Sustaining a Social Enterprise: Palash Eye Hospital

Palash Eye Hospital was established with the aim of providing free eye care to the poor and affordable treatment to individuals with paying capacity in Calicut district of the State of Kerala in Southern India. Starting as the only specialty eye hospital of its kind in 1999, the hospital had grown over the last 10 years. It was operated on a cross-subsidy model where revenues from paid services were used for providing free treatment and funding expansion plans. The hospital was being managed by Palash Eye Care Trust while its community outreach activities were being handled by Palash Eye Care Society.With the entry of new commercial eye hospitals in the region, the hospital was facing competition for skilled resources and was falling behind on efficiency. The growth of the hospital was not accompanied with a corresponding development of structures and processes. The hospital was being run on the basis of informal relationships which could not be depended upon to manage a growing enterprise. Administrative control of the hospital lay in the hands of the Trust and Society members and was not shared with the medical staff. This had resulted in dissatisfaction on the part of doctors who wanted to be involved in the hospital administration in order to professionalize and increase hospital efficiency.Consequently, a conflict of interests emerged between the Trust and Society members on the one hand and the doctors on the other. Lack of established operating processes, career growth avenues, and reward and recognition systems was also creating discontent among the paramedical staff. At the same time, the failing health of the founder chairman was not allowing him to be actively involved in the hospital activities. Being a member of both the Trust and the Society, he was managing the interests of both groups in the hospital. In view of his decreased role, the problem of developing new interlocking mechanisms between the Trust and the Society was surfacing.