B M S College of Engineering(Autonomous under VTU)Course Title: Seminar 1(Contemporary Issues in Management)Course Code: 16MBA1SCIM A Seminar Report on”Aravind eye care- McDonalds model in eye-care”Submitted by:-Karthik.vUnder the Guidance of:-Mr. Sridhar. H RDepartment of Management Studies and Research Centre 2017-2018AbstractThis report mainly focuses on the Aravind eye-care system McDonald’s model in their health care operations. In today’s healthcare there is a need for high quality treatment with less time consumption. India consists of 33%of blind people of the world’s population. The 80 percent of the blindness can be corrected by operating. Aravind eye-care came forward to solve the problem of curable blindness. AcknowledgementI heartly acknowledge Dr. John Manohar, Head of MBA Dept, for providing me with this opportunity and for supporting throughout my endeavour. I take this opportunity to express gratitude to my course instructor, Mr Shridhar, who has always been supportive and has guided me throughout. She has helped me in numerous ways and his invaluable suggestion made me feel comfortable throughout .I am very much thankful for the immense helps and moral support. -Karthik .vTable of contentSL NO TOPICS PAGE NO Abstract 2 Acknowledgement 31 Introduction 52 How Dr. V influenced by McDonalds 73 Aravind eye-care system- McDonalds model in eye-care 84 What Aravind feel about their success 115 How this model make business sense 136 Conclusion 14 1. IntroductionAravind Eye Hospitals overviewAravind eye care originated with a vision of one man, Dr. Venkatasamy, commonly known as Dr V. In 1976 he founded Aravind eye care after his retirement. He was inspired by one of India’s Philosophers, Sri Aurbindo, whose teachings on the humankind influenced many thinkers. Dr.v sets his goal to give the right to sight to the 12million people in India suffering from preventable blindness. Initially in the starting no banks came forward to lend money. So he decided to mortage all the jewelery of his family members and created the first 11-beds hospitals in Mdurai in the south India, one of the countries oldest cities and home to the famed Meenakshi temple, dating to 6 BC. Initially the hospital was started with only eleven beds in a small rented home in 1976.Aravind hospital mainly focuses on eradicating the cataract related blindness in India. Cataract is an eye problem were the vision gets poor day by day and results in complete blindness. Then a building was built with accomodation for thirty patients. In 1977 they constructed the low cost free hospital to serve hundred patients. The main hospital in Madurai was built in 1982. Now, the building has the facilities to accommodate two 4000 beds with three fully furnished theatres. Today there are 7 major hospitals, 50 vision care centers and they also operate in over 30 countries. Today they see more than three million patients and perform over 300,000 surgeries a year.The main vision of Dr. V was to eradicate the preventable blindness so he started to provide quality eye treatment to poor people with low fees or no fees.The hospital was organized in such a way that patients can get eye treatment at any time irrespective of day or night. The doctors are well qualified and equipped with modern technology to serve their patients with out compromising in the treatment quality.Aravind hospital conducts rural camps to create awareness among the people about the eye problems and also conduct eye check up to find out the eye problem. If there is a serious problem they provide transportation, food and Accommodation facility to the patient and one care taker to the main hospital.Aravind eye care as treated 3million patients in 36 years and performed 4million surgeries but majority of them being cheap or free and also doctors perform 2000 surgeries a year on average.Aravind hospital is the blend of traditional hospital with high-tech ophthalmic care. The hospital is renowned for its effective and efficient eye care in organized manner. Patients around the globe swarm to Aravind Eye Hospital for its excellence eye treatment.2. How Dr. V influenced by McDonalds business model.Once Dr. V visited the McDonalds restaurant in America and was shocked to see the efficiency and co-ordination between the workers to deliver the service to their customers impressed Dr. V .He started thinking that if McDonald’s can sell huge number of burger, why can’t Aravind sell millions of sight-restoring operations and he wanted to implement the service efficiency of McDonalds in their eye care system to increase the numbers of patient treated. Then he came up with Aravind’s business model which is based on his vision to solve the blindness problem regardless of the patient’s ability to pay. Aravind eye care has been successfully executed this business model over forty years to become the largest provider of eye-care services all over the world. 3. Aravind eye-care system – McDonald’s model in eye-carea) Business model:- Aravind has developed a self funding healthcare delivery model it creates value to their customers but capture the small value from it. Aravind is able to provide free cost or at low cost, high quality treatment to half of its patients who are economically poor by using the profit generated from the paying patients. The hospital will not differentiate between the paying and non-paying patients and is consistently providing high quality care from 40 years. The organization has been able to achieve this by focusing on the following strategies:-I. Dr. V’s vision model: – Dr. V chooses a specific vision for the hospital to focus on eliminating blindness through cataract surgery.II. Hybrid business model: – The hybrid model helped the Aravind to use the revenue generated from paying customers to serve the poor and needy patients. The high end ophthalmic care also helped Aravind to attract and retain qualified doctors.III. Business model with low cost: – The cost of cataract surgery at Aravind could be as low as 3000 rupees in India while in America it is in the range of US$3000. This is mainly due to high volume surgeries without compromising in quality. IV. Reaching out the rural areas: – Aravind has to create demand through customer outreach programs. This is so done by conducting the health care camps in rural areas and organizing the awareness program regarding eye diseases and steps to prevent those.b) Operating Model:- Aravind has developed standardized process for performing the operations. To ensure consistency and efficiency in delivering the quality treatment.I. OPD: Aravind serves 6,000 outpatients in the hospital and 1,500 patients in outside camps every day. The process is followed by registration, vision examination, preliminary exam, refraction, final exam, counseling and also recommendation for surgery.II. Surgeries: The doctors of Aravind hospital performs more than 2,000 surgeries in a year compared to the Indian average of 400. This significantly higher productivity is acquired by adopting the assembly line approach to perform surgery as McDonalds use in producing the burger. Each operating room consist of one surgeon room, two operating tables, multiple sets of equipment and multiple nursing team to carry out the non-surgical task, such as preparing the patients and assisting the anesthetic. This unique process enables the surgeon to complete a surgery, and start immediately the surgery on the next patient who has been already prepared by nurse team. This procedure helps doctor to perform six to eight procedures per hour.c) Training the work force: To allow the doctors to focus on the most critical task of diagnosis and surgery, Aravind uses huge staff of nurses and technicians to operate the equipments efficiently. By the aim of further reducing the cost, the hospital recruits and trains women from local societies and certifies them as technicians. The nurses and technicians are effectively trained so that the can be able to perform multiple tasks. They also break up the labor into small parts and then fine tune them in specific area. As McDonalds recruit and train the local people to work effectively and efficiently in their restaurant to reduce the cost and to gain the customer loyalty by providing quality food on time. d) In-house manufacturing:The intraocular lens used in the surgery is the part of fixed cost of the surgery (rupees 6000). Then Aravind over come this by setting the manufacturing facility which makes intraocular lens called Aurolab in 1992. The price of the lens then came down to rupees 600(90% reduction).As McDonalds produces their own buns and ingredients which is necessary to make burgers to reduce the unnecessary cost.e) Using technology to outreach:To facilitated the community outreach programs it uses both eye campus and rural awareness program centers to source patients for surgery to the main hospital. The visionCenters use telemedicine so that doctors from the main hospital can evaluate and diagnose the millions of patient. As McDonalds attracts customers by providing offers and providing advertisement in television.f) Globalization: Aravind is expanding its eye-care system all over the world. It mainly focuses on countries were there is a huge blind population. So that they can serve the patients effectively. As McDonald’s golobalized by providing quality food (Burgers, French fries) all over the world they also involved in providing the franchise so that they can reach out to huge customers.g) Expanding to other operations:-Aravind has focused main aim was cataract operations since model fits this surgery type. But recently Aravind has been able to start specialty clinics to address more specific eye condition like Galucoma. As McDonalds recently started manufacturing French fries and sandwisches in their restaurants beside Burgers to attract the customers.h) Sustainability model:-Aravind has a strong R department which has been been able to develop the new technologies in eye care. The high volume and procedures helps in improving the capabilities in the surgery. The good quality infrastructure attracts the wealthy patients which have seen constant growth over the last few years.i) Planning model:-Aravind eye care plans the surgeries on advance and informs the patients. Doctors also guides the patients about the surgery and steps to be followed before the surgery. By this their will not be waste of valuable time of doctors which result in effective operations by reducing the cost. The Aravind hospital gets fully prepared in the Diwalli festival times were there is the high rate of eye damage due to burnings of crackers. As McDonalds gets prepared to produce more burgers during holidays and during special occasions to serve their customers. 4. How did Aravind eye hospital responded to their success They look at it from two perspectives. First internal perspective are , they assume to be quite successful when they use indicators like number of patients treated, number of people trained, level of capacity utilization, financial sustainability, etc. When they look at it from the public perspective they are quite far from being successful. This comes from the vision ‘Eliminate Needless blindness’ which makes them feel responsible and confident to reach out to a larger society in the nearest surrounding of Aravind eye care and its services is for India and beyond India5. What are the reasons for this model to make sense?This model makes a very sound business sense because it’s basically concentrates on core business concepts • The first one is market development and demand generation this is done by out-reach programs like free healthcare camps, rural healthcare camps and awareness programs regarding the eye problems and demand is generated by the peoples word of mouth because the provide quality eye treatment at low cost.• The second principle is quality treatments provided by Aravind eye care attracts the majority of people from all over the world. Which results in revenue generation which can be used to treat the poor people?• The third principle is to achieve excellence by ensuring a high level efficiency in providing the treatment. The main aim is to ensure that the patient gets value for his investment on time or money. • The fourth principle is to sustain wherein they set the price not so high. Aravind hospital sets the fees based on the market price which is affordable by many people and also provide free treatment for those who can’t able to pay the fees.• The fifth principle is that each and every employee in the hospital work towards the single goal. This is so done to reach the goal more effectively and efficiently. 6. Conclusion:-• Aravind has proved that by managing their resources well they can help the society along with achieving their professional excellence. The are effectively managing their human resource which is the back bone of the organization which results in cost reduction and generate revenue in the long run.• It has proved that various business models and techniques that are used in industries can be used in healthcare to work effectively. This is proved by implementing the McDonalds model in their operations.• If an organization should grow it should mainly focus on innovation. As Aravind spent lot on R to get innovation in eye-care so that they can effectively treat their patients.• If an organizations main aim is to maximize the profit it should first provide the quality product and services to their customers then in the long run they can make profit. This concept is proved by Aravind eye-care system.