of prematurity and childhood blindness; and (c) community-based eye health and rehabilitation
(including alleviation of cataract blindness). A few other key decisions were made: (a) seek the active
support of the community for various projects; and (b) approve projects only after setting clear and
specific goals and timelines, a well-defined project methodology, monitoring mechanisms, and
procedures for evaluation and impact analysis at the end of the project. Partners were identified and
involved in raising funds for specific activities; this approach gave a boost to Vittala’s charitable
activities without compromising its financial health. Systems were introduced to control costs, and
non-value adding activities were eliminated. These approaches helped Vittala enhance its social
impact, but in a sustainable manner.
The spirit of togetherness in the family was another major factor that helped it deal with the
formidable challenges that confronted Vittala. Krishna stated:
“We are a joint family. We have continued to stay together even after our father’s
death. After our father passed away, we transferred all the assets to our mother and
jointly took over all the liabilities. We gave an assurance to our mother that all the
liabilities would be settled expeditiously. Since we are together, it is a huge strategic
strength for the two institutions. We sat together and worked out our individual roles
and responsibilities based on our individual strengths, inclinations and limitations. We
ensured that everyone was fully occupied and that everyone’s interests were
respected. It was decided that no differentiation would be made based on the size of
operations handled.”
Praveen, the eldest son, was designated Chairman of the Keshava Trust; Krishna, Medical Director of
Vittala; and Vinay, the youngest son, Medical Director of Prabha Eye Clinic. Praveen’s wife Gowri and
Krishna’s wife Kalpana were also ophthalmologists and they treated patients at both hospitals. Vinay’s
wife Archana, an engineer, was involved in ocular prosthesis services at Vittala. Although the family
members had responsibilities at both Prabha and Vittala, they received salaries only from Prabha. On
the compensation received by family members, Praveen said:
“All the spouses are given the same salary and all the sons also get the same salary. It
does not depend on how much you contribute to either Prabha or Vittala. This takes
the economics out of the equation. We’re all doing our best, and that’s all that
matters. We make no comparisons. All of us realize that our unity is a great strength
to sustain both the institutions. We have assumed our responsibilities based on
organizational needs and our individual strengths. We are all very conscious of the
fact that our job is a big one and that we should not get entangled in petty matters
and concerns.”
On making major decisions, Krishna stated:
“Our father’s influence on the three brothers and their spouses has been tremendous.
It is inevitable for individuals to have different opinions. The important thing is that
we need to respect the views of every single member. It is important for all of us to
remember that every member has made some sacrifice or the other by not pursuing
their own self-interest in order to serve a larger good. We sit together and make big
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decisions. Before starting anything new, we check with the others and take their
consent.”
Family values also included maintaining the highest ethical standards. Not a single rupee was spent
on marketing Vittala. Patient footfalls were the result of positive word of mouth, vision centers, and
the use of soft marketing techniques such as conducting eye camps and screening schoolchildren for
eye ailments.
The salaries of clinicians at Vittala were at least 20-30% lower than the market rate. It was initially a
challenge to attract the right talent, but once people joined Vittala, the ethical practices at the
institution provided them with a strong sense of professional satisfaction. Unlike many private
hospitals, clinicians were not given monthly targets for the number of surgeries performed or
revenues generated. They had complete autonomy over clinical decisions. The salaries of
administrative staff and technicians were generally on par with market rates. The attrition rate was
low but attracting new people was a challenge.
OUTREACH PROGRAMS AT VITTALA
Given the mission of providing eye care to the underprivileged, outreach programs were very
important for Vittala. Krishna stated:
“In a populous and relatively prosperous city like Bangalore, it is very easy for us to
run a profitable private eye care hospital. But there is a huge disparity between urban
India and rural India in terms of healthcare facilities. Many people have no access to
facilities and cannot afford treatment. It is necessary for us to go out and connect with
people through outreach programs. People in distant places cannot afford to come
here, yet they need the same treatment when they have medical problems. So, some
handholding becomes necessary.”
Nayana Project – Treatment for Diabetic Retinopathy (DR): KRM had sown the seeds of the Nayana
project and taken the first steps to get it off the ground. The equipment required to treat retinal
problems was manufactured in Germany and cost INR 8 million. Given the large investment needed,
it was not financially feasible to set up the infrastructure required to treat DR in several small towns.
The only solution was to transport the equipment to different locations. However, this did not seem
practicable as the delicate and sophisticated equipment could not be safely transported on bumpy
and muddy rural paths and tracks. There was also no precedence anywhere in the world of anyone
constantly moving this type of equipment from one place to another. The German manufacturer
indicated that the fragile equipment had been designed to be used at one location. When Vittala
persisted with its request and asked how the manufacturer transported the equipment from Germany
to different countries, the company showed them the special boxes used to move the equipment by
air or sea, but pointed out that this was very different from transporting it on bumpy and uneven mud
tracks. Vittala felt that such challenges could be dealt with. It approached over 40 funding agencies to
support the experiment by granting funds for the purchase of the equipment and a custom-built
vehicle to transport it to needy patients in small towns. But they all rejected the proposal as infeasible.
Finally, in 2005, the World Diabetes Foundation (WDF) agreed to fund the project for a duration of
three years with a grant of INR 30 million. WDF had funded other projects by eye care providers to
screen patients for DR. In those projects, images of the retina were uploaded from remote locations
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and screened at the base hospital. If a patient was diagnosed with DR, he or she was treated at the
base hospital. The model Vittala proposed to WDF was different. It visualized providing medical
treatment at the remote locations themselves using a well-equipped mobile van. The main objective
of the project was to leverage the trained manpower already available in many small towns of
Karnataka and reduce the cost of DR treatment. Vittala expected that people facing the threat of
avoidable blindness would be motivated to seek treatment because diagnosis, treatment and
management of the disease would all be available within 50 kilometers of their residence. The hospital
worked out plans to bring their clinical practice up to global standards and make the project
sustainable beyond the three-year funding period. Praveen and Krishna realized that this required
building a thoughtful economic and social model, adopting process innovations and getting buy-in
from key stakeholders.
Once Vittala received the necessary funds, its next step was to commission a custom-made vehicle
that could absorb the shocks on bumpy rural roads. The vehicle chassis was donated by Ashok Leyland,
an Indian automobile manufacturing company. For the interior work, Subbakrishna Rao, one of the
architects of Nayana, approached Vortex Engineering, a company that had been set up by alumni of
Indian Institute of Technology, Chennai, which was one of the top technology institutions in India. The
team at Vortex designed a vehicle that had a compartment floating on high pressure springs that
rested on wheels, which in turn rested on rails. There were four springs that held the compartment
from the roof of the vehicle. The floating compartment housed the tightly strapped equipment in
special boxes, and thus offered perfect shock absorption for the fragile equipment (see Exhibit 3).
Krishna said:
“The engineering innovation is not what you would call hi-tech. The major challenge
was not technological, but really one of mindsets — of the equipment manufacturers
and funding agencies. People had to understand why it was critical for us to move the
equipment all over the state. There were other challenges too — the absence of
reliable power and clean infrastructure to deliver treatment in rural areas. We
resolved these issues by building a treatment chamber and a mobile power unit in the
vehicle. The van was built to be totally self-sufficient. Without any external support,
it could be made operational for treatment in 15 minutes. ”
The beneficiary communities had no local ophthalmologists (LOs) who were trained in DR to deliver
treatment and provide follow-up care. There was no way that Vittala ophthalmologists could travel
across the state to deliver ongoing treatment to patients in far-flung communities. At the same time,
LOs who had set up practices in small towns were likely to consider people associated with the Nayana
project as outsiders stealing their livelihood. Vittala believed in building win-win partnerships
wherever possible as undercurrents of mistrust could lead to the failure of the project.
The hospital introduced a revenue sharing mechanism, whereby 70% of the revenue would go to LOs
and 30% to Vittala to cover the operational costs of running the vehicle and the salaries of the driver
and technician. This would give LOs the dual benefit of acquiring new skills and an increase in income.
When this model was proposed to the LOs, they readily agreed to be a part of Nayana project. The
equipment was made available to them on a pre-determined day each month and they were required
to pool in their patients. Poor patients would receive free treatment and revenue sharing would apply
only to paid patients. This allowed Nayana to provide standardized care in multiple locations at the
patients’ doorsteps. For the patients, the cost of DR treatment through Nayana was a fraction of what
they would have incurred at any urban private clinic. The project was a win-win solution for all parties
— LOs, patients and Vittala.
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Praveen and Krishna took on the responsibility of training the LOs. They first offered theoretical
knowledge sessions for all LOs at Vittala. Then, they conducted individualized skill transfer sessions in
the van at the respective locations. Krishna and Praveen traveled with the mobile van to 23 different
locations and trained the LOs for a period of one and a half years. Krishna stated:
“Now the LOs at various locations are fully trained. They manage the project
themselves. Our present involvement is at a bare minimum. We must ensure that the
vehicle reaches the location on the designated date. The project has been running
successfully for a decade. The original equipment is heavily used and perpetually in
transit, but still going strong. The project is even generating a little surplus for Vittala.”
The van traveled 25 days a month to 23 locations across 13 districts, catering to a population of about
18.5 million. Since the start of the project, the van had logged over one million kilometers, treated
more than 43,000 patients and trained 83 ophthalmologists (see Exhibit 4). MahadevAppa, a DR
patient, said:
“I have been a diabetes patient for 20 years, but had no idea about DR. When this van
came to my village two years ago, I got myself checked and was diagnosed with
diabetic retinopathy. I immediately started treatment, and now my retinopathy
problem is gone.”
The Nayana project became WDF’s star project. It was a pioneering and innovative approach to
diagnosing and treating DR at remote locations. Given Vittala’s mission of making eye care treatment
accessible and affordable to the underprivileged, it did not patent this model. Thanks to WDF, this
approach was replicated in 17 locations across nine countries. Krishna wanted to replicate the project
in other states in India. He first visited health officials in the central government about the project.
After a few visits, these officials responded that health was a state subject, so there was little that the
Indian government could do to drive the project. Krishna then approached a few state health
ministers. They appreciated the experiment but reported that there were no avenues for public-
private partnership and hence nothing could be done, at least in the near term.
Retinopathy of Prematurity (ROP): With generous funding support from Amit Sangani, a relative of
Dhirubhai Sangani, Vittala set up an ROP clinic to address a serious affliction that could cause blindness
in newborn children who were prematurely born. A formidable challenge in ROP treatment was that
there was no way of moving premature babies out of NICUs. An ophthalmologist with expertise in the
area was required to examine the baby’s retina, and reviews had to be conducted every week till the
baby was out of the risk zone. This was quite a different ballgame from Nayana, where the van would
visit a location only once a month. Not all NICUs had ophthalmologists, and of those that did, not all
were trained in treating ROP. There were only a small group of ophthalmologists working on ROP.
Krishna was qualified to treat ROP, and he started screening and treating pre-term babies at Indira
Gandhi Institute of Child Health, a state government hospital, every Wednesday. However, he wanted
to increase his reach to other NICUs in remote areas of Bangalore and in smaller cities where there
was no ophthalmologist trained in ROP. The lessons from the Nayana project helped Krishna initiate a
plan to transport ROP screening equipment. ROP screening required a device called RetCam, which
cost INR 7 million and was funded by WDF.
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Once it had acquired the RetCam, Vittala transported the device by car to NICUs in different locations.
It trained technicians to take retinal images of babies and upload them using web-based software. To
keep the costs low, the hospital used open source software to generate electronic medical records
(EMRs). The EMRs not only contained retinal images but also gave details of the hospital, doctor and
baby’s medical condition. As ROP treatment required weekly reviews, Vittala limited itself to 23 NICUs
at six locations. Krishna screened the EMRs of around 150 babies every week and once a baby was
diagnosed with ROP, it was treated at its location (see Exhibit 5). This required Krishna to travel as and
when an ROP case was diagnosed. Krishna reminisced:
“A case was detected 600 kilometers from Bangalore, which required immediate
treatment. I left for the site at 3 a.m. and reached the place at 10:30 a.m. The
treatment took 2-3 hours, and I returned to Bangalore around 10 p.m. I had traveled
almost 1,200 kilometers to treat one baby. But you cannot put a monetary value on
the satisfaction of ensuring that the baby will grow up with the gift of sight.”
Tumkur Project: In 2016, The Queen Elizabeth Diamond Jubilee Trust wanted to develop a program on
DR screening and treatment in commonwealth nations. India was designated to run the pilot project.
The Karnataka government invited Vittala to conduct the pilot in Tumkur district. This was a welcome
opportunity as it gave Vittala visibility at an international level. Krishna said:
“We had great learnings from our Nayana and ROP projects and knew the problems
of tele-screening. We wanted to consolidate all the learnings and use them in this
project as it required the ROP screening model and the Nayana treatment model.”
Vittala adopted the tele-screening model and trained technicians to take images and create EMRs
using customized software. They used hand-held cameras to screen patients once a week in each of
the six talukas.7 Those who needed treatment were served using the Nayana mobile van. Initially, Dr.
Bhargavi, a vitreo-retinal consultant at Vittala, and Krishna treated all the patients, but over a period
of time, government ophthalmologists were trained in DR treatment. One of the big challenges of
treating chronic diseases such as diabetes was patient compliance. Here, software helped manage this
challenge by making it possible to schedule follow-up visits via automated messaging. The software
also flagged patients who missed appointments and scheduled fresh appointments for the following
week.
The main challenges in this project were the non-availability of government ophthalmologists and
their frequent transfers to other locations. Being a government project, monitoring was lax and formal
approvals were required for even small decisions. While a project of this scope required the active
involvement of local government staff, the “will” factor was often missing.
Vision Centers: Another initiative by Vittala to enhance its visibility and acquire paid patients was
establishing vision centers in the urban slums of Bangalore. This was done in collaboration with
Operation Eyesight Universal (India), a development organization committed to eliminating avoidable
blindness. The vision centers carried out the following activities: conducting surveys to identify the
number of people with various eye problems; rehabilitation of the blind to provide mobility and life
skills to persons with blindness; school health camps to screen children at government schools in
7In India, a taluka is an area of land with a city or town that serves as its administrative center, which may have
additional towns or villages. Source: https://en.wikipedia.org/wiki/Tehsil.
to Mar 2024.
ISB121
underprivileged communities (see Exhibit 6); registration of members of the community in government
health insurance schemes, which helped Vittala reimburse patients’ treatment costs; and awareness
building and other assistance to the community on various government schemes related to pensions,
disability assistance, and so on.
The centers were manned by an optometrist and a few health workers selected from the local
population and trained by Vittala. The centers provided spectacles at a nominal cost, and individuals
requiring eye care treatment were referred to Vittala (see Exhibit 7). Krishna stated:
“The objective of our vision center is to declare the area free of avoidable blindness
in four years. Now we have three vision centers, and this helps bring patients to
Vittala. We set up vision centers at locations where there are no big eye care centers
between the vision center and base hospital in order to maximize the social impact.
The vision centers also provide us with an easier way to attract corporate funds as the
impact is tangible.”
ROAD AHEAD
As Krishna reviewed an internal summary statement of Vittala’s finances (Exhibit 8), it became
abundantly clear that its operations were stable and that a 70:30 ratio of paying and non-paying
patients would be able to ensure viable operations, with the shortfall being made up by donations —
largely from individual donors. Of course, patients at the high end would generate a bigger surplus
that could be utilized for subsidizing more non-paying patients. But Krishna felt that there was little
justification to spend money on publicity and promotions to attract such patients. It may even end up
putting Vittala in competition with Prabha. There had to be an organic way of steadily increasing the
inflow of both paying and non-paying patients. With an increase in the volume of operations,
corresponding investments would have to be made in technology. Vittala would have to bring in
medical staff with the right skills and values. Despite vast disparities in terms of healthcare access and
affordability, there could be no dilution of quality in the healthcare services provided to patients.
Assurance of quality of care was critical. Krishna felt that skills could always be developed, but for a
social enterprise, the right values and attitudes were paramount.
The central government had introduced “Ayushman Bharat” and the state government “Arogya
Karnataka”, both of which were insurance schemes for the poorer sections of the population. But their
reimbursements were below the cost price. For instance, Vittala would be reimbursed INR 5,000 for a
cataract surgery, which was below what it spent on providing treatment. However, with some receipts
from insurance schemes, Vittala would be able to reduce the extent of its subsidy, and hence treat a
larger number of patients.
Donations from individual and institutional donors comprised about 15% of the total revenues. The
main source of donations were individual donors, who supported a specific number of free surgeries.
Social media campaigns also helped attract some funds. However, it was difficult to get donations
from business organizations, unless there were projects with a tangible impact that could be
measured. Krishna and his brothers were selective about approaching corporations as they felt that
unless there was an emotional connect with the cause, their efforts would not yield results in terms
of attracting donations. Whenever opportunities arose, Vittala proposed and took up outreach
initiatives and projects in DR, ROP and community-based rehabilitation, where the institution had
to Mar 2024.
ISB121
expertise. Its tried-and-tested approach and methodology were applied to provide services in new
geographies.
After reviewing the overall picture of Vittala’s operations, Krishna turned his focus to the presentation
he would be making at the forthcoming board meeting. As Vittala entered the third decade of its
operations, what approach should he propose as the way forward for the institution?
Exhibit 1
Keshava Family Tree
Dr. B. K.
Narayan Rao
Son-in-law
Dr. H.
Krishnamoorthy
Son
Dr. K. R. Murthy
Son Daughter-in- Son Daughter-in- Daughter-in-

Son
Dr. Dr. Krishna Dr. Vinay Archana V.
Dr. Gowri Dr. Kalpana
Praveen R. R. Murthy R. Murthy Murthy
J. Murthy B. Murthy
Murthy
Source: Company documents.
to Mar 2024.
ISB121
Exhibit 2
Organization Chart of Vittala
Sri Keshava
Trust
Managing
Chariman Trustee
Trustees
VITTALA
Medical
Director
General
Consultants Manager
(Admin)
Community
Medical Relations and Counselor
Fundraising
IT Accountant
Projects Camps
Fundraising &
Paramedical
Investments
Networking Receptionists
Housekeeping
Security
Canteen
to Mar 2024.
ISB121
Exhibit 3
View of Mobile Nayana Vehicle
to Mar 2024.
ISB121
Exhibit 4
Nayana Project (2005-17)
Year Patients Screened Patients Charged Patients Treated Total Patients

for Treatment Free of Cost Treated
2005 (2 months) 1650 198 131 329
2006 8900 2134 1408 3542
2007 9567 2789 1841 4630
2008 11345 2943 1942 4885
2009 10908 3124 2062 5186
2010 11200 3221 2126 5347
2011 11890 3987 2631 6618
2012 13315 2559 1261 3820
2013 15767 2157 1050 3207
2014 12589 1591 986 2577
2015 x* 1496 319 1815
2016 x 1210 1209 2419
2017 x 1740 1402 3142
Total 107131 24703 15438 47517
* x – data not collected

Exhibit 5
ROP Project (2010-17)
Year No. of Screenings Babies Treated

2010 666 14
2011 675 19
2012 707 23
2013 1214 26
2014 3265 22
2015 4480 42
2016 2825 42
2017 1784 26
Total 15616 214
to Mar 2024.
ISB121
Exhibit 6
Details of School Screening Camps
YEAR Cases Screened Treated for Visual Defects

2002 4965 454
2003 2099 97
2004 955 29
2005 503 40
2006 2253 75
2007 487 23
2008 3158 56
2009 2462 413
2010 1846 32
2011 2714 115
2012 5372 330
2013 11552 182
2014 4741 233
2015 0 0
2016 2007 364
2017 6397 964
Total 51511 3407
Exhibit 7
Vision Center Activities (2015-17)
Vision Center Patients Patients Spectacles Patients

Screened/Tested Referred for Disbursed Rehabilitated/General
Surgical Health Awareness
Management
Nandini Layout 5548 1056 922 297
Padrayanapura 10994 2890 1707 290
to Mar 2024.
ISB121
Exhibit 8
Bird’s Eye View of Vittala’s Finances (2015-18) (in millions)
Particulars FY 2015-16 FY 2016-17 FY 2017-18

Paying Patients (Revenues Generated)
IPD 15.1 15.1 13.4
OPD 5.6 6.4 9.6
TOTAL 20.7 21.5 23
Non Paying Patients (Expenses)
Concession/Free Treatment Extended to
8.2 8.9 6.8
the Patients
TOTAL 8.2 8.9 6.8
Vision Centers (Revenues Generated)
Vision Center — Nandini Layout
0.3 0.4 0.2
(Consultation + Optical Sales)
Vision Center — Padarayanapura
0.5 0.5 0.4
(Consultation + Optical Sales)
Vision Center — Jigani (Only Optical
0 0 0.1
Sales)
TOTAL 0.8 0.9 0.7
Outreach Activities (Revenues Generated)
Nayana 1.4 3 3.2
ROP 0.5 0.5 0.5
TOTAL 1.9 3.5 3.7
Donation Received 11.8 8.5 7.8

Overall Hospital Revenue & Expenditure
Revenue 56.4 58.9 66.5
Expenditure 59.7 61 70.2
to Mar 2024.

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S. Ramnarayan | Sunita Mehta

CREATING AND SUSTAINING A SOCIAL ENTERPRISE: THE VITTALA STORY

ORIGIN AND HISTORY

“My grandfather, Dr. HKM did not automatically inherit my great-grandfather’s

1In Sanskrit, Prabha means “light” or “luminous”.

Creating and Sustaining A Social Enterprise: The Vittala Story | 2

Geneva, Switzerland, 9-11 November 2005. Retrieved from

Blindness, India), April-June. Retrieved from http://npcb.nic.in/writereaddata/mainlinkfile/File312.pdf on January 29, 2018.

Creating and Sustaining A Social Enterprise: The Vittala Story | 3

Creating and Sustaining A Social Enterprise: The Vittala Story | 4

EMERGING FROM THE CRISIS

Creating and Sustaining A Social Enterprise: The Vittala Story | 5

On making major decisions, Krishna stated:

Creating and Sustaining A Social Enterprise: The Vittala Story | 6

OUTREACH PROGRAMS AT VITTALA

Creating and Sustaining A Social Enterprise: The Vittala Story | 7

Creating and Sustaining A Social Enterprise: The Vittala Story | 8

Creating and Sustaining A Social Enterprise: The Vittala Story | 9

Creating and Sustaining A Social Enterprise: The Vittala Story | 10

Creating and Sustaining A Social Enterprise: The Vittala Story | 11

Son Daughter-in- Son Daughter-in- Daughter-in-

Source: Company documents.

Creating and Sustaining A Social Enterprise: The Vittala Story | 12

Source: Company documents.

Creating and Sustaining A Social Enterprise: The Vittala Story | 13

Source: Company documents.

Creating and Sustaining A Social Enterprise: The Vittala Story | 14

Year Patients Screened Patients Charged Patients Treated Total Patients

* x – data not collected

Year No. of Screenings Babies Treated

Source: Company documents.

Creating and Sustaining A Social Enterprise: The Vittala Story | 15

YEAR Cases Screened Treated for Visual Defects

Source: Company documents.

Vision Center Patients Patients Spectacles Patients

Source: Company documents.

Creating and Sustaining A Social Enterprise: The Vittala Story | 16

Particulars FY 2015-16 FY 2016-17 FY 2017-18

Donation Received 11.8 8.5 7.8

Source: Company documents.

Creating and Sustaining A Social Enterprise: The Vittala Story | 17

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