Case Overview 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 amil !adu can get their sight restored for about "#$. If they can%t afford that, it%s free. &tarting with an ''-bed clinic in '()*, Dr. V%s system is now a five-hospital system. +is model became the sub,ect of a +arvard -usiness &chool case study, and is being copied in hospitals around the subcontinent. he cheap, high-.uality implantable lenses the system manufactures are exported to more than /$ lenses the system manufactures are exported to more than /$ countries around the world, 0ravind says. Dr. Venkataswamy%s basic insight was that health care can be marketed to the poor if a program is closely tailored to a local niche, something that has come to be known as social marketing. In a country with, by some estimates, 1$ million blind eyes -- /$2 of them due to curable cataracts -- the appeal for patients was financial. 30 blind person is a mouth with no hands,3 is an Indian saying that Dr. V liked to .uote. In India, health professionals say, the years of life left to those who go blind can be counted on one hand. 4ith sight restored, the patient can return to work. he 0ravind system offers services that range from a simple pair of spectacles to optical oncology. he bulk of surgeries are to treat cataracts -- removing the cataract and replacing it with an artificial intraoptical lens. he assembly-line approach is most evident in the operating room, where each surgeon works two tables, one for the patient having surgery, the other for a patient being prepped. In the 56, doctors use state-of-the-art e.uipment such as operating microscopes that can swivel between tables. &urgeons typically work '1-hour days, and the fastest can perform up to '$$ surgeries in a day. he average is 1,$$$ surgeries annually per surgeon -- nearly '$ times the Indian national average. Despite the crowding and speed, complication rates are vanishingly low, the system says. 5utside the operating rooms, conditions are as &partan as the tables at a fast-food restaurant7 5ften only a straw mat on a ward floor for postsurgical recovery. Patients who pay more than the basic "#$ 8 about 9$2 of patients -- can receive cushier treatment such as private rooms for extended recovery, and hot meals. Dr. V liked to say that his ambition was to stamp out needless blindness in India, and broaden his model all over the world. 3 ell me, what is this concept of franchising:3 Dr. V commented to the +arvard -usiness &chool researcher who conducted a case study in '((#. 3;an%t we do what <cDonald%s and -urger =ing have done in the

>nited &tates:3 +e has laid the groundwork for it. 0ravind says its model has made significant gains in the subcontinent in recent years, with the basic model being adopted in hospitals in <umbai, =olkata and !epal, and the Indian government adopting its medical protocol for training centers around the country. eams of 0ravind consultants advise hospitals in ?ast 0frica and the @ar ?ast. 0urolab, the 0ravind system%s successful manufacturing arm, says it produced *2-)2 of the lowcost lenses world-wide in 1$$1, and has sold them in '1$ countries -- though not in the >.&., where @ood and Drug 0dministration regulations is a prohibitive hurdle. -ut Dr. V%s dream of <cDonald%sstyle eye-care franchises around the world may prove difficult, because the culture of 0ravind involves more than the profit motive and a fast-food manual. Aike Dr. V, many of the highly dedicated surgeons and staff are devotees of &ri 0urobindo, a +indu master for whom the hospital was named. Dr. V has said they are 3building an organiBation that seems to be linked to the higher consciousness.3 he work is grueling, and while pay is comparable to that of government surgeons, retention is still a problem. 0 .uarter of the professional staff defects each year to better-paid ,obs in the private sector, the system says. <anagement is still largely with Dr. V%s family. -ut where are the charismatic capitalists to open new 0ravinds abroad: 3&o far we have not been able to develop entrepreneurs in health from the management side,3 Dr. V lamented in a 1$$# interview with an Indian business ,ournal. 3?verybody wants to be an entrepreneur in information technology or an associated field.3

QUESTIONS
Q1.What is the vision of AECS? What is the role of operations in meeting it?

0nswer7 At pr es ent the m ed ic al s c ien ce ha s a tr em en do us de velo pm en t an d achi eved s o m e amazing breakthrough in terms of innovation, pushing frontiers of surgery, transplant technology, drug therapy and a host of other research fields to make the people live a dignified and healthy life . But the medical treatment has always been an expensive or costlier means for the poor people. T h e po or peop le we r e unable to af fo r d hu ge amount of money needed for medical treatment. This is especially in case of eye related treatment.

Thus in order to make this eye related treatments and corrective surgery Dr. enkataswamy who w o r k e d as the head of the Department o f !p ht halm olog y at th e " over nm en t #e di cal $ o l l e g e i n # a d u r a i , w h o h a d t h e v i s i o n f o r eliminating curable blindness started Aravind %ye $linics. That vision drove programmes of innovation which p e r s i s t s t o d a y a n d h a s a l r e a d y a c h i e v e d s ign ific an tly ag ains t th e or ig inal go als . 0?;& has a very clearly defined set of vision,mission and goal. oal! Their goal is to offer &uality care at reasonable cost. "ission! %radicate needless blindness by providing appropriate, compassionate and &uality eye care for all' #ision! (%liminate needless blinds by providing &uality service in reasonable price for all' T h e Aravind %ye $are )ystem is the largest and most productive eye care facility in the world. *hilst there are many complex optical disorders, cataracts are not generally regarded as a difficult challenge in eye care. But for nearly fifty million people around the world and nine million in +ndia cataracts mean blindness. Dr ,s vision was totarget and treat this group, using the simple tools an d te chni&u es wh ic h he and

coll ea gues ha dworked with over many years but bringing them i nto the reach of everyone.

The role of operations in meeting #ision!

0?;& has two operations sections7 '- main hospital for paid patients, 1- free hospital for non paying patients 0nd these are the steps in operating the sections7

The role of operations in meeting their vision are! ;ost cutting Cfactory setup, mass surgeryD. 6educed time per patient Cinfrastructure, managementD. <ass surgery Chelp in achieving higher surgery everydayD. ;amp organiBed in rural areas Cattracted people to come forward with their problemsD

So far what have the$ %een &oing to a'hieve their vision thro(gh operations! *$ hours a week instead of 9$ hours, industry standard. started doing #$$ operation per month by onedoctor instead of 1E. Proper infrastructure allows doctor to do more operation in less time. <ass awareness ;ost cutting-

 set up their own factory to manufacture lensesCbring prices down from /$$ to 1$$D.

Q). Can this s$stem %e repli'ate& to other aspe'ts of health 'are? Other servi'es? What will %e the pro%lems? What will %e the a&vantages?
Answer! Dr. V created a system for sight-saving cataract surgeries that produces enviable medical results in one of the poorest countries 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. +is unusual assembly-line like model of business has some strong competitive dimensions unlike more traditional medical health care systems. hey are7 Cost or *ri'e Dr. V provides eye surgery and tests at a very low cost and even for free to those who cannot afford his services. &tudies have shown that 0ravind ?ye ;are &ervices provides the cheapest eye care medical service in the world because instead of two doctors Cthe standard in the fieldD, each surgery is performed by one doctor with two assistants standing by. Dr. V has also developed lenses in his own factory at a staggeringly low cost of ,ust 6s. '$$ per lens as opposed to the industry price tag of 6s. /$$. Q(alit$ he hallmarks of the 0ravind model are .uality care and productivity at prices that everyone can afford. he same team of doctors and nurses attend to both the paying and the non paying patients. 5ne secret of 0ravind%s productivity is its well-trained battalion of ophthalmic assistants. hese are young village women who%ve undergone two years of training to take on the routine tasks associated with eye surgery. his allows 0ravind%s doctors to focus on diagnosis and the surgical procedure itself, ensuring that both groups of patients receive world class eye treatments. +eliver$ Spee& 0ravindFs surgeons take only '$ minutes to successfully complete one surgery against the industry standard countdown of 9$ minutes. hus they are able to carry out #$$ surgeries per

doctor per month as opposed to the average of 1E surgeries per doctor per month. -ased on the high volumeGlow margin kind of business model his high productivity is achieved by significant process innovation driven by close analysis of value adding time. @or example, each surgeon works on two operating tables alternately, and is supported by a team of paramedics to carry out less-skill dependent aspects such as washing the eye, putting in sutures, giving anesthetic in,ections etc. in this way the valuable time of the surgeon is used properly and the surgeries are performed at an incredibly fast rate. ,elia%ilit$ Dr. V and his pool of surgeons and nurses ensure that both paying and non-paying patients receive e.ual care and treatment and are treated at the right time too. 6ich or poor, the patients can rely on 0?;& to attend to them with the same level of care and eye care service. Te'hni'al -iaison an& S(pport 0ravind set up its own factory to produce *$,$$$ I5As per year and have brought down the cost from a regular 6s. /$$ t$ 6s. 1$$ and the cost is expected to fall further, due to the relentless progress and technical support provided by its own factory. hus, keeping so many competitive strategies in mind and the efficiency and effectiveness that the 0ravind model has brought to the industry, it can be assumed that the system can be replicated to other aspects of health care. +owever, the implementation has possible pros and cons. &ome of the problems that this model might impose could be a weak capital structure. -anks and aid agencies hardly show the intent to back up such a model with loans, so raising capital through only personal contribution and the little fund expected from only those who can afford to pay, could be a problem. 0lso, the basis of the 0ravind eye clinics is standardiBation and engineering cataract surgery for high volume production. &o unless other health care systems, wishing to implement this model, can attract a substantial volume of patients at all times, the model will fail. !ext, the high volume production model means the 0?;& doctors have to work longer Cfor almost double the timeD and harder than doctors anywhere else and the weaker capital structure means much lower salaries for the surgeons in comparison to industrial standards. hus, if any other form of health care service wants to adopt the 0ravind model, they might face the problem

of recruiting doctors who would be willing to work longer and harder with relatively lower pay structure. +owever, this model also has its many advantages, which is probably the reason why 0?;& has been going strong for three decades. his model makes very sound business sense because itHs fundamentally built on a few core principles. he first one is in terms of market development and through that demand generation. his 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. he second core principle is excellence in execution of ensuring a high level of efficiency in providing the treatment, including outpatient services and surgeries by applying assembly-line standards. he third core principle is one of .uality. he aim is to ensure that the patient regardless of whether he is a free or a private patient gets value for his investment in money or time. he fourth principle is of sustainability wherein they set the prices not so much based on what it costs them but on how much the various economic strata of the community can afford to pay. hen they work backwards to contain the costs within these estimates. the organiBation. his leads to not ,ust financial viability but a higher order of management, as well as inculcating a certain culture in

Q..

/ow &o &ifferent elements of AECS wor0 together to &eliver the vision

of +r. #?
Answer! 0ravind ?ye ;are +ospital C0?;&D is an ophthalmological hospital with several locations in India. Despite the vast need for eye surgery to prevent blindness, national health institutions in India is unable to meet demand. <oreover, while cataracts are almost always curable, the poor often cannot afford the surgery needed to restore vision. 6ecogniBing this service gap, Dr. Iovinda Venkataswamy founded the 0ravind ?ye ;are &ystem in '()* as a supplemental health initiative aimed at combating unnecessary blindness amongst IndiaFs growing and aging population. -eginning with a single ''-bed hospital, the organiBation has grown today into one of the largest facilities for eye care in the world.

0ssembly-line approach worked as the vital element of 0?;&. India became home to a .uarter of the world%s blind, and every year at least # million Indians develop cataracts, the ma,or cause of blindness. 0?;&%s doctors perform 1,$$$ surgeries a year versus the national average of #$$.

0?;&%s scale and productivity are noteworthy in themselves. -ut another dimension is that treatment is either free or heavily subsidiBed for the poor, who come from the remotest villages in the region. he hospital chain earns its keep from the other half it serves7 well-off folk who flock to it for its reputation for excellence in eye care.

Ietting rich patients to pay for the poor has worked exceedingly well for the hospital chain. >nlike other charities, 0ravind isn%t dependent on donorsJ it makes enough money to be mostly self-funded. In the last fiscal year its net profit of ").( million on revenues of "1$ million was a performance worthy of any commercial venture.

he differential pricing has nothing to do with the .uality of treatment, which is the same for every patient, but with the type of lens inserted in the eye and the amenities provided. !onpaying patients are given a basic hard lens and share a room with other patients where they get a mat on the floor. Paying patients can choose from a menu of soft lenses and other categories of rooms.

Q1.

Con'l(sion
0?;& has proved that by using +uman 6esource efficiently and by bringing in innovation in +ealthcare, 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 techni.ues and interventions used in any Industry can be successfully employed in the +ealthcare Industry. >ltimately, it revives the concept that if an 5rganiBation is willing to serve the masses with .uality product and services, it is bound to generate revenue and earn profits.