Healthcare with a Vision – Aravind Eye Hospital

This is the story of a Rs. 50-crore organization that provides free services to around 70 percent of its customers. The non-profit organization does not depend on donations, but manages to operate on 40 percent margins. It has been cited by management gurus as the perfect example of an organization that successfully redefined markets and customer service. What are we discussing here – a case study on corporate utopia? No, a brief history of Aravind Eye Hospital.

The first Aravind Eye Hospital was a 10-bed facility started in Madurai by Dr. G. Venkataswamy with the vision of eliminating blindness among the poor. Today it has centers in 5 cities of South India and has cured more than 1.3 crore patients of blindness. What makes the business model special is its focus on poor patients – the 70 percent majority who do not have to pay for their surgeries and treatment. In fact, the hospital’s sales personnel have to meet annual targets for a certain number of free patients. The staff travels to rural areas to look for poor patients suffering from cataract and transport them free of charge to the nearest Aravind Hospital where highly qualified doctors perform state-of-the-art cataract surgery. The hospital has a self-sustaining business model – the fees obtained from the paying minority supports the cost of free medical care for the majority. Rather than depend on charity and funders, the hospital manufactures all the materials needed for surgeries and eye care, including intraocular lenses for which it has a 10 percent global market share. And what is Dr. Venkataswamy’s vision? “To mass-market cataract surgery the way hamburgers and pizzas are marketed by Mc Donald’s and Pizza Hut”!

Free medical care as a growth engine – could social entrepreneurship get any better?

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Explore posts in the same categories: 01 Leadership, 03 Customer and Market Focus, Benchmarking, Business, Management

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