A friend found this gem in a blog - singaporeangle.blogspot -
and emailed me:
Charity or helping the poor and needy
Rather, I want to tell a story--and this time, it's a real life
present day story--about the Aravind Eye Care System, based in
Madurai, India (hat tip to this book; scroll down).
In brief, Aravind is a profit making institution providing
healthcare--specifically, for the eye; and very specifically, the
cataract eye surgery. The equipment and service is world class. The
quality of care compares favorablely with the Royal College of
Ophthalmologists, UK, so much that British patients have been
travelling to India to get their surgery done there in recent
years. (A resident from Harvard Medical School who was there at one
point also remarked that he was getting more clinical experience
than any of his classmates in Harvard, as he got to see many
instances of rare eye diseases that back in Harvard, you only get
to read about.)
At this point, one might think: must be expensive to go to Araind.
And that's where the shocker lies: 60% of the patients are
nonpaying patients while the remaining 40% pay about US$50 to $300
for cataract surgery. (It cost about US$3000 for the equivalent
surgery in the US.) Even allowing the differences in cost of labor,
the contrast is out of this world, considering the quality of care
that Aravind provides. Furthermore, Aravind is not only debt free,
runs a surplus, but has been financially self-sustaining from day
one. No government grants, no donations, never asked for them
either. How is this even possible?
The founder, Dr. Venkataswamy ("Dr. V") says he was inspired by
McDonald's. Nothing mysterious, merely the observation that an
"In-depth attention to inputs and process steps guarantees
high-quality outputs":
Dr. V has developed and standardized the Aravind process, in which
the first step is more than 1,500 eye camps where the poor are
tested for vision problems and those needing help are admitted.
They are then transported to hospitals. This is different from the
more popular on-site eye camps in villages and small towns in
India. The conditions of sanitation and medical care in such camps
cannot be controlled as well as they can be in specially designed
hospitals developed for this purpose. In the Aravind process,
technicians, often young women drawn from the local areas and
trained in eye care only, supplement the work of doctors. Patient
preparation and postoperative work are done by these technicians.
Doctors perform only surgeries. The process flow allows a doctor
and two technician teams to perform more than 50 surgeries per day.
Because the process is so well developed, technicians and doctors
are so carefully trained, inputs are fully controlled, and the
system and values are rigidly enforced, Aravind boasts of an
outcome rate that is among the best in the world. (Prahalad, 37;
emphasis mine)
In other words, process innovation drives the costs way down, thus
enabling very low prices, thus allowing Aravind to serve "Bottom of
the Pyramid" customers--the poor and needy.
A thought (slightly revised July 16, 1100 -0400)
I do wonder if in the NKF uproar and the subsequent soul searching
over how charity organisations should conduct themselves, an
alternative has been overlooked.
"Charity organisation"--of the scale of an NKF anyway--did not,
does not, could not survive on charity alone. It has to be
thoroughly professional and business-like in efficiency--in
translating the charity of the donors, on the one hand, into actual
relief for the patients under its care, on the other hand. And
there is no better way to guarantee this professionalism than by
paying good money for the best brains that money can buy--and I am
not talking about unnecessary toilet fixtures or shenanigans with
the travel perk (after all, it is possible to overpay a CEO even in
the profit making world).
There is thus an important sense in which the "charity
organisation" is a misnomer: the small time donors putting in his
$10 from a take home pay of $1000, the volunteers putting in time
and effort, and the staff on half pay because he or she is there
for the cause--that's where the charity resides. But the
organisation--it cannot run on charity alone precisely if it wants
to be the best steward for the charitable contributions of its
supporters.
It is undeniable that Dr. V has deep compassion for the poor and
needy--remember that 60% of the patients do not pay--that the very
foundation of Aravind is inspired by his desire to do his bit to
help the lot of fellow men. But what he runs is not a "charity
organisation" of the kind that we might be familiar with, i.e., one
that asks for and is sustained by our charity. And because it does
not do that, the issues that plague us about how "charity
organisations" ought to be run simply do not arise for
Aravind.
Perhaps what we need to rethink is not how "charity organisations"
should be run, but the more basic question of how the poor and
needy could be helped. And it is not obvious that they are always
best served by the charity of donors, that is, it is not obvious
that that they could not be even better served by other
means.
Something to think about for the aspiring
social-entrepreneur.
Some more background on Aravind: Aravind started in 1976 with a
11-bed private clinic (in Dr. V's brother's house, no less). The
mission: to eradicate all needless blindness in Tamil Nadu, if not
in the entire nation of India. Today, the System consists of five
hospitals, manufacturing centers for lenses, sutures and eye care
related pharmaceuticals, training institute, international eye
bank, a woman and child care center, a postgraduate institute of
ophthalmology (awarding MS and fellowships, and a center for
community outreach programs. The 1,500 bed hospital at Madurai
alone performs some 95,000 eye surgeries every year. The five
hospitals (Madurai, Tirunelveli, Coimbatore, Theni and Pondicherry)
together perform 190,000 surgeries every year, 45% of all eye
surgeries in the state of Tamil Nadu, 5% in the whole of India
(Prahalad, 265-266).
