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Progressive Focus© Newsletter

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Volume 2, Number 2 Summer, 2001
Helping You Manage the Expectations of Managed Vision Care

What Makes One Managed Vision Care Plan "Better" Than Another? (Part 4)

In the previous three issues I've suggested many criteria by which you can differentiate managed vision care plans. Hopefully you've gained a little insight and started building your list of issues to help decide which plans might be worth joining, which of those you're now in might be worth keeping, and which should be dropped.

It's clear from ophthalmic journals, Internet discussion sites, and from conversations at professional meetings that practitioners are waking to the reality that many vision plans are not good for their practices' health. The data over the past few years shows that there are plenty of problematic and marginal third party plans that may be bringing patients to ODs' offices but are contributing precious little to improved bottom line performance.

As a result, many ODs are selectively culling under-performing plans. And they're doing this based on financial realities. Despite claims to the contrary in promotional brochures and on websites, many vision plans simply do not deliver.

Need convincing? Consider the following chart with data from the American Optometric Association's Caring for the Eyes of America 2000. AOA's research in 1999 indicated that on average an OD's patient base came 40.4% from private third party plans, 22.1% from public (govt.) plans, and 37.5% private-pay.

Did You Know...?

The AOA's patient demographic data for the typical OD breaks down as follows:

Mean Percent Patients Covered By and Practice Revenue From Third-Party Sources, 1998

Source  Patients Covered By Practice Revenue From
VSP 15.1% 13.1%
Other PPOs 6.9% 5.6%
HMOs (private) 9.8% 7.4%
All other private health plans 8.6% 8.2%
Medicare HMOs 4.0% 2.8%
Medicare fee-for-service 11.3% 10.3%
Medicaid 6.8% 5.2%
Private pay 37.5% 47.4%

Source: Caring for the Eyes of America 2000,
American Optometric Association, pg. 14

Note that while ODs typically get 62.5% of their patients from third party plans, that 62.5% brings in only 52.6% of income. This is disproportionately less than the 37.5% private-pays who account for 47.4% of income.

That disparity is no surprise, of course, but the magnitude of it seems to escape some optometrists whose practices have become virtually dependent upon what probably are under-performing vision plans. And once dependent, then its very tough to cut loose these plans when they bring in so many patients.

Certainly it's a psychological hurdle that some just can't negotiate, even when presented with financials showing that participation is counter-productive. And so, despite full appointment schedules, their practices stagnate year to year with relatively poor net incomes.

More From The AOA Report

The AOA report also states that ODs typically took 22% discounts on third party exams in 1997. Additionally, frames and lenses were discounted 26%, and contact lenses 15%. My suspicion is that when 1999-2000 data are released these average discounts will be even deeper, and the bottom-line financial picture will be bleaker for more ODs.

There's plenty of evidence that the disparity continues to widen between the percentage of patients seen under most vision plans and the percentage of revenues that these plans bring to the practice. The AOA data indicates that while for most ODs gross income from vision plans rose, net income did not necessarily follow. You've heard it before -- that under managed care you work a lot harder and earn a lot less.

Well, that incongruity is only getting worse as vision plans battle each other to gain contracts and capture market share. This struggle to capture what is essentially a finite pool of patients inevitably results in even lower reimbursements and thinner margins for those who provide the patient care. It's a vicious circle.

Did You Know...?

Through the mid-1990s patient volumes increased as ODs joined more managed care programs. However, gross income rose for only about 2 out of 5 ODs. And, most telling, the number of optometrists reporting better net income from managed care declined significantly.

Managed Care Patient Volume, Gross and Net Income

Category 1993 1997
Patient volume increased 54.8% 64.0%
Gross income increased 40.7% 42.1%
Net income increased 28.7% 22.8%

Source: Caring for the Eyes of America 2000,
American Optometric Association, pg. 15

In the next issue of Progressive Focus© we'll look into more ways you can differentiate vision plans, and make those difficult but necessary determinations as to which might benefit your practice and which probably can't.

Quotables...

"Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do, when it ought to be done, whether you like it or not."

Thomas Huxley

OSHA's Free (And Painless) Consultation Service

If you've been in practice for a few years then you've probably been through a facility expansion or, perhaps, supervised the construction of your office from the cement slab up. If so you've certainly come face to face with one or more issues subject to OSHA regulations and oversight.

Perhaps yours involved the handling and disposal of hazardous materials by-products created in the production of spectacle lenses at your new finishing lab. Perhaps you added a tinting tank and had to worry about venting the fumes. Or maybe you're not even aware that you may have OSHA issues.

Well, it's essential that you understand OSHA is always a concern, and that concern should extend to protecting your managed care business. If your facility fails an OSHA inspection it's quite conceivable that an HMO or PPO or vision plan could terminate your provider agreement "with cause" (citing, for example, that the unsafe conditions could put their Members at unacceptable risk). Obviously losing a managed care contract over an OSHA violation is something you can and must avoid.

OSHA is one of those powerful government agencies that everyone seems to fear and is desperate to avoid. In the back of your mind may be several common worries: Are we going to have problems with OSHA? And how do we avoid the turmoil that always seems to accompany an unfavorable OSHA inspection?

OSHA's Not The Bad Guy

Well, there's encouraging news for those facing or potentially facing OSHA issues. You can be pro-active and save yourself a lot of worrying.

OSHA provides a free consulting service for smaller businesses. You can learn about possible hazards in your workplace and find out how to improve and manage your safety systems. OSHA's safety and health consulting program is confidential and not part of its inspection program.

Your name, the practice's name, information you provide to the consultant, and any unsafe or unhealthful working conditions are not routinely reported to OSHA's inspection division. However, in exchange for the free consultation you agree to act on the consultant's recommendations and to correct any serious health or safety problems within a reasonable time.

How The OSHA Program Works

You initiate the free consultation by contacting OSHA. A complete list of all OSHA offices offering free consults is on the Internet at http://www.osha.gov/oshdir/consult.html

A consultant will discuss your needs and then schedule an on-site appointment. You have the option to schedule a review of all your safety and health matters or you can request to have the consultation limited to a specific concern.

When the consultant arrives at your office here's what will happen:

1) First the consultant will conduct an "opening conference" during which you'll learn about his or her duties and your obligations as a participant in the program.

2) Next the two of you will do a facility walk-through. The consultant will also talk with your employees and gather information. You'll learn about OSHA standards applicable to your inquiry and to other matters that may not fall under OSHA but which the consultant may observe. This can be an incredibly valuable side-benefit.

For example, the OSHA consultant might observe that your staff dumps used lens tint and/or neutralizer into the sewer grate behind your office. That's likely something that would ring alarm bells at the EPA (Environmental Protection Agency). You don's want EPA citing and fining for contaminating the water table!

3) After the walk-through the consultant reviews his or her findings in a "closing conference." You'll get feedback on what's wrong and what's right. You can then discuss any problems and possible solutions. And together you'll establish time frames for making necessary corrections to matters deemed serious hazards.

After this meeting you'll get a written report detailing the consultant's findings, necessary corrections, and the time frames agreed upon during the "closing conference." The consultant monitors your progress on any required corrections so as to achieve the program goals -- protection of all workers and a safe work environment.

Note: If you fail to complete the necessary corrections according to the plan and in the time frame you agreed to, then the matter can be referred to OSHA's enforcement office for action. You'll want to avoid this, and OSHA indicates such referral is rarely necessary.

Note also: If the consultant finds an "imminent danger" during the on-site meeting you will be required to take immediate action to protect your employees. The consultant will help you with a plan for correction.

Finally, the consultant will not:

  • Issue citations,
  • Report possible violations to OSHA enforcement,
  • Guarantee that your practice will pass a full-blown OSHA inspection.

Resources

http://epls.arnet.gov

Excluded Parties List System -- Here's where to go to find out if an individual or company is excluded from federal programs such as Medicare.

Diagnosing the Health of your Managed Vision Care Business

  • Does staff track the frequency of multiple pair purchases by managed vision care patients?
  • Does staff track the percentage of multi-focal wearers upgrading to progressives?
  • Does staff track the percentages of high plus/minus prescriptions upgraded to high-index?
  • Does staff track the percentage of patients who upgrade their frames, and the average upgrade dollar amount above each vision plan's allowance?

 

Vision Plan Profile

Vision Benefits of America

Founded in 1965, Vision Benefits of America (VBA) was one of the first Preferred Provider Organizations to focus exclusively on managed group vision care benefits. Once a part of the Vision Service Plan network, VBA is now an independent, non-profit corporation providing service to more than 1,400 clients in all 50 states, Puerto Rico, and Washington DC. This represents more than 1.5 million covered subscribers.

VBA markets its managed vision benefit programs to corporations, school districts, hospitals, HMOs, municipalities, and health & welfare funds. There are many plan designs to accommodate almost any benefit requirements or budgetary constraints.

VBA's comprehensive and diverse national network includes more than 11,000 participating optometrists (76%), ophthalmologists (15%), and well known retail opticals (9%). VBA does not own a laboratory, frame company, buying group, or mail order contact lens company. Participating providers have all prescriptions fabricated through any of the 270 full- service optical labs contracted with VBA.

VBA pre-certifies every claim using a pre-printed benefit form. Eligible subscribers must present this form on the first visit. This frees the provider from having to establish eligibility and coverage prior to or during the patient's appointment.

Effective January 1, 2001, VBA includes a Laser Vision Correction program with every plan. This is a national, discount arrangement with the 60+ TLC Laser Eye Centers.

To learn more about VBA , visit the website at www.visionbenefits.com or call Dave Crooks, Director of Provider Relations at 1-800-432-4955, extension 211.

 

These materials are intended to provide useful information about the subject matter covered. The author believes that the information is as authoritative and accurate as is reasonably possible and that the sources of information used in preparation of the materials are reliable, but no assurance or warranty of completeness or accuracy is intended or given, and all warranties of any type are disclaimed.

The materials are not intended as legal advice, nor is the author engaged in rendering legal services. The materials are not intended as a replacement for individual legal or professional advice. Information contained herein is presented only for illustrative purposes, and it should not be used to establish any fees or fee schedules, nor is it intended and it should not be construed as encouraging any user of the materials to take any actions that would violate any state or federal antitrust laws, tax laws, or Medicare or Medicaid laws.

Copyright © 2003-2007, Gil Weber, MBA. No part of this newsletter may be reproduced or distributed in any form whatsoever without the author’s prior written authorization.

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