GROUP 1

The Aravind Eye

Hospital: In Service
for Sight
LAKSHMI SHRAVYA | NIKHIL VAMSI | SREEKAR REDDY |
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 more than 32 million patients and has
performed 4 million surgeries
 BUSINESS MODEL CONTEX
T
Aravind has been able to develop a self-funding healthcare
delivery model where it creates value for its entire customer base India is home to one-third of the
but captures the value only from a part of it. world’s blind population with close to
200 million Indians needing eye-care. In
Aravind is able to provide free-of-cost or at cost, high-quality 80% of the cases, blindness is caused by
service for 50-60% of its patients who are poor or ‘non-paying’ by
factors which can be corrected. Dr. V set
using the profits generated from the 40-50% of the paying
out to address this problem of curable
patients.
blindness and created an institution
The hospital provides the same quality of service across both
which performs 400,000 eye surgeries
paying and non-paying patients and has consistently provided
high-quality care for the last 39 years. a year.

The organization has been able to achieve this

by focusing on the following strategic imperatives –
SINGULAR VISION
Dr. V chose a specific vision for the company to focus on – eliminating blindness through cataract surgery

HYBRID BUSINESS MODEL

The hybrid model helps Aravind use the cash-flows from paying patients to cross-subsidize services for the
needy. This model helped Aravind develop specialty services along with basic cataract surgery and care. The
ability to develop high-end ophthalmic care also helped Aravind attract and retain qualified doctors

HIGH VOLUME, HIGH QUALITY AND LOW COST BUSINESS MODEL

To provide perspective, the cost of cataract surgery at Aravind could be as low as US$50 while in the US, it
is in the range of US$3,000

REACHING OUT TO THE UNDER- SERVED

Given the highly fragmented nature of its customer base and due to the need for scale, Aravind has to
generate demand through customer outreach programs
BUSINESS
MODEL
Dr. Venkataswamy has a vision to cure blindness in India. If the Aravind marketing
“formula” could be applied to all hospitals in India, could blindness be cured in a single
decade?

The Aravind model has been partially replicated in more than 300 hospitals globally. However, Aravind believes
that it has only covered the tip of the iceberg and that the impact that it can potentially have is much larger.
Aravind plans to expand its reach to other parts of India and globally to other developing markets which have
large impoverished population.

While 80% of visual impairment can be prevented or cured, there remains 20% of cases for which there is
currently no way of curing. A range of conditions exists where those who develop them are faced with a
gradual loss of vision until their impairment is so severe that they are effectively blind.
 PRODUCT PLACE
What is the Aravind
marketing “formula?”
• Preliminary eye examination • Hospitals location - main hubs - Madurai; rural -
That is, what does • Patients with retina and vitreous diseases- check up Tirunelveli, Theni
Aravind do with respect in specialty section • Auro Lab- supply of IOLs for the ECCE cataract
to the 4Ps and the 5Cs? • Patients needing only corrective lenses- surgery
measurement and prescription of glasses • Eye camps conducted by Aravind for nearby
• Cataract surgery communities with the help of local sponsors
• ICCE – normal cataract surgery • Sponsors take care of the transportation of the
• ECCE – with IOL implant patients needing surgery

PRICE
PROMOTION
Main Hospital
• Most patients at this hospital pay for the services
• Promotion of eye camp done under sponsor's name
• Price of ICCE cataract surgery- Rs 500-1000
• Publicity done by local sponsors working with camp
• Price of ECCE cataract surgery- Rs 1500-2000
• Price of IOL per piece- Rs 800 for import organizers to neighboring communities
• Promotion done through public announcements in market
• Different price levels depending on facilities provided
places, newspaper advertisements, information pamphlets,
Free Hospital
• Cost of the surgery and medicines bore by Aravind posters- 1-3 weeks prior the camp date
Eye Camp
• Sponsors bore the costs of organizing the camp- patient
transportation, food and aphakic glasses
• They also bore costs of transporting, feeding and bringing
selected patients to surgery – Rs 200 (estimated per patient)
 • Private nonprofit eye hospital to provide quality eye care
• Aim- to bring eyesight to the masses of the poor countries like India, Asia, Africa and
Company the world; offer 100% IOL surgeries for all patients, paying and free
• Dedicated surgeons, doctors and staff to help the patients
• In house training for nurses from scratch
• Main hospital has patients coming from all over Madurai district and complicated cases
Customers from the free hospital
• Free hospital has patients coming mainly from the eye camps and nearly rural places
• Eye camps has patients visiting from nearby villages to check ups

• Local sponsors help Aravind set up eye camps and help with transportation, feeding
Collaborators and bringing patients needing surgery to the hospital
• Research and training collaboration with St. Vincent’s Hospital in New York City and
University of Illinois’ Eye and Ear Infirmary in Chicago
• Financial help from Royal Commonwealth Society for the Blind(UK) and SEVA
Foundation (US)
Competitors
• Not many private or government hospitals in the area
• Doctors and staff are paid reasonable salaries compared to private sector
• Proper salary scales need to be maintained to attract and retain the employees
• Initially, not much credibility; Now- very credible
Climate • Number of patients screened and operated on more in the free hospital than main
hospital
• Built reputation for providing quality care for the masses for free
Has the formula been transferred successfully to Theni, Tirunelveli, and/or Coimbatore?(1/2)

At Tirunelveli

Dr. Ravindran said

 There are fundamental Management problems
 The physical design is an improvement over Madurai facility
 Yet, after 4 years, could not be financially self-sufficient
Could be because
 Central surgical facility which the free and paying sections jointly utilize
 This could reduce the revenue generated by the paying section of the patients
as there is a possibility to get the same treatment for free

Some Observations
 The no of patients Screened at Tirunelveli was around 40% of those screened
at Madurai facility but the no. of surgeries done were far less in ratio -9911 to
39557 In 1991 (from Exhibit 5)
 This could be due to
 Less no. of patients who required surgery
 Less turnover of the patients to visit for the surgery

At Tirunelveli, There are problems in transferring the marketing formula of

Madurai facility but the Idea of providing surgery for free for the poor was
successfully transferred
Has the formula been transferred successfully to Theni, Tirunelveli, and/or Coimbatore?(1/2)

At Theni

 Is a Small facility compared to other three

 Its operations has an informal supervision from Dr. Nam as it is his hometown
 The numbers of the screening and the surgeries in this facility are very less
than those of the Madurai facility in 1991 as this covers only small region
 The no. of campus that could be conducted in this location are also less when
compared to Madurai facility
On a whole this facility if working in small numbers but in almost same lines as
of the Madurai facility so we can say that the marketing formula is successfully
transferred here

At Coimbatore

 As of 1991 It is planed to perform similar to Madurai facility as Coimbatore is

Hub of district and is larger in population and commerce
 The case did not provide with the data on its performance but as of the
current rating in the “google” which is 4.5/5, we can assume that the formula
is transferred successfully to this facility
Future plan
Can work the way McDonald’s and Burger King work but not exactly the same

Though the pioneer in revolutionising affordable eye care in India, Aravind Hospitals
has a lot to do to realise its dream of eliminating blindness in developing countries.
Economies of scale
Large number of camps
More screenings
More surgeries
Per capita cost of treatment decreases
Collaborations with different entities
Competitors should be made partners as the mission is to eliminate blindness
Training youth into professionals to help build a sustainable system
Partnering with medical colleges in reaching and educating more people and expand
network
Increasing the occupancy rate to reduce average costs

Build a Social Franchise

 Identifying
key zones to Identify potential
expand entities like NGO’s,
services Governments
Prepare a
blueprint to
achieve the Building
mission teams in
collaboration
with the
entities
SOCIAL
FRANCHISE Build all the
existing
Increase the training
capacity of facilities to
manufacturing meet future
lenses. Optimising
Campaigns to demand.
utilisation of
educate the bed
people capacity
THANK YOU