Al Cleinman's Blog

Economic Stimuli in the Real World!

For the past couple of weeks, I spent some time at the beach near Rockport, Massachusetts, one of my favorite places on earth.  I rented a cute little beach house, within a stones throw of the surf.  While the weather didn't much cooperate, the mostly continual rain provided me with a great opportunity for some much needed solitude and work on a new book which I've been hatching.  Little did I know what excitement would unfold on my last day.

11:00am:  It had been raining all night and the wind was pretty active.  The surf was angry.  Through the rain pelting down, I notice a man in a bright orange raincoat standing on the beach, about 200' from my front door.  No big deal.  There are plenty of people who enjoy a walk on the beach in any weather, although the place is pretty much deserted now, what with the howling wind and driving rain. 

But, about 30 minutes later, with the rain subsiding, I notice him again.  He's still standing in the same place.  Hmmm. What's going on?  I grab my binoculars and notice that he's appears to be guarding a small canister that's apparantly washed up on the beach.  Ah hah!  With the headline "Cleinman wins Pulitzer Prize for Breaking Story" in mind, I unpack my Nikon with the 400mm zoom lens and start photographing what's unfolding before me.   

Noon: The original chap has disappeared but I observe that now there are three "officials" standing around and eyeballing this cylinder.  They're talking both among themselves as well as by radio.  There's obviously something BIG going down, here.

 

 

 

1:00pm:  By now, the suspense ever-increasing, there are five "officials" on the beach, some looking  at the strange canister, others off to the side.  They're likely discussing when they expect the bomb to go off or what to do if the nerve gas escapes.  This is serious stuff!  Binoculars and Nikon in hand, I'm watching all this unfold from my upstairs window.

  

3:00pm:  After watching no less than seven "officials" and two pick-up trucks arrive and depart over a period of about four hours,I'm anxiously awaiting the bomb squad with their sniffing dogs.  Not a single hand has touched this strange device.

Instead an orange dump truck arrives, carrying a 55 gallon open drum. Why aren't they breaking out the HAZMAT suits and the remote control bomb detonating device? 

 

No sooner had the dump truck arrived, I mean almost immediately, one of the "officials" leans over, nonchalantly picks up the canaster with one hand and deposits it, bare-handed, in the barrel with the flip of his left arm.  Without a single moment of hesitation, without even a glove, the mystery cannister was been relegated to the trash. 

Again, virtually instantaneously, the dump truck drives off (probably to the landfill) and the seven men scatter to their respective destinations.  Poof...they're gone.

Yep...this is your stimulus package at work in the real world.  Add up the impact to our economy.  Seven men at $30 an hour and three vehicles; benefits, pensions, time off with pay, etc.  Four hours start to finish.  That's likely well over $2000 of economic stimuli...all to accomplish what one guy did in less than 30 seconds. 

Perhaps Abe Lincoln summarized this situation best with "if I have a one hour job, I'll spend the first 45 minutes planning it."

Now, as for your and my tax dollars, I feel compelled to report that we can feel secure knowing that so many people and assets are deployed to ensure our safety. 

As they say, "Only in America."

800# Gorilla retains 800# Attorney

According to the San Francisco Business Times (thanks, Tom, for passing this on to me), VSP has retained former U.S. Solicitor General Ken Starr to handle their appeal to the U.S. Supreme Court over their tax exempt status.  You'll remember this guy as the former judge who was appointed to the Office of Independent Counsel to investigate the suicide death of Clinton's deputy White House counsel Vince Foster and the Whitewater land transactions by Bill Clinton. He later submitted to Congress the Starr Report, which led to Clinton's Impeachment on charges arising from the Monica Lewinsky scandal.  As I recall, his final report cost you and me about $30million.  Does anyone recall a return on that investment?

I find Starr an interesting choice.  What's evident is that VSP feels that this is a matter worth fighting and investing your money in.  My guess is that they've concluded that it's cheaper to fight the tax exempt status to the Supreme Court rather then pay the taxes.  In the end, my bet is that they will lose their battle, but settle on an amount substantially less then their back taxes.  It's a logical strategy.

Stay tuned.

Al Cleinman

PS:  Have an idea or comment for the blog?  Please don't hesitate to send them my way.  You can reach me directly at cleinman@cleinman.com. 

Feet vs. Eyes

Here's a couple of numbers to contemplate:

U.S. per capita consumption of footwear - $145.46.  Every man, woman and child in the U.S., on average, invests this much money, each year, for shoes.  That's a market of $44.3 billion.  And that doesn't even include the medical side of feet, like podiatry, etc.

The U.S. Eyecare Market is $28.6 billion.  That means that every man, woman and child in the U.S. invests about $94.70 in their eyes and eyewear.

OK, so some simple math says that we consider each foot worth $72.73 a year but we only value each eye at $47.35.  Now, if we want to match the footwear industry, we can accomplish it by two routes.

a) we can convince the consumer that they're eyes are at least as valuable as their feet or;

b) we can ask our patients if they will fore-go vision in one eye (therefore, about equalizing their investment on a per unit basis).

What's wrong with us that we can't convince the consumer that their eyes are at least as important as their feet? 

What might we learn from this?  What actions might we take? 

I'd love to hear your thoughts.

Regards,

Al Cleinman

Congratulations to Pete Kehoe

Cleinman Performance Network member Dr. Pete Kehoe is the new AOA President.  Congratulations, Pete.  Also congratulations to Dr. Barry Baressi, a former Cleinman colleague from the past, on his appointment as AOA Executive Director. 

You are what you say you are!

The words we use in our everyday language make a huge difference in how we’re perceived.  As one “for instance”, try eliminating the word “can’t” from your vocabulary.  It’s a word used by negaholics.  If you use it frequently (you can’t do this, I can’t do that) you may be perceived as someone who only focuses on what’s wrong.  And you may even build a reputation as someone who can’t get things done.  The inverse is that person who comes across as confident and meets every challenge with “we can do it.”  That individual will generally be the first one picked for any team; the one that gets the best assignments; the most support.  The two individuals may have similar technical skills…but one will more likely get the opportunities before the other.  The difference? A single word.

            As a long-standing member of the eye care community, I’m often troubled by some of the words I hear.  One such word is “dispensary.”  I say let’s get rid of it.  Stamp it out.  Off with its head!

            Dispensary.  Roll the word around in your mind for a minute.  It’s a cold word.   Say it out loud slowly.  D..i..s..p..e..n..s..a..r..y.  It sounds so old and very medical. What comes to mind is despicable; desperate; discipline; disorganized.  These are cold and angry words?  So very non-fashion and low tech.  “Mrs. Jones, please go to the dispensary and pick out some glasses” connotes an image of white walls and linoleum floors; scrubs and dirty sneakers; florescent lighting and that horrible smell of disinfectant.  Thick, Coke bottle bottom lenses in an tortoise shell frame.  It’s a 1950’s socialistic kind of word. 

            My vote…let’s replace the word with “boutique” or “gallery.”  Try those out for a minute.  Say them out loud.  “Mr. Smith, please join me in our Eyewear Gallery, we’ll pick out some really special eyewear.”  Doesn’t that send a more positive message? I’ll bet you’re sensing images of color and fashion coming forth; warmth. Smiling faces. Laughter.  “Boutique” and “gallery” are welcoming words. The word "eyewear' denotes something hip and fashionable.  Something of value.

            I’m on a personal mission to wipe the words “dispensary” and "glasses" from our industry’s vocabulary. Please join me in my quest. I’m confident that, together, we can accomplish this daunting task.  I know that our industry, and your individual enterprise, will be better for the change. 

Good luck!

Al Cleinman

What's in the Consumer's Best Interest?

As I mentioned in an earlier post, the Pennsylvania House of Representatives Insurance Committee is exploring PA House Bill 2101.  If passed, this bill will have BIG implications on retrieving a part of your brand.  Yes, this bill has major implications on your practice. 

Basically, PA House Bill 2101 would eliminate the ability for plans such as Davis Vision, Spectera and others to insist that you acquire laboratory services and products from them as a condition of obtaining payment for vision services.  They operate with a basic monopoly on the product, ostensibly to control quality and service.  In a recent article in Vision Monday, it was reported that a Highmark spokesperson said, "We believe this bill is flawed and not in the best interest of consumers and employers."

Well, in my opinion, whenever you put an entity in between the consumer and the provider, you're aborting what I term "the Law of the Marketplace."  In this particular case, providers have had a major portion of their brand (lab services and customer service) stripped away.  And when the job from the lab isn't correct or the delivery takes weeks...who does the patient blame...the provider.  Further, as a result of the eroding margins from plans that control the product, providers look for every trick in the book to maximize their reimbursements from medical insurance (read Coding and Billing).  That, in turn, drives up the cost of health care.

Reality is that the requirement to buy product from the plan sponsor is in place for one reason and one reason only...profits.  If these plans allowed the provider to obtain lab services from whomever the provider desired, the provider would find the best, and most cost effective, resource.  Why?  Because the provider controls his/her brand and providers that don't deliver value go out of business.  It's really that simple.

The Law of the Marketplace is a good law and works in the best interest of the consumer.

This is groundbreaking legislation and, perhaps, the beginnings of a pendulum swing away from managed care plans holding your brand hostage. 

Really...I mean reeaallyy...expanding scope of practice

In my 35 years in this industry, I've watched Optometry move from refractionists to first line of defense, medically focused, physicians.  Lots has been written about "scope of practice" in the interim.  The big question...is Optometry done?  Is Optometry all that it can be or is there more?

This article in Boston University's Science and Technology e-zine offers some interesting insight into new opportunity for optometry (thanks to Cleinman Performance Network member Alan Bishop, O.D. for the lead). Take a look.

http://www.bu.edu/today/science-tech/2008/01/21/new-bu-prof-offers-hope-alzheimers

In this article about the work of Dr. Lee Goldstein, the authors provide some profound insight into a potential connection between optometry and Alzheimer's.  Alzheimer's is the 7th leading cause of death in the U.S.  Early detection, like that for Macular Degeneration, is BIG...really BIG.  This article and the underlying technology clearly signals a new wave of opportunity for optometry.  Are you ready? 

But what of other, more available opportunities?  One only needs to make a list of how we use our eyes to expand the potential scope of optometric practice.  As just one example, what about lighting ergonomics.  Increasing productivity is BIG BUSINESS.  I'm confident that there are thousands of employers who would welcome the opportunity to work with an expert consultant (read "optometrist") to help employees be more productive; more comfortable; through improved lighting. What a great evening workshop for employer groups.  Is lighting just the domain of lighting salesmen...or should optometry carve out a piece of this market (not to sell lighting...but to provide ergonomic lighting consulting services)? 

When contemplating "scope of practice"...optometry shouldn't limit its thinking to the obvious or just the medical side of the house.

What other areas can you identify?  Let your mind wander and post your ideas.

 

The 800# Gorilla gains a few more pounds!

You heard it here first. On April 21st, VSP filed to acquire a "Vision Care Company" for 700 million big ones.  What Vision Care Company has a $700 million worth?  Who might VSP be acquiring? 

Also, interesting to note on VSP's financial statements that they've a net worth (that's book value, not market value) in excess of $350 million.  That's about $15,000 per provider.  Do you list this asset on your balance sheet?  Who owns VSP anyway?

VSP - The 800# Gorilla

Definition:  800# Gorilla - An overbearing entity in a specific industry or sphere of activity. A seemingly unbeatable presence always to be reckoned with; whose experience, influence, and skill threatens to defeat competitors with little effort.

Fact:  VSP proudly communicates that the company has been voted "100 Best Companies to Work For in America" by Fortune Magazine every year since 2000.  Hmmm, I wonder if they include the O.D. providers in the survey as "employees?" 

Fact: J.D. Power and Associates ranked VSP “Highest in Member Satisfaction Among National Vision Plans, Three Years in a Row (2004 -2006).” Hmmm, I wonder if VSP sent a thank you to the O.D.  providers for providing "Highest in Patient Satisfaction."  After all, who delivers the service?

Fact: VSP announces that it begins also offering a “direct to consumer” comprehensive eyecare plan to those who don’t have access to vision coverage through an employer.  Hmmm, I wonder if they asked the providers if it was OK to offer discounts to your existing patients?

Ever wonder about the irony of it all?  While you struggle to pay your employees a competitive wage and provide reasonable benefits, you're also paying VSP employees fully paid health benefits; dental; vision; employee assistance; up to 15% 401k contribution; life insurance equal to 3x salary; disability up to 50% of salary; 4 weeks of paid vacation after 10 years; up to $5250 reimbursement for education and, for some, 50% of the amount over $5250; average bonus equal to 4% of salary...the list goes on and on.

visit https://www.vsp.com/careers/html/benefits.jsp#01 for an eye-opener.

So, I ask you to contemplate this: If VSP's "products" are your services (which they buy from you at deep-deep discount and resell to employer groups and, now, directly to consumers), then the monies that deliver all these employee salaries, benefits and programs come directly out of your pocket (I read somewhere...but don't hold me to it...that VSP's average salary was over $90k). 

And contemplate this:  Who owns VSP?  Who are the shareholders?  Where are the annual financial statements? What are their financial reserves?  What do they really do with their profits?  Whose money is it?  Are your VSP reimbursements growing at a rate equal to that of their employee salaries and benefits? 

While VSP has certainly helped grow the market for eyecare, is there a point where their dominance in your practice becomes more harmful then good?  Or are they the "savior" that they position themselves to be?

Hmmm...what do you do with this 800# Gorilla?   

InfantSee provides a business lesson

Go to the AOA's InfantSee website (www.infantsee.org) and you'll hear former president Jimmy Carter tell the public that "two of my grandchildren suffer from vision problems that could have been prevented had they been given an eye exam as infants."  He appeals to consumers to take their babies to an optometrist so that the most common handicapping condition of children can be prevented. 

It's interesting to note that President Carter doesn't suggest that patients ask their friends, relatives, pediatricians or teachers to provide eyecare advice...he recommends an Optometrist.  Why?  Because Optometrists (that means you) are specifically trained and have the experience to detect vision problems early.  And solve problems early.  And provide for better lives. 

Hold that thought.

I'm in the middle of a ten-day trip visiting clients and solving some significant relationship issues.  This particular trip has been somewhat frustrating as it involves a number of situations that could have been prevented.  In several instances, my clients have been caught in traps because they attempted to design transactions themselves.  In one instance, our client significantly overpaid for a practice and is suffering near bankruptcy conditions as a result.  In another, an important associate is leaving the practice to pursue another opportunity.  In still a third, partners are figuratively at war due to inequities in compensation.  Millions of dollars of capital investment and future earnings are at stake.  Good relationships end up soured...or worse.  These situations repeat themselves dozens of times a year. The sad truth is that each could have been prevented.   

InfantSee is designed to identify vision problems early, when they can be treated and, hopefully, cured.  Relationship design is like that early exam.  So often, a big problem is the result of a design flaw that occurred early in the relationship.  And just as parents, friends or non-qualified professionals don't make for good vision diagnosticians, neither do most optometrists, friends and family make for good relationship designers.  It's about experience, not intent.

I urge you. No, I'm pleading with you.  If you're even thinking about bringing in an associate; negotiating or renegotiating a deal; buying; selling; merging; leasing; or entering into any other type of relationship...please...please...please...call us first.  Call us early in the game, so time is on your side. 

This is not a selfish appeal just as InfantSee isn't a selfish program.  The reason for making the call is simple.  As with InfantSee, it costs nothing for the exam (our assessment calls are always at no fee).  As with InfantSee, an early intervention might well prevent a significant problem downstream. 

As the old saying goes, "an ounce of prevention is worth a pound of cure."