School of management studies , cusat

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Case- Aravind Eye hospital
Group 7
B-batch
Case Summary
Dr G. Venkataswamy, popularly referred to as Dr V, was head of the Department of
Ophthalmology at the Government Medical College in Madurai. His objective was to eliminate
blindness in his home state and to make the treatment affordable to all. Dr V and his
colleagues using simple tools and techniques managed to do just that. The challenge was to
carry high quality process at low cost. Solution was to design a system which standardized as
much of the process as possible and reduce the key skills and discretionary to minimize and
apply this to high volume production. The key factor is that they never compromised on quality
while providing treatment at low cost. He adopted the model from McDonalds and Henry Ford.
He opened his first hospital in 1977 with 30 beds and later it spread to other locations
across Tamil Nadu with a total of 3649 beds of which 2850 were free. Later Aravind Eye
Hospital was shifted to become the Aravind Eye Care System in which many key elements
were added which includes a dedicated factory for producing lenses, training centre, research
centers and an International eye bank. Around 90% of the patients are interviewed which
provides valuable feedback on factors like outcomes of cataract surgery, the number of people
recovering normal vision, intermediate vision and so on.
The high productivity is achieved by significant process innovation driven by close analysis
of value adding time. Early operations often involved fitting an ‘intra-ocular lens’ which was
expensive as an imported product. Value engineering the design and then setting up
manufacture within a division of Aravind, called Aurolab, the IOLs can be made for a fraction of
the import price. Learning by doing is a powerful aid to developing robust systems and in the
Aravind case, the model is now being looked at by many health authorities around the world.
1. Discuss the reasons for effectiveness of Aravind eye Hospital?
He created a new model of operating enterprise touted as Aravind Operational Model of
patient centered care which is the primary reason for the effectiveness of the hospital. The
model consists of Quality, Financial stability, Efficient Service, Giving value, High Volume and
reaching the people. The hospital focused on providing large volume, high quality and
affordable care. Dr.Venkataswamy focused on employees and their development and the staffs
have also high social commitment which led to the increased effectiveness.
They followed service efficiency of McDonald's and try to adapt it to the eye care system to
cope with increasing the numbers of patients treated.50% of patients receive services either
free of cost or in a subsidized rate while maintaining the financial stability of the hospital. In-
house manufacturing-They set up a manufacturing facility which makes intraocular lens called
Aurolab in 1992 which help to reduce the cost compared to others. Important component of
Aravind’s model is the high patient volume, which brings with it the benefits of economies of
scale.
They established an outreach program where doctors reach out to remote villages to
conduct eye camps with the help of organisations.They take care of the costs of the camp,
transporting the patients for surgery. Aravind concentrates on rotating doctors between free
and paid wards, focuses on efficiency and hygiene thus eliminating differences between the
surgeries done for paid and non-paid patients.

2. 2
2. Discuss the applicability of concept of “bottom of pyramid" in healthcare sector?
Management scholar CK Prahalad popularized the idea of this demographic as a profitable
consumer base in his book The Fortune at the Bottom of the Pyramid (2004). He proposes that
businesses and governments stop thinking of the poor as victims and instead start seeing
them as resilient and creative entrepreneurs as well as value-demanding consumers.
The Need for a BOP Approach in Health:
There is an inverse 2-way association between poverty and the health status of the
society. Therefore, research into newer market strategies for the BOP strata can be a sword,
cutting through both simultaneously. Several pragmatic BOP approaches can be employed in
health care delivery. More-over, this segment of population constitutes our major workforce.
Poor health status will translate into low profit and an overall lower gross national product.
Therefore, investing in the health of this population will reap rich economic dividends. The
present strategies of government, non-government, and civil society organizations have been
unable to eradicate poverty. The present strategies must change. The business sector, with its
BOP approach, can do more for public health than public health ever could do for itself. This
concept has revolutionized the business world and likely will transform the health sector as
well.
Aravind Eye Hospitals has been utilizing enterprise information and communications
technologies to expand access to quality health services while radically lowering costs. This
initiative use the principles of performing surgeries on a massive scale with relentless focus
on ‘‘par skilling’’ (i.e., instead of physicians, nurses perform certain tasks that require similar
skills with equal efficiency, thereby reducing the need for 24-houravailability of physicians)
and optimization of resources. This assures quality while containing costs
Conclusion
The real story of the “McDonaldization of Eye-Care” started with Dr.V’s visits to America
where he was impressed by the Golden Arches of McDonald’s. One can conclusively say that
the real genius behind the Aravind model lies in the mindset behind it. The thought of Dr.V
about the possibility of harnessing assembly-line efficiency of McDonald’s to the mission of
fighting blindness. The other main factors are the well-crafted processes and the build-in
interdependencies of the system. This model’s applicability to other complex high cost
operations like heart by-pass surgery are also being explored.
All the factors that contributed to the effectiveness of Aravind eye care like in-house
manufacturing of lenses, establishment of own training and research institutions and benefits
of economies of scale with high patient volume contributed to the growth of Aravind Eye
Hospital as the most efficient eye-care institution in the world.Opthalmology students from
universities like Harvard and Johns Hopkins regularly rotate through Aravind for training. The
Aravind model is a successful example to prove the applicability of “bottom of the pyramid”
approach in healthcare sector. The methods discussed above like the “par skilling” and
optimization of resources ensures quality along with affordability. Human resource is one of
the most important resources of any nation. In developing nations, poverty and healthcare
having inverse association, the need for a “bottom of pyramid” approach is quite conclusive.

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References
1. McDonald’s and Dr.V "Aravind Eye Hospital, Madurai, India: Harvard case study" (PDF) .
2. Driving down the cost of high-quality care: Lessons from the Aravind Eye Care System,
Health International, Mckinsey Health Systems and Services Practice
https://aravind.org/our-story/.
3. Bhatnagar, Nidhi & Grover, Manoj. (2013). Health Care for the "Bottom of the Pyramid".
Population health management. 17. 10.1089/pop.2013.0036.
4. Business Strategy at the Base of the Pyramid. Washington, DC:World Resources
Institute &International Finance Corporation; 2007.
5. *Giesler, Markus; Veresiu, Ela (2014). "Creating the Responsible Consumer: Moralistic
Governance Regimes and Consumer Subjectivity". Journal of Consumer
Research. 41 (October)P: 849–867.
6. Aravind Organizational Case study: https://digital.hbs.edu/platform-
rctom/submission/aravind-eye-care-system-mcdonaldization-of-eye-care/