What makes Aravind Madurai excel in eye care ?

In a study published in HBR of 2010, carried out by Prof. Vijay Govindarajan, Tuck School of Business and Prof. S Manikutty from IIM Ahmedabad, (click here) five factors were identified as being responsible for the success of Aravind Eye care.

First it is the extremely high levels of efficiency, while an ophthalmologist in an eye hospital does almost 1-2 cataract surgeries per day, an Arvind hospital eye doctor does about 15 cataract surgeries a day, almost 10x.

Secondly so many surgeries are done daily in the hospital, besides the high level of medical expertise of the doctors, the Intra-ocular lens that the hospital manufactures on its own, it is able to sell at $5 apiece, while an imported IOL would cost anywhere above $80. The low cost of the lens helps support cheap surgeries and thus results in increased cost efficiencies in a vicious cycle.

The third factor is the economies of scale and assembly lines concepts that are taken from the industry helping increase operational efficiency, besides organising outreach camps nearer to the customer to generate the necessary demand. 

While Aravind Hospital does not invest much in advertising or other frill activity, it invests heavily in the latest state of the art machinery in the hospital and top world class training and exposure for its doctors and nurses, which is the fourth factor.

The fifth factor is the value set imparted by the founder Dr. V Govindaswamy in eradicating needless blindness from the country that has helped the hospital in offering more than 50% of its surgeries to the needy people in society free of charge and giving world class trainig to medical personnel from other hospitals at very low rates.

A later article by Prof. Vijay Govindarajan in HBR of January 2012 points of the audacious nature of Aravind's goals and how the hospital has managed to rise above expectations. Click here .. The benefits of lower costs of labour and process innovation steps have helped Aravind steal the limelight and become one of the world's top and high quality eye care centre.  

I have been asked by MBA students, would the Aravind eye care system have survived in another culture or country ? According to me, the high population always ensures a high demand for Aravind services. The high poverty levels in society puts pressure on the system to offer high quality low cost services to the masses, pushing the system to continuously strive for innovative methods of functioning and service delivery. 

George