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How to establish a pricing structure?

How to establish a pricing structure?. Financing eye care institutions in poor countries S asipriya K M L ions Aravind Institute of Community Ophthalmology , Madurai, India . Pricing Structure: Underlying principle. Organisation’s Mission Business model.

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How to establish a pricing structure?

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  1. How to establish a pricing structure? Financing eye care institutions in poor countries Sasipriya K M Lions Aravind Institute of Community Ophthalmology, Madurai, India

  2. Pricing Structure: Underlying principle • Organisation’s Mission • Business model

  3. Pricing Structure: Considerations • Understanding the community • Service volumes • Encouraging greater footfalls in the hospital

  4. Understanding the income levels Above cost – market rates Pricing that would encourage patients to pay The bird of gold: The rise of India’s consumer market – May 2007, McKinsey Global Institute, p.12

  5. Willingness to pay: • Sample size: 1271 households (one person represented) • 96% of the patients were willing to undergo cataract surgery • 57% were willing to pay irrespective of availability of free surgeries • 31% were willing to pay if free surgeries were not available • Of these, 27.8% were willing to pay at Rs. 500 – 1000/- • 45% were willing to pay between Rs. 300 – 450/- Unpublished report: Household Willingness to Pay for cataract surgery in Rural India - MuralikrishnanRadhakrishnan, RengarajVenkatesh, Vijayakumar Valaguru & Kevin Frick

  6. Willingness to pay for phaco surgeries: an example from Aravind Theni Revenue per Surgery

  7. An example from hinterland Cataract surgeries:

  8. Consider 1,000 persons requiring cataract surgeryin a communityOn the basis of the economic profile…

  9. Cost of 1,000 Surgeries (Rs.1,500/surgery): 1,500,000 Surplus: 900,000

  10. Pricing strategy: is beyond hard money! • Quality of the services • Designing the services taking into account the “other costs” to the patients • Transparency • Standardisation • Utilisation of the resources

  11. Thank You Better pricing strategy = Service volumes + better quality + financial health!

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