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«IPIHD Case Study # Replicating Indian Eye Care Innovations in Mexico: The Founding and Expansion of salaUno 2 IPIHD Case Study #102 Copyright IPIHD ...»

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Case Study


Replicating Indian Eye Care Innovations in Mexico:

The Founding and Expansion of salaUno

2 IPIHD Case Study #102

Copyright IPIHD 2013

Mukesh Singhal, Jeffrey Moe, and Richard Bartlett

Published by the International Partnership for Innovative Healthcare Delivery

Durham, NC (USA)

Cover images of man courtesy salaUno

The Founding and Expansion of salaUno 3

Executive Summary

Inspired by C.K. Prahalad’s The Fortune at the Bottom of the Pyramid, Javier Okhuysen and Carlos Orellana cofounded salaUno (SU), a Mexico City-based eye care center. Launched in 2011, salaUno’s model draws heavily from the decades of experience of the Aravind Eye Care System (AECS) and LV Prasad Eye Institute (LVPEI) in India.

The founding and subsequent expansion of salaUno in Mexico created an observation point of the challenges of replicating a successful health innovation from one culture (India) and contextualizing it to another (Mexico). Within two months of operation, SU had positive cash flow, which supported initial optimism for SU’s vision of opening and operating 10 surgical centers by 2016. Mukesh Singhal, an MBA intern with the International Partnership for Innovative Healthcare Delivery (IPIHD), visited eye care centers in India and Mexico in July and August 2012 to conduct the primary research for a descriptive case study of the replication of a low-cost, high-quality, high-volume eye care model in Mexico.

Drawing upon best practices from AECS, and to a lesser extent LVPEI, SU is emulating key success factors with the expectation of achieving more quickly the impressive results realized in India. Through a review of SU’s development and the care delivery models of AECS and LVPEI, IPIHD intern Mukesh Singhal identified six principles that SU has adopted in their early efforts.

1. Charismatic leadership inspires staff and creates an organizational culture with a commitment to lean production, continuous process improvement, and patient-centered care.

2. SU’s compelling vision, “eliminating needless blindness,” applies to all income levels. SU is committed to serving everyone with the same high quality of care, regardless of ability to pay. This goal is achieved through a cross-subsidization structure in which additional amenities, including upscale waiting rooms and reduced wait times, are offered to patients able and willing to pay for such services. Revenue generated by paying patients helps to cover the cost of care provided to those who cannot pay.

3. High volumes are required to cover the high fixed costs of eye care surgery. India and Mexico are both markets with high unmet eye care needs. However, significant outreach to patients is required to generate adequate numbers for consultation and a resulting fraction who, upon positive diagnosis, seek treatment.

4. Standardization of processes reduces training time, eliminates wasted steps and allows workers to focus on a limited, specific set of tasks with associated quality measures and continuous improvement approaches.

Standardization enables economies of scale, which further reduce costs.

5. Right-skilling reorganizes roles and responsibilities whereby each worker is trained for specific knowledge, skills, and abilities. Tasks that can be reorganized away from a highly paid surgery or ophthalmology role, without sacrificing quality, are shifted to other roles.

6. The Indian models emphasize mentoring and teaching: the less experienced learn from the more senior, allowing continuous movement to higher-skilled roles upon mastery of the preceding level. Patients are triaged such that less experienced workers take lower-intensity, lower-complexity cases and increase their capabilities over time toward more complex cases.

4 IPIHD Case Study #102

SU faces several challenges on the path to realizing its vision of “eliminating needless blindness”1 :

• Balancing fidelity to the AECS-proven approaches with the demand to contextualize those approaches to Mexico

• Achieving a sufficient volume of diagnoses and treatments to fulfill the business model requirements

• Gaining staff acceptance of lean processes, new roles, and right-skilling coupled with ever-increasing volumes

• Doing well by doing good: pursuing social welfare goals in a for-profit organizational structure SU creates an observation point for gauging the challenges of adapting a proven innovation to a new context. It may also contribute insights to the emerging phenomena of “reverse innovation” in health care, where innovations developed for a low-income country can be adapted for an unmet need in other countries, including high-income countries.

–  –  –

Not only does visual impairment personally affect those with the condition and their families, but it has a significant impact on the economy.7 In 2010, the direct and indirect (productivity, informal care, etc.) healthcare system costs to the global economy as a result of visual impairment were estimated to be greater than $2.3 trillion and $3.0 trillion, respectively. A subsequent study by the University of Michigan and VisionSpring, a non-profit social enterprise whose purpose is to alleviate global visual impairment, indicated that a pair of eyeglasses given to a visually impaired individual increases their productivity by 35%.8 Individuals in the study who obtained eyeglasses experienced a 20% increase in their monthly incomes. These findings suggest that solutions for the visually impaired and needlessly blind can have a profound impact on their lives and the economy.

With the second largest population in the world, India is home to a significant portion of the global blind (8.1M)9 and accounts for over 20% of the visually impaired.10 In the lowest segments of the socioeconomic strata, the prevalence of blindness is nine times greater than in the highest.11 The lack of resources and expertise in ophthalmology make the process of reaching the marginalized that much more difficult. In the 1980s, whereas phacoemulsification (PHACO) surgeries in developed countries had become common, the few cataract 2 Paul Courtright and Susan Lewallen, “Global Blindness 2010: What Do We Know?,” Expert Review of Ophthalmology 6, no. 3 (2011): 385-92 3 World Health Organization. “Vision 2020: The Right to Sight,” accessed September 29, 2013, http://www.who.int/blindness/Vision2020_report.pdf.

4 Donatella Pascolini and Silvio Paolo Mariotti, “Global Estimates of Visual Impairment: 2010,” British Journal Ophthalmology 96, no. 5 (2012): 614-18.

5 Donatella Pascolini and Silvio Paolo Mariotti, “Global Estimates of Visual Impairment: 2010,” British Journal Ophthalmology 96, no. 5 (2012): 614-18.

6 G. Natchiar, Alan L. Robin, Ravilla D. Thulasiraj, and Senthil Krishnaswamy,“Attacking the Backlog of India’s Curable Blind: The Aravind Eye Hospital Model,” Archives of Ophthalmology 112, no. 7 (1994): 987-93.

7 AMD Alliance International, “The Global Economic Cost of Visual Impairment,” accessed September 29, 3013, http://www.amdalliance.org/global-economic-cost-of-visualimpairment-2010.html.

8 VisionSpring, “Why Eyeglasses?,” accessed September 29, 2013, http://visionspring.org/why-eyeglasses/ 9 Donatella Pascolini and Silvio Paolo Mariotti, “Global Estimates of Visual Impairment: 2010,” British Journal Ophthalmology 96, no. 5 (2012): 614-18.

10 Rohit Khanna, Usha Raman, and Gullapalli N. Rao, “Blindness and Poverty in India: The Way Forward,” Clinical and Experimental Optometry 90, no. 6 (2007): 406-14.

11 Rohit Khanna, Usha Raman, and Gullapalli N. Rao, “Blindness and Poverty in India: The Way Forward,” Clinical and Experimental Optometry 90, no. 6 (2007): 406-14.

6 IPIHD Case Study #102 surgeries that were taking place in India were intracapsular cataract extractions (ICCEs). The lack of equipment, ophthalmologists, and instruments needed for surgeries led to higher complication rates and prevented widespread adoption of these surgeries. Furthermore, the cost of the surgeries was prohibitive for those most affected, the poorer segments of the population.12 Cataract surgery Modern day cataract surgery was developed in the mid-1700s. The ICCE procedure was used in the 18th century and involved large corneal incisions to remove the natural lens in the eye. Not only did these procedures result in high mortality rates, but they also left the patients in need of high-powered hyperopic glasses to see.

The development of the intraocular lens (IOL) in 1949 was a major inflection point for cataract surgery. The IOL allowed for replacement of the natural lens and eliminated the need for glasses following surgery. Gradual improvements in surgical technique and instrumentation allowed the surgery to be performed more quickly and through smaller incisions. The PHACO surgical technique, in which the natural lens is emulsified with an ultrasonic handpiece and aspirated from the eye, followed by an IOL implantation, has since become the standard for cataract surgery, resulting in excellent clinical outcomes with reduced perioperative morbidity and recovery time.13 Cataract surgery has advanced into a finely tuned procedure that has transformative vision results within a matter of minutes.

Aravind and LV Prasad response to eye care needs in India India, under the heavy economic and disease burden from blindness and visual impairment, spawned many innovations in eye care. Two care models that have gained considerable global acclaim are the Aravind Eye Care System (AECS) and the LV Prasad Eye Institute (LVPEI). AECS and LVPEI are two of the largest, and arguably among the most successful, eye care hospitals in the world. Both organizations were founded by charismatic leaders who personally embody the vision, mission, and values of their respective facilities. The leaders mandated that their services be affordable and accessible to low-income patients while serving other economic segments.

–  –  –

14 John Touissant and Roger A. Gerard, On the Mend: Revolutionizing Healthcare to Save Lives and Transform the Industry (Cambridge, MA: Lean Enterprise Institute, 2010) 15 Christopher S. Kim, David A. Spahlinger, Jeanne M Kin, and John E. Billi, “Lean Health Care: What Can Hospitals Learn from a World-Class Automaker?,” Journal of Hospital Medicine 1, no. 3 (2006): 191–99.

16 Christine Laine and Frank Davidoff, “Patient-Centered Medicine: A Professional Evolution,” Journal of the American Medical Association 275, no. 2 (1996): 152-6.

17 Author’s interview, August 2012.

8 IPIHD Case Study #102 were a major barrier for the target population. To address this, AECS provided food and round-trip transportation for the outreach patients to support their transport to surgery and subsequent recovery periods. The rates of surgery conversion immediately spiked and have remained over 90% with transportation support.

The third principle is minimizing treatment time. Through their unique “assembly line” approach to operating rooms, AECS can perform 10 times as many cataract surgeries per year as the US national average (Appendix A). Each surgeon works with two beds in a single operating room. While the surgeon is operating on one patient, the nursing staff preps the next patient on the adjacent bed. In this manner, the surgeon is able to rotate between the two beds, allowing a single microscope and “phaco machine” to be used for both beds, maximizing the utilization of both the equipment and surgeon. The highly standardized and repetitive processes of the surgeries allow the nursing staff to be extremely efficient, irrespective of the surgeon operating. The placement of four operating beds, for two operating surgeons at a time, in a single operating room further maximizes utilization and reduces the costs of each surgery.

Aravind has further optimized its systems, allowing patients to receive treatment the day after consultation. This applies both to outreach patients, who are able to receive cataract surgery the day after the eye camp, and to paying patients, who can undergo surgery the day after their consultation. Aravind puts considerable planning and effort on a daily basis into scheduling cataract surgeries. Each morning, all surgeons (regardless of specialty) first perform cataract surgeries, before performing surgeries in their specialty. This requirement has the two-pronged benefit of clearing all the cataract patients and maintaining high surgical skill in cataract procedures.

Cross-subsidization Aravind implemented a cost-tiering system for its services. Patients pay as they are able; some patients who are unable do not pay for services, and others choose from a “tariff” of service and product bundles at varying price points. Patients choose the type of recovery room, the time to surgery, and the type of lens, all of which are price differentiated to appeal to different patient segments. These features and costs are transparently described during the pre-surgery consultation. Great care is taken to ensure the clinical outcomes are virtually identical among the various priced and free care options. The availability of expensive brand-name lens options coupled with AECS’s high quality outcomes attract paying patients who make possible the cross-subsidization financing scheme, allowing poor patients to receive free care.

In the late 1980s, as AECS sought to lower the costs of surgery, analysis of their cost data found that the single largest component cost was the IOL. Aravind vertically integrated by creating AuroLab, a manufacturing facility initially designed to produce inexpensive IOLs. At the onset of production, the AuroLab was able to create lenses that were seven times cheaper than imported lenses but comparable in quality.18 Over time, the variable manufacturing costs have further dropped, and the success of AuroLab has allowed it to expand into manufacturing most instruments and equipment for ophthalmology at a fraction of worldwide prices.

The combination of these various efficiencies allowed AECS to perform over 300,000 surgeries in 2010 (over 150,000 for free) while maintaining prices lower than market clearing prices in the local Indian market.

–  –  –

19 LV Prasad Eye Institute, So That All May See, Silver Jubilee Commemorative Book (Hyderapad: LVPEI, 2012).

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