Aravind Eye Care – Restoring Dignity & Livelihood by Curing Blindness

GORMALONE January 17, 2019

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In rural India, cataract led blind person’s life expectancy radically drops to two years. Aravind restores vision and thereby livelihood, by curing preventable blindness. At 0.5m surgeries each year, Aravind Eye Care does the largest number of eye surgeries in the world. 49% of these surgeries are done free or at very subsidized rates. For patients coming from camps, apart from cost of surgery, their travel cost, medicine and food expenses are also covered. Aravind charges market rates to the balance 51% paying patients and generates surplus from them by being frugal and optimizing resource utilization. We believe Aravind is India’s largest philanthropic initiative which generates its own resources and is NOT dependent on external grants. How do they do it?

Restoring Dignity & Livelihood by Curing Blindness

Leveraging Surgeon’s Skill to the hilt

Cost of surgeons, is ONE of the three big cost areas in eye surgery. Aravind, ensures that Surgeons’ invest their time only doing the skill led work in an eye surgery. All other work that can be done by someone else, with proper amount of training, is done by the support teams called MLOPs (Mid-level ophthalmic personnel). This system has led to surgeons at Aravind performing 1500 surgeries per year as compared to less than 400 by other surgeon’s in India and our neighboring countries.

High Volumes Ensure Better Capital Cost Absorption

The capital cost of setting up a hospital including expensive instruments, is the second of the three big cost areas in eye surgery. Aravind’s high volumes of surgery ensures significantly superior capital cost absorption. Aravind has been training other eye care hospitals in India and abroad on appropriate systems, processes to be adopted for scaling up their operations profitably.

In-house manufacturing of high value Components

Components such as Intra Ocular lens (IOL), sutures, and eye drops, are the third of the three big cost areas in eye surgery. Aurolab, an unit of Aravind Eye Care System, makes all of them in-house. Aurolab has brought down the cost of IOL from range of Rs. 2,500 – 3,000 to Rs.270 when it first introduced IOLs in 1992. Even today the foldable IOLs made by Aurolab cost Rs.1,000 compared to market price of Rs.6,000 plus for its equivalent. Aurolab has also managed to reduce the cost of sutures by more than 50% for their equivalent. Of late, by making Affordable foldable IOL, Aurolab has halved, recovery time for a larger number of patients, by reducing incision size for surgery and thereby also eliminating the need for sutures. Aurolab supplies these high quality, low cost IOLs, sutures and medicines to other eye hospitals in India and abroad to ensure reduced cost of eye treatment globally. So this price advantage now does not remain unique to Aravind.

Women Empowerment In Rural Areas

Aravind has developed a unique system to hire young women from rural areas and provide them training to become
(i) part of support teams for clinical as well as non-clinical work
(ii) operate rural primary eye centres which do primary screening and provide care through tele-medicine. Doctors from the base hospital connect with rural patients through video conferencing.
This has led to increased access for patients and eliminated the need to travel for 90% of patients seen in primary Centres. Besides benefiting patients, Aravind system has led to financial independence for these women and their families.

Consistent Cost reduction has created a frugal operation leading to profitability

Aravind eye care had Rs.346 crores (US$49m) of income and Rs.205 crores (US$29m) of expenses for year ended March 2018. Rising cash surplus is being reinvested to
(i) aggressively expand new hospital network such as at Chennai & Tirupathi and
(ii) Increased investment in basic research with a strong focus on improving clinical outcome on eye diseases which are curable such as Cataract and developing management strategies for challenging conditions like retinoblastoma.

To conclude
Aravind, in our view, is a Role Model for :

(i) Superior clinical outcomes despite operating on large volumes. In addition to reduced surgical cost, Aravind has created growth opportunities for ophthalmic surgeons and young girls from villages in India.
(ii) Aravind was started by Dr. G. Venkataswamy (Dr. V) in 1976. Dr. V passed away in 2006, yet, Aravind continues to scale new heights due to strong succession planning and systems driven model and
(iii) Doing philanthropy on a large scale without being dependent on grants. Aravind keeps raising the bar for itself by making smart improvements in its operations on a daily basis.

Our standing ovation to Team Aravind…..

Anchor Grant provider for Jagriti is on board…..

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Manish Jain
GormalOne LLP

Delivering Resources to Empower

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