Arvind Eye Hospital

1. Case summary

The case describes the transformation of an eye hospital's comprehensive eye-care system. Aravind Eye Hospital in Madurai, Tamil Nadu, India, does about 60 per cent of their eye surgeries (mostly cataract) free for poorer patients. Yet it does not charge paying patients a high fee either. It achieves this through a highly efficient and streamlined system of operations; a dedicated set of doctors, nurses and supporting staff; and a visionary and energetic leadership driven by a sense of mission. It also has a number of other units such as a manufacturing unit to produce inter-ocular lenses, a research unit, an outreach system and a training centre. The case describes the culture and values of the units under the system. It poses the issues involved in the further growth and retention of the core culture and values.

2. Critical elements of Strategy of Aravind Eye Hospital

The hospital was started in a small way by Dr.G.Venkataswamy after his retirement in Government Service. His vision for the hospital was to eradicate needless blindness. The business model consisted of catering to the poor but underserved patients who needed eye surgery and treatment. The strategy depended on using economies of scale and cross subsidy to provide quality healthcare to rich patients and use the profits to fund subsidise treatment of the poor.

As the business grew, they improved the infrastructure at Madurai and later expanded their operations to Tirunelveli, Theni, Coimbatore and Pondicherry. To reduce the cost of treatment, they borrowed technology for items for items like Intra Ocular Lens and started mass producing in India at a fraction of the cost. Regarding manpower like Nurses, they recruited from poor families from villages around the hospital.This ensured that the nurses had a sense a belonging and were loyal to the hospital

3. Changing Market Place

With rapid increase in the patient population and increased demand for the treatment, there arose strains on the existing model.Doctors were very busy at the operation table to meet the patients needs for surgery and treatment that they had hardly any weekend holidays and time for research. With expansion of the hospital at other places than Madurai required logistical issues.

4. Environment Analysis

The increased workload and large multiple hospitals with large number of doctors resulted in the issue of attrition. Because of the reputation of the hospital and the excellent learning opportunities it offered, it attracted doctors in droves