The Daily: You’ve helped prevent disabilities across the developing world. How did you do it?

David Green: There are basically two ideas behind what I’ve done. The first idea is [that] it is possible make healthcare both self-sustaining and still orientated towards providing for the poor. You can do this with a multi-tiered pricing system — where free is the lowest price. The second big idea is that you can reduce the price of key medical products.

TD: How do you reduce the cost of medical products?

DG: Consider the case of intraocular lenses. In the 1970s in America, using intraocular lenses became the procedure-of-choice cataract surgery. I was getting lots of intraocular lenses donated, since cataracts are the main cause of blindness in the world.

When the donation of lenses started drying up, we started looking to making interlocutor lenses. That’s when we set Aurolab in south India, which now sells over 600,000 lenses a year to over 80 countries. It meets the same regulatory requirements as other companies do in order to sell in Europe.

When we started, the lenses sold for $300 in developed country markets and over $100 in markets in India. Now, our price is around $4. We have been able to bring down the price to key technology and make them available to non-profit programs. In turn, this helps those programs become sustainable.

Since then, we have done the same for producing suture and hearing aides.

TD: You promote a “sliding-scale” of payment for medical services. How can that be sustainable?

DG: A lot of my earlier work I did in conjunction with Aravind Eye Hospital in India. It is one of the largest eye care programs in the world.

Aravind Eye Hospital has a model where 47 percent of patients pay nothing, 10 percent pay two-thirds cost, and 35 percent pay well above cost. That model allows it to be self-sustaining. For every dollar they spend, they make about a $1.60. They do over 220,000 surgeries a year.

With multi-tiered pricing, you can offer first-rate quality to rich and poor alike, rather than offer third-rate quality to people.

TD: You design, produce and distribute medical devices — just like any other company. What’s different about your approach?

DG: We have consciously chosen to maximize distribution — while still remaining sustainable.

That’s quite different from how most corporations exist. Most corporations have an ethical responsibility to provide a return on investment to shareholders.

In the case of Aurolabs, we have no shareholders. Our shareholders are the communities and the people that benefit from our work. It’s a different business model.

TD: Obviously, there’s a lot of need at the “bottom of the pyramid.” Why aren’t multinational corporations serving those people better?

DG: Multinational corporations usually are not convinced that developing markets are viable for them to go into. Usually, multinationals perceive such markets as costing too much to develop and having too low of margins.

We consciously decided that if we can’t convince companies to lower their prices and still make margins, then we would instead try to gain control of technology, production, distribution and pricing to better serve the poor.

For me, the question is this: How can we transform corporate behavior so that corporations use more of their core competencies and assets to help the world? How do you make important products more affordable to those that need them?

TD: Some people think that capitalism is all about the bottom line. How does one practice more compassionate capitalism?

DG: There are two ways you can pursue compassionate capitalism.

First, you can do what we have done and develop a fresh approach. That is really hard. You have to be willing to take risks, and you have to be ready for failure. Most ventures like mine fail.

Second, you can be a force for change in the corporate environment in which you find yourself. This route is probably equally hard. Most corporations in the industries I work in have similar cost structures to mine and have a lot more wherewithal.

Stanford students as they move into the corporate world have the intelligence and wherewithal to bring about that level of transformation in their corporations.

If you’re interested in learning more about David Green and Project Impact, visit http://www.project-impact.net. Adam Stone and Lija McHugh are about to graduate, and that scares them. E-mail them at astone@stanford.edu and lmchugh@stanford.edu to make them feel better.