Pharma Futures 3 Emerging Opportunities

More documents

Recommendations

Info

Pharma Futures 3 Example 5 Healthcare Aravind Eye Hospital Aravind Eye Hospital has been pioneering approaches to affordable healthcare for over 30 years. Today, it is the largest provider of eye care in the world. It comprises patient care, manufacturing (Aurolab), research, training and capacity building. It has a network of five eye hospitals with 3,600 beds, performs over 260,000 surgeries and handles over 2 million outpatient visits annually. By 2007, Aravind had performed more than 3 million surgeries, making a tremendous impact, given that some 12 million people suffer from blindness across India. The Starting Point – The Ability to Pay Two things make Aravind unique among healthcare organisations. First, it has a steadfast commitment to eradicating unnecessary blindness in India, which is underpinned by a strong organisational culture of caring for the patient. Second, the company has proven a ‘Robin Hood’ business model, which provides high-end surgical services to wealthy customers to subsidise high-quality surgeries for poor patients, and has proven to be highly effective and scalable. 34 The basic premise of this model is that its cost structure has to be dramatically lower than that of other, more mainstream medical service providers. In order to achieve this, Aravind designed something akin to an assembly line surgery model, with multiple beds in each room and an average patient stay of half a day. All staff at Aravind clinics have mobile personal digital assistants (PDAs), which ensures that the preparation of facilities is done in a timely way, and all prescription information is transmitted digitally. Patients self-assign to different income groups, with a simple outcome: the wealthier patients get a higher standard of ancillary service (private rooms, air conditioning, etc.) and their fee helps to subsidise the cost of surgery for the poorer patients who, in turn, get a more basic ‘patient experience’. All patients receive the same level of quality medical services. Currently, the breakdown of the patient base is 45% paying, 55% free. This split not only covers Aravind’s operational costs, but provides the capital for further growth. The organisation’s revenue in 2007-08 was nearly US$20 million, and its costs some US$10 million, indicating a strong (and growing) profit margin.
Pharma Futures 3 This model has also shown to be transferable to other therapeutic areas, such as cardiovascular surgeries at the Narayana Hrudayalaya hospital in Bangalore. Dr Thulsiraj Ravilla of Aravind is currently working with the Indian government to develop a similar model for primary healthcare services in 100,000 clinics across the country. Moreover, low-cost intraocular lenses and other ophthalmic supplies produced by Aurolab (Aravind’s manufacturing arm) are used in over 100 developing countries. In addition to working out how to streamline costs, Aravind has successfully identified and addressed other patient concerns relating to affordability, such as the significant ‘hidden costs’ in providing medicine to patients. Costs resulting from lost work and travel to urban centres all play a factor in a patient’s decision to seek treatment or fill a prescription. Two examples illustrate how addressing these ‘hidden costs’ can tap into a significant population with an ability – albeit limited – to pay for treatment. The first example relates to eye glass prescriptions. Aravind doctors travel extensively to provide eye tests for people in the rural areas. When the service was first established they used to write eye glass prescriptions for patients to obtain at their convenience, despite the fact that this often required travelling to urban areas sometimes a day or even two days from their home. The costs of travelling and lost work meant that most of the prescriptions went unfilled. Aravind changed its approach to ensure its doctors travelled with a limited range of low-cost, affordable eye glasses which enabled people to obtain the glasses prescribed on site. They now see a 90% conversion rate. A second example of Aravind’s constant adaptability in the face of affordability challenges was shown in how they adapted a recentlydeveloped modern eye surgery technique. The new surgery would significantly decrease the healing time for the patient, but the cost was 30–40% greater than the traditional technique. After launching the offering, they saw very little patient uptake. 35 When they explored further, they realised that the counsellors discussing the new surgery were focusing on the technique and technology and not the economic and lifestyle benefits to the patient, i.e. fewer days off work, less family disruption, rapid healing, etc. Once the counsellors started selling the financial benefit of the surgery, Aravind saw a significant uptake in patients electing to pay the premium for this benefit. The insights and innovations developed by Aravind result from a laser-sharp focus on the mission to eradicate avoidable blindness in India. This clear purpose combined with a strong sense of organisational culture has made Aravind a model social enterprise. And, despite the hybrid nature of the company, the lessons gleaned at all stages of the value chain are being readily shared across the spectrum, from non-profits in India to for-profit institutions in the US. It’s also a commercial player in its own right as the largest Indian customer of global eye care company, Alcon.
Page 1 and 2: Pharma Futures 3 Emerging Opportuni
Page 3 and 4: Pharma Futures 3 Executive Summary
Page 5 and 6: Pharma Futures 3 Conclusions PF3 un
Page 7 and 8: Pharma Futures 3 Not All Companies
Page 9 and 10: Pharma Futures 3 Pharma Futures 3:
Page 11 and 12: Pharma Futures 3 The Siren Call of
Page 13 and 14: Pharma Futures 3 The Social Contrac
Page 15 and 16: Pharma Futures 3 The geographical l
Page 17 and 18: Pharma Futures 3 First, per capita
Page 19 and 20: Pharma Futures 3 The result is that
Page 21 and 22: Pharma Futures 3 Governments also e
Page 23 and 24: Pharma Futures 3 Societal expectati
Page 25 and 26: Pharma Futures 3 Taking as a starti
Page 27 and 28: Pharma Futures 3 Accessible A major
Page 29 and 30: Pharma Futures 3 The key to this pr
Page 31 and 32: Pharma Futures 3 Patrimonio Hoy’s
Page 33 and 34: Pharma Futures 3 Manila Water condu
Page 35: Pharma Futures 3 But he did not giv
Page 39 and 40: Pharma Futures 3 In October 2007, t
Page 41 and 42: Pharma Futures 3 Pharma Futures is
Page 43 and 44: Low Risk High Pharma Futures 3 To d
Page 45 and 46: Pharma Futures 3 — Improved commu
Page 47 and 48: Pharma Futures 3 Appendix 1 Project
Page 49 and 50: Pharma Futures 3 Notes 1 There is a
Page 51: Publication Details Title Pharma Fu

Pharma Futures 3 Emerging Opportunities

Create successful ePaper yourself

Delete template?

Save as template?