Aravind Case Study Introduction In a country plagued by curable and needless blindness, 58 year-old surgeon Dr. Govindappa Venkataswamy recognized upon retirement that his 100,000 sight-restoring surgeries were not enough of an impact to fight blindness in India and cure the 12 million people affected by it. With a big dream, but no money, no business plan, and no safety net, he embarked on a journey to start an organization with a single purpose in mind: to give sight for all.
Starting with a small 11-bed clinic, he went on to create the Aravind Eye Care System, today’s largest and most productive blindness-prevention organization on the planet, which sees more than 2. 5 million patients a year. With the success that Aravind has had, it is undeniable that they are doing something right, and for that reason it is important to analyze them to determine what has made them such a high performance social enterprise. This analysis will provide a detailed explanation of the determining factors behind their success; especially the motivation behind Aravind, and the innovation at the core of the enterprise.
The analysis will also provide a brief opinion on how their novel approach can be used to deal with problems in US healthcare. Motivation by Social Impact and Spirituality The motivation behind Dr. V’s creation of Aravind was never about profits, selfishness, or any sort of personal accolade or recognition. The main motivator was to restore people’s vision, and improve the way they live their lives coupled with “bringing higher consciousness to transform mind and body and souls of people,” including his own.
Sri Aurbindo’s beliefs that “ perfection is the consciousness that surpasses any form which we can give it” is what shaped Dr. V’s own beliefs. Perfection is a concept that is ambiguous for most of us, but for Dr. V it now had a meaning. Being perfect was based on self-development, consciousness, pushing your limits, understanding your own limitations, and helping people be the best they can be. For that reason, Dr. V focused a lot of his time in understanding himself, developing himself both mentally, physically, and spiritually; feeling empathy for people’s suffering, and working hard and with an attitude of inner attunement like Swami Vivekananda and Mahatma Gandhi.
Dr. V also took to heart Sri Aurobindo’s idea that ‘humans have the capacity to shape their lives in harmony with the deeper forces at play, and that by doing so, they actively help all of creation make an evolutionary leap to its summit potential. ” In other words, to Dr. V the creation of Aravind was not just the creation of an eye care facility, but to it was his grain of salt towards the bigger development and evolution of the world as a whole, and it represented a spiritual movement in the field of eye care.
He didn’t care whether or not a person had money to pay for their services, since his motivation was to create the highest possible social impact, regardless of whether it meant having free or ultra-subsidized surgeries. In Dr. Aravind Srinivasan own words “Dr. V over time has built a conviction in us that serving the poor is good. That giving most of your services away for free is good. ” It was this mix of spiritual motivation with a genuine desire to positively impact people’s lives that helped shape Aravind and anyone who was part of it. Dr. V was also not concerned with keeping secret the processes and innovations behind Aravind’s success, instead, he treated every other hospital, social business, or firm as a partner in his fight towards curing curable blindness. Aravind became known to give away their secrets to their success to ‘competitors’ and help hospitals model after them. Since it was first founded, Aravind de linked its aspirations from money, and treated it with equanimity. Money was “neither an obsession nor an obscenity, but a tool that aids in the restoration of sight. ”
Dr. V’s beliefs and motivations shaped the innovations, business structure, hiring policies, pricing structure, and company culture that made Aravind the great success story that it is today. Business Model When Aravind was first started it was done so as a non-profit, raising money through private donors and fundraises, but these efforts failed as there was not enough credibility and people weren’t providing them with enough money. Then Aravind changed to a hybrid model, charging patients based on how much they could afford to pay for their services.
The creation of differentiated services was based only on the accommodations associated with the surgery, and the type of less – meaning the quality of the surgery was never affected whether you paid or not. This cross subsidy system in which charging patients relied in that the revenues from the paying customers would help cover the cost for the non paying or ultra subsidized customers. For this pricing strategy to work successfully, it was important for Aravind to have a high volume of customers. Aravind used community partners and eye camps to access the poor; this created a uge demand for their services. With each surgeon performing more than 2000 cataract surgeries per year (5 times more than the average) the reputation of its surgeons and of the organization quickly grew, and there was more interest among wealthier people to be treated at Aravind.
Also, high volumes of people meant lower cost per customer due to higher productivity and utilization of equipment “While the average practitioner uses his surgical microscope 20 times as month… At Aravind, our utilization is actually 20 or 30 times higher. Aravind business then quickly changed from just an eye-hospital but quickly gained recognition as an institute for research, a training center for ophthalmic professionals and managers, as well as a manufacturer of ophthalmic products. Innovation At most eye hospitals, before a surgery a patient undergoes a basic vision test, preliminary examination, measurement of ocular pressure, pupil dilation, and a final examination. An ophthalmologist usually does all of this. However, at Aravind this is done differently, and the entire stream of activities is broken up into sets of discrete tasks.
These individual tasks are given to a group of employees and their sole focus is on doing their own job. This works the same in the operating rooms with the goal of maximizing the time and skill of Aravind’s surgeons. Surgeons don’t do anything else but operate, with the nurses, almost systematically handling everything else. (See Figure 1) The Aravind assembly line processes lead to high efficiency, with operations for cataracts taking around 10 minutes to complete, which is 3 times faster than anywhere else in the world. Meanwhile lag times between operation is just 1 to 3 minutes, versus 15 minutes in other hospitals in India.
Aravind is always looking to cut down on unnecessary delays and avoidable irregularities, and in finding places where small changes in efficiency can have big impacts on overall productivity. These innovative assembly line processes applied in their hospitals has been one of the strongest reasons behind their success. Technology innovations have also been essential to the success of Aravind. After failing to negotiate good purchase prices with IOL suppliers the decision to manufacture their own intraocular lenses through Aurolab was very important.
Taking on manufacturing meant that they were able to achieve more than 90% cost savings on the lenses, igniting competition in the entire industry of IOL manufacturers, leading to better quality products, and putting sight restorative cataract surgeries within reach of the poorest of the poor. Another technological innovation implemented by Aravind to keep their costs low yet still reach rural customers was the use of webcasting to allow patients to be examined real time without having to visit the hospitals. The data management systems in place at Aravind were also very impressive.
Outpatient volumes, processing times, and bottlenecks were monitored very closely, just as were surgical and clinical outcomes. All this information was stored, and analyzed and each time feedback was given to surgeons and improvements were made depending on results. Aravind changed the world through its innovative approach towards medical procedures and hospital management, and if there was an important impact of Aravind to society, this has to be the greatest of all. Aravind motivated organizations all around the world to rethink the way they do things, and become more productive. See Figure 2) Measure and Evaluation of Impact The impact of Aravind can be assessed by looking at the number of individuals that have been treated by them since being founded; the positive impact on their lives post-surgery and the reach of the organization throughout the country.
Each day Aravind has 7,500 outpatient visits, 8501,000 surgeries performed, 5-6 outreach camps conducted, 7,000 intraocular lenses produced, and classes conducted for doctors, paraprofessionals, and administrators. According to a research study the social impact on post-surgery Indian cataract has increased the verall living conditions of people, with 85% of men and 58% of women regaining the jobs they lost due to cataracts. The study also says that having regained their jobs; the return on investment in the first year postsurgery was 15 to 1 for patients, due to their increased household income. This is a prime example that fighting blindness is not just a nice deed, but it can change a person’s life. In fact, by having a person see again, they can finally work again, provide more to their children, the children can then have a higher chance of doing better for themselves, and so on.
In other words, the impact of Aravind shouldn’t just be measured on the amount of surgeries they perform, but on the overall impact that it has in the community. More able workers means higher productivity, and all this also has a positive impact on the economy. Sustainability There are two kinds of sustainability: operational and financial. Operational sustainability was achieved at Aravind due to the effective hiring policies, great training given to all of its workers, and the company culture imposed on every single employee from top-level executives to the janitors.
Hiring at Aravind was rarely done on a person’s individual skill, but rather on their personality. The idea was that skill can be acquired, but a person’s bad habits are hard to change. They always looked to hire people who didn’t mind long hours of intense work, and wanted to have a positive impact on the world. This meant that most people that worked for Aravind were good by nature, hard workers and didn’t mind being given substantially lower salaries (meaning Aravind could keep their costs lower).
After being hired, they would then be taught the skills needed for them to succeed, and they would be slowly enveloped in a company culture that thrives on working hard, effectively and efficiency not for money, but almost as a moral obligation. In terms of financial sustainability Aravind has proved it is extremely financially self-reliant. While in its formative years Aravind started out with failed fundraisers, the company’s finances really took off when they developed their hybrid model of having both free and paying customers.
This meant that they were not reliable on anyone but themselves, and their customers. Also, strict policies such as not accepting any donations to operate their core business were decisions that have led to their good financial health. Aravind has quadrupled its growth every decade, successfully undergone leadership transitions, and consistently changed and upgraded the services it provides without many big problems. Replication and Scale Dr. V wanted Aravind to be like McDonalds in terms of being easy to replicate and scale. However, replication has not been easy.
The reason for this is not because their business model is too complicated for other organizations to understand and copy. Instead, it is because Aravind is more than just an organization that has executed a perfect high-volume, high quality, low-price strategy; Aravind has a special culture and values that have been embedded for years that is hard to replicate. Nevertheless, through LAICO they have consulted for 60 hospitals in 29 countries and 213 hospitals in India. They also have 5 hospitals around India, with another two being managed by them.
This goes to show that while transforming every organization into a perfect model Aravind is impossible, that the Aravind mantra can be applied to many organizations to make them run more efficiently, make them more self-sustainable, and help in the fight towards blindness around the world. Scalability has definitely been achievable at Aravind throughout the years. They have done so through their hybrid business model which allows them to be financially and operationally sustainable. They have money to finance their own growth without being dependent on outside funding.
Also, the development of Aurolab in producing low cost IOL’s was key to their success in scaling the business. Had they not been able to produce cheap IOL’s they would have not been able to provide its customers with good quality and low cost procedures, and it is likely that Aravind would have either needed outside funding to subsidize its poorest patients, or it would have had to used outdated methods and products for surgeries. Another factor that helped their scalability was that they had very standardized methods of doing things.
Also, the handling of high volume of patients allowed them to have access to a lot of data that through innovative analysis they could look at to find flaws in what they were doing. This quick responsiveness to issues allowed them to quickly and efficiently learn from their mistakes when opening new hospitals, or when consulting other organizations. Aravind in US Healthcare Aravind’s approach to delivering affordable healthcare, while not necessarily easily applicable, can be applied in the US to help improve the healthcare system.
One of the important practices to enhance in US hospitals would be a more transparent system for measurement and standardization. Currently, doctors have quite a bit of power over what they do, without so many questions. However, by keeping a closer eye on every detail and every procedure, data can be gathered and analyzed to figure out what mistakes are made often, the reasons behind them, and find ways to improve procedures, and training and education of young doctors. Delinking doctor’s salaries from the number of patients they see could also improve quality of healthcare in the US.
While the motivation of doctors to make money is not necessarily bad, it does incentivize them to not always spend as much time with a patient as they should, but instead to keep the flow of patients coming for their own financial benefit. Having a system that rewards on quality more than quantity would greatly benefit patients. Unfortunately, too many hospitals still have many things in their agenda that are not always aligned with having the highest social impact and improving the health and positive outcomes of patients.