Progressive Focus© Newsletter
|Volume 4, Number 4||Winter, 2003|
|Helping You Manage the Expectations of Managed Vision Care|
Recent Statistics – Managed Vision Care
Each year Jobson Publishing produces a report on managed vision care. This year's edition of the 2003 Managed Vision Care Report includes some interesting data that can be used along with previous discussions on patient satisfaction in Progressive Focus© (second and third issues 2003) to understand better the needs and wants of patients who directly or indirectly control so many of the dollars spent in optometric practices.
Did You Know?
On a national basis 35 to 40% of all revenues generated in the $16.2 billion retail optical industry result from managed vision care (mvc) programs?
In some states, notably those in the West, mvc can account for 80% of an optometric practice's revenues?
2003 Managed Vision Care Report, page 1
With so much of the typical practice's business coming from these vision plans, one might think that ODs would welcome the incremental patient flow that supplements the private-pay patient base. After all, the vision plans are directing patients to, or certainly create incentives for them to use participating providers. And the patients are coming in without those practices having to pursue them. (The practices typically don't -- and sometimes can't -- advertise that they're on the vision plans.) So wouldn't it seem natural that ODs would welcome this business?
To the contrary, most optometrists are not at all pleased that so many of their patients come through the doors holding a benefits voucher or vision plan I.D. card.
Independents vs Retail Chains
As you might imagine such displeasure is expressed more often by independent practitioners than by those who run the retail chains. And it's no surprise to anyone that the chains are doing everything they can to attract mvc patients on whom they can and usually do make a healthy profit.
And therein is an interesting "quirk" in this mvc business. Even though the independent practitioners voice the most displeasure and disgust with managed vision care, patients would prefer to use their benefits at the independents' practices rather than use them at the retail chains.
Jobson surveyed patients (2003 MVC Report, page 40) who had a vision benefit or discount plan and asked: How interested would you be in using your vision plan at the following locations? The results, combining "very interested" and "somewhat interested," showed:
- Independent optometrist -- 71%
- Independent ophthalmologist -- 69%
- LensCrafters – 41%
- Pearle Vision – 35%
- WalMart – 31%
- Sears Optical – 29%
- JC Penny and Target Optical – 21%
- Sam's Club and Costco – 19%
The message should be clear to all independent practitioners – a door of opportunity is open and the patients are willing to walk through. If you're to benefit financially then the task is to select vision plans carefully and then to make the patients feel welcome and appreciated.
Managed vision care is a money-losing proposition. The fees are awful and the patients only want what's covered and won't spend a penny more. Why bother?
an anonymous OD
This sentiment is certainly widespread. And, in part, it's correct. There are some terrible vision plans our there that prey on vulnerable ODs. On the other hand there are also some others that many ODs find pay reasonably and promptly, that treat them respectfully, and that don't tie-up their staffs in impossible, administrative quagmires and blizzards of frustrating paperwork.
But I think it's a mistake to shun managed vision care based on a perception that most of those patients won't pay anything out of pocket so it's a waste of time. To do so is to miss a growth opportunity for your practice.
Now if many or most of your mvc patients are not upgrading then something is seriously wrong either in how your staff approaches the presentation process or, perhaps, in how you, the optometrist, discuss visual and lifestyle needs with those patients. Understanding your patients and their wants and needs is key to profiting in mvc. Patients will respond and spend over and above their basic plan allowances when they're appropriately educated.
Did You Know?
On average, 58% of mvc patients upgrade.
- 32% spend more on frames,
- 25% spend more on progressive lenses,
- 21% spend more on contact lenses,
- 17% spend more on lens treatments.
Selling-Up is Not Wrong
These numbers show that there is significant, potential bottom line growth available to practices through the sale of upgraded frames, premium lenses, and lens treatments. And it's not as if these incremental profit dollars are wishful thinking – they're real.
Consider, Essilor's data shows that in Japan and Europe some 80% of spectacle lenses are dispensed with A/R coating, while in the US that figure is around 20%. What do Japanese and European eye care professionals know that we don't? Nothing. But they clearly do a much better job of making sure their patients know about the benefits of A/R.
When I managed three optical dispensaries some years ago the staff routinely and significantly exceeded published national dispensing benchmarks. And staff did that while carefully avoiding putting a patient into the position of feeling that we were focused only on digging into her pocket book or into his wallet. We sold-up a large majority of patients by taking the time to understand each one's unique needs.
Let me share with you another revealing set of numbers showing missed opportunities to upgrade lens sales. Consider this 2001 data from independent OD dispensaries:
Spectacle Lens Materials
Conventional plastic – 50.7%
Polycarbonate – 28.6%
High index plastic – 15.9%
Conventional glass – 4.4%
Mid index plastic – 1.9%
High index glass – 0.3%
Trivex – 0.1%
Source: Jobson Optical Research,
When staff is properly educated and trained it can appropriately and without any sense of impropriety sell-up based on each patient's visual and lifestyle needs. Whether it's premium lenses or a second pair or sunglasses, a significant percentage of patients will purchase over and above their mvc benefits when they're educated and when they understand the benefits.
And part of that sales and education process goes beyond knowing and explaining the technical differences between lenses, or the reasons for the higher cost of a titanium frame. A big factor in successfully selling-up is psychological. It just as much the personality in the presentation as it is the content of that presentation. It's understanding what business you're really in.
What Business Are You Really In?
Not long ago I was talking to a group of optometrists. I had known most of them for several years. We discussed a variety of practice management issues, and I asked them, What business are you in?
Optometry, they said. And when pressed to be more specific they replied, eye care.
I was not surprised with these answers. While most optometrists have the clinical side of their practices nailed down, they typically don't appreciate that their practices are not single dimensional entities that can be placed into one, generic category of "eye care." Rather, optometric practices are multi-dimensional entities that must satisfy critical, choosy patients (not to mention an occasional referring primary care physician).
And I started to ask those optometrists about why so many of them seem to have difficulty relating to the term "business of medicine," and differentiating it from the term "practice of medicine." After some additional conversations I concluded that a significant part of the problem might be that many optometrists don't seem to understand clearly what business they're really in.
It's Not Always What You'd Think (and Sometimes Things Change)
What is American Airlines' business? Do you think it's air passenger transport? Or are they in two related but distinct lines: business and leisure travel? What about their air cargo business? What about carrying the US Mail? Different lines of business, yes, but all closely related.
What about General Electric? Is your first thought that GE is in the home appliance and/or light bulb business? That's true, but then what about the locomotives and jet engines they make? Those lines of business are not even close to home appliances and light bulbs.
What about Encyclopedia Britannica? Does your mind flash and say Britannica is in encyclopedias and other educational books? That was Britannica's answer until a few years ago. It had a large sales staff that went door-to-door peddling weighty, hard cover book sets. Then almost overnight CDs and the Internet came into everyday use and, for research purposes, they essentially eliminated the need for bookshelves and printed volumes. Britannica's book business withered.
And what is Britannica's line of business today? They're now in information and research, not in "books."
What About Your Practice?
If you think that an optometric practice means you're in the healthcare business, that's only partially correct. Sure, taking care of patients is the biggest part of what you do, but your practice is fragmented, and it includes multiple lines of business.
Members of your staff see the same patient, but each conducts his or her business with that patient based on different business and operational perspectives. It's essential that everyone recognizes this and acts and responds appropriately. Let's look at some examples.
What Business is Your Front Office Staff In?
Customer service, of course. And being in the customer service business means that the front office staff must make a good impression on the initial phone contact prior to every visit. Customer service also means that these staffers must make good impressions, including good last impressions, on each patient at every visit.
All your great clinical care can be for naught if front office staff fails to meet and exceed patient expectations. In part this means being very quick and very efficient -- in some aspects sort of like the production line at a fast-food restaurant (e.g., McDonald's).
It means that each patient must be greeted promptly and professionally. None can be allowed to stand unacknowledged at the reception window. None can be allowed to sit in the waiting room long past the scheduled appointment time without an explanation and options. None should be left standing at the checkout window waiting and waiting to pay for the visit. Each should be sent away with a smile and a couple of your business cards paper-clipped to the visit receipt.
And What About Your Optical Shop; What Business is That?
Did you immediately think patient care or, perhaps, customer service?
I'd suggest that your optical shop is in the retail fashion business. The staff is selling tangible products and often dealing with patients who will spend considerable amounts of money outside any insurance coverage. This all creates a "shopping" atmosphere unique to eye care, something most of your non-eye care colleagues never encounter.
And so your staff must be able to "walk the walk and talk the talk" of fashion -- discussing the latest trends, cosmetics, clothing, facial and eye color, etc. It's likely that on average they'll spend more time with each patient than your other staffers and, especially when choosing frames, it will probably be at a more relaxed and leisurely pace. This is, after all, a business that lives or dies on interpersonal relationships, not on speed, not on repetitive accuracy. It's the antithesis of cookie-cutter (McDonald's-like) efficiency.
And Your Clinical Staff is In Yet Another Line of Business -- Or More Accurately, at Least Three.
Certainly they're in patient care. But they're also in the relaxation business. And they're in the productivity and efficiency improvement business.
Obviously your clinical staff must be able to do all the work-ups and gather the information you need. That's the patient care component.
They also must be able to put each patient at ease both during the pre-test and work-up periods, and in anticipation of whatever you might have to do during the exam or any procedure such as a foreign body removal. That's the relaxation component of the business, a touch of psychology requiring a skill set all its own.
And your clinical staff must also see itself in the productivity and efficiency business -- constantly looking for ways to move more patients more quickly through the practice, and bringing the results of that improvement to the bottom line.
So What Business are You Really In?
In the end, everyone in your office is in the people business.
Time, energy and resources may be directed toward those patients a bit differently, but everyone, everyday is in the people business. Focus on that first and foremost and you've taken an important step to building a successful business in these challenging times.
Closing Thoughts: Little Will Happen Unless You and Staff Make it Happen
If your practice participates in managed vision care programs but you're not selling-up a majority of those patients then you're certainly missing significant incremental income possibilities. Frankly, if most of your mvc patients leave with only that which their vision insurance covers then you may actually be losing money for your time and effort.
If many or most patients leave your practice with only a pair of "free glasses" then you've failed to use the tremendous leverage presented to you by the design of most vision plans. It's essential that each patient be educated to think of his or her benefits as a first-dollar allowance toward something better than might otherwise have been selected. That's the key.
Once this concept is appropriately presented to each patient then upgrading to premium lenses, lens treatments, 2nd pairs, etc. becomes relatively simple. But most patients who come in thinking "free glasses" won't get to that point unless you and staff are proactive.
Richard Edlow, OD, and Glenn Markus emphasized this point perfectly in the January 2002 issue of Optometry (pg. 60) when they commented on the AOA's 2001 Optical Dispensing Survey by stating: The Optical Survey points again to the fact that optometrists and their staffs still help patients decide which options best meet their individual needs. Patients by themselves do not decide most lens options.
Education is what you get when you read the fine print.
Experience is what you get when you don't.
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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