The Aravind Eye Care System aims to deliver high-quality, low-cost ophthalmological care to some of India’s poorest people. In 2012, it conducted over 370,000 eye operations including laser procedures – 55% of them delivered at low or no cost. Mr Thulasiraj, Executive Director at Aravind, explains how the system works.

Zoe Tabary: What are the barriers to innovation in India’s healthcare system? 

Mr Thulasiraj, Aravind: There are two main barriers to innovation. The first lies in people’s (medical staff as well as patients) mindset – how you look at problems makes a huge difference to how you solve them. For instance, patients traditionally don’t go to hospitals although facilities there are available. You have to innovate to explain how a simple operation will help. Another challenge is that very few healthcare organisations inIndia have a structure that enables innovation, both from a people and technology perspective. There is a significant lack of effective leadership and skilled human resources.

What have been the keys in overcoming these barriers? 

We studied closely the population we were going to serve -- how many people could afford to pay, and how much? The business model that Dr Venkataswamy, the founder of Aravind, established, was simple: providing care to those who can afford to pay market rates and then use the profits to fund care for those who cannot. We were also fortunate to work under leadership that was uncompromising and encouraged us to push further the boundaries of our work. For instance, medical staff rarely used to check if a patient acted upon their diagnosis, so we now ensure we follow up with them and that they take their prescription and follow through with other advice given, be it for surgery or a pair of glasses.

How does Aravind’s pricing structure work and who are the payers?

Our mission was to establish low-cost and high-quality care, so the system was designed to support patients and build on economies of scale. The more patients we treat, the more we can use the same equipment, operating rooms, medicine, which brings the cost of care down. Most of the payment comes from individuals’ pocket and each fully paying patient cross-subsidises the care of three or four others. Third-party payers such as government and insurers cover approximately 15-20% of payments.

How interested has the general healthcare system in India been to using your approach?

The general healthcare system is increasingly interested in replicating our approach. The government and the Centre for Innovation and Public Services reached out to us to help them improve public services. In a way, we work as consultants for the national prevention of blindness; for example, we collaborate with several hospitals to improve their productivity and quality of care. Until now we have been pro-active mostly on eye care and adopted a reactive approach to other areas of healthcare.

Where do you see the Aravind Eye Care System heading next?

We have several goals, one of which is pushing for universal coverage of eye diagnosis and care. We also aim to enhance eye care services that relate to non-cataract conditions such as glaucoma and diabetic retinopathy, but much of this will depend on technological innovation. We are working to optimise technology so that it can be used by high school graduates (today, most technology is geared towards use by an ophthalmologist). Training and research have also become very important to us and we hold classes to teach residents, fellows, technicians and administrators.

This interview is part of a series managed by the Economist Intelligence Unit for HSBC Commercial Banking. Visit HSBC Global Connections for more insight on international business.