Friday, May 23, 2008

Two Indian health-care service models that I love!

Aravind Eye Hospital is one of the largest eye-care network in the world. However, that is not the reason for my love and mentioning it here. Aravind Eye Hospital in many ways competes with Sankara Nethralaya, which is also a very large eye-care network and has huge following from as far as Bangladesh (patients travel all the way to the southern city, Madras or recently known as Chennai). Both of these hospital systems have best technology, good number of doctors, very good processes, good follow-up, very good infrastructure etc. However, the business models that these two adapted are radically different.

Sankara Nethralaya is a typical hospital with better amenities, charges the customer relatively less and largely runs on two financial reasons. Firstly, it is the volumes that reduces the cost here and secondly it is a non-profit Hindu trust, so it attracts donations from Hindu community all over the world.

Aravind Eye care system is very innovative in covering up its finances while treating the poor at low cost. Its model is like this: patient is charged based on amenities that they would avail during the treatment. It means, if you take up expensive ward to be in then you would be charged at premium. And on the other hand, the poor can be low-cost ward in order to be charged less for the treat. What does this mean, the rich are provided better amenities and in turn pay up premium charges which also pay up the poor who may not be able afford surgery costs. And moreover large volumes in number of patients makes the hospital infrastructure better utilized and in turn, costs are further reduced.

Because of this innovative business model, which can be described as BoP in practice, it started attracting the number of social capitalists all over the world. One of them is Google Foundation. It has recently funded this organization while expecting profits on its investment.

Another bit of interesting piece is that Aravind Eye Hospital in Pondicherry has interesting treatment for Myopia. They teach certain eye-exercises for about a week and if one practices for few months it would definitely show a clear difference in eye vision.

For a long time, I have a lot of reservations on ethics in medical profession. It is basically outlined as following. If a person has more issues with his/her health, then it is beneficial to the health practitioner. So it is likely that modern medical professionals may not provide right treatments by keeping the problem alive for more number of days (and/or increase the problems) in order to increase the revenue. Few other reasons are making this problem even deeper such as the number of health professionals is abysmally low and the cost of health education unbelievably expensive. It is obvious that the system would produce more corrupt practitioners because honesty may not pay their cost of education. It is just a simple Return on Investment issue. For example, if a patient enters into a hospital having fever, then he may be treated for fever but his treatment procedures might lead to other health problems whose symptoms may appear after few months/years. This is very practical way of thinking because, there are no audit procedures exist in the health industry, in general. In many places, I did find this kind of attitude particularly in rural India among health practitioners.

So I was looking at business models in health services wherein
1. if a patient is treated quickly or rather aptly then it should benefit the hospitals financially.
2. it should be like less number of patients should lead more revenue to the hospital.

Satisfying these two basic objectives, Narayana Hrudalaya has recently started a unique health care service model to cover large number of poor peasants in Karnataka (a state in India). Yashasvini is a health insurance program covering 2 million farmers costing each of them 10 Rupees (0.25 USD) a month (Government is also a partner in this program and it is unclear how much is its contribution, apart from providing infrastructure). Here, as numbers are very large, they are able to get the volumes which are cutting down the cost dramatically. Moreover, it also led to the efficient use of technology.


eye surgery oakland said...

we know that the eyes are the best blessings of the god and nobody can reject the importance of the eyes so we must be more concern about the care of the eyes.
i am agree that the need of the time is organize different hospitals whose main performance is just toward the eye care as the indions done.

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