Lessons from Aravind Eye Hospital for Surgery Centers

Aravind Eye Hospital is a popular case study among business schools. After being encouraged by a friend, I saw this video of Pavi Mehta who studied the hospital’s model and wrote a book (called Infinite Vision). It reminded me of the MBA case study and made me think about how ambulatory surgery centers could use the ideas presented. Aravind performs the largest number of cataract operations at the lowest costs but at the highest levels of quality. Each doctor in the hospital performs on 2,000 cataracts/ year v/s an average of 200 cataracts/ year in the US. Here’s a summary of the book:

When a crippling disease shattered his lifelong ambition, Dr. Venkataswamy (better known as Dr. V) chose an impossible new dream: to cure the world of blindness. The tiny clinic he founded in India defied conventional business logic and is now the largest provider of eye care on the planet. At Aravind, patients choose whether to pay or not. Millions are treated for free, yet the organization remains stunningly self-reliant. Serving everyone from penniless farmers to the president, it delivers world-class outcomes at a hundredth of what similar services cost providers in advanced nations. Its model is emulated by organizations everywhere from Rwanda to San Francisco.

In several ways, it largely performs the largest number of outpatient surgeries by using 3 creative constraints set forth by its founder:

1) We can’t turn anyone away

2) We can’t compromise quality

3) We must be self-reliant

In an environment of universal coverage, increasing malpractice liability, and reimbursement cuts, all these three creative constraints  apply to ambulatory surgery centers (ASCs). How would a center run high volume operations, keep capacity utilization high, not build a business model that relies on getting paid by low or delayed or difficult insurance plans but yet standout in its quality? Unimaginable? Watch the video.

By Praveen Suthrum, President & Co-Founder, NextServices