CASE:

ARAVIND EYE CARE SYSTEM

Dr. Govinda Venkataswamy (fondly called Dr. V) founded the Aravind Eye Hospitals in 1976 with an 11-bed facility in Madural, which performed all types of eye surgeries. Its goal was to offer quality care at reasonable cost. In 1978, a 70-bed free hospital was opened to provide the poor with quality care. In 2004, Aravind Eye Care System comprised Eye Care Facilities at Madural, Theni, Tirunelveli, Coimbatore and Pondicherry (Exhibit 1) and performed nearly 230,000 eye surgeries and handled 1,640,000 outpatient visits (Exhibit 2). It is recognized as the worlds most productive eye hospital handling the largest patient volume. Its website states that with less than 1% of the countrys ophthalmic manpower, Aravind accounts for 5% of the ophthalmic surgeries performed nationwide. Its mission has now become to eradicate needless blindness by providing appropriate, compassionate and quality eye care for all. Each day, across all five Aravind Eye Hospitals, about 4481 out-patient visits are handled, about 627 surgeries take place and about three camps are conducted. [3] Currently, there are more than 20 million blind people in India and only over four million surgeries are performed every year. Over 75% of the blindness is due to cataract. Cataract is the clouding of the natural eye lens due to ageing or otherwise. There are two types of cataract surgeries; one in which the natural lens is removed and then glasses are provided after three to four weeks, called intracapsular surgery or ECCE and the other where after removing the natural lens, the intraocular lens inserted, called extracapsular surgery or ECCE. In ECCE, patients normally do not require corrective lenses after the surgery. ECCE is better and often preferred because the quality of the restored sight is distortion-free and near natural. However, ECCE is slightly expensive due to the cost of the intraocular lens. Talking to a Harvard Business School professor, Dr V argued, Tell me, can a cataract surgery be marketed like hamburgers? Dont you call it social marketing or something? See, in America, McDonalds and Dunkin Donuts and Pizza Hut have all mastered the art of mass marketing. We have to do something like that to clear the backlog of 20 million blind eyes in India. We perform only one million cataracts a year. At this rate we cant catch up. [1] Each of the Aravind Hospitals has two sections: one is the Main Hospital for the paid patients and other is free hospital for nonpaying patients. The series of steps, which a patient normally goes through, is the same in both the hospitals: patients are initially registered, their vision is recorded and they undergo a preliminary examination followed by testing of tension and tear duct function. This follows refraction test and final examination. While the assistants carry out many of the intermediate steps, a senior ophthalmologist does the final examination. The two sections differ in size, the kind of beds they provide and general kind of patients, who come to use them. However, the same pool of doctors and nurses serves both sections. 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 selfsupporting. This principle is achieved through high quality, large volume care and a wellorganized system. [3] In Aravind Hospitals, a typical Operation Theater (OT) has two tables side by side. The surgical team keeps one table ready while the surgeon is working on the other. The surgeon merely turns and starts doing surgery on the other table as soon as he finishes the current one. In this way, the valuable time of surgeon is used properly. Aravinds surgeons take only 10 minutes per surgery while industry standard is 30 minutes. Aravind

achieves this test while maintaining the world standard in quality. Its infection rate is only 4 per 10,000 cases as opposed to 6 per 10,000 in UK. And they are able to carry out 400 surgeries per doctor per month as opposed to the average of 25 surgeries per doctor per month. [2] To cater to such high performing, large-scale surgical system, Aravind has to ensure that enough patients come to it. Partly to achieve this, Aravind organizes camps to attract patients in rural areas. Help of local organizations like Lions Club is taken in publicizing the camps. They also often help with sharing of the part of cost in transporting patients and other such activities. In these camps, patients go through the similar steps of registration, vision recording, preliminary examination, testing of tension, refraction, and final examination. If a surgery is found to be required, patients additionally undergo BP and urine sugar test and their surgery papers are prepared. Following this, patients are taken to the nearest Aravind for surgery and brought back to the same place after three days. This is unlike many other camp organizers who perform surgeries in the camps themselves. For its hospitals, Aravind recruits nurses from the nearby village. Aravind essentially looks for hunger to do some good in such people before it trains them for the job. They need not have any nursing training before coming to Aravind. Nurses typically do not leave Aravind because they lack the necessary qualifications to get employed in other hospitals. Aravind is finding it a little harder to recruit and keep doctors, it expects its doctors to work nearly 60 hours a week as opposed to 30 hours in many institutions. They tend to leave Aravind after few years as they command higher salaries in the marketplace than what Aravind gives them. Till few years back, Aravind used to provide only the intra-cap surgeries for free patients as the cost of inocular lens was high. Each inocular lens used to cost Rs 800, as it had to be imported. In 1991, Aravind a setup a factory to produce 60,000 IOLs per year. Initially, it had a defect rate of 50% and the cost of each lens worked out to be Rs 200.00. Over time, it was expected that the cost of the lens would drop to Rs 100.00 as the factory improved its working. This factory was set up as a separate venture so that the hospitals could keep their focus on eye care. Recently, the factory has also started manufacturing sutures and other items used in the surgeries. In a recent interview to two Indian business school professors, Mr. R. D. Thulsiraj, MD, Aravind hospitals, remarked that eye care has some unique characteristics than make it possible to transfer the model directly. One characteristic is the high volume; about 20% of the population needs glasses and 1% has cataract. Secondly, the intervention for the most part is one time, because it is not a chronic disease, or one needing long-term treatment like cancer. Finally, intervention is quite low cost unlike, say bypass surgery. But Dr. V argued, I think this model must work in other health care sectors also, whether it is womens health or childrens health, or cancer or tuberculosis. People like you must explore and see where this model can be applied. Our main focus should be on improving the total health of the country. [2]

REFERENCES 1. Rangan, Kasturi, V. The Aravind Eye Hospital, Madural, India: In Service for Sight, Harvard Business School Case, 1994.

2. Shah, Janat and Murty, L.S. Compassionate. High Quality Health Care at Low Cost: The Aravind Model. IIMB Management Review, September 2004. 3. www.aravind.org

4. Rubin, Harriet, The Perfect Vision of Dr. V. Fast Company, Issue 43, p. 146, Feb. 2001.

Exhibit 2 ARAVIND EYE HOSPITALS Statistics Year 2004 Statistics Outpatient Visits Surgeries Free Eye Camps Outpatient Visits Surgeries Free Eye camps Year 2004 1,635,599 228,894 1,271 Year 1976 2004

17,778,075 2,225,225 20,995

Source: Aravind Eye care website at www.aravnd.org

Testing of tension and tear duct function, refractions test. Aravinda achieved this feat Intra cap surgeries inocular lenses sutures

Comparative Study: Arabind

Competitive Factor Surgery time Infection rate Number of surgery doctor per month Ophthalmic Manpower per Aravind 10 minutes per surgery 4 per 10,000 400 <1%, 5% ophthalmic Surgeries Competitor Industry standard 30 minutes per surgery 6 per 10,000 in UK 25 (average)

QUESTIONS 1. What is the vision of AECS? What is the role of operations in meeting it?

2. Can this system be replicated to other aspects of health care? Other services? What will be the problems? What will be the advantages? 3. How do different elements of AECS work together to deliver the vision of Dr. V?

4. What are some of the problems AECS facing? Are they inherent in its model or they could be rectified while keeping the model intact?