Paper # 1
The Aravind Eye Hospital Case
Dr. Venkataswarny, founder of The Aravind Eye Hospital in Madurai, India has accomplished his initial goal of offering quality eye care at a reasonable cost. However, in the process he has created an empire of three hospitals and 707 eye camps that pays staff members 2/3 less than ophthalmologists in private practices for twice the amount of work. In order to successfully spread the Aravind model to India, Asia and Africa, I recommend that Dr. Venkataswarny holds off on expansion until he maximizes efficiency within the screening process. This recommendation would require a two-tiered approach: shutting down the Tirunelveli hospital and reallocating his expenses towards more pressing issues. Following this strategy, Dr. V will be moving towards a more sustainable business model that will not hold him back during his next expansion phase.
Shutting down Tirunelveli Hospital
When analyzing patient statistics in relation to productivity in Exhibit 5, I learned that doctors at the Tirinuvelli Hospital utilize 7 percent of their time performing surgeries and 93 percent of their time screening patients. This statistic raises a concern on the hospital’s operations and efficiency, possibly providing evidence for the financial difficulty that were noted by administrators. With this all in mind, the best option would be to close down the hospital and distribute the patients evenly to the 293 eye camps in the surrounding area, causing each eye camp to experience as little as 200 more screenings annually. Patients that require surgery will have to be transported to Aravind, a facility only located one hour away. Because sponsors are already responsible for paying transportation costs, Aravind would not bare this cost – allowing them to reallocate their money towards more pressing issues like increasing salaries for underpaid staff members. This strategy would place the...
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