In India there are roughly 9 million people who suffer from blindness that can be cured via corrective glasses and a simple surgical procedure. Dr Venkataswamy had organized rural eye camps and he was keen to offer a low-cost, high quality solution to this problem. The hamburger business is known for its low cost, consistent quality and standardized operations.
Dr Venkataswamy felt that he could replicate the process innovation model in the hamburger industry to provide good quality, affordable eye care. The diffusion of the innovation model has led to five hospitals in Tamil Nadu that provide a cumulative facility of 4000 beds.
The model has evolved over a period of time. Starting off as a specialist in cataract surgery, today Aravind eye care has diversified to include education, lens manufacturing and developing R&D facilities. The hospital has a single minded goal of improving sight and making treatment easier to access. Today the global health care system in advanced countries is looking at this model and this has spawned innovative approaches in health care.
The Aravind Eye care hospital has become the largest eye care facility in the world. Its doctors perform over 200000 cataract operations by using sophisticated methods of diagnosis and treatment. 60% patients do not pay for the treatment while 40% patients pay for the service. Arvind has also adopted a backward integration strategy by providing lenses and supplies at a very low cost.
In this model, specialized services are provided in large volumes. As part of service innovation, Aravind Eye care has chosen to adopt the “lean” model by simplifying processes, elimination of non value added activities, reduction of waste and commitment to operations excellence.
What can global health care providers learn from Aravind Eye care’s business model of innovation?
Can this model be used by other industries? List out any three industry sectors where this model can be replicated. Give reasons to support your answer.
How do Aravind Eye care’s backward integration strategy/ diversification efforts support the main innovation agenda?
Do you think the present innovation model is sustainable in the long run? Explain the rationale for your decision.