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Social Entrepreneurs: Taking On World Problems

India Eye Care Center Finds Middle Way To Capitalism

Originally published on Tue November 29, 2011 6:38 pm

At an Aravind hospital in Madurai, a city on India's southern tip, the waiting room is packed. A clinical assistant calls out the names of patients, and they're escorted to examination rooms. This hospital alone screens around 2,000 patients a day — and tour guide Shawas Philip says this day is busier than usual.

"We might break that record today — of the number of patients that are seen on a particular day. That's exciting," he says.

Aravind is used to breaking records. But it began modestly in 1976 with an 11-bed hospital. Aravind Eye Care System now has 4,000 beds in seven hospitals, most in the southern Indian state of Tamil Nadu. It was late founder Dr. G. Venkataswamy's goal to eliminate needless blindness.

About 45 million people in the world are blind. About 80 percent of them could be cured through surgery.

Dr. "V," as he is known, founded the organization on a deep belief in the spirituality of service. But Aravind embraces its mission by pursuing efficiency the way Goldman Sachs pursues profits. That's obvious in the operating theater.

Productive Surgeons

Dr. Hari Priya, scalpel in hand, looks through a surgical microscope into the eye of a cataract patient.

"This is called a phacoemulsification procedure," she says. "This is considered the gold standard in cataract surgery across the world."

Priya sits between two operating tables. When she finishes one patient, usually in less than 10 minutes, she turns to the next table, where the patient is draped and ready. This way, there is no time wasted between surgeries. Priya says she performs 30 to 40 surgeries a day.

R.D. Thulasiraj, a top Aravind official, says that early on the organization embraced the simple idea that if it wanted to have a real impact in reducing blindness, its surgeons needed to work as efficiently as possible.

"We want to make sure they're not idle because we didn't get our act together," he says. "They're not waiting for a patient, they're not waiting for a staff — they're not waiting for a lens."

That attention to process has made Aravind surgeons quite possibly the most productive in the world. In total, the number of sight-restoring eye surgeries that Aravind Eye Care System conducts each year is 300,000 — and about half, or nearly half, are free.

"Compared to India, we're probably four or five times as productive as an average surgeon," Thulasiraj says. "If you compare to the U.S. or many parts of Africa or Latin America, it could be a factor of 10 to 15 times more productive."

Aravind's surgeons average about 2,000 operations a year. The average for eye surgeons in the U.S. is 125.

Free Surgeries

The push for more efficiency forces down the average cost of a surgery for Aravind. But that doesn't mean quality is sacrificed. Aravind surgeons have just half the number of complications that the British health system has for the same procedure. That high quality allows Aravind to attract patients who are willing to pay market rates. Then it takes the large profit made on those surgeries to fund free and subsidized surgeries for poor people — like K. Karuthagangachi.

Karuthagangachi, 49, lives in the village of Alanganallur, about 15 miles from Madurai. One of Aravind's 36 small satellite eye care centers is located just a few steps off the village's bustling main street.

Karuthagangachi wears her salt-and-pepper hair pulled back and has an easy smile. She says when she developed cataracts, she lost sight and her job as a document writer filling out forms like birth certificates and license applications. She had no income, she's unmarried, and had to depend on friends to support her. The cataracts clouded her vision so much that she couldn't recognize people. She lost her confidence and mostly stayed at home.

After two years, her friends finally convinced her to visit this eye center, which confirmed she needed cataract surgery. She had no money to pay, so Aravind did surgery on both of her eyes for free. It was a total success. She says "it was like seeing a new world," and she was very happy. She also got back her job as a document writer.

Dr. Aravind Srinivasan, the director of projects at the organization, says it's only possible to provide free surgeries on the scale that Aravind does by running an operating surplus, like a profit-making company. That's what Aravind manages to do, even though it's legally a charitable trust.

"I think traditional charities start with a lot of goodness in their heart," he says. "They're emotionally connected. That connection we had. But it was always superimposed with business acumen."

Overcoming A Lens Shortage

Fifteen years after it was founded, Aravind's ability to provide free and subsidized surgeries was being limited by the high cost and availability of the intraocular lenses needed for cataract surgery. That's not a problem most charitable organizations could overcome, Srinivasan says.

"How do you expect a charitable organization, which is providing eyesight, to say, 'I'll go and manufacture lenses.' You don't think that way. You kind of look at it as a bottleneck or a wall, and keep complaining about it," he says.

But Aravind attacked the problem with the help of an American social entrepreneur named David Green. Green had been helping Aravind collect donated lenses to be implanted in their cataract patients. But donations were averaging only about 25,000 a year. That wasn't nearly enough to meet Aravind's needs, and the lenses cost several hundred dollars to buy. So Green helped Aravind set up its own lens manufacturer on-site, a subsidiary named Aurolab.

"Now today Aurolab sells, I think this year it will be 1.8 million lenses," he says. "So you can see that when you have a business model, an economic model, it enables something to scale because it's not dependent upon charity, which is fickle."

And even more remarkable: By squeezing out profits made by middlemen in the production and distribution chain, Aurolab is now providing some lenses at the astoundingly low price of just $2.

With cheap lenses available, the number of cataract surgeries at Aravind shot up dramatically.

Green says the main thing he has learned doing this work is that there's a middle way to capitalism.

"You can find a pathway, as Aravind has, to see how you can use your profit and production capacity to serve others," he says. "And I think that service to others is really the foundation of what Aravind does."

That's the culture that was started by Aravind's founder Dr. Venkataswamy — and it continues to pervade the organization today.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

GUY RAZ, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Guy Raz.

MELISSA BLOCK, HOST:

And I'm Melissa Block. Restoring someone's sight is a priceless gift. Now, imagine doing it 300,000 times a year. That's the number of sight-restoring eye surgeries that Aravind Eye Care Systems does and about half of those are free or nearly free.

Aravind is based in India. It's a not-for-profit company, but it isn't a traditional charity, either. NPR's John Ydstie reports that Aravind is one of the earliest examples of something people now call social entrepreneurship, adapting business strategies and techniques to solve social problems.

JOHN YDSTIE, BYLINE: The waiting room is packed at this Aravind Eye Care hospital in Madurai, a city in India's southern tip. A clinical assistant calls out the names of patients and they're escorted to examination rooms.

This hospital alone screens around 2,000 patients a day and our tour guide, Shawas Philip, says today is busier than usual.

SHAWAS PHILIP: We might break that record today of the number of patients that we see on a particular day.

YDSTIE: That's exciting.

PHILIP: Yeah, that's exciting.

YDSTIE: Aravind is used to breaking records, but it began modestly in 1976 with an 11-bed hospital. It now has 4,000 beds in seven hospitals, most in the southern Indian state of Tamil Nadu. It was the goal of the late founder, Dr. G. Venkataswamy, to eliminate needless blindness. About 45 million people in the world are blind. About 80 percent could be cured through surgery.

Dr. V., as he's known, founded the organization on a deep belief in the spirituality of service, but Aravind embraces its mission by pursuing efficiency the way Goldman Sachs pursues profits. That's obvious in the operating theater.

HARI PRIA: I am right now removing the (unintelligible) lens (unintelligible).

YDSTIE: Dr. Hari Pria, scalpel in hand, looks through a surgical microscope into the eye of a cataract patient.

PRIA: This is called a phacoemulsification procedure. This is considered the gold standard in cataract surgery across the world.

YDSTIE: Dr. Pria sits between two operating tables. When she finishes one patient, usually in less than 10 minutes, she turns to the next table.

PRIA: We can move on to the next table and the patient is all draped and ready, so we don't have to waste time in between surgeries, so we get more efficient that way.

YDSTIE: How many surgeries do you do a day?

PRIA: It would depend upon the volume, around 30 to 40 surgeries.

YDSTIE: You personally do that?

PRIA: Yeah.

YDSTIE: I see your patient is ready.

PRIA: Yeah, ready. Thank you.

YDSTIE: R.D. Thulasiraj, a top Aravind official, says that early on, the organization embraced the simple idea that if it wanted to have a real impact in reducing blindness, its surgeons needed to work as efficiently as possible.

R.D. THULASIRAJ: We want to make sure that they're not idle because we didn't get our act together. They're not waiting for a patient. They're not waiting for a staff. They're not waiting for a lens.

YDSTIE: That attention to process has made Aravind surgeons quite possibly the most productive in the world.

THULASIRAJ: Compared to India, we are probably four or five times as productive as an average surgeon, if you compare to U.S. or many parts of Africa or Latin America, it could be a factor of 10 to 15.

YDSTIE: Aravind's surgeons average about 2,000 operations a year. The average for eye surgeons in the U.S. is just 125. The push for more efficiency forces down the average cost of a surgery for Aravind, but that doesn't mean quality is sacrificed. Aravind's surgeons have just half the number of complications that the British health system has for the same procedure.

That high quality allows Aravind to attract patients who are willing to pay market rates, then it takes the large profit made on those surgeries to fund free and subsidized surgeries for poor people - people like K. Karuthagangachi. She's 49 years old and lives in the village of Alanganallur, about 15 miles from Madurai.

One of Aravind's 36 small satellite eye care centers is located here, just a few steps off the village's bustling main street. Karuthagangachi, who wears her salt and pepper hair pulled back and has an easy smile, joined us here to tell her story.

K. KARUTHAGANGACHI: (Foreign language spoken).

YDSTIE: Karuthagangachi says, when she developed cataracts, she lost her sight and her job as a document writer, filling out forms like birth certificates and license applications. She had no income. She's unmarried and had to depend on friends to support her. The cataracts clouded her vision so much that she couldn't even recognize people. She lost her confidence and mostly stayed at home.

After two years, her friends finally convinced Karuthagangachi to visit this eye care center, which confirmed she needed cataract surgery, but she had no money to pay, so Aravind did surgery on both her eyes for free. It was a total success.

KARUTHAGANGACHI: (Foreign language spoken).

PHILIP: She's telling us it's something like seeing a new world and everything is very, very clear.

YDSTIE: It must have been very exciting.

PHILIP: (Foreign language spoken).

KARUTHAGANGACHI: (Foreign language spoken).

PHILIP: I am very, very happy.

YDSTIE: And she got back her job as a document writer. Dr. Aravind Srinivasan, the director of projects at Aravind, says it's only possible to provide free surgeries on the scale that the organization does by running operating surpluses, like a profit-making company. That's what Aravind manages to do, even though it's legally a charitable trust.

ARAVIND SRINIVASAN: I think traditional charities start with a lot of goodness in their heart. You know, they want to do something well. They're emotionally connected. That connection we have, but it was also superimposed with the business acumen.

YDSTIE: Here's an example. Fifteen years after it was founded, Aravind's ability to provide free and subsidized surgeries was being limited by the high cost and availability of the intraocular lenses needed for cataract surgery. Not a problem most charitable organizations could overcome, says Dr. Srinivasan.

SRINIVASAN: How do you expect a charitable organization which is providing eyesight to say that I'll go and manufacture lenses? You don't think that way. You kind of look at it as a bottleneck or a wall and keep complaining about it.

YDSTIE: But Aravind attacked the problem with the help of an American social entrepreneur named David Green. Green had been helping Aravind collect donated lenses to be implanted in their cataract patients, but donations were averaging only about 25,000 a year. That wasn't nearly enough to meet Aravind's needs and the lenses cost several hundred dollars to buy.

So, Green helped Aravind set up its own lens manufacturer onsite, a subsidiary named Aurolab.

DAVID GREEN: Now, today, Aurolab sells - I think, this year, it will be 1.8 million lenses. So you can see that when you have a business model, an economic model, it enables something to scale because it's not dependent upon charity, which is fickle.

YDSTIE: And even more remarkable, by squeezing out profits made by middle men in the production and distribution chain, Aurolab is now providing some lenses at the astoundingly low price of just $2. With cheap lenses available, the number of cataract surgeries at Aravind shot up dramatically.

Green says the main thing he's learned doing this work is that there's a middle way to capitalism.

GREEN: You can find a pathway, as Aravind has, to see how you can use your profit and production capacity to serve others. And I think that service to others is really a foundation of what Aravind does.

YDSTIE: That's the culture that was started by Aravind's founder, Dr. Venkataswamy, and it continues to pervade the organization today. John Ydstie, NPR News. Transcript provided by NPR, Copyright NPR.