Al Cleinman's Blog

Some Questions for VSP Regarding their Cisco Vision Center

The banter about VSP's opening of a vision center on the Cisco campus in San Jose has been significant.  Announced on this blog on May 11th, the topic is hot enough for VSP to feel compelled to respond with various PR efforts, including releases to the press and a national "town hall" tour.  These efforts are likely the work of an expensive PR firm retained by VSP for just such events.

In one recently released communication, VSP works hard to rationalize their action as a competitive response.  "If not us, then it would have been someone else," they say.  OK, I get that.  Competitive actions require competitive response.  I'm a firm believer in the law of the marketplace.  But had VSP done just two things...only two...they could have turned this sow's ear into a silk purse.  And the fact that VSP doesn't do these things generates other questions, for sure.  So I have two questions for VSP:

a) If this is so good for your providers, why not announce the action back last fall when you took it instead of hiding it and then reacting once it was discovered?  Why not transparency?

b) If this is so good for the providers, why not take the profits from the activity and return them to the VSP providers within a 20 mile radius of the Cisco Campus.  After all, this can't be a highly profitable activity, with only 1000 on-site claims.  Why not give the money back to your providers, VSP? 

My own opinion  of VSP's strategy is well documented in this blog.  Let's see if VSP has the cojones to respond.

The 800# Gorilla Strikes Again!

I share this with my readers simply as a reporter.  What follows is apparantly a letter from the American Optometric Society to their members, followed by press release on the same topic.

I make no comment...what follows speaks for itself.

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Last October, in order to bring accurate information to our members about VSP’s new relationship with Costco, we sat down with VSP’s Chairman of the Board, Tim Jankowski, O.D., and its President Rob Lynch, for an interview. After the interview VSP tried to tell us what we could and could not do with the interview transcript. We rejected VSP’s demands. VSP threatened to sue the AOS if we did not do what they wanted. Again, we rejected VSP’s efforts to control the AOS. The AOS considers it critical that we are independent and do not allow outside organizations to influence our decisions. It distinguishes us from many other organizations.

With that in mind, the AOS told VSP that we had an obligation to our members and would not be told by VSP what we could and could not do. We published the transcript and allowed our members to read it. VSP responded with more threats from their lawyers. But the AOS again refused to permit VSP to tell us what we may and may not do. So, this past week VSP sued the AOS, two of its Board members (Pam Miller and Rich Driscoll) and its attorney, Craig Steinberg claiming that the VSP interview was recorded without permission, and that the transcript was wrongfully published. The Press Release regarding this sets forth the facts as we believe them to be. Please read it. A copy of the Press Release is included at the bottom of this news bulletin.

This past year VSP has initiated a program allowing some groups to obtain VSP covered eye care through Costco. VSP then began selling frames and glasses on-line, in direct competition with their network providers. Most recently VSP initiated a program where, if you sell enough Altair and Marchon frames you receive preferential listing when a VSP patient searches for VSP providers in their area. If you don’t sell enough VSP frames you are listed after the other doctors in your area. And now VSP has sued the AOS for providing our members with the most accurate information we could obtain about VSP – information provided to us from VSP itself.

If, like many others, you are tiring of VSP being the 1000 lb gorilla and want the AOS to stand up against VSP’s bullying tactics, we ask that you click here now and donate $100 or more to the AOS legal fund. We are confident that the VSP lawsuit has no merit and that this lawsuit is nothing more than VSP’s way to show everyone what will happen if you don’t do what they tell you – classic strong-arm bully tactics.

 We hope you’ll let us know with your donations to the AOS legal fund that you want the AOS to fight VSP and show them that we will not be intimidated

 VSP SUES THE AMERICAN OPTOMETRIC SOCIETY FOR ALLOWING AOS

MEMBERS TO READ TRANSCRIPT OF VSP INTERVIEW

AOS Says Lawsuit is Nothing More than VSP Bully Tactics

LOS ANGELES, CA, February 14, 2011 - Vision Service Plan (VSP) has filed a lawsuit against the American Optometric Society (AOS), several members of its Board of Directors, and its General Counsel, alleging that VSP was illegally and unknowingly taped during an interview on October 8 and that the AOS improperly published the transcript of that interview. The AOS adamantly denies the claims made by VSP and says it will vigorously defend itself against what it views as nothing more than VSP bullying tactics.

Says AOS President, Pamela Miller, OD, JD, of the lawsuit, “VSP's actions are a travesty and an embarrassment to what until recently was a respected pro-optometry organization. Not only was VSP told ahead of time that the meeting would be recorded and transcribed, not only was it openly recorded, and not only was VSP given a month to review and supplement the transcript before it was published, but the very purpose of the interview was so the AOS could disseminate VSP's explanation for its new relationship with Costco. And now VSP is unhappy that we did. The AOS believes the lawsuit is motivated by the AOS' refusal to be controlled by VSP. We have been honest to our word, and we will vigorously defend this baseless and frivolous lawsuit.”

The facts are largely undisputed. On September 5, 2010, Dr. Miller, wrote to VSP Chairman Tim Jankowski, O.D., inviting VSP to be interviewed by the AOS during Vision Expo to allow VSP to explain its newly announced relationship with Costco. In the letter and follow-up email Dr. Miller wrote, “We would record and then publish a transcript of that discussion so that our members have an opportunity to hear answers to their questions, directly from VSP.” In response, Dr. Jankowski replied that he was 99% sure he could do [the interview] on October 8. On September 13 Dr. Jankowski confirmed that he would be there along with VSP President Rob Lynch.

The interview took place in a Las Vegas meeting room, with several AOS Board members and AOS attorney, Craig Steinberg, OD, JD, present. Several other AOS board members participated via Skype. A recorder was placed on the table in front of Dr. Jankowski and Mr. Lynch during the nearly three hour interview. At no time did VSP indicate, or have they since indicated, that any part of the discussion was confidential.

On Saturday, December 17, the AOS provided a copy of the transcript to Dr. Jankowski and Mr. Lynch for their review. In response, VSP President Rob Lynch wrote, “We would ask that this not be posted until both Tim [Jankowski] and I give you written approval and have had a chance to review it. I will not be able to look at this before Monday afternoon.”

On December 19, VSP attorney Eric Johannessen, in an email to AOS attorney Craig Steinberg, wrote that, “Neither Rob [Lynch] nor Tim [Jankowski] understood that their conversation was being audio recorded until the end of the meeting.” Mr. Johannessen stated, however, that “... to be clear, we are not attempting to block the publication and dissemination of complete and accurate information to the AOS members. In fact, it is precisely VSP’s support of such efforts that led us to agree to meet in Las Vegas in the first place.” Mr. Johannessen continued, “We do not intend to rewrite history or inhibit publication. But, Rob [Lynch] and Tim [Jankowski] do intend to continue to withhold their respective personal consents to the audio recording until and unless we are provided a fair and reasonable opportunity to review the completeness and accuracy of the record.” Accordingly, the AOS did not make the transcript available to its members until January 13, 2011. At no time before or since has VSP offered any changes or supplement to the transcript.

Nonetheless, VSP filed a lawsuit claiming that the interview was recorded illegally because VSP did not know it would be recorded, and that VSP is suffering unspecified damages due to the transcript being made available to AOS members. VSP seeks damages, penalties, and an injunction against further publication of the transcript.

According to AOS attorney Craig Steinberg, “There is no merit to this lawsuit. Given the recent actions of VSP, which, among other things, is now selling frames on-line and is punishing VSP network doctors that do not sell a high enough volume of VSP owned frame lines, this latest misguided action by VSP appears to me to be nothing more than part of a larger VSP strategy to try and show it can still control the profession. Because the AOS resisted VSP’s effort to control it, VSP sued. I look forward to the Courts having the opportunity to examine the facts, and I am confident the AOS will be fully exonerated of any wrongdoing.”

Is There a Fox in your Henhouse?

I first predicted this eventuality in June, 2009 (see post of June 19, 2009).  VSP announces below that they are reaching into your patient files and driving your patients to the internet...of course, all in the best interest of the private practice ECP.  When will VSP Providers wake up and smell the coffee?   

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RANCHO CORDOVA, Calif.—Following its announcement on Dec. 20 about establishing an internal task force to examine the opportunities in the online space, VSP Global said it will launch a live beta test of eyeconic.com, www.eyeconic.com, an online optical retail store, on Feb. 18. To be launched with 8,600 small California VSP Vision Care clients, the test will enable 473,000 VSP members to use eyeconic.com to purchase contact lenses, prescription eyewear and sunwear.

The company said, “Eyeconic.com is designed to enable independent eyecare providers to compete with online optical retailers.”

Stated David Plevyak, vice president of business development and leader of VSP’s online initiative, "We've heard and understand the concerns doctors have regarding online sales, especially the fear of reducing patient visits. Recognizing the online optical space is growing rapidly, we’re confident that eyeconic.com is the right online partner for independent providers. We're making them an integral part of the online solution by referring patients to independent eyecare providers, generating revenue for providers and by offering a virtual extension of their dispensary."


After the beta test is complete, which a company spokesperson told VMail would be about four weeks, “Eyeconic.com will consider implementing any enhancements and launching the site nationally later this year” to all 55 million VSP Vision Care members. Both members and consumers will have the ability to order contact lenses and browse, select, virtually try-on, and purchase sunwear and prescription eyewear using the Marchon and Altair portfolio of products. Additional frame brands may be available in the future, although VSP said a timetable for these was not determined.

Plevyak added, “Eyeconic.com will be the only player in the online optical marketplace that will offer the ability to use a VSP Vision Care benefit to purchase a mix of brands and prescription lenses including proprietary coatings and options. We believe there’s a growing market for this type of offering and look forward to providing VSP Vision Care members with a world-class online browsing and buying experience that will connect them back to their local independent eyecare provider. Also, purchases made on eyeconic.com will generate revenue for independent providers.”

VSP said that eyeconic.com will refer consumers shopping online back to providers’ offices. The spokesperson told VMail, “When a patient shops online with a prescription from a VSP doctor or indicates a VSP doctor as their doctor when checking out, eyeconic.com will refer the patient to their VSP doctor on the order confirmation and invoice. Eyeconic.com fills the order and handles all the details. Eyeconic.com ships products directly to customers; on the site, customers who browse can view offices that carry frame brands.” In addition, “If a patient doesn't have a VSP doctor or has a prescription from an out-of-network doctor, eyeconic.com will refer them to a nearby VSP doctor.”

The company announcement also said eyeconic.com is designed “to give providers a new channel for second pair, sunglass and contact lens sales.” Asked to clarify, the spokesperson told VMail, “Providers can use eyeconic.com to reach patients who shop online, where they shop: online. They can include eyeconic.com in second pair/sunwear email promotions and direct patients walking away from their practice without filling their prescription to eyeconic.com, where they can browse and buy optical products and, most importantly, connect back to their prescribing VSP doctor.”

VSP Global cited several issues behind its development of the eyeconic.com test, among these: a change in consumer purchasing behaviors, a growing amount of direct revenue being lost by independent ECPs to online purchases and a growing need for doctors to generate a steady stream of non-office-based revenue.”

VSP network doctors will find additional details at VSPOnline on eyefinity.com.

VSP Lobbies for its Life

VSP recently announced the appointment of what appears to be a chief lobbyist dedicated to convincing Congress that VSP and other stand-alone vision plans are good for the country.  In my opinion, VSP is good for only one thing...VSP.  The logical place for Vision Care Services is within our medical insurance system; not as a stand-alone benefit provided by commercial firms whose only motivation is profit.  The American Consumer doesn't need "insurance" for eyewear any more than we need insurance for the oil changes for our car.  The American Consumer is NOT benefiting because the costs associated with eroding margins on materials are simply being shifted to medical services or worse, are actually driving down the quality of vision care. 

It's time for the likes of VSP to pack up their bags.  They squeeze Providers to provide their product...it's that simple.

I find it fascinating that VSP has the cajones to make statements like:

"VSP has a long and proven track record of promoting healthy outcomes for both patients and the companies they work for"

What about VSP's Provider's?  VSP was founded for private practice optometry.  Our studies indicate that, thanks to the likes of VSP, Providers are operating on ever-slimmer margins.  Indeed, the difference between Gross Charges and Collected Revenue has declined by double digit percentages in just the past five years.  With these eroding margins, Providers are being squeezed for the capital necessary to invest in ever-evolving technology, the best employees, updated facilities and increased service levels.  The result...the patient loses.

VSP was founded to serve its Providers and help Providers serve patients.  Now, Providers are simply a pawn in their game...to make as much money as they can. 

The squeeze continues.  Many Providers are gasping for economic air.  When are they going to revolt? 

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VSP Vision Care Appoints Cecil Swamidoss to Director of Federal Policy

RANCHO CORDOVA, Calif. and WASHINGTON—VSP Vision Care announced that it has appointed Cecil Swamidoss as director of federal policy. Based in Washington, D.C., Swamidoss will help develop and implement VSP's Federal lobbying efforts to ensure the company's 55 million members will retain access to stand-alone vision care services under the new national healthcare reform legislation.

Swamidoss has more than 10 years of Federal legislative experience having worked in Senators Herb Kohl (D-WI), John Breaux (D-LA), and Chuck Grassley's (R-IA) offices as Senior Counsel and/or assistant dealing with national health care policy issues, Swamidoss has some of the most extensive health care regulatory and legislative experience in the nation including developing policies around the marketing and sales of Medicare Advantage plans, as well as the development of the Physician Sunshine Act, the Patient Safety and Abuse Prevention Act and Medicare Modernization Act, VSP’s announcement said. Most recently, Swamidoss served as vice president of Dutko Worldwide.

"Cecil brings a unique understanding of how to work with both Republicans and Democrats in government," said Thomas Fessler, Chief Legal Officer and General Counsel of VSP Global. "Eyecare is an important component in health care reform. Cecil will focus on supporting good policy that is in the best interest of the nation's overall eye health and wellness needs."

Over the past few years, VSP has increased its focus and attention on Federal health care policy initiatives, having worked closely with Alston & Bird, a D.C. lobbying firm. VSP is bringing Swamidoss on to drive its Washington, D.C.-focused efforts.

"VSP has a long and proven track record of promoting healthy outcomes for both patients and the companies they work for. This is an important story to tell, and one that legislators in Washington, D.C. need to hear," added Swamidoss. "While the healthcare reform package has been passed and signed into law, there are still opportunities to protect the one-in-six Americans VSP covers with stand-alone vision care benefits. It's in the country's best interests that not-for-profit health insurers like VSP are included in the qualified exchanges."

Swamidoss received a Master of Public Health (M.P.H.) from George Washington University, and a law degree (J.D.) from Case Western Reserve University School of Law. He received his Bachelor's degree from University of Michigan.

Optometry - An Amazing Profession

Forty years ago, at the ripe age of fourteen, I took the step that was to open the door to my career.  As the yard-boy for an entrepreneurial optometrist, I was exposed to the profession at an early age.  My first job in the industry was at age sixteen, as a telephone sales person for a start-up frame importing company owned by that same O.D.  From the very beginning, the profession of optometry grabbed at me.  I flew home from the American Optometric Association convention to graduate from high school.  I went on to start the first national buying group for optometrists (Co-Optics of America) at age twenty-three.  Today, twenty-two companies or company divisions later, I am still in love with the profession.  While not an optometrist, I consider myself the profession's biggest fan.

Currently, I am finishing up a tour of North America's Optometry Schools under Graduate Connections, a program jointly sponsored by my firm and Hoya Vision Care.  My "Entrepreneurial Optometry" workshop begins with my telling the students that the profession of optometry has more opportunity today than ever.  They can look forward to an amazing career full of possibilities.  Apparantly, U.S. News and World Report agrees with me as they've recently named Optometry one of the top 50 careers. 

Optometry as a Career

I founded Cleinman Performance Partners in 1989 to help optometrists both recognize and realize all of their possibilities.  Today, Cleinman Performance Partners is the leading business development consultancy for the owners of large optometry practices.  We are honored that so many of North America's most successful optometry leaders have chosen our firm as their business guide.  It is our privilege to work with amazing people in an incredibly diverse and dynamic industry.  Thank you!

Actions Speak Louder than Words!

VSP continues it's arrogance, this time with the announcement that it has launched a “pilot” program with Costco Wholesale.  Yep...of all retailers...COSTCO!  Under this brilliant plan, employees of a number of employer groups (and current VSP clients) who are Costco warehouse club members can now use their VSP vision benefits at the vision centers in Costco’s stores.

What a great way to build a brand!

Perhaps, in all it's wisdom (after all, VSP knows all about private practice optometry...they have 27,000 optometrist "employees") VSP is simply setting up a comparative whereby the "brand" of the private practice optometrist is compared with that of Costco? 

VSP appears to be claiming that failing to have a retail option for it's members is causing competitive challenges.  I believe that this is simply rationalization for VSP to continue it's "globalization" plan and push for more, more, more.  After all, VSP's employees need higher salaries, new cars, more gourmet meals and, of course, to maintain their 15% of salary 401k contribution.  Also, VSP needs dough to expand around the world...because that will, of course, help it's providers who gave VSP life 50 years ago.  What is VSP's mission? 

Why can't VSP just be honest?  Why can't VSP leadership simply come out and tell everyone who they really are:

"We are driven by money and we are going to continue to do whatever we can to grow our business for the benefit of our employees; private practice optometrists be damned!" 

Sorry, VSP...this is just one more action that says it all.

Pack your bags, Jack...and don't come back!

RADFORD, VA – It’s often said that law enforcement officers divorce at a higher rate than couples working in any other profession.

Not so, says Radford University Professor Emeritus Mike Aamodt and recent RU graduate Shawn McCoy in a soon-to-be published study.

“A Comparison of Law Enforcement Divorce Rates with Those of Other Occupations” is set to be published in the spring issue of Journal of Police and Criminal Psychology.

McCoy, who was one of Aamodt’s undergraduate students, is the lead author of the study that has determined that police officers do not have a higher level of divorce than those in other professions.

“There is a common belief that divorce is higher among police officers in spite of the fact that there is no empirical research supporting such a belief,” said Aamodt, a retired RU psychology professor. “To compare the divorce rate of law enforcement personnel with the rates for other occupations, we analyzed data from the 2000 U.S. Census. The results of the analysis indicate that the divorce rate for law enforcement personnel is lower than that of the general population, even after controlling for demographic and other job-related variables.”

McCoy and Aamodt’s study has received much attention in the international media over the past month. However, many of those media reports have credited Aamodt with creating a formula to predict divorce. “That is not what the study is about,” Aamodt said. “Although the differences in occupational rates of divorce are fascinating, we conducted the study as part of a series of studies investigating the many myths involving law enforcement personnel.”

Occupations with high divorce rates included dancers, bartenders, massage therapists and telemarketers, whereas occupations with low divorce rates included optometrists, agricultural engineers, clergy and podiatrists, Aamodt said.

I can attest to this phenomena through our valuation work.  While we've worked on a number of divorces for clients over the years, and indeed currently have several divorce valuations on our docket, divorce among optometrists is clearly not as prevalent as that of mainstream America.  I wonder why? 

 

Travel is Necessary...Travel Agents are Not. Eye Exams are Necessary...

Two Interesting News Items.  Are these potential indicators of optometry's future?

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MIT Researchers Develop Refractive Method Using Cellphones

A team at MIT's Media Lab has come up with a quick, simple and inexpensive way to perform refractions using cellphones. The method, known as NETRA (Near-Eye Tool for Refractive Assessment), is especially suitable for remote, developing-world locations that lack conventional examination instruments such as phoropters or aberrometers, according to MIT.

SoloHealth to Bring Health Care Screening Kiosks to Supermarkets, Pharmacies

SoloHealth plans to put kiosks in retail stores that allow people to perform basic personal health screenings. The new health care IT unit is a follow-up to the EyeSite vision-screening kiosk, which can be found in stores such as Kroger and Schnucks.

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For over two decades I've predicted that eye exams would be "vended."  Has that time come?  Put these two together and you have just such a machine..or at least one that provides what the majority of the populace believes is an eye exam. 

What will prevent you from being replaced by a coin operated aberrometer? 

 

A Wolf in Sheep's Clothing?

A couple of headlines recently caught my attention:

"VSP Vision Care will no longer provide in-network coverage for eyewear manufactured and/or distributed byAspex Eyewear."

"Carl Zeiss Vision is canceling its lens distribution agreements with the prescription laboratory networks operated by its two biggest competitors,Essilor of America and Hoya Vision Care."

In each of these cases, it appears that both VSP and Zeiss are attempting to legislate where and if the independent provider will have access to certain products.  I find it interesting that these firms feel that limiting access to certain products for the independent is a good thing.  VSP purports to be the "savior of the independent" and yet continually makes it more difficult for the independent to thrive (see my many posts on "VSP and Managed Care").  Their action against Aspex, while clothed as resulting from separate litigation with Aspex, appears to be a case of them flexing their muscles with little consideration for their constituents.  I find this interesting as Aspex is also partnering with Pixel Optics...clearly a potential competitor with VSP  (and Zeiss) in the lens business.  Are these two issues connected?  Is there more to this story?

In the case of Zeiss, limiting access to its products appears to be an attempt to force the independent to use Zeiss labs.  Or is it?  On the surface, if you want Zeiss products, you can no longer do so through either Essilor or Hoya labs.  Essilor has also done this with other lab networks...while Hoya has not (my understanding).  Both Zeiss and Essilor took this action while serving both the Walmarts and other major chains.  Are not these actions at the expense of the independent? 

Now superimpose VSP and Zeiss' actions against the significant rumor that VSP is about to acquire Zeiss..  Are all of these issues connected?  What's the rest of the story? 

In recent speeches, I've communicated that it's no longer a question of whether or not the independent will align with industry partners, but simply a question of with whom.  The competitive landscape is changing rapidly. The independent is under siege.  The supply side is consolidating.  Forces are at work that we've yet to clearly understand.   

In my opinion, few companies can serve multiple masters effectively.  Just as retailers find it virtually impossible to successfully serve both the "carriage trade" and the "bargain shopper," it's my opinion that vendors will find it increasingly difficult to serve both the independent and the "Walmarts" of this world.  Are not the needs of these two worlds strikingly different?   

Before you make a decision about which vendors with whom you'll partner, carefully check out what is driving your prospective partners' business.  Look deep at their long term strategy. Ask the hard questions.  You could be aligning yourself with the proverbial "wolf in sheep's clothing.

 

Buy Your Own Darn Popcorn!

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies.  PhRMA's members are "devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives."

Among other activities, PhRMA establishes guidelines for its member's participation and sponsorship of educational activities and other events at industry meetings.  Of late, PhRMA has begun tightening restrictions on their members, as have certain states.  These restrictions complicate the member's involvement in such areas as supporting continuing education programs and sponsoring receptions and other events at meetings attended by doctors.  While some of these regulations are likely necessary, it seems that they've gone a bit too far.

At the recent American Optometric Association, the new PhRMA regs were very visible.  At one event graciously sponsored by Allergan, where the only food that was available was popcorn, there appeared an interesting sign.  Now I personally know the power of popcorn to change people's lives.  Popcorn is, after all, the reason that I got connected to the eyecare industry way back in 1970 (I'll save that story for another day).  But, in spite of popcorn's power to change the world, I'm having a hard time believing that Dr. Jones is going to change her prescribing habits for Restasis because someone bought her a box. Of course, perhaps this is just a safe way for an entire industry to drive profit improvement.  Popcorn is, after all, pretty darn expensive.    

PS:  My commentary is, in no way, directed at an individual company.  I am acutely aware of the frustration of individual PhRMA member company executives at these new regulations. Further, Cleinman Performance Partners is a significant producer of industry educational programs and our firm benefits from these new regulations.  All that said, I think that the regulators and company attorneys have taken there concerns over influence-peddling to the level of "ludicrous."