‘We set prices not on our costs, but on who can afford to pay how much’

Oct 29 2007, 01:07 IST
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SummaryWe look at it from two perspectives. From an internal perspective, we rate ourselves to be quite successful when we use indicators like number of patients treated, number of people trained, level of capacity utilisation, financial sustainability, etc.

Though Aravind Eye Hospitals group conducts 75% of surgeries free of cost, it runs profitably. Even 65% of the outpatients are offered free consultancy. Last year, doctors performed 2.70 lakh surgeries and treated over 23 lakh outpatients. Starting on rental with 11 beds in Madurai in 1976, today the group founded by Dr G Venkataswamy runs hospitals in Theni, Tirunelveli Coimbatore and Pondicherry with a capacity of more than 3,500 beds. Executive director RD Thulasiraj outlines the business model in an interview with Rajiv Tikoo. Excerpts:

How do you rate your success?

We look at it from two perspectives. From an internal perspective, we rate ourselves to be quite successful when we use indicators like number of patients treated, number of people trained, level of capacity utilisation, financial sustainability, etc.

However, when we look at it from the community perspective we are far from being successful. This comes from our vision—‘Eliminate Needless blindness’—which makes us feel responsible to reach out to a larger community in the immediate surroundings of Aravind and its service area, our country and beyond our country.

Is it only a matter of scale?

While we have made reasonably good progress and have been successful in treating cataract, we are nowhere near being successful in handling other eye conditions including refractive errors. We estimate that less than 10% of those who can benefit by a pair of glasses are wearing them.

Similarly for many other conditions like diabetic retinopathy, glaucoma, etc, very little has been done. In addition, there are many parts of the country where the level of eye care is a very small percentage of what it needs to be. From this perspective we can’t claim to have been successful (yet) in eliminating needless blindness.

How does your model make business sense?

Our model makes very sound business sense because it’s fundamentally built on a few core principles. The first one is in terms of market development and through that demand generation. This is a process of converting a need in to a demand and in the process we get a significant percentage of this to our own facilities.

The second core principle is excellence in execution of ensuring a high level of efficiency in providing the treatment, including outpatient services and surgeries.

The third core principle is one of quality. The aim is to ensure that the patient regardless of whether he is a free or a private patient gets value for his

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