Al Cleinman's Blog

Let's Make a Deal!

VSP Vision Care and Johnson & Johnson Vision Care’s Vistakon division recently announced that they are partnering to offer VSP “members” (your patients) what the two firms call “an enhanced additional rebate program,” which kicked off Oct. 1.

According to the announcement, members who purchase an annual supply of Acuvue CLs from one of VSP’s 27,000 network providers will receive an additional $25 rebate in addition to Vistakon’s current national rebate program. “This program will assist us in our continuing efforts to provide VSP members with access to high quality eyecare at more competitive prices,” said Gary Brooks, VSP Vision Care’s president.

Vistakon says it’s supporting the program with a marketing campaign “focusing on educating VSP members about the program and the value available from their eyecare professional,” the announcement said. 

 

Let’s think more seriously about what consumers’ value.  

There’s an old marketing saying, “in the absence of anything else, price prevails.” Is this not just one more example of lazy marketing that’s destroying our industry? Is not this program right up there with all the BOGO programs that have taught consumers that our industry is overpriced and they should expect 50%+ discounting? Does this not continue the branding message that our industry is at about the level of the proverbial used car dealer; if you don’t like the deal, wait a minute?  Why is it that, when studies show that price is the number six most important element in eyecare delivery (behind such items as doctor communication, knowledge of staff, etc.), all that our industry seems to be able to deliver is marketing based on price?  

I think Gary Brooks and his VSP team should focus their attention on delivering VSP providers with an increase in their reimbursements.  VSP “members” and the employers who fund their benefits already receive an outrageously amazing deal…pricing for eyecare and eyewear services at operating profit margins (based on our research) fully 10% points less than those of only five years ago. Indeed, in a recent study, we identified that our clients in California are being reimbursed by VSP at an average of  62% of their U&C exam fees.  Worse, their last reimbursement increase from VSP came, on average, three years ago (and amounted to pennies).  I wonder if VSP employees received their last raise three years ago.

How can VSP providers continue to invest in providing the very best care at these levels of reimbursement?

What is particularly offensive about this strategy is that VSP providers have no direct say in this matter.  VSP is touting that they have provided this as a “service” to their members (VSP Providers’ patients).  What about the 27,000 optometrists, many of whom, thanks to VSP's dominance in their practice, are effectively employed by VSP?  VSP employees receive annual raises and vote VSP in the top 100 of “The Best Places to Work.”  What about VSP’s other “employees?”  VSP providers are effectively commandeered to accept this rebate program and continue the slippery slope of brand destruction based on price, price, price. Vistakon and VSP, of course, will likely say that rebate programs cost the provider nothing. Certainly, rebates are better than direct discounts.  But it's time to start communicating at a level other than price. 

I ask whether these and other similar programs end up costing providers their most valued asset...their brand? 

Assuming that each VSP provider has five patients claim the rebate, that has the investment in this program at $3.375 million.  Add the cost of administration, and you're easily at the $4 million mark.

What might Vistakon do with $4 million that would better support the desired brand of the independent optometrist as well as that of Vistakon?  I encourage Vistakon and other industry marketers to more deeply consider the implications of price oriented marketing.  You can do better.

For an interesting and enlightening education on the impact of discounting, I encourage you to pick up Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell, professor of science journalism at Boston University. 

10,000 Hours to Success

In his recent book, Outliers, author Malcolm Gladwell (The Tipping Point, Blink) takes an interesting and unique approach to the study of success.  Gladwell’s premise, which he supports with deep fact, is that success has little to do with raw ambition or intelligence, but that the story of success is much more complex.

As just one example, he outlines a study completed in the early 1990s of violinists at Berlin’s elite Academy of Music.  The study divided the schools violinists into three groups; the stars; those judged merely good; and those who would never become professional musicians but teachers.  All of the violinists were asked to provide information about their entire career since picking up the violin.  Some interesting facts emerged.

 

·     Everyone from all three groups started playing at roughly the same age

·     In the first few years, everyone in all three groups practiced about the same amount of time.

·     The students who would end up the stars simply began practicing more than everyone else:

o   Six hours a week by age 9

o   8 hours a week by age 12

o   Sixteen hours a week by age 14

o   By 20, they were practicing over 30 hours a week.

 

The “good” players and those who would end up teachers never practiced as much.  But what’s so fascinating is that none of the students were “naturals”…all had the same level of raw talent.  Simply stated, the sole difference that distinguished one performer from another was how hard he or she worked.  Other studies are cited, including studies of such phenomena as the Beatles, Beethoven, Bill Gates and Steve Jobs.  The bottom line, Gladwell observes, is that it takes about 10,000 hours of practice to have what it takes for success.  Those that invest the time earn the dime.

 

I share this story (and recommend the book) because, in my opinion, the same thing applies to success in Optometry.  It’s my observation that natural talent or IQ has little to do with success in the profession.  Indeed, while I haven’t done the empirical study (yet) I certainly know of many highly successful optometrists (I’m talking net income higher than most professionals gross) who certainly didn’t excel as academics.  In my experience, the difference between these highly successful optometrists and those who might be classified as “average” boils down to their willingness to work and work hard; both at their clinical and business skills.

 

Now, for most optometrists, practicing 10,000 hours on the clinical side will come about naturally.  By then, you likely really know your stuff.  But what of business?  For so many, the concept of investing even a small number of hours on developing business skills is a foreign concept.   One sometimes gets the impression that many in the profession feel that leadership, financial and operational excellence just happens.  The profession at large seems to struggle with business.  Most optometrists appear not to see business as the art form that it is and look to bury their problems and fail to see their many opportunities.  I suggest that the reason is that they fail to see the importance of practicing business.  

 

This concept was driven home to me recently when a member of Cleinman Performance Network said to me, “Al, thanks to my membership the business side is getting easier.  It’s taken me three years, but today I’m more comfortable being the leader that I need to be.”  What he was telling me was that he had increased his efforts and investment in practicing his business, just as he has for years practiced his profession. 

 

With practice, everything gets easier.  But it does take work.  And it’s times like this, with our economy in turmoil, that it’s so very important to raise your investment of time and energy on the business side. 

 

Some 30 years ago I wrote the following maxim as I was trying to define my personal belief system.

 

“Success is not from 9 to 5, but from 5 to 9”

 

Success is what you’re willing to do when others are not.  It’s not about IQ and it’s not guaranteed with a piece of parchment.  Success is the result of hard work; and that comes from first making the commitment to practice…practice…practice. 

 

 

Are You Juggling Elephants?

Do you feel like the proverbial circus plate spinner?  Are you running from one plate to another, franticly transferring energy to projects, ideas, problems, situations, patients, charts, phone calls, vendors, spouses, kids, community, exercise and the like?  Do you feel pressure to keep those plates spinning, spinning, spinning?  Do you finish each day, collapsed in your favorite chair with nary the energy to walk the dog or devote some time to …you?  

 

Sound familiar?

 

While all of your activities may have value, if these words resonate with you, what’s likely occurring is that you’re not using your time as wisely as you could.  You’re Juggling Elephants.  And the result of trying to juggle elephants is that no one, including you, is thrilled with your performance. 

You may be focused on the emergent but not the important things in your life.  You may be investing energy in tomorrow’s problem while today’s opportunities go untapped.  You may be so focused on fixing the problem in front of you that you can’t plan the things that need to be put in place for tomorrow to work.  And you’re likely not using your team to their fullest potential. 

In their 2006 book, Juggling Elephants, Jones Loflin and Todd Musig explore this phenomenon.  They describe our lives as that of a three-ring circus.  Considering that I spent about ten years of my life in that environment (yes, really), and sometimes I feel the proverbial plate-spinner myself, this concept caught my attention. 

 

The authors ask you to think of your life as that of a three-ring circus and you as the ringmaster (leader).  Everyone knows that the ringmaster is the most important part of the circus, as he/she makes sure that the right acts are in the right place at the right time doing the right thing. Without the ringmaster, chaos results.  The ringmaster’s job is to focus his two most critical resources, time and energy, to ensure the delivery of the most productive “show” possible.  The ringmaster must fully engage each act and harness the energy of others to work as a team and accomplish the overall goal of the circus; that of delivering a memorable experience that gets a standing ovation from everyone.  

As for your circus, it’s comprised of three rings too; your work; your relationships; and yourself.  Every act in your rings must serve a purpose.  Every team member is important and has to be fully engaged to make the act successful.  Your job is not to be the act…but to orchestrate the acts. 

Based on the book, Juggling Elephants, by Jones Loflin and Todd Musig.

At What Stage is VSP?

Recent articles in the eyecare press have reported that the American Optometric Association (AOA) ruffled the feathers of VSP and the National Association of Vision Care Plans by suggesting to a senator instrumental in the currrent health care reform debate that stand-alone vision plans are aiming to "turn back the clock by continuing to segment vision from eye health," and said such plans are "seeking to impose misguided limits on the care that our patients—especially children—receive."

Logically, reaction to those statements was aggressive.  After all, it doesn't take a rocket-scientist to recognize that, with optometry's increased scope of practice and their inclusion in most medical plans, such stand-alone plans may have run the course of their usefulness to anyone but the plans promotors and owners.

A follow-on joint statement issued by the AOA and VSP after their recent meeting said "both organizations are committed to expanded access to eyecare," and that both "recognize the importance of including provider non-discrimination provisions that will safeguard patient access to optometric care in any health-care bill."  AOA president Randy Brooks, O.D. said some statements in the earlier AOA/AAO letter may have been misinterpreted.  Brooks said the AOA would "never do anything to compromise existing vision care," noting "we're not against stand-alone vision plans."

Logically, reaction to the AOA's statement by the the Managed Vision Care industry was strong.  With VSP and their breathren being major contributors to various association activities, it's logical that they used their political clout to soften the AOA's position.  Afterall, money talks.

Yes, consider whether it really matters whether the AOA is against stand-alone plans or not.  Are Providers, who represent the key ingredient of both the AOA's and VSP's success, fed up with low reimbursments and arrogant unilateral actions by the likes of VSP?  Are Providers at the stage where they are sick and tired and near the point where they're not going to take it anymore?  What's really going on here?

Perhaps there's a roadmap for what's been unfolding for VSP over the past number of years.  I find it in Jim Collins' latest volume of management thinking, How the Mighty Fall ... and Why Some Companies Never Give In.  This great read begins with Collins recalling the advice of his mentor, Stanford professor Bill Lazier: "Don't try to come up with the right answers; focus on coming up with good questions." And certainly that describes Collins' achievement in this book. The question of why leading companies, seemingly in possession of every competitive advantage, so often manage to blow it is surely a good one.

Collins provides the five stages of a company's demise:

1. Hubris born of success
2. Undisciplined pursuit of more
3. Denial of risk and peril
4. Grasping for salvation
5. Capitulation to irrelevance or death

I've often said that the questions are far more important than the answers.  Have you read the book?

Norm and Bo...You had me at Hello!

I just bought Norm Brodsky's and Bo Burlingame's new book, The Knack...How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up.  Having met these two wonderful authors in a serendipitous way(see my post of May 3, 2008), I was excited to dig into their latest offering.  It took me all the way to the middle of page two to recognize that this book is a winner.  I share the excerpt:

"One of my best habits, for example, grew out of my father's practice of breaking down problems and challenges into their basic components.  He believed that most issues in business -- and in life -- are fundamentally simple, even though they appear complicated at first.  He taught me that, to deal with them, you have to examine the underlying elements and figure out what's really going on.  Never assume, moreover, that the real issues are those that you see on the surface.  That way of thinking has been one of my most powerful business tools over the years."

Norm Brodsky has very effectively communicated a fundamental that has served me well.  First, I purposely practice what might be termed a bit of "schizophrenia."  What I mean by this is that I enjoy debate, with myself and my team, which results in looking at issues from every possible angle.  This can be somewhat frustrating to my team, as they sometimes find me arguing against what they thought was my own position.  I find it very effective to verbalize both sides of any position.  I feel strongly that passionate debate is a very powerful tool in arriving at good decisions and this methodology has served me well.

Equally as important, Norm strongly advises that often the real issues are not those on the surface.  We find this the case in many of our consulting projects...what the client believes is the issue is simply not.  In my opinion, the hallmark of a good advisor is one who forces the client to dig below the surface of an issue.  Giving a client exactly what they want when they've self-diagnosed their challenge is easy.  Helping the client see below the surface and face the underlying issues that are the root cause of a challenge requires experience, courage and understanding.  However, the rewards are worth the effort. 

Don't take either the first solution or the one that comes easy...it may lead to ineffective results or worse.  Oh...and buy this book!