Preservation and Restoration of Vision:

Vision for the Future, Part 2: Economic Benefits of Ophthalmologic Care: Predictive Modeling Methodology

The process of developing a cost recovery model is very similar to the predictive modeling that most businesses perform in projecting costs, determining prices and estimating market share. It involves the following steps:

1. Definition of total costs: The first step is defining costs. These include variable costs which are mostly related to the consumables for cataract surgery; fixed costs which include items such as salaries, rent, utilities, and insurance; and depreciation which is the loss in value of an asset such as equipment calculated over time.
   
   
2. Assessment of constraints to more productive service delivery: this includes accessing management expertise; skill level of staff and their training requirements; additional staff required; leadership and continuity of staff; supply and equipment needs (acquisition, inventory control, costs, needs, maximization of material resources); facility expansion/renovation requirements; and financial controls.
   
   
3. Removal of constraints: The inputs to consider in the removal of these constraints include clinical, surgical and management training; equipment acquisition; facility renovation; and improving organizational efficiency with systems development.
   
   
4. Market projections and assessment of paying capacity of population: This involves surveys in the catchment area that determine varying income levels of population (rich, middle, poor, very poor) and the percentage of population that fall into each income bracket; defining the economic status of the population and what percentage have the ability to pay and at what price; review of outreach and interaction with various community and social groups; examination of past-user patterns of eye care services; review of existing epidemiological data on prevalence of eye disease; and review of pre-existing data/surveys in the catchment area that have ascertained the economic levels of population.
   
   The goal is to arrive at a table that determines what percentage of the population is rich, middle, poor and very poor; and what the average monthly income is for each economic strata. That average monthly income then becomes the affordable price for that group for surgery.
   
   
5. Creation of different scenarios (changing variables of price, percentage of patients per pricing category, of patients and costs) and choosing the one that most approximates reality
   
   
6. Development of multitiered pricing system appropriate to the local economy. Different prices are set according to the level of privacy and comfort in accommodation, or type of surgery, be it manual ECCE or phacoemulsification.
   
   It is always best if a system can be established where the patient chooses the price they will pay; however, there are instances where a social worker evaluates the patient and together they determine the price the patient is able to pay.

Next: The Real Issues are Price and Choice