K. J.

Somaiya Institute of Management

Subject
Operations Management

Topic

Aravind Eye Care

Submitted by:

Sakshi Goyal - 43

Raghav Khandelwal - 40

Neha Tayal - 34

Saket khetan- 28

Shubhi Goel – 53

MBA Retail Management

Contents

Introduction...........................................................................................................................................4

Objectives..............................................................................................................................................4

Operations Strategy...............................................................................................................................5

Business Model.................................................................................................................................5

Following a Serial Production Model................................................................................................6

Using Principle of 4Vs......................................................................................................................7

INNOVATIVE COMMUNITY OUTREACH PROGRAMME........................................................8

Operation Design & Process Analysis...................................................................................................9

Operation Theatre Process Flow Analysis:......................................................................................10

Operational Theatre Process Flow:..............................................................................................10

Bottlenecks and Improvements in the Pre-Operation Process..........................................................11

Bottlenecks and Improvements in the Operation Theatre............................................................11

Quality Assurance Strategies in Outreach............................................................................................12

Lean Management...............................................................................................................................12

Revenue Model....................................................................................................................................16

Challenges...........................................................................................................................................18

Solution to challenges – Being customer-centric.................................................................................19

Bibliography........................................................................................................................................21

2
Introduction

Dr. M.S.C. Bose founded Aravind Eye Hospital (AEH) in 1983 as an outpatient clinic. Dr. Bose
established his clinic in with the goal of providing high-quality, low-cost eye treatment. What began
as an 11-bed hospital has evolved into the Aravind Eye Care System conglomerate. Aravind now
manages an expanding network of eye care centres, as well as a postgraduate institute, a management
training and consultancy school, an ophthalmic manufacturing business, a research institute, and eye
banks. In South India, Aravind has 14 eye hospitals, 6 outpatient eye examination centres, and 94
basic eye care clinics.

Achieving scale and improving productivity has enabled us to keep costs down and treat hundreds of
thousands of patients each year. It has allowed us to give back to society, to the communities." Dr
Srinivasan, Director of Projects, Aravind Eye Care System

With the objective of 'eliminating unnecessary blindness,' Aravind delivers high-volume, high-quality,
and cost-effective care. Despite the fact that 50 percent of its patients receive treatments for free or at
a heavily discounted rate, the organization is financially self-sustaining. Equity – ensuring that all
patients receive the same high-quality care and service, whatever of their financial situation – is given
a lot of weight.

"Aravind is not just a health success, it is a financial success. Many health non-profits in developing
countries rely on government help or donations, but Aravind's core services are sustainable." NY
times Opinionator: A Hospital Network with a Vision.

The large patient volume, which carries with it the benefits of economies of scale, is a fundamental
component of Aravind's business. Aravind's one-of-a-kind assembly-line method boosts productivity
tenfold. Aravind performs around 4.5 lakh eye operations or treatments each year, making it the
world's largest eye care provider. Aravind has handled over 6 crore (65 million) outpatient visits and
done over 78 lakh (7.8 million) operations since its start. The Aravind Eye Care System has become a
model for the rest of India and the world.

Objectives

With this study, we aim to analyze the operating model of Arvind Eye Care, emphasizing on the
supply chain aspects.

Arvind eye care operates on "Productivity with quality" where it has established standardized
procedures for key operations, to ensure \unswerving and efficient delivery.

3
More than 300 hospitals throughout the world have partially replicated the Aravind concept. Aravind,
on the other hand, feels that this is just the tip of the iceberg, and that the impact might be much
greater. Aravind intends to expand its operations to other regions of India as well as to other growing
markets with big populations of the poor.

The fact that Aravind has a robust Research section and is constantly innovating – on the product,
procedure, and eye-care delivery – sets it apart from other low-cost healthcare providers. This
intrigued us to study Aravind eye care and its operations in detail.

Operations Strategy

In this section, the operating strategies followed by Aravind Eye Care has been provided
descriptively. This will enable us to understand the long-term planning of the Eye-Care service
provider for effective customer service and business strategies. Firstly, the business model of Aravind
Eye Care has been looked upon to understand the goals and aspirations of the company and the
working of the organization. Fundamental principles and models have been covered upon, which will
provide a complete strategic aspect of the organization.

Business Model
Aravind Eye Care developed the self-funding Healthcare delivery model, and they create value for
their entire customer base taking only a small part from it. Providing Free-of-cost, high-quality
service to more than 50% of the patients, the Hospital also makes sure that they offer the same service
to their paying and non-paying patients, and they have been doing it for more than 39 years. A visual
representation of the Business model of Aravind-Eye Care has been given below:

4
The model is utilized in Aravind Eye Care can be seen and understood through the diagram. Some of
the insights from the model has been given below:

Vision: The founder of Aravind Eye Care, Dr Govindappa Venkataswamy, followed a single and
clear vision, i.e., eliminating blindness through cataract surgery.

Following a Hybrid Model: The Hospital used a hybrid model. They used the cash-flows from the
patients who paid for services to subsidize the benefits for those unable to pay for the service.
Additionally, the Hospital generated cash flow by getting fees for tools for eye operations in the
medical market. 

Increased reachability: The customer base being targeted by Aravind Eye-Care was quite segmented
and so, the company utilized customer outreach programmes for the purpose. Also, the diagram given
shows that non-paying patients were served through mass camps.

Following a Serial Production Model

Aravind Eye-Care followed the Serial Production Model, which McDonald's also used on similar
lines. This was one of the reasons why Arvind is known as the Hospitalization of McDonald's.

The Hospital implemented the idea that there will be one Surgeon and four nurses for every two beds
in which two nurses are allocated for each patient. Each operating room consists of multiple sets of
equipment. People other than the Surgeon were trained to perform vital non-surgical tasks ( preparing
& administering the anaesthetic to the patient). This helped the Surgeon to a large extent as he could
complete two surgeries simultaneously. The strategy was implemented, ensuring that high
productivity should not hamper the quality of operations. This gave many advantages to the Hospital
such as:

 Better Coordination
 Reduced Surgery Time
 More Success Rate
 Lost Cost per Surgery

5
The table above shows the positive impact of Scenario B used by Aravind Eye Care compared to
Scenario A. The number of surgeries per hour considerably increased from 1 to 6-8, which is
significant.

The above chart shows how using just the single strategy of the Serial Productivity helped the
Hospital boost their productivity as they outperformed India and other neighbouring countries by a
considerable margin.

Using Principle of 4Vs

Aravind Eye Care has followed the Principle of 4Vs or :

 Volume  (High)
 Variety  (Low)
 Variation  (Low)
 Visibility  (Low)

As stated earlier, the Hospital focused on a single objective, i.e., elimination of Cataract through
surgery so, the focus is primarily on it. When the hospitals were started, the average cost of a Cataract
surgical operation in the US was about $3000. The hospitals focused on high volume and low variety

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to reduce the price, which was intended to achieve economies of scale. They also focused on common
variation to minimize costs and focus on lean quality management.

INNOVATIVE COMMUNITY OUTREACH PROGRAMME

Aravind Eye-Care hospitals used Community Outreach programmes to strategically increase their
reachability, increase their acceptance and at the same time, massively improve their cost structure.
To make the Business Model of Aravind Eye-Care work, they must need high volumes.

Aravind Hospitals started an outreach program through which Eye Camps were held on weekends to
tackle the issue. It attracted a large audience, and with time, the acceptability increased. On average,
the Eye Camps served about 500-1000 patients per day. They were given a basic eye test, refraction
test, and diagnosis. On average, only 10-20% of the people were found to need surgery.

Additionally, people were quite reluctant to go to an Ophthalmologist for treatment because of the
time and effort required. Aravind Eye Hospitals organized the Eye Camps in local communities for
this issue. If any higher treatment is needed, the patients would be given transport arrangements to go
to the Hospital.

With time, they established Local Vision Centres in place of Camps and those centres had the facility
of the internet to facilitate better communication.

In the above charts, we can see how much disproportion there is in the figure of eye surgeries
performed every year compared to the Annual cost for the UK National Health Service. Comparing its
prices with Aravind Eye Care is pretty high and inefficient. Aravind Eye-Care revolutionized the Eye
Care System by adopting effective operations strategies and presenting an ideal example to the
whole world. 

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Operation Design & Process Analysis

The primary mission of the Aravind Eye Care facility is to provide low cost and high-quality eye
care to all people. The functional design of the Aravind facility starts with patient screening and
primary care through on-field eye camps, eye centres and specialized camps for those who cannot
directly reach leading hospitals for treatment. After the initial screening, patients that require
specialized treatment are provided free transportation to the Hospital for further treatment.

To make the operating system more efficient, the main facility is supported by training and
development of human resources to compensate for the high turnover rate of medical personnel.
The Aravind facility has its own production facility called Aurolab, which manufactures
approximately seven lakh intraocular cataract lenses every year at a minimal cost of $8 compared
to the outsourced price of $150, allowing it to provide low-cost treatment to its patients. It also
has a 10% global market share by exporting the lenses to about 90 countries. The facility is
supported by continuous innovation through research centres.

The Aravind Eye Care facility has two major operation processes which it undertakes:

1. OPD Processes
2. OR Processes

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Operation Theatre Process Flow Analysis:
An average ophthalmologist performs about 400 cataract surgeries each year, whereas, at Aravind
Eye Care, each doctor performs more than 2000 cataract surgeries per year. That is 30-40
surgeries in about 5-6 hours. There are two main reasons for this operational excellence:

1. Using the production Line approach, there are two main sequential preparations, sub-
processes, and the main operation.
2. Using simple versions of the cataract operations using manual sutureless small incision
surgery is highly productive and does not compromise on quality.

Operational Theatre Process Flow:

 According to the type of operation to be performed, the preparation sub-processes are divided
into two streams and capacity is defined to the demand mix of these processes. In each
stream, there are a limited set of systematically assigned activities.
 The above diagram shows the operation theatre process flow, which starts from the
preparation area for both day patients and inpatients being assigned to rooms per retro-ocular
and local prep rooms with a capacity of 12 and 4, respectively.
 The entire preparation process takes about 9 to 10 minutes, depending on the preparation
required before the operation.
 After the preparation process, the main operation theatre has four operation tables, with each
doctor working on two tables. The process is planned so that the doctors can perform the tasks
simultaneously without wasting any time.
The entire operation process is 10 minutes with four operation tables, two doctors and four
nurses.

9
Bottlenecks and Improvements in the Pre-Operation Process

 The first bottleneck seen above is when both the inpatients and day patients from the day-care
and wards are assigned to the preparation room together, which can be more organized to lead
to less waiting time.
 The 2nd bottleneck identified here is the waiting time after the nurse gives the local/ retro-
ocular anaesthesia in the preparation room until the patient is placed on the operation table in
the OT.

Bottlenecks and Improvements in the Operation Theatre

 The bottleneck identified here is the waiting time when the first patient is moved out from the
operation theatre till when the next patient is placed on the OR table.

10
Quality Assurance Strategies in Outreach

Aravind has always prioritized providing high-quality care. The fact that eye camps are free should
not lead people to believe that quality would suffer as a result. Aravind takes extra precautions to
guarantee that quality is maintained throughout the caregiving process.

In the screening camps, a uniform procedure is followed to guarantee a thorough eye examination,
which includes refraction, intraocular pressure measurement, lacrimal duct patency, random blood
sugar test, blood pressure measurement, and fundus inspection. Aravind has established a set of
criteria for selecting, screening, and admitting surgical patients. To guarantee patient safety and
patient-centric treatment, necessary procedures are done.

Following each comprehensive session for a month, a follow-up camp is held at the same location for
patients who have had cataract surgery. This aids in increasing the rate of follow-up. Aravind is
maintaining 85% to 90% follow-up at one month. An ophthalmologist, an ophthalmic technician, and
optical staff attend the follow-up camp and deliver the essential services.

To sustain quality at all levels, it is critical to standardize and adhere to established norms. Any
community outreach program's effectiveness is dependent on the public's faith in the project, which is
impacted by maintaining high quality. To assure quality, Aravind Eye Hospitals have an excellent
documentation system in place, as well as a continuous evaluation of complications, results, and
infections, among other things. It's also crucial to keep track of postoperative case follow-up rates.

Monitoring is an important part of any eye care business that strives to enhance the quality of services
provided on a regular basis. Every week, in the presence of the concerned personnel, Aravind Eye
Hospitals conducts outreach performance evaluation sessions. The relevant data for each type of
outreach activity is gathered from the concerned staff. The standard outreach management
information system (MIS) is used to track the previous week's camp performance and plan future
camps and follow-up camps. [ CITATION Nam20 \l 1033 ]

Lean Management

Aravind Eye Care System (AECS) utilized "lean production" healthcare principles to successfully
function with a high patient volume. AECS was an early follower of the lean manufacturing concepts
popularised by Toyota vehicle manufacturing, without formally describing them as lean production or
specifically referencing to auto manufacturing methods. All elements of hospital operations are
observed, assessed, evaluated, and subjected to continuous improvement procedures, with the patient's
perspective and requirements as the organizational focal point.

11
The first Principle is a patient-centered treatment for people of all socioeconomic backgrounds. The
patient's perspective is given top importance in decision-making, problem-solving, and
communication in patient-centered care.

The second Principle follows the first, with "quality" being defined as the patient's experience.
Clinical quality is only one of several contact points for a patient during a hospital visit. True quality
is achieved by ensuring quality and compassion at every stage of the patient lifecycle at the Hospital.
Patient satisfaction is valued equally to clinical outcomes from the minute a patient enters the
Hospital, including how they are greeted and handled, as well as how long they wait. To enhance
openness, all clinical treatment choices and related expenses are fully disclosed to the patient prior to
the operations. Transparency has been a crucial approach for gaining patient trust and community
confidence in an Indian healthcare sector where cost deception is frequent, and misconduct is not
unusual.

Aravind has established a number of systems to gather, monitor, and assess quality parameters on a
regular basis. Patient wait times between registration and seeing an ophthalmologist, for example, are
recorded and shown in real-time. Real-time feedback keeps healthcare personnel informed and
motivated to achieve their objectives. Furthermore, by gathering data, clinics may objectively
experiment with various procedures, allowing them to embrace new methods.

Every weekend, AECS hosts outreach camps in collaboration with local sponsors. However, at first,
the number of patients who chose free procedures was quite low. The opportunity and transportation
expenses of getting to the Hospital for the treatments were a considerable barrier for the target
demographic, according to careful examination of later surveys. To help with this, AECS supplied
meals and round-trip transportation for the outreach patients to help with their transit to surgery and
recuperation. With transportation assistance, surgical conversion rates skyrocketed and have stayed
around 90% ever since.

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The third Principle is to keep treatment time to a minimum. AECS can do ten times as many cataract
procedures per year as the US national average, thanks to its innovative "assembly line" approach to
operating rooms. In a single operating room, each Surgeon works with two beds. The nursing team
prepares the next patient on the next bed while the Surgeon is operating on the first. The Surgeon may
rotate between the two beds in this fashion, allowing a single microscope and "phaco machine" to be
utilized for both, optimizing the usage of both the equipment and the Surgeon. Regardless of the
physician performing the surgery, the nursing team can be exceedingly efficient due to the highly
standardized and repeated operations. The use of four operating beds in a single operating room for
two operating surgeons at a time optimizes utilization and lowers the cost of each procedure.
[ CITATION Muk \l 1033 ]

13
A network of health organizations (including a general facility for triage, specialized units for process
efficiency, and support units for scale and scope economies) facilitates sub-processes that reduce
patient variability and the application of lean practises, which may result in improved productivity and
quality, thus more efficiently fulfilling the social function of healthcare. The application of these
concepts to various public and commercial healthcare delivery systems aids in addressing the
concerns of rising prices in wealthy nations and uneven access to healthcare in underdeveloped
countries. [ CITATION Ang21 \l 1033 ]

Key Features of Lean @ AECS

AEH is dedicated to working continuously using lean concepts to minimize wait times and improve
throughput at the Hospital.

1) Standardization
a) Standardization at the highest level - Everybody does the same things in the same way.
Individual preferences are put on hold in favour of the greater good.
b) Far-reaching task delegation - Only specialists perform specialized tasks. It takes five to 10
minutes to remove a cataract (this varies indeed per Surgeon). In one morning, a specialist
may operate on up to 60 patients.
c) Processes are being improved - This refinement process continues, step by step. They were
able to minimize the time between the end of one operation and the beginning of the next to
just a few seconds.

2) Plan, Do, Check & Act

a) Strong Planning - They try to predict how many patients will show up in what month and on
which day of the week based on prior experience (numbers). On busy days, they increase
capacity to prepare for this.
b) Excellent feedback loop through Visual Controls - When demand is higher than expected at a
given period, the planning procedures are constructed in such a manner that it is readily
obvious. When an employee notices this, he or she alerts others from other departments, who
are then requested to come in and assist right away.

3) Agility
a) Team Work and Leadership Alignment - People must collaborate to ensure that the patient
receives the care he need. Demand, not self-interest or their own department, dictates who
works where (according to expertise and skills). [ CITATION Mar11 \l 1033 ]

14
Revenue Model

In our country, 12 million people are blind, the most majority of them due to cataracts, which strike
people in India before the age of 60, far sooner than in the West. Blindness takes away a poor person's
livelihood and, with it, their sense of self-worth; it is also an illness that is often fatal. A blind person,
according to an Indian proverb, is "a mouth without hands."

50% of Aravind Eye Care's patients receive free eye care and surgery, making it the world's largest
and most productive eye care center. As a result, they operate two types of hospitals: the Main
Hospital and the Free Hospital. The Free Hospital focuses on providing individuals in need with basic
yet high-quality services: The patients are given a little pillow and a coir pad instead of a bed.

The Main Hospital operates similarly to a traditional ophthalmology facility. The Hospital's services
are paid for by all of the patients that are admitted. The Hospital has a variety of room types with
varying levels of seclusion and comfort. Simple treatments to more difficult surgery, such as retina
detachment repair, are all performed at the Main Hospital.

"Aravind is not just a health success, it is a financial success. Many health non-profits in developing
countries rely on government help or donations, but Aravind's core services are sustainable." NY
Times Opinionator: A Hospital Network with a Vision.

Aravind is able to earn a high EBITDA because to efficient operating methods and a large number of
patients.

The Free Hospital is able to give free eye treatment to the underprivileged members of society
because to the cash generated by the Main Hospital. Patients are brought in for free treatment from
eye camps. (Give one business model – get one)

Patients at the Main Hospital can select from a variety of room classes, each with varying levels of
seclusion and amenities, as well as corresponding pricing ranges.

Key Features:

1) Differential Pricing for equitable treatment: -

 Aravind's business relies heavily on differential pricing. One wealthy patient's entire payment
pays for the treatment of multiple underprivileged patients.
 The quality of treatment, on the other hand, is consistent across patients, ensuring that
complication rates are in line with international standards. Only the type of lens utilized and
the degree of post-surgery facilities given varies. While a subsidized patient is given a basic
hard lens and a shared room, patients who pay the full fee have a variety of options.
 Cross-subsidization can only be sustained if the Hospital's costs are minimal.

15
2) Decreased fixed costs

Fixed expenditures, such as infrastructure, equipment, and salaries, are the primary drivers of
healthcare costs.

3) Utilization and Productivity

Aravind is working to make the most of its infrastructure and equipment while also enhancing the
productivity of its employees. It ensures that doctors are solely focused on diagnosing and operating
on patients. It allows nurses to handle a variety of non-surgical jobs by offering high-quality training
and standardizing processes.

The implementation of the just-in-time method to boost the use of its operating rooms is one example.
A typical Aravind room contains two surgery tables and a variety of non-surgical equipment. When a
doctor is performing surgery on a single patient, the nurse assists the second patient with non-surgical
chores. The doctor can relocate the surgical set up to the other patient and begin the next procedure as
soon as the first patient is finished.

4) High-volume of patients: -

Large patient volumes are essential for spreading fixed costs and generating bargaining power with
equipment vendors. Surgical eye treatment is not prioritized in huge portions of India due to the non-
life threatening nature of vision issues. As a result, India is home to over a quarter of the world's blind
people.

Aravind employs a three-pronged strategy – community clinics, telemedicine centres, and eye camps
– to enhance access to preventative eye care, raise awareness of surgical eye care, and direct willing
patients to Aravind hospitals outside of its hospitals. The community gains by having access to basic
eye care just outside their door, and the hospital benefits by being able to see more patients.

5) Lowering variable costs

 Aravind founded Aurolabs in 1992 to produce its own intraocular lenses, citing the exorbitant
cost of intraocular lenses ($70) as a barrier to its ambitions.
 Aurolabs has been designing a manufacturing technology that reduces the cost of lenses to $2
since 1992.

16
  Become a multinational intraocular lens supplier.
 Other players were encouraged to manufacture low-cost, high-quality lenses.

6) Training and Research

Another type of vertical integration that allows Aravind to have a pipeline of well-trained doctors and
nurses is through training institutes.

Nurses and technicians, who make up 60% of the staff, constitute the backbone of the company's
operations. Every year, Aravind selects women from the local community to get advanced nursing
training. Aravind also offers a two-year post-graduate specialization in ophthalmology, and the
institute annually recruits around 45 doctors.

These doctors and nurses will continue to develop and flourish thanks to a solid performance
monitoring system and an emphasis on research.

Aravind has spent years building a solid operational model that is well-aligned to give high-quality
treatment at affordable prices, and it is a shining illustration of compassionate capitalism's potential.

Challenges

1) Transportation

For some of the selected patients from the eye camps, transportation is an issue. They might be unable
to travel to the Hospital for surgery or to be away from home for extended periods of time, resulting
in a decrease in the number of patients who accept surgery.

2) Irregular patient flow

The patient flow would be significantly higher immediately following an eye camp and much lower at
other times. At times, the Hospital was overcrowded, while on the other hand, it was much below
capacity.

3) Scalability

Patients need to visit the Hospital in order to receive treatment. The camp could not be held in an area
that was too far away from the hospitals.

17
Solution to challenges – Being customer-centric

Aravind Eye Care's biggest problem is coping with the large volume. There are other considerations
to be made, particularly from a non-clinical standpoint. What will be the best way to maintain the
place clean? How to ensure that everyone understands where they should go? When there is such a
huge volume of patients, patient safety becomes extremely crucial. AECS has opted to assist those
who are unable to obtain care elsewhere, in contrast to other hospitals, which focus on patients who
are ready to accept treatment. Providing care for such persons differs significantly from providing
care for those who are unaware that they have a problem or how to seek help. Many more obstacles
arise, and overcoming them takes a great deal of creativity, making Aravind Eye Care an innovative
enterprise.

AECS seeks to be an open and transparent organization that puts the patient first in all they do. As a
result, much of Aravind Eye Care's processes and procedures are centred on the patient. It also
focuses on their very sensitive market. Even if people are less educated and destitute, they retain a
strong sense of dignity and self-respect. As a result, it is critical that AECS provides an environment
in which they may feel valued and cared for. Even if they are receiving free or low-cost care, it is
necessary to develop an atmosphere that can meet their requirements. Being a customer-centric
organization is critical nowadays, but things are a little different in a social enterprise with a cross-
subsidized business model.

The majority of Aravind's clients are free or subsidized. However they are able to do so because they
also attract a large number of paying clients. It is also crucial to deliver a positive patient experience
for paying clients. The needs are always shifting. Patients today are far more demanding than they
were in the past. They know what they want and what they can anticipate; therefore they continuously
want more and a specific degree of service quality. It's difficult to strike a balance between their
demands and being productive. That will be our primary emphasis moving ahead. And it is because to
those patients that AECS is able to carry out this charitable activity. [ CITATION Ale14 \l 1033 ]

18
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