The world’s largest provider of eye care has found success by
directly adapting the management practices of another big-box food
brand, one that is not often associated with good health: McDonald’s.
In
1976, Dr. Govindappa Venkataswamy — known as Dr. V — retired from
performing eye surgery at the Government Medical College in Madurai,
Tamil Nadu, a state in India’s south. He decided to devote his remaining
years to eliminating needless blindness among India’s poor. Twelve
million people are blind in India, the vast majority of them from
cataracts, which tend to strike people in India before 60 — earlier than
in the West. Blindness robs a poor person of his livelihood and with
it, his sense of self-worth; it is often a fatal disease. A blind
person, the Indian saying goes, is “a mouth with no hands.”
Dr. V
started by establishing an 11-bed hospital with six beds reserved for
patients who could not pay and five for those who would pay modest
rates. He persuaded his siblings to join him in mortgaging their houses,
pooling their savings and pawning their
jewels to build it. Today, the Aravind Eye Care System is a network of
hospitals, clinics, community outreach efforts, factories, and research
and training institutes in south India that has treated more than 32
million patients and has performed 4 million surgeries. And it is still
largely run by Dr V’s siblings and their spouses and children — he has
at least 21 relatives who are eye surgeons.
(Aravind’s story is
well-told in depth in a new book, “Infinite Vision.”)
Aravind is
not just a health success, it is a financial success. Many health
nonprofits in developing countries rely on government help or donations,
but Aravind’s core services are sustainable: patient care and the
construction of new hospitals are funded by fees from paying patients.
And at Aravind, patients pay only if they want to. The majority of
Aravind’s patients pay only a symbolic amount, or nothing at all.
Dr
V was guided by the teachings of the radical Indian nationalist and
mystic Sri Aurobindo (Aravind is a southern Indian variation of
Aurobindo), who located man’s search for his divine nature not in
turning away from the world, but by engaging with it.
This
philosophy, however, has produced a sustainable business model because
of the other major influence on Dr. V: McDonald’s. Sri Aurobindo and
McDonald’s are an unlikely pair. But Aravind can practice compassion
successfully because it is run like a McDonald’s, with assembly-line
efficiency, strict quality norms, brand recognition, standardization,
consistency, ruthless cost control and above all, volume.
Aravind’s
efficiency allows its paying patients to subsidize the free ones, while
still paying far less than they would at other Indian hospitals. Each
year, Aravind does 60 percent as many eye surgeries as the United
Kingdom’s National Health System, at
one one-thousandth of the cost.
Aravind’s
ideas reach around the world. It runs hospitals in other parts of India
with partners. It is also host to a parade of people who come to learn
how it works, and it sends staff to work with other organizations. So
far about 300 hospitals in India and in other countries are using the
Aravind model. All are eye hospitals. But Aravind has also trained staff
from maternity hospitals, cancer centers, and male circumcision
clinics, among other places. Some share Aravind’s social mission. Others
simply want to operate more efficiently.
The vast majority of
people blind from cataracts in rural India have no idea why they are
blind, nor that a surgery exists that can restore their sight in a few
minutes. Aravind attracts these patients in two ways. First, it holds
eye camps — 40 a week around the states of Tamil Nadu and Kerala. The
camps visit villages every few months, offering eye exams, basic
treatments, and fast, cheap glasses. Patients requiring surgery are
invited with a family member to come to the nearest of Aravind’s nine
hospitals; all transport and lodging, like the surgery, is free.
When
Aravind surveyed the impact of its camps, it found to its dismay that
they only attracted 7 percent of people in a village who needed care,
mainly because they were infrequent. To provide a permanent presence in
rural areas, Aravind established 36 storefront vision centers. They are
staffed by rural women recruited and given two years’ training by
Aravind. They have cameras, so doctors at Aravind’s hospitals can do
examinations remotely. These centers increase Aravind’s market
penetration to about 30 percent within one year of operation.
At
Aravind’s hospitals, free patients lodge on a mat on the floor in a
30-person dormitory. Paying patients can choose various levels of
luxury, including private, air-conditioned rooms. All patients get
best-practice cataract surgeries, but paying patients can choose more
sophisticated surgeries with faster recoveries (but not higher success
rates). The doctors are identical, rotating between the free and paid
wings.
Also standard for all patients is the Aravind assembly
line. Dr. V spent a few days at McDonalds’ Hamburger University in Oak
Brook,, Ill., but that visit was a product of his longstanding obsession
with efficiency. “This man would go into an airport and walk around
with the janitor and see how he cleans the toilet,” said Dr. S. Aravind,
an eye surgeon with a masters degree in business who is Aravind’s
director of projects. (He is Dr. V’s nephew, also named for Sri
Aurobindo.) “He would go to a five star hotel and follow the catering
people.”
Doctors are hard to find and expensive, so the surgical
system is set up to get the most out of them. Patients are prepared
before surgery and bandaged afterwards by Aravind-trained nurses. The
operating room has two tables. The doctor performs a surgery — perhaps 5
minutes — on Table 1, sterilizes her hands and turns to Table 2.
Meanwhile, a new patient is prepped on Table 1. Aravind doctors do more
than 2,000 surgeries a year; the average at other Indian hospitals is
around 300. As for quality,
Aravind’s rate of surgical complications is half that of eye hospitals in Britain.
This
volume is key to Aravind’s ability to offer free care. The building and
staff costs are the same no matter how many surgeries each doctor
performs. High volume means that these fixed costs are spread among
vastly more people.
In the 1980s, Aravind faced a dilemma. A new
surgery, which implanted a lens in the patient’s eye, had become the
gold standard for treating cataracts. But these lenses were not made in
India, and Aravind could persuade manufacturers to reduce their cost
only from $100 to $70 per lens. Should Aravind begin providing
first-class treatment for paying patients and second-class treatment for
free ones? Or should it try to get enough money from paid patients to
cover intraocular lenses for all? Neither was acceptable.
The
solution was to get into manufacturing. In 1992, Aravind set up Aurolab,
which now makes lenses (for $2 apiece), sutures and medicines. Aurolab
is now a major global supplier of intraocular lenses and has driven down
the price of lenses made by other manufacturers as well.
Aravind
could not do its work without paying patients, of course — they
subsidize free patients. They also improve service, by demanding high
quality for their money. But it also works the other way around: the
free patients improve service and price for patients who pay. “One of
our big advantages is the scale of the work we do,” said Dr. Aravind.
“You become a good resource center for training doctors, nurses,
everybody. Because of high volume, doctors get better at what they do.
They can develop subtle specialties.” And free patients make cost
control a priority. “If 60 percent of your patients are paying very
little or nothing, your cost structure is attuned towards that,” Dr.
Aravind said.
Whenever there is an innovator like Aravind, the
question arises: how replicable is this? Do you need a Dr. V? Or is
there a system that ordinary mortals can adapt?
The answer is a
little of both. Other hospitals can and do successfully use the model.
Lions Clubs International, which has worked to
prevent blindness for more than a century, finances and supports a training institute. Aravind also works with the Berkeley-based
Seva Foundation
to grow eye hospitals in other countries. “There are a lot of eye
hospitals in the developing world. Almost every single one is
considerably underproducing,” said Suzanne Gilbert, the director of
Seva’s Center for Innovation in Eye Care. “Surgical programs so often
focus on the technique being used. Often the same level of scrutiny not
applied to management, human resources and other systems that make the
surgery work.”
Seva
has worked with Aravind to establish hospitals in other countries (the
Lumbini Eye Institute in Nepal has been particularly successful). But
its campaign to turn those hospitals into training centers has gone
slowly. It’s hard to build those hospitals to be able to reach out while
keeping good quality,” said Gilbert. Seva was aiming to have 100
hospitals in the network by 2015, but has scaled back that goal.
“Of
the 300 hospitals (that use Aravind’s model), I’d say 20 percent get
the whole thing,” said Dr. Aravind. “Another 50 percent pick up pieces —
how to make your operating tables more efficient, for example. And the
rest struggle.”
Combining paid and free care in a self-sufficient
hospital is not possible for most health specialties. “The essential
ingredient is volume that straddles the socioeconomic spectrum,” said
Jaspal Sandhu, a Berkeley engineer who has
studied
Aurolab, and who is co-founder of the Gobee Group, a design firm that
works with organizations to increase their social impact. “If you’re
focusing on rich diseases or poor diseases, this model in existing form
can’t really play out. The nice thing about cataracts is that it doesn’t
greatly discriminate. And a cataract is a one-time hit. There’s a cure
for it. You can treat it in a couple of days and it won’t come back.”
Male circumcision — an AIDS prevention measure — fits this description, and the World Health Organization’s
guidelines
for scaling up male circumcision uses Aravind’s principles. “When I was
a doctor in a government hospital we did between 8 and maybe 12
circumcisions in a day per doctor,” said Dino Rech, a South African
physician who has overseen the expansion of circumcision in several
countries. “With this model, the slowest doctors are doing 40 in a day —
up to 60 for the faster ones.”
The McDonald’s part is the easiest
piece of the Aravind model to export. More difficult to replicate is
Aravind’s commitment to serving the largest number of free patients
possible — indeed, to aim to eventually serve all of them. What’s
needed, said Dr. Aravind, “is not leadership in the sense of organizing
and making it work. It’s leadership that comes from empathizing with the
community.”
Aravind spends a lot of resources recruiting free
patients. “Never restrict demand. Build your capacity to meet the
demand,” Dr. Aravind said. This community outreach work is the easiest
part to sacrifice, he said. “This is where mission and leadership come
in. People try to justify it with many things — we’ll build a bigger
organization, then we’ll go back to community. If you have a choice
between your paying and your free patients — well, the team is watching
how you prioritize. Here’s its been internalized that this is the way we
deal with any issue. If someone can embody that, they can be like our
founder.”
