Value Proposition & Customer:

In India, twelve million people suffer from blindness, with the vast majority of cases attributed to cataracts, which often affect individuals before the age of 60—significantly earlier than in Western countries. Blindness devastates the livelihoods of the poor, stripping them of their sense of self-worth and often leading to fatal consequences. An Indian proverb poignantly describes a blind person as “a mouth with no hands,” highlighting the dependency and helplessness that blindness induces.

Aravind Eye Care System, recognized as the largest and most productive eye care facility globally, addresses this critical issue by offering free eye care and surgery to 50% of its patients. This model is sustained through a dual-hospital system comprising the Main Hospital and the Free Hospital.

Free Hospital

The Free Hospital is dedicated to providing essential but high-quality services to those in need. Patients at the Free Hospital receive necessary treatments without the amenities offered at the Main Hospital. For example, instead of beds, patients are provided with a small pillow and a coir mat. This approach ensures that a larger number of individuals can receive care despite limited resources.

Main Hospital

The Main Hospital operates like a standard ophthalmology hospital, where all patients pay for the services they receive. It offers various classes of rooms, providing different levels of privacy and comfort based on the patient’s preference and financial capability. The treatments available at the Main Hospital range from simple procedures to highly complex surgeries, such as retina detachment repairs.

By maintaining this dual-hospital system, Aravind Eye Care System ensures that quality eye care is accessible to all socio-economic segments, thereby combating blindness on a large scale and restoring the livelihoods and dignity of millions.

Mission & Core Values:

Established in 1976 by Dr. Venkataswamy, Aravind Eye Hospital was founded with the mission to eliminate needless blindness. The hospital seeks to provide high-quality eye care that is accessible and affordable to all, regardless of socio-economic status.

Core Values

Efficiency: Aravind Eye Care System employs innovative operational procedures, akin to a fast-food chain assembly line, to streamline processes and maximize productivity. This efficiency allows the hospital to keep costs low while maintaining high standards of care.

Quality Care: Despite the focus on efficiency and cost reduction, Aravind ensures that the quality of care is never compromised. The hospital adheres to rigorous standards to provide top-notch medical services.

Accessibility: A significant portion of Aravind’s services is provided free of charge to patients who cannot afford to pay. This commitment to accessibility ensures that no one is denied the care they need due to financial constraints.

Compassion: At the heart of Aravind’s operations is a deep sense of compassion for those suffering from preventable blindness. The hospital’s efforts are driven by a commitment to restore sight and improve the quality of life for all patients.

Sustainability: By balancing a dual-hospital system where the paying patients at the Main Hospital help subsidize the Free Hospital, Aravind ensures the financial sustainability of its mission to combat blindness.

These core values guide Aravind Eye Care System in its mission to eliminate needless blindness and restore vision to millions, thereby transforming lives and communities.

Value Formation & Core Activities
“Achieving scale and improving productivity has enabled us to keep costs down and treat hundreds of thousands of patients each year. It has allowed us to give back to society, to the communities.” Dr Srinivasan, Director of Projects, Aravind Eye Care System (source: McKinsey “Driving down the cost of high-quality care—Lessons from the Aravind Eye Care System”)

Aravind Eye Care System performs 60% more eye surgeries than the UK National Health System at a fraction of the cost—one-thousandth to be precise. This remarkable efficiency is achieved through several key strategies and operational procedures.

Efficient Operation Procedures

Aravind’s hospitals operate like an assembly line with minimal turnaround time, a model often referred to as the “No-Frill Business Model.” This approach allows surgeons to perform a significantly higher number of surgeries compared to conventional methods. Key aspects of this model include:

• Batch Processing: Patients are prepared in batches before surgery and bandaged afterward by Aravind-trained nurses. This systematic approach minimizes idle time for surgeons.

• Assembly Line Surgery: Surgeons immediately move to the next operating table after completing a surgery, where another patient is already prepped by a second support team. This seamless transition results in tremendous efficiency.

• High Surgical Volume: Due to these efficient processes, Aravind doctors can perform more than 2,000 surgeries a year, compared to an average of around 300 surgeries per year in other Indian hospitals.

Outreach Through Eye Camps

To support the high volume of surgeries and reach a broader population, Aravind conducts eye camps in rural and semi-urban areas. At these camps, patients are screened, and those requiring surgery are identified and prepared. This proactive outreach ensures that Aravind can serve a large number of patients who might otherwise lack access to quality eye care.

Cost-Reduction Strategies

Another major factor contributing to cost reduction is Aravind’s in-house production of intraocular lenses. By manufacturing these lenses internally, Aravind significantly cuts down on one of the major expenses associated with cataract surgeries. This cost-saving measure is crucial in enabling the hospital to provide free or low-cost surgeries to a large segment of its patients.

Summary

The value formation at Aravind Eye Care System is rooted in its ability to achieve scale and improve productivity through innovative operational procedures, extensive community outreach, and strategic cost-reduction measures. These core activities not only enable Aravind to treat hundreds of thousands of patients each year but also allow it to sustain its mission of eliminating needless blindness while giving back to society.

Revenue Model

“Aravind is not just a health success, it is a financial success. Many health non-profits in developing countries rely on government help or donations, but Aravind’s core services are sustainable.” — NY Times Opinionator: A Hospital Network with a Vision.

Aravind Eye Care System’s revenue model is designed to ensure both financial sustainability and broad access to quality eye care. Key components of this model include:

Efficient Operations and High Patient Volume

Aravind’s efficient operational procedures and high patient volume enable it to generate a high EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). The streamlined processes, such as the assembly line model for surgeries, significantly reduce costs and increase productivity, allowing Aravind to serve a large number of patients efficiently.

Dual-Hospital System (Get One – Give One Model)

Aravind operates a dual-hospital system where revenue from the Main Hospital subsidizes the Free Hospital:

• Main Hospital: Patients who can afford to pay for their treatments receive care at the Main Hospital. Here, they have the option to choose from different classes of rooms, each offering varying levels of privacy and facilities, and consequently different price levels. This “add-on business model” allows patients to pay for additional comfort and amenities, generating higher revenue.

• Free Hospital: The Free Hospital provides essential eye care services to the poorer sections of society at no cost. Patients, often brought in from eye camps held in rural and semi-urban areas, receive free treatment funded by the revenue generated from the Main Hospital. This “get one – give one business model” ensures that for every paying patient, Aravind can offer free services to those in need.

Add-On Business Model Approach

At the Main Hospital, Aravind employs an “add-on business model” where patients can choose between different classes of rooms with varying levels of privacy and facilities. The available options range from basic shared accommodations to private rooms with enhanced amenities. This tiered pricing structure allows patients to select the level of comfort they desire and can afford, thereby generating additional revenue from those opting for higher-end services.

Sustainable Financial Success

Unlike many health non-profits in developing countries that rely heavily on government aid or donations, Aravind’s core services are designed to be self-sustaining. The combination of high efficiency, strategic pricing, and a balanced dual-hospital system allows Aravind to maintain financial health while fulfilling its mission to eliminate needless blindness.

In summary, Aravind Eye Care System’s revenue model leverages operational efficiency, a dual-hospital approach, and an add-on business model to generate sustainable income. This model not only supports the financial viability of the organization but also ensures that high-quality eye care is accessible to all, regardless of their financial means.

Organisation

Aravind Eye Care System’s organizational structure is designed to maximize efficiency and impact, leveraging innovative operational procedures and empathetic leadership to meet the eye care needs of the community. Key elements of this organization include:

Efficiency Through Innovation

Efficiency resulting from innovative operational procedures is a key strength of Aravind Eye Care. The system operates with a focus on minimizing costs and maximizing patient throughput without compromising the quality of care. This efficiency is a cornerstone of Aravind’s ability to provide affordable and accessible eye care to a large population.

Empathetic Leadership

Dr. Venkataswamy, the founder of Aravind Eye Care, emphasized the importance of leadership that goes beyond organizational efficiency. In an interview with the NY Times, he stated, “It is not leadership in the sense of organizing and making it work. It’s leadership that comes from empathizing with the community.” This approach ensures that Aravind’s growth and operations are always aligned with the needs and well-being of the community it serves. He also believed in never restricting demand but instead building the capacity to meet it, a philosophy that has driven the expansion and scalability of Aravind’s services.

Comprehensive Eye Care Network

The Aravind Eye Care System comprises a wide range of facilities and institutes, each playing a crucial role in the delivery of comprehensive eye care services:

• Eye Hospitals: Aravind operates 14 eye hospitals that provide a full spectrum of eye care services, from routine examinations to complex surgeries.

• Outpatient Eye Examination Centers: There are 6 outpatient centers dedicated to eye examinations, facilitating early detection and treatment of eye conditions.

• Primary Care Facilities: With 80 primary care facilities, Aravind ensures that basic eye care is accessible to people in various regions, particularly in rural and underserved areas.

• Postgraduate Institute: This institute provides advanced training for ophthalmologists, ensuring a continuous supply of skilled professionals.

• Management Training and Consulting Institute: This institute focuses on training healthcare managers and providing consulting services to other organizations looking to improve their healthcare delivery systems.

• Ophthalmic Manufacturing Unit: Aravind manufactures intraocular lenses and other ophthalmic products, significantly reducing costs and ensuring a steady supply of high-quality materials for surgeries.

• Research Institute: The research institute conducts studies to advance the field of ophthalmology and improve clinical practices.

• Eye Banks: Aravind’s eye banks facilitate corneal transplants, helping restore sight to individuals with corneal blindness.

Summary

Aravind Eye Care System’s organizational structure is built on a foundation of operational efficiency, empathetic leadership, and a comprehensive network of specialized facilities and institutes. This structure enables Aravind to meet the vast demand for eye care services while maintaining high standards of quality and accessibility, ultimately working towards the mission of eliminating needless blindness.

Transportation
Transportation remains a significant issue for many patients selected from eye camps. These patients may face difficulties traveling to the hospital for surgery due to the distance, cost, or inability to stay away from home for extended periods. This transportation challenge often leads to a reduction in the number of patients who follow through with the recommended surgeries, thus affecting the overall number of treatments performed.

Irregular patient flow
The flow of patients to Aravind hospitals is highly irregular. Immediately following an eye camp, there is a surge in the number of patients requiring attention, leading to overcrowding in the hospitals. Conversely, during periods without eye camps, the patient flow decreases significantly, causing the hospitals to operate below their capacity. This irregularity poses challenges in maintaining a steady workflow and optimizing resource utilization.

Scalability
While Aravind has been successful in reaching many patients, scalability remains a challenge. Patients are required to travel to the hospital for treatment, limiting the reach of Aravind’s services to areas within a feasible distance from its hospitals. Conducting eye camps in locations that are too far from the hospitals is not practical, as it exacerbates the transportation issue and further reduces the likelihood of patients completing their treatment.

Human Resources
Recruiting, training, and retaining skilled medical professionals, especially in rural and underserved areas, is a persistent challenge. The high volume of surgeries and the demand for efficient operations require a consistent and well-trained workforce. Burnout and turnover among staff, especially surgeons and nurses, can impact the quality of care and operational efficiency.