Notes on Aravind Eye Care

One of my all time favourite movies is The Founder. The movie describes the story of Ray Kroc, founder of the multinational food-chain, McDonald’s. A brilliant scene that has stuck with me is one where the McDonald’s brothers narrate how they managed to reduce the time to make and serve burgers from 30 minutes to 30 seconds.

McDonald’s model of efficiency made its way to healthcare in India in the form of Aravind Eye Care. The founder of the legendary chain of eye hospitals, Dr. Venkataswamy’s vision, was to eliminate needless blindness in India. In the 1993 Harvard Business School case study on Aravind Eye Hospital, Madurai, “Dr. V” says to the author, Prof. Kasturi Rangan:

Tell me, can cataract surgery be marketed like hamburgers? Don’t you call it social marketing or something? See, in America, McDonald’s 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 cataract surgeries a year. At this rate we cannot catch up…

Why can’t we bring eyesight to the masses of poor people in India, Asia, Africa and all over the world? I would like to do that in my lifetime.

Aravind Eye Care managed to massively improve productivity by rebalancing the use of resources.

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Source: Presentation by Dr. RD Ravindran, Chairman of AECS

 

Recently, I got the opportunity to visit Aravind Eye Care hospital in Madurai along with some colleagues from Villgro. Aravind is well-known for performing cataract surgeries for the poor at scale. The at scale bit is what differentiates it from every other institution in the world. Currently, Aravind Eye Care’s network of hospitals performs more than 4 million cataract surgeries every year. For comparison, this is 60% of what the National Health Service (the main healthcare provider for the UK) does for the entire country!

The hospitals work at peak productivity.  Just as McDonalds is described in the movie, Aravind also operates like a “symphony of efficiency”. Its operations are a sight to behold. Running like a well-oiled machine, Aravind has managed to be ruthlessly efficient by optimizing on the most expensive resource- the ophthalmologists time.

A few other interesting tidbits about the organization and its operations:

  • Aravind has a cadre of paramedical staff called MLOPs (mid-level ophthalmic personnel) who are typically female high-school graduates from villages in Tamil Nadu. They are trained at Aravind in a structured program and they make up 60% of the workforce. By doing all the administrative tasks, they free up ophthalmologists time for surgeries.
  • Aravind’s eye-camps were the answer to “how do we expand the market?”. In a highly fragmented market, one of their key customer acquisition channels (25% of all surgeries) is to conduct free-screening camps with the help of a local partner. The partner organizations, typically local NGOs, take care of the costs of the camp, transport the patients for surgery at the base hospital, cover food and accommodation,  while Aravind does the surgery free of cost.
  • On the quality of care: “Aravind focused on rotating doctors between free and paid wards, concentrating on efficiency and hygiene thus eliminating differences between the surgeries done for paid and non-paid patients. The rate of infection in Aravind was about four per thousand surgeries which was significantly lower than the international norm of six per thousand surgeries.”
  • The organization has ingrained a culture of data-driven decision making. Forecasting and planning for demand fluctuations, for example, is how they manage to utilize resources optimally. All non-patient activities like internal training, workshops and conferences are conducted during the slack days. More eye-camps are conducted to increase patient load during the slack months.
  • Brand value is built and then leveraged over the years. Aravind maintains the brand by making care patient-centric. For example, in the paying hospital, all first-time patients are escorted by staff through all the processes to make it less overwhelming. Word-of-mouth is immensely important to Aravind as it is a large contributor to walk-in patients.
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Source: AECS Genesis Presentation (LAICO)

A puzzling question here is: how did Aravind, a non-profit organization manage to scale its operations to a meaningfully large level while maintaining high quality? After all, research shows that most charities typically cannot grow beyond a certain level.

The answer to the scale question, I think, lies in the fact that Aravind has consciously decided to be guided by the market, even as it remained a non-profit. Historically, less than 10% of Aravind’s revenues have been from donations and government support. By using the revenues from its paying customers to build infrastructure and provide services to the poor for highly subsidized rates, Aravind put in the right incentives for organizational scale and success. Without any doubt, Aravind’s story is inspiring for all social entrepreneurs in the world.

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