Al Cleinman's Blog

Take a VSP Vacation...You Deserve It!

Just heard from a doctor who viewed the video link to the  VSP employee “Wellness” benefit (see Post November 5th).

He's going to cancel his next 2 VSP exams to give his staff a break.

He says he's going to see a medical visit patient later in the day that will more than make up the difference.

 

VSP's Fight For Your Reimbursement Increases Causing Employee Stress

Thanks to a loyal reader for submitting this video (see comments).

Apparantly, VSP employees, who have one of the best benefit packages in the world (for example: 15% 401k Contribution...twice that of IBM), have been fighting for Provider fee increases.  Yep...it's hand to hand combat out there as they attempt to obtain reimbursement increases for their downtrodden providers.  As a result, employees at VSP are apparantly pretty stressed. 

So, what does VSP do?  View the video below.  Rumor has it that the benefits described (read post of July 14, 2009) will soon be available to the employees of VSP's 26,000 Providers through a special grant; the result of outstanding profits from VSP's various companies who sell their products and services to...you guessed it...VSP Providers.

http://www.kcra.com/video/21532360/index.html

Reality is that I wish I could provide these services to my employees.  And, under normal circumstances, I'd applaude any company that did this for their team.  That said, VSP (and other vision plans) earns its largesse by; a) controlling 55million patients and; b) cramming ridiculously low reimbursements and ludicrous policies down the throats of Providers, many of whom are dominated by VSP patients and scared to say a word. 

What's going on with Vision Plans isn't fair...and sooner or later things are going to change.

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?

The National Association of (Feed Off Optometry) Vision Care Plans

Below you'll find a link to the National Association of Vision Care Plans. 

http://www.navcp.org/

This organization represents those companies (except VSP) who wholesale your services.  Understand them.  Read their letter regarding Obamacare.  While they promote "equal access for optometry" are they not wolves in sheep's clothing?  As the saying goes; "keep your friends close and your enemies closer."

Tired of 50% reimbursements?  Tired of having the quality of your services negatively impacted by these plans?  Tired of having someone else control where your patients go for services?  STOP TAKING ACCEPTANCE!  Many of our clients are successfully moving away from Vision Care Plans.  They provide their patients with the paperwork but operate out of panel.  Vision Care Plans are DOA without providers.    

VSP and Other Vision Plans Fight for Their Life

Here's an interesting video about the impact of Obamacare on Vision Plans.  If you read between the lines, what VSP is saying is that Vision Benefits will (and likely should, in my opinion) find their way to medical plans and away from specialized plans.  Every provider knows that the fact that vision plans are NOT part of medical care is wasteful and inneficient.  Were this to happen, specialized vision plans would go....bye bye!

Vision and Dental Plans Under Obamacare

A Consumer's Perspective on Vision Insurance and Optomap

I came across the following post by a fellow blogger.  This gives an interesting and balanced perspective on the perceived benefits of Optomap while reiterating the danger of sales exaggerations and scare tactics.  It also speaks to the overall expectations of insureds. 

Enjoy!

http://www.overclockeddrama.com/2009/07/28/consider-it-a-health-investment/

VSP Reduces Provider Reimbursements to Support Employee Lunches

I have a client who once told me that he never drove his Porsche in his own community.  His reasoning?  He didn't want his patients to get the impression that he was getting rich serving them.  While that's a pretty conservative approach, it was likely the right approach given my client's visibility in his mid-western community.  In any event, he simply didn't want to rub his patient's proverbial noses in his success. 

VSP just cut your contact lens reimbursements, eliminated your eyewear case allowance and told you (not a request) to provide additional discounts to VSP patients from your own pocket.  Their message: "it's a cold, cruel, competitive world out there and we all have to sacrifice."  

The article below comes directly from VSP's own blog and was proudly crafted by a member of VSP's Public Relations staff (thanks to a loyal reader for passing this on to me).  What a great response to your sacrifice. 

 

VSP Moves to Mail Order Eyewear - Providers are Out, Out, Out!

Dateline:  Sometime in the not too distant future:   In an effort to continue it's growth against competition from the likes of Highmark and EyeMed, and to further reduce employer costs for eyecare/eyewear plans, VSP announced that it was going "direct to consumer" with the sale and delivery of eyewear. 

"We now control over 50 million patients (that's 1 in every 6 Americans) and have the purchasing and technology clout to deliver unprecidented savings to our employer groups and individual subscribers," said a VSP spokesperson.  "We have the resources and technology to eliminate the middleman and, in the case of eyewear, the Optometrist Provider is simply not necessary," he said. 

The announcement above is bogus and is this author's creative endeavor. 

Ask yourself an important question.  Can the above happen?  What's to prevent it?    Eyewear is now sold daily through a host of internet providers and estimates indicate that the delivery system currently controls as much as 10% of all eyewear/sunwear volume.  What's to stop VSP from harnessing the technology that they know so well?   Further, VSP has your patient list and controls a significant portion of many Provider's business now.  Unless en masse, Providers simply won't be able to drop VSP in a defensive move, since, for many, VSP represents the lion's share of their business.  Providers will be left with just the medical/refractive side. 

VSP has all the assets it needs to take the Provider out of the loop on eyewear; as well as, perhaps, a compelling competitive reason (and advantage) to do so.  With Marchon (frames), VSP Labs (lenses) and Eyefinity/Officemate (internet and computing technology), direct delivery to consumers appears a logical next step.  Why not?  VSP is already selling consumers directly (see June 15th post).  VSP certainly demonstrates little care for the economic health of its Providers.  There's little to prevent them from eliminating the Provider entirely from the eyewear delivery system. 

Sorry, Providers, you're just not needed!  Will you join the ranks of stock brokers and travel agents?  Will the internet do you in?  What can you do, now, to prevent this eventuality (think "patient experience")?

Think losing your eyewear business isn't logical or possible? Take a look at what's going on in the pharmacy world.

http://money.cnn.com/2009/06/16/smallbusiness/small_pharmacies_fight_for_suivival.smb/index.htm

Providers - Send a Thank You to VSP

In a recent press release, VSP proudly announced that the "individual vision plan" they launched two years ago has now gained more than 25,000 members; that's about one patient for every VSP provider.

 The release went on to say that, according a recent survey, 16 percent of respondents "invested in individual vision care benefits due to unemployment or forced reduced hours, causing them to lose access to vision care." (author's emphasis)

Further, VSP informed us that "of the individual-plan members who are employed, more than 50 percent said they do not have vision coverage at work." (author's emphasis)

Gary Brooks, president of VSP Vision Care, went on to note in the release that VSP’s individual plan has seen “a large uptick in 2009.” Brooks said VSP attributes that increase to the plan’s personalized service and  affordability (author's emphasis).

Hm-mm.  I wasn't aware that VSP provided personalized service and affordability.  If I understand correctly, VSP provides NOTHING but administrative and marketing services.  Is it not VSP's providers who deliver these attributes which VSP so proudly calls their own?  Is it not these providers who are taking it in the shorts while VSP is walking away with profit adequate to fund tens of millions in excessive management benefits and perks annually; near $billion acquisitions and global expansion efforts? 

And with 25,000 providers within minutes of virtually everyone; with the likes of WalMart, Shopko, Lenscrafters, Pearle, etc; since when do consumers lack access to vision care? 

VSP Providers should send a letter of thanks to VSP.

*    Thank you for reaching into our patient files and re-selling our services at deep discount to individuals who would otherwise likely have been willing to pay U&C. 

*    Thank you for recognizing that we have no individual marketing capability; that we're lost without you. 

*    Thank you because, as just lowly optometrists, we know that we can only survive by selling all of our services at a deep discount. 

*    Thank you, for showing us that the only way to develop a successful brand is to position ourselves as the proverbial "Monty Hall"...let's make a deal with everyone. 

*    And while we're at it, Thank You VSP for unilaterally cutting our contact lens and second-pair reimbursements/allowances so that our margins continue to erode, further reducing our ability to invest in the services that you describe to YOUR customers as "personalized." 

When will Providers rise up and finally say "we're sick and tired of someone else controlling our destiny and we're not going to take this anymore?"

VSP Study Supports Significant Increase in Provider Reimbursements

In a recent press release, VSP announced the results of a study that indicates that annual eye exams save companies nearly $3 billion each year.  That's great and very logical.  And I trust that VSP will be making the study available to all it's Providers for use in their individual marketing efforts.

These results certainly appear to be very compelling and I applaud the study.  Great job VSP (I really mean it)!

Reading the Study from a different direction, the results are also reason why VSP should be able to convince employers to increase their investment in vision care for their employees and, as a result, bring Provider reimbursements to a realistic level. 

But one doesn't really have to look to VSP's customers (employers) for rationale for improvement in reimbursements.  While VSP's 2008 Audited Financials (reflecting the impact of the Marchon acquisition) don't yet appear to be available through my source, here's a copy of their 2007 Auditor's Report for your viewing pleasure (Download VSP 2007 Financials).  As this report shows, for 2006 and 2007,VSP had net income (after reserves for taxes) of over $100 million each year!  That's after paying  their employees what can only be viewed as ludicrous benefits and outlandish salaries. 

So let's assume for a moment that 50% of that income is reasonably available for distribution to the Providers whom VSP purportedly serves.  After all, reserving $50million in capital each year (VSP has a net worth in excess of $1billion and cash/securities as of 12/31/07 of almost $800 million) should be adequate to fund capital investments and their required statutory reserves of about $15million. 

The result would be a distribution of about $2,000 per Provider each year.  Not great, but it helps.

But now, since VSP has proven that employers save about $3billion a year through annual eye exams, it seems safe to say that employers would be thrilled to save, say, only $2.5 billion.  After all, that's a huge return on their premium investment and a compelling bottom line improvement.  That would give VSP the ability to improve reimbursements by, let's say, about $20,000 per Provider per year.  Now that's real money and would finally bring Provider reimbursements in line with increasing costs.

I know that VSP would say "that's ridiculous, it's a cold, cruel world out there and we have to compete."  That's logical, after all, VSP is the "high cost producer" in the "managed vision" world.  VSP premiums are higher than most other plans.  Unfortunately, what none of the plans seem to get is that Providers require margins to continue to invest in people, facilities and technology to deliver the very health benefits that the VSP Study proves are of such value.  And that, without quality Providers, all these managed care businesses are worthless..can't operate...nada...vaporized...or...as my grandfather would say..."kaput." 

Hmmm, I wonder when Providers will finally say "we're sick and tired of being treated like dog dirt and we're not going to take this anymore?"  What would the result be of a unilateral "strike" during which all optometrists simply refused to accept any vision care plans?  What would happen if optometrists simply told plan participants, "I'm sorry, Mrs. Jones, your insurance is not reimbursing us at a level at which we can continue to provide the quality care that you expect from us.  So, we've decided to participate in a national boycott for the next week to send a message to these plans and to your employer that we can't deliver what you expect us to deliver without adequate reimbursements.  I'm sure that you can understand this...our plight is the same as if your employer reduced your hourly wage by 50%."   

Perhaps, only then, will the likes of VSP, EyeMed, Spectera and Davis and the employer groups whom they represent (they sure as heck don't represent Providers) stand up and take notice?