Another key for the Aravind hospital’s success were the eye camps set up around India. At these camps people were tested and screened to see if they needed eye surgery. To keep the costs down on this expensive operation, the hospital had sponsors that paid for all of the publicity costs and eventually food and transportation for those determined to need surgery. The hospital was able to bring in 200 Rupees per person this way before the medical costs. The eye camp enabled the hospital to help more people and generate more revenue, while the sponsors earned prestige and goodwill in the communities.
Finally, Aravind hospital was able to be successful by standardizing the eye procedures. It is significant that Dr. V mentions McDonalds and Burger King, because these fast food companies standardize their food so it is always the same but widely available. This was Dr. V’s goal, and the case writer observes it as she watches Dr. Natchiar perform back-to-back fifteen-minute eye surgeries again and again by simply moving between three beds in a room. The ability to provide eye care successfully and repeatedly for a low cost was detrimental to the hospitals success.
2. What was Dr. V’s role in all of this? What was the support staff’s role in all of this? Dr. V was the founder of the Aravind hospital. Influenced by Gandhi, Dr. V’s wanted to help his fellow man by making eye care accessible to the millions who needed it but were unable to afford it. Dr. V was motivated to his goal to standardize eye care as if it were a cheeseburger being sold at McDonalds. In 1976 Dr. V mortgaged his house and raised money in order to build the ground floor for his new hospital. After that, Dr.
V was able to continue expanding between the revenue from the hospital and additional donations. Not only did Dr. V sacrifice and take on all the risk in order to start the hospital, but he was also responsible for recruiting staff such as his sister and brother in-law. Eventually, as time passed, Dr. V began to take on a more of a leadership role instead of an active participant. Dr. V allowed his support staff and others to complete administrative activities as well as the surgeries. In 1992 there were 240 people employed by the Aravind hospital.
That staff included doctors, nurses, administrative personnel and maintenance. Dr. Natchair and Dr. Nam were the first surgeons at the hospital after Dr. V, and Dr. Natchair rose to become senior medical officer. Moreover, there was Dr. Ravindran, also a relative, who ran the Tirunelveli hospital, Thulasi, the administrator for the Aravind hospital, and Mr. Balakrishnan, the manager of Auro Lab. Dr. V was able to recruit many employees, some relatives and some not, but all were skilled and willing to help Dr. V achieve his vision.
3. What were the weaknesses with the Aravind model? As the Aravind hospital continued to grow and extend its reach across to the poorest parts of India, the amount of patients was also growing. While the Aravind hospital is dedicated to being a non-profit organization, Aravind’s current model may not be sustainable. In order to remain successful, Aravind needs to continue to attract paying customers, sponsors and donators. According to exhibit 4, from 1976 to 1991 the amount of paying patients receiving surgery grows each year.
However, the amount of patients receiving surgery that are nonpaying are growing at a much faster rate and more than double the paying patients until 1990. Although a large part of the growth in nonpaying patients is the growing amount of screen visits, it still means many more people are receiving free care than are paying for the care. In 1991, the amount of free surgeries brings the profit per person down from about 939 Rupees to about 356 Rupees. Another issue with the Aravind hospital was the irregularity of patient occupancy.
During the beginning of the week the patient inflow is intense and the hospital overflows with patients. The hospital must work at peak efficiency to handle all of the patients. However, later in the week on Thursday and Friday, there is a let down in patient inflow. Aravind needs to conclude what is causing the irregularity and figure out a way to fix it. There needs to be a balance between overcrowded and performing under capacity. According to exhibit 7, “total bed capacity” is 1,224 while “beds occupied per” day (six month average) is only at 903.
If the Aravind Hospital is able to create a more regular inflow of patients, capacity per day will improve which will decrease costs per day. Furthermore, while many of the quality employees are family members and therefore were easier to persuade to help Dr. V with his vision, it may be more difficult to attract other employees capable of running hospitals and surgery teams. In order to reach the goal of getting eye care to all those in need regardless of their ability to pay, Aravind will need to continue growing. However, for the hospitals to continue being efficient, Aravind will need the most qualified employees.
In addition, the hospital’s current employees are not being paid as well as they could be and are working longer. Dr. Natchair explained that it was only recently that surgeons’ salaries were consistent to their reputations in the field. However, Thulasi mentioned that some ophthalmologists could make as much as 300,000 Rupees per year compared to the ophthalmologists at Aravind that make an average of 80,000 Rupees. Therefore, between the strain of low pay and long hours, the sacrifices that the high quality surgeons at Aravind Hospital are making may eventually drive them away from the hospital.