Much to learn from Aravind Eyecare

Views in this article are personal opinions and do not represent the views of the organization I work for.

In early 2000s when I was doing my MBA at IIM Bangalore, I had opportunity to read Fortune at Bottom of Pyramid by C K Prahlad. Book details how organizations can serve poor and make profits at the same time. Book has several case studies and one among them is case study around how Aravind Eye Care is attempting to eliminate preventable blindness in India. Book made a big impression on me. After reading the book, I took time to visit some of Aravind Eye hospitals and had opportunity to witness the miracle in person.

I started working for US Health Care since 2018 and quickly realized how inefficient US health care is. US as a country is gifted with enterprise and innovation but for various reasons is not able to transform healthcare. Focus on Value Based Care in recent years is nudging US health care to be more efficient. Nevertheless, lot of transformation still needs to happen which is where studying Aravind Eyecare can help. This blog attempts to articulate the learnings from Aravind Eyecare which US Healthcare can look at to improve efficiency.

Aravind Eyecare is the largest Eyecare provider in the world with 4.6 million outpatient visits and more than a half a million eye surgeries every year. Aravind Eyecare performs surgeries at a 2X better clinical quality than the clinical quality of similar surgeries in developed countries. To provide some context, Aravind eyecare alone perform 60% of the volume of surgeries in UK at one-hundredth of cost with clinical quality far superior than UK Health system. Cost of Cataract surgery at Aravind is $50 while the same surgery costs more than $3000 in US. Add to that Aravind Eyecare provides free care for roughly half of its patients.

How does Aravind do it? Below are some of the key innovations

Assembly Line approach: Dr.Govindappa Venkataswamy (called Dr.V) who is the founder of Aravind Eyecare implemented McDonald like assembly line efficiency for eye surgeries with strict quality norms, standardization and ruthless cost control.

• Surgeon productivity: Everything is optimized for Surgeon productivity. Each operating room has at least one surgeon and at a minimum two operating tables, multiple sets of equipment and multiple nursing teams. Operating room unique layout enables surgeon to complete a surgery, turnaround and start the next surgery on the patient who has been pre-prepared. In Aravind, a surgeon performs on an average at least 2600 surgeries a year in comparison to global average of less than 400 per year. Aravind surgeon can perform 50 cataract operations a day. Ophthalmologist density in US decreased from 6.3 to 5.68 per 100,000 individuals over last 22 years and productivity has not changed much. With population ageing albeit slowly, productivity of surgeons need to improve significantly to have some downward pressure on the cost.
• Backward Integration for cost control: In terms of volume, cataract surgery beats other eye surgeries by a big margin. Intraocular lens replace natural lens in the cataract surgery. Intraocular lens used to cost $100 and Aravind quickly realized that $100 price tag for lens is prohibitive for most of its patients. Aravind started Auro lab in 1992 which is an inhouse manufacturing facility for lens. Cost of lens is now less than $10. Aravind did ruthless cost control and looked at cost of everything which went into surgery. Auro lab today exports lens to more than 85 countries. US providers do have obligation to look at entire supply chain, demand efficiencies. Else, consolidate and do backward integration and bring down the per unit cost of surgery.
• Cross Training the workforce: Aravind has a large staff of nurses and technicians to allow surgeons to focus only on most critical tasks which are diagnosis and surgery. Aravind recruits and trains women from local community. Aravind has a two year training for Mid-level Ophthalmic personnel(MLOP). MLOPs constitute 60% of the work force. Aravind opened up employment opportunities and initiated several women in their health care journey. Women constitute more than 60% of workforce at Aravind. Standardization and simplification allowed Aravind to easily train and ramp up workforce. In US, average age of a Nurse is 52 years and every year US requires additional 200K nurses through to 2031. Nursing shortage would only aggravate and this would certainly put upward pressure on the cost. Hence creative solutions are needed for capability building in US.
• Outpatient: Aravind does more than 12000 outpatient visits every day. Process of registration, vision test, preliminary exam, refraction, final exam, counseling and recommendation for surgery works like assembly line with focus on automation, cost and patient experience. At Aravind, each outpatient visit costs less than $5. In US, average outpatient visit costs $500 which is too expensive. With 900 million outpatient visits in US every year, one can only imagine the spend on Outpatient visits. This is simply unsustainable.

In short, much efficiency to be gained in US Healthcare by standardization, clinical capability building, consolidation and automation.

Patient Outreach: Aravind opened eye clinics in rural places in South India to reach out to non-consumers of Eyecare. These clinics are staffed with technicians and nurses, who do the necessary tests and then do a video consultation with a doctor in Madurai, India. If surgery is recommended, Aravind helps the patient with transportation to Aravind's urban surgical centers. Aravind conducts 1.5 million outpatient visits every year in this kind of setting. 97.4% of rural counties in US lack an Ophthalmologist. Aravind's patient outreach can be a good model to follow and serve US rural population.

Affordable care: Aravind is able to provide free or steeply subsidized care to 50% of its patients.?Aravind has a “no questions asked” policy – anyone can receive free treatment if they choose, regardless of ability to pay.?Doctors alternate between working at the Main Hospital and the Free Hospital, so patients receive the same high-quality care at the free or steeply subsidized rates that they would receive if they were paying patients.?Aravind financial model is entirely self-sustaining despite providing so many services for free. Aravind doesn't receive any government grants or donations from charities. Aravind generates over 30% gross margin which allows it to open a new hospital every two years. Aravind Eyecare financial model is a good example to illustrate that one can serve poor at profit.

US Healthcare is in a stasis. Enterprise, innovation and dynamism is the need of the hour. Time has come to restructure the Healthcare value chain. Value based care thankfully is being embraced by all stakeholders. Providers can restructure their services to standardize, simplify and optimize for high volume surgeries. Outpatient services should be restructured using technology to deliver them at a lower price point and scale the service to reach and serve hitherto underserved communities. Surgeon productivity and upskilling of Healthcare professionals are the areas to invest in to kick-start the transformation. These are some of the learnings from Aravind Eyecare.

I cannot end the article without writing about its founder. Dr.V who is the founder of Aravind Eyecare is an inspirational figure. Dr.V was inspired by teaching of Gandhi, Aurobindo and Vivekananda. Dr.V himself performed over 100,000 successful eye surgeries in his lifetime. This is despite the fact that his fingers were permanently twisted because of rheumatoid arthritis. Dr.V never married in his lifetime and devoted his entire life in service of others. Aravind Eyecare is his legacy to the world.