the aravind eye hospital, madurai, india- in service for sightaravind

8/13/2019 The Aravind Eye Hospital, Madurai, India- In service for sightaravind

1/7

The Aravind Eye Hospital, Madurai,

India- In service for sight

Submitted by: Group 6

Aditi Sharma

Charu Sharma

Aditi Tamby

Anuj Pasricha

Arnav Shankar


2/7

Introduction:

Dr. Govindappa Venkataswamy(Dr. V.) founded the hospital in 1976 with20 beds. It later developed into one of the biggest hospitals of its kind inthe world in 1992, with 1224 beds.

The hospital was named after an Indian philosopher and SwamiAurobindo from whom Dr. V learnt that anyone, through dedication in

its professional lives, could serve humanity and God. Dr. Vs dream was

to cure 20 million people from their blindness which was far from the 1

million cataract operation a year that the hospital was conducting.

The Services of Aravind Eye Hospital can be classified as: Paid Free Camps

By 1992, the Aravind group of hospitals had screened 3.65 millionpatients and performed 335,000 cataract operations. Nearly 70% ofthem were free of cost.

Almost 90% of the annual budget was self generated and the rest 10%came from sources such as Royal commonwealth society for the blind

(U.K.) and the SEVA Foundation (USA).

Marketing function

Aravind eye hospital does not advertise itself. It has sustained and achieved growthmainly by word-of-mouth.

Promotion was done for free eye camps under sponsors name, with Aravindhospital only playing supporting role through public announcements in market

places, newspaper advertisements, information pamphlets and other publicity

material were prepared and distributed one to three weeks in advance of the camp.

Price was kept at a minimum so that a larger numbers of people could be served.


3/7

Human Resource Function:

In 1992, there were around 240 people on Hospitals staff, including 30 doctors, 120nurses, 60 administrative personnel and 30 housekeeping and maintenance staff.

Among them thirteen Ophthalmologists were related to Dr. V.

To ensure the same quality of services in both paid and non-paid hospitals, Doctorsand Nurses were posted in rotation.

Special care for the training of ophthalmic personnel and nurses were beingprovided at Aravind Hospitals. It had research and training collaborations with St.

Vincets Hospital in New York and University of IllinoisEyeand Ear Infirmary in

Chicago.

The salary structure was quite reasonable at Aravind. Ophthalmologists were earningRs.80,000 annually as compared to Rs. 60,000 in government hospitals and Rs.

300,000 in private ones. Nurses received a salary of Rs. 12,000 since they were

recruited and trained from scratch and this training would serve them for life.

The expectations from the Doctors at Aravind were quite high, they were expectedto devote 60 Hours a week.

One of the biggest concerns was the occupancy rate in free hospitals. Usually onMonday, Tuesday and Wednesdays, maximum patients used to visit hospital but on

Thursdays and Fridays, the patients visiting rate was verylow. This sometimes de

motivated the staff.

Service Sequence:


4/7

Preliminary Examination: Opthalmic assistants noted preliminary diagnosis on patients medical

record

Testing of Tension : Ocular tension is often referred to as intraocular pressure. It is the pressure of

the gel-like fluids, such as the aqueous humor and the vitreous humor, against the tunics of the eye.

Tear Duct Function: The purpose of the tear duct is to act as a kind of tiny drain for the eye. The tear

ducts excrete excess fluid from the eye, sending the extra lubrication into the nasal cavity.

Refraction Test: It measures a person's prescription for eyeglasses or contact lenses.

Features of Service Operations:

Building volume through community outreach- Hence realizing economies of scale.Reaching out to the patients through camps, bringing them to hospital and making

excessive use of their plant.

Backward Integration: They started their own production of intraocular lenses in theaurolab which helped them in reducing the cost of a lens to 200 against Rs.800


5/7

Finance:

1. Cost CuttingfreeIntensive cost cutting was done to ensure low cost of the free hospitals.

2. Support fromNGOs 90:10 self funded: outsideAlmost 90% of the annual budget is self generated and around 10% of the annual budget

comes from sources around the world, such as the Royal Common Wealth Society for the

blind (U.K.) and the SEVA Foundation (USA).

3. Family MembersMost of the top management at Aravind Hospitals are family members, therefore are

relatively cheaper.

4. Workhorse staffThe doctors at Aravind Hospitals are made to work for 60 hours a week compared to 30

hours a week in government hospitals.

5. DensificationTo increase capacity, densification projects were initiated at the Madurai facility.

Reorganisation is a short term approach to increase capacity without incurring heavy costs.

Recommendations:

1. The IOL factory seems to be a cash positive venture, the tables below provide projections ofcash flow for the coming 5 years taking the following assumptions:

a) Excess produce is sold in the outside market for 600b) The utilisation grows at 10% per yearc) The plant charges the hospitals 400 for each lens used in a paid surgeryd) The plant is able to operate at 100% capacity after 2 years of operation after

successful implementation of six sigma

e) The cost of production reduces to 100 from 200 after 2 years of production


6/7

Surgeries Number Ratio

Paying 16447 0.41577976

Free 23110 0.58422024

Total 39557

Year Production Utilisation Cash Flow Comments

0 -8000000 Sunk Cost

1 30000 19078 3726099

Excess Cash

Generated

2 30000 20986 2898708

Excess Cash

Generated

3 60000 23084 19988579

Excess Cash

Generated

4 60000 25393 18987437

Excess Cash

Generated

5 60000 27932 17886181

Excess Cash

Generated

The excess cash flow from the factory can be used to fund future strategies for the hospital

chain.

2. To utilise the excess capacity at Tirunelveli and Theni 4 buses can be bought, assuming eachbus has a capacity of 50 people and we have an excess capacity of 179 beds in total at both

the locations. The buses by way of branding can also be used to promote the chain.

3. A Central Management Team should be set up that manages all the hospitals and helps tobring in economies of scale.

4. Leveraging the brand Aravind Hospitals have built over the years, a franchisee model can beadopted to cater to the world and the Central Management Team should instil the following

checks to ensure that the brand is not spoilt:

a) Engaging with only reputed NGOsb) Ensuring proper training of the staff at the franchisesc) Imposing conditions, breach of which may lead to cancellation of the franchisee

contract and forfeiting the security deposit collected at the initiation of the contract

d) An upper limit to the number of franchises should be set to avoid mismanagement andensuring that the right profile of NGO is involved.

5. Get donations from abroad by leveraging the brand built. Collaboration with more national and international NGOs and sponsors to increase

awareness especially against fear of surgery and family opposition.


7/7

Promotion through social media for attracting sponsors for franchisee in other partsof the country. This would also attract doctors to take up the cause and they would

be willing to work for Aravind hospital.

Collaboration with other small hospitals which do not have enough capital andequipments to market the vision. Together they can organize more camps andspread the awareness. Such small hospitals can also be encouraged to accept

franchisee with terms and conditions of Aravind hospital so as to maintain

standardization and they could also be provided monetary and technical assistance.

Promotion among young medical students through guest lectures by visiting variousmedical colleges and sending them invitations to attend eye camps. They can also be

invited for internships. The aim is to encourage them to work for a social cause. As

Dr. V said we all can serve humanity in our normal professional lives by being more

generous and less selfish in what we do.

the aravind eye hospital, madurai, india- in service for sightaravind

Documents