There are an estimated 12 million blind people in India with most cases arising from treatable or preventable causes such as cataracts. In a developing country with limited resources government alone cannot meet health needs of all the poor and the challenges are to make the service accessible, affordable and with high quality.
Aravind is the world’s biggest eye-hospital chain, based in India founded in 1976. Its core principle is that the hospital must provide services to the rich and poor alike, yet be financially self-supporting. It treats over 1.7 million patients each year, two-thirds of them for free.
Aravind's Freemium Business Model:
- Fee for service: 35% of patient care
- Free or subsidized service: 65% of patient care
There are separate facilities for paying and non-paying patients and it is up to the patient to choose where to get the care. The fee based service can include fancy meals or air-conditioned rooms and the paying customers pay well above costs to cover the costs for subsidized and free services. The free or subsidized services are made very cost efficient by proving only the basic facilities that enact a process of social self-selection and create a hurdle for those who can afford to pay to demand free treatment.
To maintain the quality of the care, the same doctors rotate to deal with both paying and non-paying patients.
Aravind uses community partners and eye camps to access the poor, something that creates a huge demand for its services. Aravind’s business model is based on the high volumes generated and a surgeon in Aravind performs more than 2000 cataract surgeries a year which is 5 times the number performed by an average Indian ophthalmologist. The large number of performed surgeries creates an expertise and reputation which has lead to Aravind becoming a training center for ophthalmic professionals and trainees.
Aravind is not only a eye-hospital but also
• a social organization committed to the goal of elimination of needless blindness
• an international training centre for ophthalmic professionals and trainees
• an institute for research that contributes to the development of eye care
• an institute to train health-related and managerial personnel in the development and implementation of efficient and sustainable eye care programs
• a manufacturer of ophthalmic products available at low costs
"Aravind’s model does not just depend on pricing, scale, technology or process, but on a clever combination of all of them" The Economist, April 16th 2009