Aravind Eye Clinics – Managing innovation (Case Study)
The Aravind Hospital Case Study
The Aravind Eye Care System has become the largest eye care facility in the world with its headquarters in Madurai, India. Its doctors perform over 200,000 cataract operations every year –and with such experience they have developed state-of-theart techniques to match their excellent facilities. The cost of these operations runs from $50 to $300, with over 60% of patients being treated free. Despite only 40% of customers paying, the company is highly profitable and the average cost per operation (across free and paying patients) at $25 it the envy of most hospitals around the world.
Aravind was founded by Dr. G. Venkataswamy back in 1976 on his retirement from the Government Medical College and represents the result of a passionate concern to eradicate needless blindness in the population. Within India there are an estimated 9 million (and worldwide 45 million) people who suffer from needless blindness which could be cured via corrective glasses and simple cataract or other surgery. Building on his experience in organizing rural eye camps to deal with diagnosis and treatment he set about developing a low-cost high quality solution to the problem, originally aiming at its treatment in his home state of Tamil Nadu.
One of the key building blocks in developing the Aravind system has been transferring the ideas of another industry concerned with low cost, high and consistent quality provision –the hamburger business pioneered by Ray Croc and underpinning McDonald’s. By applying the same process innovation approaches to standardization, workflow and tailoring tasks to skills, he created a system, which not only delivered high quality but was also reproducible. The model has now diffused widely –there are now five hospitals within Tamil Nadu offering nearly 4000 beds, the majority of which are free. It has moved beyond cataract surgery to education, lens manufacturing, research and development and other linked activities around the theme of improving sight and access to treatment.
In making this vision come alive Dr G. Venkataswamy has not only demonstrated considerable entrepreneurial flair –he has created a template which others, including health providers in the advanced industrial economies, are now looking at very closely.
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