It's what management guru C.K. Prahalad calls a "gem at the bottom of the pyramid". In less than 30 years, it has grown to be the biggest organisation of its kind in the world, serving millions in India and hundreds of thousands abroad. Its self-sustaining model is being copied in at least 30 countries around the world. Its staff is almost ten times as efficient as the national average. And its engine of growth is not a hard-headed businessman, but an 86-year-old arthritic called Dr Govindappa Venkataswamy - Dr V.

What started as a 40-bed hospital in little-known Theni near Madurai has become a global centre for excellence in eye surgery - the Aravind Eye Hospital. It now boasts of a 5,500-bed setup spread across five hospitals in Theni, Madurai, Coimbatore, Tirunelveli and Pondicherry. What's even more amazing is that this fast-growing, sustainable model has been possible despite the fact that two-thirds of the patients at Aravind are treated free of cost.

This remarkable feat has come about through the relentless execution of some age-old business strategies - increase volumes, build efficiencies and reduce costs. But at Aravind, all this is not as cut-and-dry as it would seem on a PowerPoint presentation. Behind it is a story of absolute commitment and genuine compassion. It's the story of Dr V's lifelong mission to eradicate blindness.

Ironically, the man who started it all didn't always want to be an eye surgeon. Saddened at the death of a young neighbour at childbirth, Dr V set out to be an obstetrician. After graduating from Stanley Medical College, Chennai, he joined the Indian Army, but was discharged when he was found to have developed a rare strain of rheumatoid arthritis. The disease mangled his fingers. This debilitating phase lasted till he was reinvigorated by the preaching of Aurobindo (after whom the hospital is named). The pain having abated a bit, Dr V retrained, took up the lancet again, and entered government service.

Soon after, his attention was drawn to the work in eye care done by Dr M.P. Mahray. Dr Mahray, who set up the Sitapur Hospital in Khairabad, Uttar Pradesh, in 1926, pioneered the system of holding eye camps in rural areas and bringing eligible patients to the main hospital for operations. Dr V started the eye camp movement in the South while still in government service. When he retired in 1978, he had a plan in hand.

He raised money by mortgaging his house and set up the Govil Trust. The first hospital came up soon after. Dr V's reputation ensured a steady stream of patients. He pulled in his sisters and brothers-in-law and started a free eye camp programme. Some initial attempts to raise money through donations came to nought. So a new model was needed to dispense free eye care to the needy. "The only way we could do that was to bring in efficiencies and volumes," says R.D. Thulsiraj, or Thulsi, the first administrator at Aravind. The team bet on a strong paid-service model that would offset the cost of free service.

When Thulsi, an IIM Calcutta graduate, joined Aravind from a multinational company in 1982, there was just the one hospital. The second one was commissioned soon after and the challenges multiplied proportionately. While clinical excellence wasn't a problem, sustained growth depended on efficient administration and tight control over costs. Dr V, a strong believer in systems, ensured that hospital records were put on a computer-based system as early as the 1980s. It allows doctors to track every patient's records online, updated by the minute. Dr Aravind Srinivasan, the current administrator, keeps a keen eye on surgeries and costs through this.

The key to volumes lay in detailed time-and-motion studies. It was found that an efficient doctor should be able to conduct about 40 operations a day. So operation theatres (OTs) were designed to facilitate a doctor's movement between two tables without a loss of momentum. "We have reduced costs by sweating our assets - our main assets are our doctors. So we do not let them waste time at anything other than practicing their skill," says Thulsi. True, the doctors don't do administrative or routine work; they only take medical decisions. In the OT, doctors perform the surgery - the stitching, dressing, etc. are handled by the nursing staff.

Getting trained nurses used to be a major headache for the administration. So Aravind started recruiting girls from nearby villages and training them from the ground up in housekeeping, paramedical duties, counselling and OT duty. Even now, around 100 new girls start training with Aravind every year.

The results of this whole effort are startling. Each doctor averages 2,000 surgeries a year against the national average of 220. And while the cost of doing a routine cataract operation (with lens replacement) by a private practitioner is Rs 2,000-5,000, it costs only Rs 750-900 at Aravind. The comparable rate in the US is about $2,000.

Well, Indian demographics have a hand to play here. Of the 45 million blind people in the world, about 12 million are estimated to be in India. The large share is thanks to our genetic predisposition which makes us susceptible to cataracts almost a decade and a half earlier than in the West. But in 80 per cent of the cases, blindness can be prevented. Thus the free screening camps have proved to be a hit. In 2002, over 45 per cent of the patients at Aravind came though the 1,500-plus camps that were conducted that year. All this effort adds up to almost two lakh surgeries a year.

Ask Dr V whether he is satisfied with the performance of Aravind, and he says: "Aravind has turned out well till now, but we have to constantly develop people with vision and the ability to implement vision." He adds: "Our hospital has worked well, not only as an institution which is able to help the poor in restoring sight, but also as a business model." Understanding that one Aravind can't eradicate blindness on its own, Dr V is now sharing his model with the rest of the world.
His inspiration for replicating the model came from the unlikeliest of sources - McDonald's. In the rigorous franchisee model of the American multinational, Dr V saw a tremendous scope to copy his own model of eye care around the world. "If that can be done, the problem of blindness is gone," says Dr V matter-of-factly.

A surgery underway at Aravind’s state-of-the-art facility

So since the mid-1990s, Aravind has been helping in setting up hospitals and maximising capacity utilisation at established ones with the help of Lions International's Sight First programme. Thulsi leads this initiative as its executive director. The Lions Aravind Institute of Community Ophthalmology (Laico), a team of ten, handles hospital consultancy. First, a hospital is selected for funding. Then, a team of four that includes an ophthalmologist and an administrator goes for a site visit. After the inspection, a week-long, structured strategy workshop is held. The hospital team is allowed to set its own targets. Strategies on marketing and community outreach are defined.

"What we teach them is optimum utilisation of resources," says Thulsi. Usually, a team from the selected hospital is taken for a tour of the Aravind facility at Theni. It's a comparatively small hospital with 100 beds, but one where just two ophthalmologists conduct about 7,000 surgeries a year. "Since the hospital is small, it becomes easier to demonstrate that the model can work successfully," says Thulsi.

The capacity-building programme extends to implementation, technical support, training, and follow-up visits. The cost of the consulting module is borne by a seed capital of $10,000 given by the Sight First programme. At present, Aravind is assisting 166 hospitals - 137 in India and the rest in the Middle East, Latin America, Africa, Nepal, Bangladesh and Indonesia.

Aravind is also starting on tele-medicine, a technology to remotely connect medical systems to each other or to the consumer. Right now, all the five Aravind hospitals are hooked up on this, and through Laico, they can have access to over 150 hospitals worldwide. Right now, it's used mostly for teaching. "We discuss cases with John Hopkins Institute in the US. We don't pay them for referrals - they should pay us, considering the number of cases on which they have learnt from us," says Dr Srinivasan.

It has been a long journey for Aravind. But there are no full stops for Dr V. At this age, he does not perform eye surgeries any more, but he arrives at 7 a.m. sharp - to see a patient occasionally, look at the developmental work being done and meet visitors from all over the world. Whenever a hospital is completed, he waits for a couple of months for the operations to stabilise, and then inevitably suggests: "As we were saying, let's open another hospital." His fifth hospital, at Pondicherry, has just been completed. The world is waiting for the octogenarian's next move.