Pearle Vision to become in-network VSP

[scriptfiller]

The goal with Pearle was a 90% "Licensed Operator" 10% Corporately owned model.

Can't go into specifics but keep your ear to the ground about this, especially as Q4 2015 nears. Within the sphere of the current winds I may be a dead man walking by that time.

[CCGREEN]

Pearle franchises taking VSP means they have access to a network that Lenscrafters does not and at the end of they Lux takes its cut from those franchises anyway. I wonder how fiscally viable it is to give VSP a cut of a transaction and Lux a cut of a transaction. Pearle advertises nationally and regionally to bring in clients if VSPs main value add is putting buts in chairs then Pearle is paying twice for that overlap in service.

Well if a franchise Pearl location has to give VSP a cut and LUX a cut and Pearl corporation a cut. Then how do they turn enough $ to meet their operating cost? Much less turn a profit of any kind for a franchise owner.
I spent a few years working at a franchise location. (Back just as they were being acquired by LUX.) By the time the clowns that owned it finished paying all their corporate fees there went 70% of their profit. Leaving only 30% to meet operation expenses. And IF you could do that with 30% you had very little if any to call "profit." So what would be the point in owning a franchise?

[racethe1320]

During my time with Luxottica they sent a notice out that they were trying to convert at least half of the Pearle Vision stores into franchises. However, I do not think they converted anywhere close to that number and possibly gave up on the idea altogether. I am interested to see what actually happens with this considering all the changes going on at corporate levels of Luxottica.

They are already above 50% in terms of franchises. In fact there's just over 130 corporate owned stores, the rest area franchises.

[racethe1320]

Naw. I don't think Lux will buy VSP. If there is any speculation in my mind, it's whether all Pearles will be spun off as franchise (which I think would be a good idea, all around for all parties) OR VSP gets itchy to purchase their own retail outlets.

Lux isn't going to buy VSP....LOL......My money is on VSP buys Pearle and perhaps others. That's the logical business move and this is likely just step one. Come on people, put business hats on already.

[racethe1320]

Ugh those lenses. I was given a pair and when asked by the VSP rep what I thought of them I told him flat out they were pretty bad. I also got real tired of multiple remakes so ignoring their pleas and selling what works.

I don't think they are issuing please for you to use their stuff. They are simply offering you the option. In the end it's your call. They control the patients via their clients and will ultimately just end up offering greater payouts to those that choose to use their stuff. Again, smart business. You don't have to fit it, so by all means don't.

"VSP, created by OD's for OD’s....er....um... Corporate EyeCare.”

Their original charter and one that still holds read "to help millions of people see better". Your part came into play in later and referenced it was to direct those patients to OD's vs non OD's such as opticians. That still holds true as well. Don't read into it though that their charter was to benefit OD's first though....it never was, it was to benefit their members aka the patients that eventually hit your chair.

[Quantrill]

They are already above 50% in terms of franchises. In fact there's just over 130 corporate owned stores, the rest area franchises.

That's true. They've been converting pearle stores into LC's for awhile though. Happened to one near me. Not sure how many have disappeared this way.

[optical24/7]

Their original charter and one that still holds read "to help millions of people see better". Your part came into play in later and referenced it was to direct those patients to OD's vs non OD's such as opticians. That still holds true as well. Don't read into it though that their charter was to benefit OD's first though....it never was, it was to benefit their members aka the patients that eventually hit your chair.

Race, you know I always read your posts, and agree with you most of the time, but the above gave me the biggest laugh I've had in a long time...And on my Birthday! Thanks!

"direct patients to OD's vs non OD's such as opticians."?? What opticians were doing vision testing when VSP started? There's been Optometry laws in every state for a hundred years. The best part is your last two sentences! Now that's funny!

[Tallboy]

So race, since you buy in to the business model 100%, negotiate spiffs with the Ohio lab, sell Unity products exclusively and marchon frames in high %s, do you feel undercut by VSP now that a Pearle vision near you starts selling those same lenses and are listed as a preferred partner, just like you? Or are you going to look into buying a Pearle franchise yourself?

[racethe1320]

Race, you know I always read your posts, and agree with you most of the time, but the above gave me the biggest laugh I've had in a long time...And on my Birthday! Thanks!

"direct patients to OD's vs non OD's such as opticians."?? What opticians were doing vision testing when VSP started? There's been Optometry laws in every state for a hundred years. The best part is your last two sentences! Now that's funny!

Happy birthday man. My point is that that VSP's main charter hasn't changed.

do you feel undercut by VSP now that a Pearle vision near you starts selling those same lenses and are listed as a preferred partner, just like you? Or are you going to look into buying a Pearle franchise yourself?

I don't worry or think about moves like Pearle coming to the panel nor do I care about Costco or the others. My focus is on my locations and what's inside the walls of my own business. If a patient chooses NOT to come to our locations, that's a concern for me and within my control. I'm not worried about them having options only when they don't choose us as the main one.

[AustinEyewear]

Anyone happen to know what VSP does with your patient data? They have large amounts of it. i.e. what products they are buying, etc. Are they legally able to use this information for marketing purposes? Been curious about this with other items as well, for example your lab, or equipment in your office that stores patient info and is transmitted back to the manufacturer.

[Paul Smith LDO]

Anyone happen to know what VSP does with your patient data? They have large amounts of it. i.e. what products they are buying, etc. Are they legally able to use this information for marketing purposes? Been curious about this with other items as well, for example your lab, or equipment in your office that stores patient info and is transmitted back to the manufacturer.

Yes, you are providing VSP with a tremendous amount of information regarding both contacts and eyewear. If you are selling VSP patient products thru the VSP frame division it helps them with their inventory, styles, sizing , and color. Don't forget about the IPD along with vertical and horizontal placement of the OC as well as the fitting height. They also have the lens material and design. They can use all of the aforementioned information to sell directly to their members.

[racethe1320]

Anyone happen to know what VSP does with your patient data? They have large amounts of it. i.e. what products they are buying, etc. Are they legally able to use this information for marketing purposes? Been curious about this with other items as well, for example your lab, or equipment in your office that stores patient info and is transmitted back to the manufacturer.

In the end, the data is that of their members who in turn are serviced by us as patients. So yes, they have the data on their members and likely use it to further their programs for the clients/members and ECP's. That's an inherent benefit they have over other manufacturers that do not have an insurance arm of their business. I doubt and see no reason why they would transmit any information back to other parties or manufacturers if that's what you're implying.

In terms of marketing to their members, I would hope they would. From a business standpoint, they own the client, their members and have that right and it would make complete business sense.

[racethe1320]

They can use all of the aforementioned information to sell directly to their members.

I wouldn't be nearly as concerns around VSP doing that as it's not a core of their business. If they wanted to they could as they own the client/member anyway. Again, we the ECP's are simply service providers. We don't own the client/member that we call our patient. They do. Consider however, many others in this industry that are indeed doing exactly that, selling directly to our patients that they do not own. Especially Lux and Big E. (outside the EyeMed Clients/Members Lux owns) they are indeed "taking your patients" away from you.

So in the end, when everyone gets up in arms about VSP's actions with programs that push their frames, that to me is simply good business. Why would they want anyone to fit their members with frames and products that they don't benefit from? They aren't in the business of supporting Saffilo or Essilor with clients/members they bring in.

[Uilleann]

How about it client/members - you like being OWNED?

LOL!

It's such an apt description of what these plans do to the masses though ain't it!

[Paul Smith LDO]

How about it client/members - you like being OWNED?

LOL!

It's such an apt description of what these plans do to the masses though ain't it!

No, VSP pays us in USD just at an exchange rate designed by VSP, they also bring clients to our door, yes they do sell directly to our patients but the were VSP members first. If I sell my VSP patients VSP owned frame and lenses VSP gives me a spiff for my trouble. We are not owned like the coal miners; who were owned by the coal company and paid in company dollars that could only be used at the company store, they had it much worse. Also, I don't have to worry about black lung.

[AustinEyewear]

In the end, the data is that of their members who in turn are serviced by us as patients. So yes, they have the data on their members and likely use it to further their programs for the clients/members and ECP's. That's an inherent benefit they have over other manufacturers that do not have an insurance arm of their business. I doubt and see no reason why they would transmit any information back to other parties or manufacturers if that's what you're implying.

In terms of marketing to their members, I would hope they would. From a business standpoint, they own the client, their members and have that right and it would make complete business sense.

I see what you are saying. I was trying to make the same distinction of who owns who. (yes, own is not best word, but it serves its purpose for point of msg board discussion) I was thinking they are simply providing a service to their clients, which is insurance. Anything that the insurance must pay for, they have a right to know about, but do they have a right to do anything with that data other than use it as confirmation that the patient indeed had services performed so they can reimburse. The patient doctor relationship is a different one. Insurance is not necessarily required to establish it and most of the interaction that takes place is strictly pt/doctors. Was wondering if there was something in writing regarding this. My concern to other manufacturers really stemmed from some of the diagnostic equipment that saves pt info and is transmitted back to a lab, etc. Can this lab utilize this data for other things beside what we may think is intended. These diagnostic machine manufactures also have the ability to use the internet to update their software on the machine, and I'm sure, mine pt. data on the diagnostic machine.

[racethe1320]

No, VSP pays us in USD just at an exchange rate designed by VSP, they also bring clients to our door, yes they do sell directly to our patients but the were VSP members first. If I sell my VSP patients VSP owned frame and lenses VSP gives me spiff for my trouble. We are not owned like the coal miners; who were owned by the coal company and paid in company dollars that could only be used at the company store, they had it much worse. Also, I don't have to worry about black lung.

sounds like you're not very happy Paul. I'm sure VSP would prefer you be happy. Why don't you just leave the provider you're at and go to one that's not on the VSP Panel? I mean really, take action and stand up for what you believe in vs playing both sides and crying that you're a victim.

own is not best word, but it serves its purpose for point of msg board discussion.

LOL, I know...I used it purposefully to go fishing. Snagged a large mouth Utah Bass right away. One might even say Mr. Dobson just got owned. Catch-n-Release is quite fun.

[Paul Smith LDO]

sounds like you're not very happy Paul. I'm sure VSP would prefer you be happy. Why don't you just leave the provider you're at and go to one that's not on the VSP Panel? I mean really, take action and stand up for what you believe in vs playing both sides and crying that you're a victim

Quite the opposite, I learned many years ago, when a child, that a well balanced diet provides a healthier life style than gorging oneself on kool-aid and baloney.

[AustinEyewear]

No, VSP pays us in USD just at an exchange rate designed by VSP, they also bring clients to our door, yes they do sell directly to our patients but the were VSP members first.

Not disagreeing with you, but I want to point out we have many pts who were our pts before they were VSP ins. customers. It works both ways. They may later drop VSP and still remain our pt. My main thing I'm trying to determine is the minutia of who actually has a legal right to utilize the data. I think most situations the answer is obvious, but I have a hunch there are a few grey zones.

[Paul Smith LDO]

Not disagreeing with you, but I want to point out we have many pts who were our pts before they were VSP ins. customers. It works both ways. They may later drop VSP and still remain our pt. My main thing I'm trying to determine is the minutia of who actually has a legal right to utilize the data. I think most situations the answer is obvious, but I have a hunch there are a few grey zones.

The doctors records are the doctors, they are required to maintain and store them for a prescribed period of time. The additional information that you are required to provide VSP with is theirs. Call it co-management. The bottom line is that they have the info along with the means and ways. There is enough evidence out there to support the notion that VSP is transforming into something other than a conventional discount managed insurance plan. Internet and on line eyewear sales should give you some idea as to the direction VSP is moving toward.

[optical24/7]

Out of the top 3 vision care insurances, VSP is the only one that does not own their own locations (except for at a select few large corp headquarter locations). The most logical step for them would be to buy up small to medium regional or small national chains and create their own (locations). I'm sure they will tackle internet providing also, but I doubt they will center their business strategy around it.


They need B&M's for the entire range of services they offer/wish to offer. I'm sure there are savy OD's out there opening up location after location with the full intent of selling their stores to them.

[racethe1320]

Quite the opposite, I learned many years ago, when a child, that a well balanced diet provides a healthier life style than gorging oneself on kool-aid and baloney.

Too bad your parents didn't raise you to be a doctor or business owner vs an employee working for someone else. Hey, I'm sure Mark pays you well enough though. Probably could pay you more if you actually pulled in some of those VSP Dollars you're so against though. He'll learn sooner or later the impact it's having.

There is enough evidence out there to support the notion that VSP is transforming into something other than a conventional discount managed insurance plan. Internet and on line eyewear sales should give you some idea as to the direction VSP is moving toward.

You don't need evidence to spot their transformation. Just talk to them and they'll tell you that and even clarify what is to come. Of course they are becoming more than a managed care company. They are evolving as many here are too. Change or die as they say.

[AustinEyewear]

Out of the top 3 vision care insurances, VSP is the only one that does not own their own locations (except for at a select few large corp headquarter locations). The most logical step for them would be to buy up small to medium regional or small national chains and create their own (locations). I'm sure they will tackle internet providing also, but I doubt they will center their business strategy around it.

They need B&M's for the entire range of services they offer/wish to offer. I'm sure there are savy OD's out there opening up location after location with the full intent of selling their stores to them.

I wonder?? If they can just control the labs, the products, and the customers, why bother with a B&M. Too much risk, too little reward, margins too thin, head counts too high. I can understand how LUX got into the business, but that was way back and didn't control the vision ins market. The best chance for success in mass retailing these days is very low cost products, with very high markups, i.e. Walmart, Costco.

[optical24/7]

I wonder?? If they can just control the labs, the products, and the customers, why bother with a B&M. Too much risk, too little reward, margins too thin, head counts too high. I can understand how LUX got into the business, but that was way back and didn't control the vision ins market. The best chance for success in mass retailing these days is very low cost products, with very high markups, i.e. Walmart, Costco.

I disagree, they are leaving money on the table not owning their own opticals/clinics. Think of the profit you make, your own office as example. They can discontinue the mom and pop providers they have around their new location which would funnel even more customers to their corporate stores. Why do you think Highmark bought EyeMasters now Vision Works? Highmark doesn't only make money off Davis clients for sure.

With synergies of manufacturing down to consumer sales it make perfect sense.

[racethe1320]

I wonder?? If they can just control the labs, the products, and the customers, why bother with a B&M. Too much risk, too little reward, margins too thin, head counts too high. I can understand how LUX got into the business, but that was way back and didn't control the vision ins market. The best chance for success in mass retailing these days is very low cost products, with very high markups, i.e. Walmart, Costco.

VSP isn't likely looking at Retail for the sake of profits. VSP IS Private Practice guys. IMO they need it to secure the future and they know it. Do you have interns at your locations(s)? I have a HUGE University near us and the percentages of graduates/interns with an interest let alone the ability to afford their own practice out of the gate is dwindling. That leaves them to work for retail from Lux or the other big boys. Combine that with the fact that none of their independents have a real 'brand' other than the top 2% of large multi location practices 20+ that is....and even those are regional.

So what's the answer? IMO, spring up a VSP Branded franchise to compete and allow students to transition into an ownership role. There would be lots of ways to do that thus securing the future of private practice and then also simultaneously lock down the materials and services business so that it's not going to non-VSP benefiting entities. None of us want Essilor to control that and they really shouldn't considering they aren't the ones winning the clients. That's why I'm not surprised at the Pearl move.

Everyone here doubting this needs to seriously put their business hats on. The millennial coming out of school out number most of you baby boomers and definitely outnumber those of us who are your parents. Did I just call myself really old? It's about the future and securing private practice 10-20yrs from now and maximizing control of the benefits for their client members today and tomorrow. If they wanted to do the retail play for the sake of competing with private practice they could have done that already years ago. I know that's not their play. Again, they will likely make a serious retail play but not for the sake of competing.