Apr, 2013     

Arvind eye care – micro market analysis


Summary

The current study focuses on bringing out the differences in operations of Aravind Eye Care System and Sankara in order to identify some best practices that Sankara can adopt:

Operations:

  • Aravind operates eight hospitals all around Tamil Nadu and Pondicherry. Out of which, centers in Tirupur, Dindigul and Salem only cater to paying patients while others cater to both paying and free patients
  • Number of free surgeries claimed by Aravind as per the 2011-12 report is 178,984(51%), however about onethird of them are charged around Rs. 500 for IOL lenses and black glasses. We estimate the total number of fully free surgeries done by Aravind till date to be around 1.3 milion.

Camp Efficacies:

  • Aravind conducts` a variety of screening camps – Comprehensive eye camps (1358), Diabetic Retinoperathy (196), Refraction error (195), Schools (553). In 2011-12, Aravind conducted 2831 camps examining 1 million patients in the process
  • Sankara is more effective in generating higher number of surgeries per camp. Aravind did around 63 surgeries per camp, while the similar number for Sankara was around 76 in 2011-12. However, Aravind had more patients examined per camp 236 as compared with Sankara which had only 186 patients examined per camp on average. Lower number of examinations per camp may mean lower collections from glasses
  • Process of conducting camps is quite different between Aravind and Sankara. At Aravind, all eye camps are fully sponsored. Majority of the publicity and community mobilization is done by the local community sponsor. Aravind has a designated camp organizer for a particular district, who based on the demographic study of the areas and past performance of the camps and list of sponsors decides on the plan for the entire year.
  • Due to long-term relationships with a large number of local sponsors and limited geographic focus (in and around Tamil Nadu), the cost per camp for hospital is lower at Aravind (around ₹5,000 per camp). Community sponsors are expected to contribute another ₹15,000 to ₹50,000 depending on the type and size of camp.

Camp Efficacies (contd.):

  • Aravind's eye camps are done at a distance of average 150-200 kms as compared with that of Sankara (an average distance of 333km and going as high as 500km). This places additional burden on transporation and logistics cost for Sankara.
  • Aravind also has a certain risk associated with their limited geographic focus as the incidences of cataract go down over time in the designated camp areas. This is possibly one reason why Sankara has higher number of surgeries per camp (i.e. 76) compared with that of Aravind (i.e. 63)

Vision Center:

  • Aravind plans to be moving away from camp outreach model to permanent primary eye care facilities in the form of 40 IT enabled vision centers established till date. For a target population of 45,000 to 50,000 around potential camp site, a vision center examines around 20 patients a day on average through telemedicine
  • Initial investment of around ₹12.5 lakh per vision center is borne by the Aravind foundation and within 2 years, the center is self sustainable through consultation fee (₹20 per patient) and income from glasses.
  • Vision center is said to have also increased the surgery referrals from the same catchment that used to have camps twice a year. Earlier, with the camps, the surgeries used to be around 120 per year now there are around 500+ surgeries referred to the main hospital by the vision center. For these referrals, patients have to bear the transportation cost and they have the option of getting operated in the free part of the hospital

Camp Efficacies (contd.):

  • Aravind's eye camps are done at a distance of average 150-200 kms as compared with that of Sankara (an average distance of 333km and going as high as 500km). This places additional burden on transporation and logistics cost for Sankara.
  • Aravind also has a certain risk associated with their limited geographic focus as the incidences of cataract godown over time in the designated camp areas. This is possibly one reason why Sankara has higher number of surgeries per camp (i.e. 76) compared with that of Aravind (i.e. 63)

Vision Center:

  • Aravind plans to be moving away from camp outreach model to permanent primary eye care facilities in the form of 40 IT enabled vision centers established till date. For a target population of 45,000 to 50,000 around a camp site, a vision center examines around 20 patients a day on average through telemedicine
  • Initial investment of around ₹12.5 lakh per vision center is borne by the Aravind foundation and within 2 years, the center is self sustainable through consultation fee (₹20 per patient) and income from glasses.
  • Vision center is said to have also increased the surgery referrals from the same catchment that used to have camps twice a year. Earlier, with the camps, the surgeries used to be around 120 per year now there are around 500+ surgeries referred to the main hospital by the vision center. For these referrals, patients have to bear the transportation cost and they have the option of getting operated in the free part of the hospital

HR Practies:

  • Senior Doctor are paid on average a salary of ₹2,00,000 per month by Aravind (Source: Interviews). However, Junior doctors (with only a PG) are paid ₹50,000 per month. Attrition rate is low even with the higher workload.
  • Every year, around 100 to 200, local village girls (high school graduates) are hired and trained for a variety of roles such as refraction testing, OR duty, Counseling and house keeping. These motivated girls are claimed to be the backbone of the high operational efficiency at Aravind
  • Senior Doctor are paid on average a salary of ₹2,00,000 per month by Aravind (Source: Interviews). However, Junior doctors (with only a PG) are paid ₹50,000 per month. Attrition rate is low even with the higher workload.
  • Every year, around 100 to 200, local village girls (high school graduates) are hired and trained for a variety of roles such as refraction testing, OR duty, Counseling and house keeping. These motivated girls are claimed to be the backbone of the high operational efficiency at Aravind

Common Practices at Aravind Eye Care

  • Day starts early at Aravind with doctors reaching the hospital at 7.00 am and nurses being there at 6:30 am. First surgery is scheduled at 7:15am
  • Every year, around 100 to 200, local village girls (high school graduates) are hired and trained for two years in a variety of roles such as refraction testing, OR duty, Counseling and house keeping.
  • These motivated girls comprise 60% of the workforce and are claimed to be the backbone of the high operational efficiency at Aravind.
  • Structured training and mentoring programs have kept up a steady supply of new personnel including Junior Doctors, continuous education has helped existing workers widen their skills.
  • All the doctors at Aravind work full-time. Private practice is not allowed and there are no part-time consultants as in other hospitals. Aravind believes that this is essential to develop institutional loyalty and the work culture and necessary skills needed to make mass impact.

Sankara business model is more attuned towards wider communityoutreach than Aravind's

  • Aravind has limited geographic focus (in and around Tamil Nadu), which is useful for creation of economies of scale. The camps are conducted on average around 150-200km distance compared with that of Sankara at 330-500km. However, Aravind also has certain risk associated with their limited geographic focus as the incidences of cataract go down over time in the designated camp areas. This is possibly one reason why Sankara has higher number of surgeries per camp (i.e. 76) compared with that of Aravind (i.e. 63)
  • Aravind has 40 satellite centers (called as Vision Centers) and 4 community eye care clinics, whileSankara currently has none. These vision centers have become profitable due to a large revenue coming from spectacle sales. Unless, Sankara wishes to go into making and selling spectacles it will be difficult to break even specifically for the satellite centers. However, the percentage of referrals generated (for the paid patients as well as replacing eye camps) could make the overall effort profitable.
  • Due to long-standing relationships with local community sponsors, Aravind is able to conduct the comprehensive eye care camps virtually at no additional costs as most of the cost is borne by the sponsors. While for Sankara, due to the dispersed nature of operations, camps are typically done at the cost of the hospital.
  • Both Sankara and Aravind ecosystems have eye banks, training and educational institutions, research and development facilities and training programmes. However, Aravind has much larger share of revenues coming from allied offerings such as education training/consultancy fees/spectacles and lens sales etc.
  • Sankara has comparatively more focus on community or totally free surgeries (70% as % of total surgeries) as compared with Aravind (25%). If we include the number of subsidized surgeries then percentage is comparable. Total number of camps conducted by Sankara is more than that of Aravind. Both the hospitals have comparable focus on preventive eyecare activities (schools and pediatric eye screening camps)

 

This document is an article which covers insights on Arvind eye care.