Economic Acupuncture: A Revolutionary Case Study in Creating Sustainable Services
Cataracts are the main cause of blindness in the developing world. Those that can afford it will have an operation to replace the cataract with an intraocular lens. 259 million people are estimated to be visually impaired, of which 39 million are needlessly blind because they cannot afford such operations. David Green found a revolutionary, innovative but practical and simple solution to make them affordable for everyone and make this lucrative industry profitable and sustainable in the long term.
Cutting out the Margin, Just Needle & Thread
Right from a young age, the power of meditation and travel inspired David to want to do good in the world. It was this that drove him to take a master's degree in public health. He combined his studies with working first as a volunteer, and then later on staff for Seva (non-profit based out of US developing eyecare programs) helping to get medical supplies donated for Aravind Eye Hospital in India and the Nepal Blindness Program. Chief among these donations were intraocular lenses, which are surgically implanted in the eye after removal of the cataract.
When the donations began to dry up, David had to find another solution to get the hospitals the products it needed. "I just used my simple practical thinking, went out and found out how these things are made. And I learned that things don't cost that much. If you take for example a suture, it's just a needle and thread. There's a huge amount of margin added in where there's the claim that it's all for research and development. I just learned that wasn't the truth." After gathering people with extreme core competency in the eyecare domain, in 1992, with help from colleagues at Aravind Eye Hospital and Seva, David set up Aurolab and began developing lower cost lenses.
Balancing the World Through Economic Acupuncture
According to a study by Oxfam with data from Credit Suisse Bank, we live in a world out of balance where every year the income concentration gets into fewer and fewer hands and with approximately 26 people owning 50% of the global wealth.
It is becoming increasingly crucial to find solutions that address the needs of all, particularly when it comes to health and wellness. With lower-income people being priced out of the market "there's no transparency in pricing and no price competition," David explains. Ultimately, such markets simply are not sustainable in the long term.
I put a needle or a pressure on where too many resources are accumulating, and I spread it to where there's not enough." This so-called "economic acupuncture" redistributes resources in health care to make it more equitable for lower-income people who don't have access because of their economic status. With the help of Aravind Eye Hospital and Seva Foundation, David developed a tiered system of self-financing from user fees where the lowest price is free and enough money can be generated from higher-income paying patients to cross-subsidize the cost of services and surgery for the poorer patients.
The eyecare programs David has helped develop are the largest players in their markets and also the most profitable even though they are doing 30-50% of their work for free or below cost. The low cost of the intraocular lenses has forced other companies to compete thus creating a price-competitive market and driving down the cost of the lenses even further.
David's solution showed other companies not just how to reach the lower end of the market but created a whole new market and showed that it could be profitable and sustainable.
Aurolab has 10% of the global market share, and has helped approximately 35 million people to see by dramatically lowering the cost of intraocular lenses from $300 to our lowest price lens today which is just $1.20."
Created by ANA (All Nippon Airways), the BLUEWING program makes it easy to support Changemakers like David that are finding innovative and practical ways to impact millions of lives across the globe. ANA supports Changemakers and their organizations by reducing the cost to fly staff around the world and focus their resources on the essential work they do. This enables David to develop more medical products at a lower cost and make healthcare affordable and sustainable for more and more people.