A

Landscape in 1992

30M 12M 75%

Blindness cases is due to
Blind People in the world. cataract in Asia and other
6M – Africa Blinds in India. developing countries
20M –Asia 80% of which are age-
4M – others 2M added annually. related

8000 1.2M 70%

Ophthalmologists in India Indians below poverty line
Cataract operations
with annual per capita
annually.
income less than Rs.2500
Evolution of Arvind Eye Care

600 beds at Madurai. 400 beds

at Tirunelveli 100 beds at Theni.
20 bed hospital opened in 1976.
1989, Eye camps were started
30 bed annex opened in 1977. to increase awareness and reach
patients who cant afford to
Main hospital commenced in travel.
1977. 1990, Free hospital for walk-in
70-bed free hospital was opened opened
in 1978

1976-80 1986-90
1981-85
1991
Main hospital completed
in 1981. Set up facility for
manufacturing of
350-bed free hospital was IOLs(Intraocular lenses).
opened in 1984.
65 million Cataract
operations performed
and 70% of them free.
key factors that led to the success of AEH
Social Organizational
Innovation
Responsibility Culture

assembly line system charging none to everyone was dedicated

in patient care and nominal fees with world and devoted to the
surgery class health care mission of the Aravind
Hospital

Cost- Scale Quality

effectiveness
Assembly line method with High quality surgery and
Due to cost effective model
time efficient patient care patient care
AEH could become self
resulted in very high daily
sufficient even with large
patient flow
proportion of free patients
 Are there any weaknesses at all with the AEH model of delivering eye care?

• AEH Model is an epitome example of how economies of scale can help a business sustain even if it is primarily running with no
motivation of profit.
• Even though the AEH has little more than 50% in net profit, there are few weaknesses which it can improve upon.
• AEH firstly need to evenly distribute or manage the inflow throughout the day, rather than concentrating it in the morning
only.
• Manage the 3 of the most busy days of the week with systems like prior appointments or tokens etc (for paid patients) and
divert this kind of patients on the slacked days, that would help ease out the skewed ratio of patients with weekdays.
• Allot the critical tasks to senior surgeons and train the junior doctors extensively on everything else so they can manage more
surgeries and bring the surgery time down which will help cater to more patients.
• And Doctors are over-worked, they can employ more doctors as suggested above which will give them more junior resident
doctors at lower cost but still will be able to provide effective services.
• Hospitals at Tirunelveli and Theni are running with low conversion margins due to lower marketing efforts and less number of
patients is contributing adversely to the cumulative results.
• Need to generate more number of revenue generating streams like tie up with NGOs etc for outreach programs rather than
just rely on the publicity through eye camps in Tirunelveli and Theni hospitals.
• And one of the obvious cost contributing factor is IOL cost which goes in ECCE surgeries and is close to 10 % of the entire cost
factors, while though most of the free surgeries are ICCE and the ratio of ICCE v/s ECCE surgeries is almost 75% v/s 25%, but if
the 25% is contributing most to the cost then they need to scale up the manufacturing facilities even more to help generate
more revenues to cover the expenses.
 Free Hospitals Paying Hospitals
Crowded. Less Organised. More Waiting.
Mostly Intra-Capsular(ICCE Type) surgery Less Crowded. Slightly premium facilities
were offered. were offered to paid customers.

Most of the patients were called through

Eye-Care Camp. All were offered free
food, travel, stay , surgery and Both ICCE and ECCE surgery offered.
medicines.

20 to 30 patients in one Hall with self Affordability of High Quality

3 different stay options with different level of
contained washroom. Bamboo/Coir mat on
privacy and facilities
floor instead of Beds.

Patients in both the hospitals were treated with The sequence and process of treatment is same
Paid
same dignity and care. for both the hospital.
Staffs were periodically rotated among both Detailed records of complicated cases were
hospitals to ensure consistency in Quality of
Free maintained and reviewed for continuous
treatment. improvement.
What is the role of clinical and support staff in all this? Is there any reason
for them to be part of this organisation?

The role of clinical and support staff is to assist doctors in patient care. They take on various tasks such as:
 welcoming and preparing patients.
 Explaining treatment.
 updating patient records.

In AEH, every doctor regularly worked long hours, and for hassle-free work, they needed the assistance of trained
clinical and support staff:
 They looked at working at AEH as a spiritual experience and thus gave their best effort to realize the dream of high
quality, large scale and cost-efficient eye care for all to reduce blindness in India.
 Helping patients and guiding them along in the sequential flow- prepared 20 patients while 3 patients waited in the
operating room and another 20 patients in the process of being prepared.
 Other than assistance in surgery, they also helped in registration; vision recording; preliminary examination; testing
of tension and tear duct function; refraction test; and final examination.
 How are the satellite hospitals at Tirunelveli and Theni doing?
How are its eye camps performing?
Tirunelveli
• Extension after the Madurai AEH, Tirunelveli hospital was equipped
with 400 beds.
• The fundamental issue at Tirunelveli hospital was, even though their
cashflow margins were looking okay, they were not able to pay the
cost-of-capital back
• They were completely relied on the Main Madurai hospital for all their
supplies
• Even though improvement over the physical design than the main
hospital, this branch was facing the “capacity utilization issues”
• They have been able to only utilize 25% of their capacity (refer the
excel sheet attached) which is contributing heavily to their cost.
• Hence their fixed cost is higher than the demand they are able to
generate, due to lack of marketing efforts other than eye camps and
that too sometimes other competitors get is done before they do and
then they are left with less numbers of patients who would pay for
the services.
• Refer the Excel Sheet Attached to see how are its eye camps
performing which is only close to 50% (55.84%) of how Madurai Eye
Camps are performing.
• Tirunelveli’s eye camp conversion ratio is 68.66% if we attribute the
eye camp screening versus the admitted patients in the hospital.
Theni
• Theni hospital was situated in Dr. Nam’s hometown and was under his
observation. It was equipped with 100 beds
• Even though it had a smaller facility than the Madurai & Tirunelveli’s
scale, it was working almost at par with Tirunelveli hospital in the
relative % terms.
• Though, much information is not available in Detail about Theni
hospital but what we can see is they are facing similar issues like
Tirunelveli.
• Both satellite hospitals have the ratio of close to 25% paid patients
and 75% free service patients compared to Madurai Hospital which
had this ratio of 40-60.
• And similar to Tirunelveli hospital, Theni is also only been able to
only utilize 25% of their capacity (refer the excel sheet attached) and
these above factors are contributing heavily to their cost because of
which they are dependent on the Madurai Hospital.
• Refer the Excel Sheet Attached to see how are its eye camps
performing which is also only close to 50% (54.12%) of how Madurai
Eye Camps are performing, same as Tirunelveli.
• But Theni’s eye camp conversion ratio is still lower than Tirunelveli
(52.21%) – refer the excel sheet for the same.
Capacity Utilization
Thank You.