Proposed Solution

But the situation is not hopeless. The challenge is to move the entire eyeglass business from a low volume, high margin approach to a high volume, low margin emphasis to gain much greater penetration among the poor. The starting point is to reduce costs as much as possible by reducing overall quality, while still providing “acceptable” quality. The proposed solution utilizes a basic screening process that does not require a trained professional, resulting in significant cost reduction. This sacrifices precision, but that is acceptable because medical evidence suggests that the undercorrection of vision does not have significant negative side effects.29 Overcorrection, however, does have side effects such as headaches and nausea. The screening process needs to avoid overcorrection, which is easy to do using simple techniques.

Self-adjustable glasses rather than becoming the final product could be utilized for determining a patient’s prescription without using a high cost technically trained professional. There is some interesting research (not yet published) going on in China that shows self refraction with adjustable lenses results in end points quite similar to the refractions done by an eye doctor for about 90 percent of the children, which is certainly good enough to be a viable solution.

The production costs of eyeglasses can be reduced by manufacturing eyeglasses in a large factory, emphasizing scale economies, centralized sourcing, and standardization.30 Lenses would be manufactured from the least expensive material, which is probably acrylic; this is the type of plastic that is used in readymade reading glasses sold in the United States. Lenses would be offered in steps of 0.50 dioptres for reading glasses; in steps of 0.25 dioptres up to -2.00D; and in steps of 0.50 dioptres above this for distance glasses; there would be no correction for astigmatism (which requires customized prescription). Using this approach, about 80 percent of the people who require a distance prescription would be corrected to 20/40 or better.31 This is a level of vision that is required to drive legally in the United States. A study in India conducted a randomized clinical trial with poor adults to compare ready-made eyeglasses with customized eyeglasses. The results showed that while vision is slightly better with customized glasses, after one month of use, 90 percent of the subjects were satisfied with ready-made eyeglasses and planned to continue wearing them.32 Another similar study with Chinese school-age children confirms the high level of satisfaction and acceptance of ready-made glasses.33

There would be a very limited variety of frame styles carefully selected based on local preferences. The factory cost of producing standardized prescription eyeglasses using simple frames in China is well below $2 per pair. Distribution costs would be reduced by piggybacking onto an existing network such as a microcredit organization, a packaged consumer goods company, or even government offices/agencies. Overhead would be minimized by locating all possible costs in a developing country and restricting the scope to one or a few neighboring countries.

Even after following all these suggestions, it is not certain whether the total costs will be below what the poor are willing to pay for glasses. There are two major sources of uncertainty here. First, what will be the total cost per pair of eyeglasses after following all these suggestions for cost reduction, and assuming a significant scale of operation. Second, how much are the poor willing to pay for such standardized eyeglasses? Clearly, this willingness to pay will vary depending on the country, region, cultural factors, and the income level of the target population. If willingness to pay is high enough to cover the total costs, then there is no need for government intervention. This could be a profitable business for private firms, and consistent with the current vogue of market-based solutions for poverty alleviation.

However, if the costs are still too high compared to the willingness to pay, then the only way to cover the gap is a subsidy. It is important to note that the subsidy does not need to cover the entire cost of the glasses, but rather only the gap between the willingness to pay and the cost. Given the scale of the problem (i.e., at least 500 million people need eyeglasses), the only source for such large subsidies is the government. Governments bear the responsibility, and accept the responsibility for public health. Since the economic and social benefits of solving the blurry vision problem far exceed the costs, this is an area where governments can intervene effectively. Governments can play a key role in building the market for eyeglasses by funding education/awareness campaigns or subsidizing eye care centers. They can also implement targeted policies such as requiring children to get basic eye screening in schools.

The appropriate role for not-for-profit organizations is that of advocate and catalyst to prod governments and companies to solve the problem. If it is profitable to sell eyeglasses to the poor (using the approach proposed above or some other business model), then a not-for-profit organization such as VisionSpring can demonstrate and publicize the economic viability of this approach. The hope is that this profit potential will attract private companies, multinational or domestic, into the market to satisfy the need for eyeglasses. The not-for-profit organization could even morph into a for-profit company in that case. However, if it is not profitable to sell eyeglasses to the poor, then the not-for-profit has to act as an advocate and catalyst to get the government to step in on a large scale. There are only two possible approaches to providing eyeglasses to the poor on a significant scale: profitable companies or government subsidies. The role of NGOs is to act as catalysts and advocates by demonstrating the appropriate approach. VisionSpring has begun pilot projects to provide eyeglasses for myopia to both children and adults somewhat long the lines of the above proposal.

Private companies and government intervention are not mutually exclusive solutions, however. They can coexist side by side. For example, there is a societal need for condoms in less developed countries to prevent sexually transmitted diseases and for birth control. The condom market in India is divided into three segments: sold at market prices by private companies, social marketing programs that sell condoms at low prices due to government subsidies, and condoms distributed free by the government. A similar segmentation might be useful for eyeglasses.

 
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