Aravind Eye Clinic

A Business Environment Perspective.

Under the supervision of: Dr. SuboohiNasim

Submitted by: Arham adnan 11-mba-18

Aravind Eye Care Hospital is an ophthalmological hospital with several locations in India. It was founded by Dr. GovindappaVenkataswamy in 1976. With the aim of providing affordable eye care services to a country which has about 20 million blind citizens and 80% of it due to curable cataracts, at the age of 58, Dr. V. Started, the Aravind Eye Hospital. Popularly known as the McDonalds of cataract surgery, with a bed strength of more than 4000 beds and serving 0.25 million patients every year, this is one of the worlds largest eye care systems catering largely to the poor population. Aravind system's successful manufacturing unit, Aurolab, has produced 6%-7% of the low-cost lenses world-wide in 2002, which were sold in more than 100 countries. This Organization has been a source of case studies to not only national, but International agencies as well.
INTRODUCTION

Dr. V. created a system for sight-saving cataract surgeries that produces enviable medical outcomes in one of the poorest regions of the globe. Its rapid expansion over three decades was not built through government grants, aid agency donations or bank loans. Instead, Dr. V took the unusual step of asking even poor patients to pay whenever they could, believing the volume of paying business would sustain the rest. Poor people with cataracts in Tamil Nadu can get their sight restored for about $40. If they can't afford that, it's free. Starting with an 11-bed clinic in 1976, Dr. V's system is now a five-hospital system. Business organizations have relationships with various publics to whom they have obligations and responsibilities. These are their employees, customers and the government, among others. Unlike with customers and the government, their relationships with the employees are purely internal. Such relationship is popularly termed as employee relations. Business organization as social institutions, in the words of Peter F. Drucker must satisfy two minimum requirements. First, they must give status and function to the individual. Second, they must afford the employees the justice of equal opportunities. Status and function within the working group requires that each employee or worker must have some importance in his or her job despite the necessity for the jobs to be subordinated within an organization. This means that everyone office messenger or clerk up to the administrators or managers who, vested with authority and responsibility, run the office according to established procedures in line with its corporate goals and objectives. Thus, there is reason for everyone to feel that he is part and parcel of the entire organization and thus foster in him or her sense of belonging.

THE SYSTEM Aravind Eye Care.

Just as Ford, McDonalds and Toyota focused on continuously improving and extending their system models, so the Aravind Eye Hospitals gradually shifted to become the Aravind Eye Care System. Key elements were added for example, a dedicated factory for producing lenses, a training centre to provide key skills, specialist ophthalmic research centres, and an international eye bank. Of particular importance has been the Aravind Eye Camp model which takes the system out to rural locations, offering advice and diagnosis and feeding patients into the core hospitals where the high productivity model can treat them. This brings an element of preventive medicine into the system by identifying early symptoms, particularly amongst children, relatively low cost measures (such as corrective glasses) can be implemented. There is now an extensive education programme linked to the camps which reaches out to rural communities. (For example, in 2002 around 70,000 children were screened and 3000 given glasses to correct refractive errors).

ARAVIND EYE CARE SYSTEM AS A SOCIAL INSTITUTION. Aravind eye clinic is one of the liveliest examples for it has created milestones in establishing the social responsibility of business organization and their close inter-relationship with the society as a whole. It is the society in which any business performs its operations and derives its profit from. There are certain factors on the ground of which it can be analyzed. 1. VALUES The values of the organization are an outcome of the founders vision. His vision was simple yet grand: eradicate needless blindness at least in Tamil Nadu, his home state; if not in the entire India with this mission, after his retirement, Dr. Venkataswamy formed a non-profit trust, namely, the Govel Trust with himself as the Chairman which later developed into Aravind Eye Hospital. Dr. Venkataswamy witnessed blindness as a menace to the society and hurdle in the progress of the nation and this made him to work for eradication of this evil beyond his profession. This vision of the founder prevails in the

attitude, dedication and commitment of every personnel of the hospital and in every aspect of the functioning of the organization as a whole.The soul of Aravind is the deep commitment to service that permeates all levels of the organization from the housekeeping staff to the surgeons, andis an outgrowth of the spiritual commitment of Dr. Venkataswamy; but what astonishes manyis that Aravind is also a superbly managed business with a focus on efficiency, frugality,and innovation.

2. VIABILITY It is thedrive to live, to grow, and achieve all that a living system is capable of becoming. Business is a viable vigorous institution in society, not just a passive receiver/reactor. The organization has proved to be an integrated part of its society from which it gets nurtured and whom it nurtures. It is the successful intra societal relation of the organization which led to the tremendous growth over the last three decades despite its limited resources and being a noncapitalistic organization.

1978 - 1987: setting up and developing hospitals by coming into existence, focusing on community outreach and cataract services 1988 - 1997: refining and scaling up internally by adding more hospitals, establishing Aurolab and the Lions Aravind Institute of Community Ophthalmology (LAICO), education and training programs 1998 - 2007: foundation for scaling up externally through capacity building work at LAICO, establishing managed hospitals, rapid growth in specialty care (e.g., diabetic retinopathy), and a focus on research and drug development LAICO now works with more than 250 hospitals across Central and South America, Africa and Asia to increase capability and capacity

3. PUBLIC VISIBILITY It refers to the extent that an organizations activities are known to persons outside the organization. Different from public image i.e. what people think, public visibility subjects business activities to public examination, discussion,

and judgment. The public visibility of Aravind eye care is evident in the tremendous increase in the number of patients obtaining treatments each year. The organization has been acclaimed not only in India but across the world for its uniqueness, innovativeness and great social contribution. Over 285,000 eye surgeries are conducted every year and over 2.4 million persons are provided with outpatient eye care per year at the 5 Aravind owned hospitals. The positive word of mouth, awards and recognitions, the success stories of several critical cases in eye care and above all the trust that the people lay in the organization has brought the public visibility of Aravind eye care one of the most trustworthy organizations across the globe. Applied principles of mass marketing and industrial engineering to create a model of eye care that combines high service volumes and quality with low cost and innovation to sustainably meet the needs of patients. In addition to this, Aravind pioneered ways to fulfill the social responsibility of an organization by reaching the poor and rural blind

Provided care free of charge to patients unable to pay for care Held eye camps in rural villages using community workers and local sponsor organizations that conducted widespread publicity in the villages Local sponsor organizations also provided transportation and food for patients needing surgery at an Aravind hospital

Economic model
Central to the success of the model have been the economics. Target costing is a well-known tool in product innovation for engineering the design of production systems, and in the case of the original cataract operation Dr V. set this as being around $50/operation (assuming no complications ensued). This compares to around $300 as an average cost for treatment in a conventional Indian hospital (and $1650 in a US hospital). Developing and refining the system has meant that the average cost in the Aravind system is $25, based on a proportion of patients paying between $50 and $300 but over 60% being treated free. In 2003 Aravind became the largest single cataract surgery provider in the world. The key is in the volumes around 200,000 patients are treated each year, based on the high volume/low margin kind of business model which Henry Ford used on the Model T and which now drives the low cost airline industry.
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Socio-Cultural and Economic Factors

Being an integrated part of the society, every organizations operations are affected by certain social, cultural as well as economic factors which not only directly influence its functioning but also imposes a greater responsibility on the management to keep a track of them. Some of these and their influence on the organization are described in the following: EYE CAMPS AND COMMUNITY OUTREACH PROGRAMMES The Aravind Eye Care System considered its community outreach programmes as absolutely vital to its mission. The only way people in many rural areas could get access to eye care was through eye camps. Eye camps were organized by different agencies and conducted differently. Aravind organized about 1500 eye camps per year. Each Aravind Hospital had its own set of camp organizers who planned their activities for each calendar year. Generally each district had a camp organizer who set a target for the year based on the population, estimated percentage of blind people, estimated turn out at the camps and percentage needing surgeries. The camp organizers then had to find the needed sponsors. The case writers were told that finding sponsors was not a problem.

1. Family Family plays a major role at every level of decision making in the case of individuals as well as in framing the integration within a society as well. As the Indian family system is traditionally a joint family system and even if its a nuclear family, the relationship orientation is very high as the interdependence on each other in Indian families suppresses the ideology of individualism. Aravind eye care takes into consideration this aspect and in its promotion of every sort, the care for ones family health is emphasized upon so as to promote the people suffering from any sort of ailment can be treated well in time. Also the patients arriving at Aravind aye hospital are always accompanied by one or more of his family members and hence the

hospital provides for adequate number of seats in the waiting area and the operations are fast & smooth enough to avoid lagging or overcrowding. 2. Caste system The evil of caste system has been prevailing in India for centuries and has affected every sphere of the nations system including business activities. There had been a time in India when the upper caste vaidya (physicians) were reluctant to treat patients of lower caste as they were believed to be the untouchables. The prejudice against the lower caste people is a curse on humanity and a true humanistic approach emphasizes on equal treatment of all. As do the modern healthcare personnel, Aravind eye care too provides for equal treatment of patients irrespective of their caste. The patients from every caste are provided the same beds, chairs etc. operated through the same machines and equipment and this imparts the sense of humanity that illness comes without asking a persons caste and so do death; then why should we differentiate people on such baseless grounds in treatment and cure. Aravind as well as most of the organizations in health care industry have contributed to the eradication of this evil and imparting the sense of equality and love for humanity. 3. Peoples attitude to work The peoples attitude for work depends upon the type of work involved and the output desired of it. Aravind eye care has been synonymous with social welfare and compassionate treatment and hence it enjoys an elevated status in the eyes of not only the local and regional population but across the nation and the globe. People involved with Aravind eye care are highly dedicated and hold a very high level of positive attitude toward it holding a sense of service to the society.Each employee realizes the importance of the founders values. This breeds a spirit of involvement and accountability. It goes

a long way toward building up a fierce brand loyalty. Effective compensation systems and welfare measures back up the high moral ground and help retain employees. Overall, it is clear that the hospitals self-sustaining and organic HR template draws and retains the best medical talent. 4. Customs & traditions The customs & traditions of India particularly south India have always been emphasized on the respect and care of elders of the society. It is the elderly people that need health care especially eye care more often and Aravind eye care has always been a destination to curb those. 5. Education Education plays a major role regarding framing ones perception about the quality of life the society should have, the health care that is the demand of the hour and above all how far one should go in extending cooperation to help the organization involved in this noble cause achieve their missions. Aravind eye care provides well-evolved in-house training operations. Currently, it runs programs to develop ophthalmologists, paramedics, eye care managers and support service personnel. It was accredited to offer diplomas in ophthalmology in 1982, and subsequently recognized to offer MS in ophthalmology in 1986. Since 1988, it has also been offering fellowship programs in various disciplines of eye care. In addition to this, it also educates the society regarding certain issues related to health care. 3. Religion The narrow-mindedness and ignorance attached to certain religious beliefs has always been a hindrance in several health care programs like Pulse Polio campaign. But, on the contrary, blindness is something which is a pressing need and a patient craves for its cure at any cost despite all religious and other barriers.Aravind eye care provides eye care to all needy patients irrespective of their religion,

caste, creed etc.and ensures that the treatment practices and methodology arent contrary to any religious laws and customs. Another aspect of religion is that the faith in almighty makes the doctors more dedicated and sincere toward their noble profession and to have a humanistic approach. This is reflected in the founders words- Intelligence and capability are not enough. There must also be the joy of doing something beautiful. Being of service to God and humanity means going well beyond the sophistication of the best technology, to the humble demonstration of courtesy and compassion to each patient. 6.. Social groups Social groups include unions, trade associations, civil society organizations, environmentalist groups and other pressure groups. Social groups have gone a long way in providing immense support to Aravind health care by organizing health camps, awareness camps & awareness programs, providing transport facilities for the patients and even financial assistance to the needy. Aravind too had gone a long way in establishing close rapports with such social groups to promote eye care in each and every section of the society. 11. Role of women Over the passage of time, the role of women has evolved from being just housewives to be a part of almost every profession and at every level of hierarchy across the globe. Aravind provides for equal opportunities to women both as human resource personnel and patients seeking eye care. It has produced some of the best female ophthalmologists worldwide. 7. Belief & Superstitions The beliefs attached to a particular object are not only difficult to change but also prove to be a hindrance in eradicating the evils associated with it. The lack of education and trust over technology strengths the superstitions attached to certain aspects. Several people

belonging to remote rural areas who are also educationally backward have a lot of misconceptions regarding eye care. Many of them fear that even a minor operation of cataract surgery could turn them blind completely. Some hold this superstition that the inability to see clearly is a curse on the person imposed by gods for the wrongful acts they did in their pasts while others believe that the methods involved in surgery are unethical and contrary to their beliefs. But over a period of time, Aravind eye care has been able to do away with such superstitions to a large extent. 8. Financial strength of the patients The majority of population of India falls below the poverty line and is deprived of health care & other amenities. This poses a big challenge to the govt., the agencies & organizations working for society especially those involved in health care. Keeping this in view, Aravind eye care treats most of its patients free of cost. Aravind Eye Hospitals try to maintain a ratio of 1:2 between paying and free patients, which keeps the enterprise financially viable. 9. Efficiency of operations & Cost management The central principle that productivity is fundamentally related to demand makes it a viable business proposition. Volume brings down the cost and ensures the viability of the enterprise. Volume in turn is ensured by the combination of low cost, high quality and efficient procedures, as well as the appropriate use of technology. Costs are kept low through

Manufacturing its own intraocular lenses (IOLs) used in cataract surgery (outsourcing not an option as no affordable lenses being manufactured at time) High surgeon productivity: 400 surgeries/doctor/month; Eye care is made affordable through cross-subsidization:

Charging patients able to pay (~30% of patients) and using the collected fees to subsidize poor patients (~70% of patients).

WHAT ARAVIND FEEL ABOUT THEIR SUCCESS?

They look at it from two perspectives. From an internal perspective, they rate ourselves to be quite successful when we use indicators like number of patients treated, number of people trained, level of capacity utilisation, financial sustainability, etc. However, when they look at it from the community perspective they are far from being successful. This comes from the vision Eliminate Needless blindnesswhich makes them feel responsible to reach out to a larger community in the immediate surroundings of Aravind and its service area, our country and beyond our country.

HOW THIS MODEL MAKES BUSINESS SENSE?

This model makes very sound business sense because its fundamentally built on a few core principles. The first one is in terms of market development and through that demand generation. This is a process of converting a need in to a demand and in the process we get a significant percentage of this to our own facilities.

CONCLUSION
Aravind has proved that by using Human Resource efficiently and by bringing in innovation in Healthcare, affordable services with high standards can be provided even at the remotest part of the country. It has also brought this concept for debate that the techniques and interventions used in any Industry can be successfully employed in the Healthcare Industry. Ultimately, it revives the concept that if an Organization is willing to serve the masses with quality product and services, it is bound to generate revenue and earn profits.