| Ref. No. | IIMC-CRC-2014-07 |
| Authors |
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| Length | 20 pages + teaching note. |
| Data Source | Primary data from Aravind Eye Care Systems on patient load, lens utilization, cost details, staff strength, surgery packages for cataract operations, apart from financial data from their annual report shared by them. Financial data on competing firms like Sankara Nethralaya are obtained from secondary sources. |
| Setting | Healthcare industry, India. |
| Abstract | Aravind Eye Care System (AECS) - an ophthalmological hospital was established in 1976 providing eye care even to those who cannot afford to bear the cost. Yet the firm has been consistently reporting an operating profit margin of 40%. The case looks at the financials of AECS and tries to analyse the numbers to get the right picture. The case provides sufficient information to make a detailed analysis of the sustainability of the hybrid pay-vs.-free model of AECS. The case examines the reasons for recent decline in profit margins and explores the cost and revenue model of AECS. The case can be used to discuss cost structure of eye care service and the pricing strategy. It can also be used to understand resource optimization under constrained situations; to forecast patient load and to plan resource mobilization during peak and slack periods. |
| Keywords | Aravind; Cost structure; Eye care; Patient load; Revenue model. |