Aravind Eye Care“restoring vision to millions”

Group No: 5

Abhishek Seth – G10063 Deepak Kumar Sinha – G10075Piyush Pati – G10094 Suresh Kumar Sharma – G10113Vipin Chand – G10119 Yatendra Kumar – G10120

What does it mean to be blind?

Loss of Vision deprives one of the

livelihood, economic independence, self-esteem &

status in the community

200 million need eye care in India

Less than 10% have been reached

What is government doing?In a developing country with competing demands on limited resources, government alone cannot meet health needs of all the poor.

• In 1976, Dr.Venkataswamy, feeling the urgent need, started an eye clinic in Madurai with 11 beds, to create an alternate, sustainable eye care system to supplement the government’s efforts.

Genesis

Mission

“To eliminate needless blindness by providing high quality, high volume, compassionate eye care to all”

Guiding Values• Compassion/

Dignity• Equity • Transparency• Sharing

Translated to action• Eye care to all –

Equity• Standardization –

Transparency• Affordability• Accountability

Dr. G. Venkataswamy

Innovation• Market conditions

at the ‘bottom of the pyramid’

Building Blocks

The need to innovateMarket conditions at the ‘bottom of the

pyramid’:•Large underserved population •Resource scarcity (Capital and HR)•Dispersed population•Low affordability•Poor logistics (Based on analysis by Prof. C K Prahalad)

Importance of Business Knowledge for Non Profit Organization

• Constraints

▫ Resources

▫ Funds

▫ Time

• Issues

▫ Sustainability

▫ Lack of financial incentives for Leadership Team and Employees

▫ Too Small to Justify or Pay for Expensive Outside Advice

▫ Efficiency and Quality Management

▫ How to carry out a high quality process at low cost

▫ Scalability

▫ Standardization of service offered at different centers

▫ Market conditions at the ‘bottom of the pyramid’

Aravind Eye Care - Creating value for society

• Marketing ▫ Community participation▫ Growing the market (reaching the unreached)▫ Brand Value creation by providing quality service to all its

customer▫ Increased awareness▫ Influencing health-seeking behaviour▫ Creating access to health service▫ Marketing Research

• Operations▫ Use of latest technology▫ Aravind Eye Camp model ▫ Backward Integration- IOL Factory, Ophthalmic products ▫ Economy of scales▫ Resource Optimization▫ Process Optimization▫ Cost Optimization

Aravind Eye Care - Creating value for society

•Finance▫Self sustainable innovative financial model▫Integration of Free and Paid Hospital

•Human Behavior▫Employee Motivation▫Employee Training▫Proper resource (internal and external)

allocation▫Value fit over skill fit

Value Creation

Management Competencies needed for this value

creation :

1. Optimization Competence

2. Governance Competence

3. Orientation Competence

4. Reception Competence

5. Communication Competence

Optimization CompetenceProcess and Cost optimization

• Aravind has borrowed concepts like economies of scale and

assembly lines from the industrial sector and applied them in

health care to bring down costs without sacrificing quality.

• Economies of scale : Aurolab produce intraocular lenses (IOLs) at

$5 whereas global prices are about $80.

o Aravind is the lowest-cost producer of IOLs in the world.

o It exports almost 50% of its production to other eye-care

hospitals, both in India and abroad.

• Paid vs. Free Service - Aravind lowers its cost position by reducing

bells and whistles without compromising on the quality of its

equipment or medicines or the competence of doctors and nurses.

Optimization CompetenceResource optimization

• Nurses are 60% of Aravind’s workforce. They perform most of the

routine clinical tasks thus allowing doctors do what they are best at

- diagnosis & surgery . This results in higher quality, productivity

and lowers cost.

• Extraordinary productivity- Aravind doctors average about 25

cataract surgeries per day (actually, over six hours), whereas other

eye-care hospitals do six to eight surgeries per doctor. Aravind

achieves this by having a highly streamlined, innovative, and

efficient system and a highly trained paramedical staff.

Governance Competence

• Organization Structure

• Employee Policies

• Training Policies

• Employee Motivation

• Aravind Eye Camp model

Orientation Competence

• Aravind Ideology Foundation

Dr. V’s Vision.

To eliminate needless blindness by providing appropriate,

compassionate and high quality eye care to all

Patient Centered Care.

Value creation for all stakeholders: Patient, Employee, Society at

large

Reception Competence• In-depth interviews for identifying the reason for low turnout of

people to screening camps

• Study Results

• Still have vision, however diminished 26 %

• Cannot afford food and transportation 25 %

• Cannot leave family 13 %

• Fear of surgery 11 %

• No one to accompany 10 %

• Family opposition 5%

• Others 10%

• Informal sessions between doctors and patients.

Communication Competence• Counseling sessions

• Marketing of Aravind brand through word of mouth

• Interactions with

• Employees

• Patient

• Society

Aravind Eye Care – Service Model

There is nothing in this model that cannot be replicated in

any country — developing or developed.

The keys are simple:

• Pay close attention to operational efficiency,

• Work on separating the core from the frills,

• Maximize the productivity of the costliest resources

(doctors and equipment),

• and utilize the sheer power of volume.

Aravind’s Evolution

1st Decade(1978-1987)

Setting up & developing hospitalsComing into existence Community outreachFocus on Cataract Services

2nd Decade(1988-1997)

Refining & Scaling up internallyMore Hospitals – TVL, CBEEstablishing Aurolab & LAICOEducation and Training

3rd Decade(1998-2007)

Foundation for scaling up externallyExtensive capacity building workExperimenting with Managed HospitalsRapid Growth in Specialty Care Focus on Research

Aravind Eye Care System, 2009

Eye Bank

Hospitals(5) Aurolab

Out Reach Research

“Aravind Eye Care System”

LAICOIT

Training

AMECS4

Hospitals

India

Aravind

Bangladesh

Thailand

Indonesia

0 500 1000 1500 2000 2500

Surgeon Productivity: A comparison

80-8

1

82-8

3

84-8

5

86-8

7

88-8

9

90-9

1

92-9

3

94-9

5

96-9

7

98-9

9

00-0

1

02-0

3

04-0

5

'06-

07

08-0

90

5

10

15

20

25

30

Expense

Revenue

Financial Results

Free (Camp) 33%

Paying 45%

Free (Direct) 22%

Surgery mix in 2008 -09

Year: 2008-09Income: US$ 22 Million Expenses & Depreciation: US$ 13 Million EBITA: 39%

Through a unique fee system & effective management, Aravind provides free eye care to 60% of its patients

Learning's from Aravind• Aggressively streamline repeating processes. Aravind identified high volume, repeatable

processes like cataract surgeries and developed highly efficient and consistent approaches. Aravind

surgeons carry out an average of 2,000 procedures a year, way ahead of the average 125 procedures

achieved in the US.

• Limit the need for high-cost personnel. Aravind recruits young paramedical staff from local

villages and trains them to carry out a wide range of duties from eye refraction testing to counseling

and preparing patients for surgery. This leaves the surgeons free to operate, predominantly removing

cataracts and inserting intraocular lenses.

• Get creative about differentiated service. Paying patients receive extra comforts such as air

conditioning and greater privacy, but Aravind staff are rotated between free and paying hospitals so

as not to compromise treatment quality.

• Blend centralized and distributed resources. Aravind uses a network in rural vision centers. The

technology allows doctors in central hospitals to consult with clinicians at the vision centers in real

time via webcam, making quality eye care accessible to the rural poor who don’t have the time or

money to travel to big cities for examinations.

• Don’t trade-off humanity for profits. According to David Green, a US consultant who setup a non-

profit arm of Aravind for manufacturing ophthalmic products at affordable prices:  ”You can have a

form of humanized capitalism and you can do it in a way where you don’t cannibalize your margins.”

“Eliminating needless blindness” requires going beyond Aravind

Creating competitionMaking eye care affordable worldwide

Creating Competition “to eliminate needless blindness”

270 Eye Hospitals worldwide

Sharing makes you strongerLions Aravind Institute of community Ophthalmology

To contribute to the prevention and control of global blindness through Teaching, Training, Consultancy, Research, Publications

& Advocacy

Promoting Best Practices

Patient access Efficiency Patient care and

quality Sustainability with

social responsibility

Publications Capacity Building

Impact: Strengthen eye care programme capacity to deliver high quality, increase access and be financially viable

Making Eye Care Affordable

Used in 120 countries

Price of IOL came down from $ 100 to $ 2 – making cataract surgery affordable

10 million people see the world through Aurolab’s lenses

8% of global market

Broader Relevance?

Is it applicable to developed countries&outside of eye care?

NHS*-UK vs. Aravind

No. of eye surgeriesOphthalmologists graduating

annually

71%

59%

(*National Health Service – Main provider of Healthcare in UK)

Cost of delivering eye care

< 1% of what it costs in UK

Why is the cost 100 times more?

•It is beyond the simplistic “UK isn’t India”•Consider:

▫Efficiency▫Clinical process▫Cost of supplies▫Regulations▫Defensive medicine

Insights

Large population

Cost-effective interventions

Cuts across all economic strata Equity issues

Cost control

Efficiency

Focus on quality Patient centred care

Productivity

Achieving scale

Compassion

Owning the Problem

Conditions

Solutions

Suggestions – In capacity of Independent Director

• Focus on increasing the market share of IOL as Aravind currently holds only 8% of total IOL market share.

• Aggressive marketing strategy at global level to collaborate with other like minded institutions in other parts of the world.

• Need to address the issue of doctor retention rate due to lesser pay package.• Only 7% of people with eye problems in village accessed care from eye camps• Even spread of occupancy rate of free hospitals over the week.• Sponsorship from corporate for Eye camps.• Eliminate non-productive activities & waiting time• Need to develop new partnerships with community based organization in

different parts of the world.• Increase in paid service charges as the current charges are 25%-30% less than

market charges• Focus on increasing revenue through trainings and consulting • Focus on Developed countries in addition to developing countries like UK.

“Intelligence & Capabilities are not enough. There must be the joy of doing something beautiful..”

- Dr.G Venkataswamy

STILL… This is the Current Reality!

Courtesy: Allen Foster

much has been done and

much remains to be done . . .