VSP GLOBAL ANNOUNCES ITS ONLINE OPTICAL STORE, eyeconic.com

[kcount]

Curious of everyone's thoughts.


KC

VSP GLOBAL ANNOUNCES ITS ONLINE OPTICAL STORE, eyeconic.com

Beta Test Set to Launch in February

RANCHO CORDOVA, Calif.- January 24, 2011 – VSP GlobalSM announced it will launch a live beta test of eyeconic.comTM, an online optical retail store, on February 18, 2011 with 8,600 small California VSP® Vision Care clients. The beta will enable 473,000 VSP members to use eyeconic.com to purchase contact lenses, prescription eyewear and sunwear.

eyeconic.com is designed to enable independent eyecare providers to compete with online optical retailers. After the beta test is completed, eyeconic.com will make any additional changes needed and then launch the site to all 55 million VSP Vision Care members. Both members and consumers will have the ability to order contact lenses and browse, select, virtually try-on, and purchase sunwear and prescription eyewear using the Marchon® and Altair® portfolio of products. Additional frame brands may be available in the future. These transactions will support independent eyecare providers by:

• Referring consumers shopping online back to their office;
• Generating revenue for VSP practices;
• Connecting new patients with high quality eyecare;
• Giving providers a new channel for second pair, sunglass and contact lens sales.

"We've heard and understand the concerns doctors have regarding online sales, especially the fear of reducing patient visits," said David Plevyak, Vice President of Business Development and leader of VSP's online initiative. "Recognizing the online optical space is growing rapidly, we’re confident that eyeconic.com is the right online partner for independent eyecare providers. We're making them an integral part of the online solution by referring patients to independent eyecare providers, generating revenue for providers and by offering a virtual extension of their dispensary."

VSP Global developed eyeconic.com to address key issues impacting independent eyecare providers including:

• A change in consumer purchasing behaviors;
• A growing amount of direct revenue being lost by independent eyecare providers to online purchases;
• A growing need for doctors to generate a steady stream of non-office based revenue.

Plevyak added, “eyeconic.com will be the only player in the online optical marketplace that will offer the ability to use a VSP Vision Care benefit to purchase a mix of brands and prescription lenses including proprietary coatings and options. We believe there’s a growing market for this type of offering and look forward to providing VSP Vision Care members with a world-class online browsing and buying experience that will connect them back to their local independent eyecare provider. Also, purchases made on eyeconic.com will generate revenue for independent eyecare providers.”

Plevyak concluded, “For the 27,000 VSP eyecare providers, eyeconic.com will enable them to compete more effectively in the market. VSP has created a premium frame board for our members, while marrying it with our high quality doctor/patient experience and cutting edge lab services.”

VSP network doctors will find additional details at VSPOnline on eyefinity.com.

###

About VSP Global
VSP Global includes VSP Vision Care, the largest not-for-profit vision benefits and services company in the United States with 55 million members; Marchon Eyewear Inc., one of the world’s largest manufacturers, designers and distributors of quality fashion and technologically-advanced eyewear and sunwear; Eyefinity®/Officemate® which offer innovative solutions and the premier management software and technology to improve overall practice management and patient experience; VSP Labs, industry leaders in new technologies, production processes, service and logistics. Since 1997, VSP has provided more than 603,000 low-income, uninsured children with free eyecare. Through relationships including those with the American Diabetes Association and Prevent Blindness America, VSP promotes the importance of annual eye exams for maintaining eye health and overall wellness.



(Oh, and how can VSP still call themselves 'not-for-profit'? They lost the supreme court case.)

[Barry Santini]

Perfect! Under the guise of "supporting/helping" indie ODs, they're gonna help these ecps to lose even more profits.

It's not about competing with online, as if that is a level playing field. It's about getting to the high ground, above the swirling waters and rapids of the race-to-the-basement.

U wanted insurance? U GOT IT!

Enjoy!

B

[obxeyeguy]

also, purchases made on eyeconic.com will generate revenue for independent eyecare providers.”

roflmao

[drk]

Posted about this before.

Remember that Marchon sells direct to consumer, now. Online.

Luxottica sells direct, too. Bricks.

Safilo? As soon as they can.

Sad, greedy world.

[kcount]

Didn't Gordon Geco Tell us Greed is good?

I'm curious as to how VSP is going to structure the deal for VSP docs. Is this going to be a purchase online pick up at the office type of thing so the Office gets the dispensing fee? How long until Dr. John Q. figures out he cant run an office on dispensing fees.

As a non network guy I just find this interesting.Ultimately I still feel there is a finite number of people that buy on-line and thoe people are looking at price not value/service. Still, its interesting and something I'll keep on my radar. In the end it will prompt everyone to charge seperately for after sale service.

[MikeAurelius]

So, where are these on-line patients going to get their PD measured?

[kcount]

So, where are these on-line patients going to get their PD measured?

I'm sure VSP will strong arm the Panel doctors into giving the PD up.

[Barry Santini]

I'm sure VSP will strong arm the Panel doctors into giving the PD up.

Why, online, of course?!

Digital Photo Uploads are, for the most part, ANSI compliant.

Barry

[MikeAurelius]

So, what's that going to do to the "I want my PD please, I'm ordering on-line with VSP" questions? Still going to refuse to give it out (I'm not wanting another flame war, just curious if this changes anyones opinion).

[drk]

I can't wait to find out what they think my role will be.

Greed is not good. Capitalism will not work unless the individuals within it exercise their own (commonly-held) morality. We can't play "win-lose" instead of "win-win". It won't work.

Granted, we are in a phase of globalism where what is fair in the Persian bazaar is different than Main St USA, and in a phase where peoples' value systems are self-made vs. a universal external standard. Capitalism groans under this new strain.

The result is centralized imposition of rules of the game, and that goes against the beauty of the free market and capitalism. You're seeing that, now.

[Uncle Fester]

I can't wait to find out what they think my role will be.

Sucker? :p

[ThatOneGuy]

It's a shame that people are reading in to the online ordering thing likes it is the end all, be all. How many internet grocery stores have gone out of business from lack of demand. Remember Steve Jobs when he came back to apple so many years ago? "We realized that for Apple to succeed, Microsoft doesn't have to fail."

We aren't going out of business just because some patients spent some discretionary dollars online.

[racethe1320]

(Oh, and how can VSP still call themselves 'not-for-profit'? They lost the supreme court case.)
[/I]

Can't comment on the case, but they way they function is still based on acting as not-for-profit.

They do not distribute surplus funds to owners or shareholders, but instead uses them to help pursue its goals and fund the development of their various companies.

Ownership is the quantitative difference between for- and not-for-profit organizations. VSP does not have private owners. They have controlling board, etc...but you know that.

Just because they are no longer tax exempt any longer doesn't mean they can't qualify and call themselves a not for profit company. All that's happened is as they've grown as an organization they no longer meet the requirements to be tax exempt as set forth by the IRS.

[Matthew]

There are 3 companies that I have watched grow into dangerous monsters. Its only going to get worse..

VSP

Luxottica

Essilor

They are totally into lining their own pockets and dont care about you. As much as they say they care, they dont...

They use us like a tool to fuel their machine...

And we keep giving them money! :finger:

[Java99]

I think this is going to be an ugly mess and we're all going to spend a lot of time on the phone with VSP, or whomever made the glasses that get brought back to us to fix.

[racethe1320]

There are 3 companies that I have watched grow into dangerous monsters. Its only going to get worse..

They are totally into lining their own pockets and dont care about you. As much as they say they care, they dont...They use us like a tool to fuel their machine...

So please elaborate on how you feel VSP is lining their own pockets without in return giving back back to you. Better yet, please outline a solution of things you would like to see them provide you. What do you want?

Please explain how they are not supporting you? Include if you are an Optician owned facility or not.

[kcount]

Can't comment on the case, but they way they function is still based on acting as not-for-profit.

They do not distribute surplus funds to owners or shareholders, but instead uses them to help pursue its goals and fund the development of their various companies.

Ownership is the quantitative difference between for- and not-for-profit organizations. VSP does not have private owners. They have controlling board, etc...but you know that.

Just because they are no longer tax exempt any longer doesn't mean they can't qualify and call themselves a not for profit company. All that's happened is as they've grown as an organization they no longer meet the requirements to be tax exempt as set forth by the IRS.

Hello Racethe1320,

I have waited to respond to your comment as I wanted to do some research instead of blurting out a knee jerk response. After some time I can tell you I probably know more about VSP and it's court dealings than anyone should ever know. That being said lets do some review.

In September 2004, the parent VSP filed suit in the U.S.
District Court for the Eastern District of California,
asserting a claim for recovery of corporate income taxes it
paid for the 2003 tax year. VSP had been granted tax
exempt status under Section 501(c)(4) in 1960, but the IRS

revoked VSP’s status beginning with the 2003 tax year.

VSP argued that it was entitled to an exemption under
Section 501(c)(4) because its operational model promoted
the social welfare purpose of ‘‘health.’’ It promoted
health, VSP argued, by arranging for high-quality vision
care to be provided to millions of enrollees. See VSP’s
Mot. for Summ. J. in Calif. case (doc. 63), pp. 23-27. VSP
stressed that its health plans reached ‘‘broad segments of
the community,’’ including small employers, the elderly,
and low-income individuals, and that it provided services
at a discount to participants in Medicaid and Medicare.
See id., pp. 27-30. VSP additionally argued that it
was entitled to an exemption because of its charity work
and community outreach efforts in California, including
Sight for Students, disaster relief, Vision USA, Health

Care Vision, and Get Focused.

The District Court would find for the US Government citing;

VSP operated primarily for
the benefit of its members, not for the community as a
whole:
[E]ven though there may be aspects of the organization
that greatly benefit society, if the majority of
the organization’s services benefit private members,
the organization cannot qualify for an exemption
under 501(c)(4). . . . [T]he fact that an organization
promotes health care, or is part of the health
care industry, does not, alone, ensure exempt status
within the tax code. . . . [T]he court concludes that
despite VSP’s charity work, the membership-based
structure as well as the types of services offered,
demonstrate that VSP’s primary activity is not the

promotion of social welfare.

(source, http://www.taxanalysts.com/www/websi...eotrsample.pdf pg. 93)

This is important in our conversation because this statement outlines the requirement to be a 'Not-For-Profit' organization. The part to take note of is that a not-for-profit must benefit the greater community. As seen here in the tax code.

The general concept, however, can be expressed as follows:

• Organizations that promote social welfare should primarily promote the common good and general welfare of the people of the community as a whole.
• An organization that primarily benefits a private group of citizens cannot qualify for IRC 501(c)(4) exempt status.

(Source, http://www.irs.gov/pub/irs-tege/eotopici03.pdf pg. 5)

It's that second bullet point that catches VSP. You see VSP has a private community of members. Because of it's membership structure it can't be a not-for-profit.

Where it all gets fun is that the founders of VSP seem to have realized this as evidenced in there articles of incorporation;

Under VSP’s articles of incorporation, ‘‘the specific
and primary purpose for which [VSP] is formed is to
defray and assume the costs of professional vision care,
by establishing a fund from periodic payments by subscribers
or beneficiaries, from which fund said costs may
be paid.’’ Feb. 29, 2008 Decl. of Pamela Grewal, Ex. 4
(Restated Articles of Incorporation of Vision Service Plan,

§ II).

(source, http://www.taxanalysts.com/www/websi...eotrsample.pdf pg.92)

So there we go, thats the back history of the case. To your point that VSP still operates as a not-for-profit, I would agree, as would lead council for VSP as seen here;

VSP General Counsel Thomas Fessler said the benefits provider was disappointed in the decision, but that the ruling would not affect its operations. “We will continue to operate as a not-for-profit organization with no service disruptions in vision care or coverage for our members, clients and doctors,” Fessler said. He also added that VSP’s charitable efforts would continue as well.

(source, http://www.ranchocordovapost.com/200...exempt-status/)

As to your statement that "They do not distribute surplus funds to owners or shareholders, but instead uses them to help pursue its goals and fund the development of their various companies." I can't really respond. The truth is that VSP does not issue financial statements as it is a privately held company. Which of course goes to your statement of ownership.

"Ownership is the quantitative difference between for- and not-for-profit organizations. VSP does not have private owners. They have controlling board, etc...but you know that."

I believe I have already covered this statement with the posting if the IRS rules regarding not-for-profit. Leave it to say ownership is not the quantitative difference.

Finally lets take a look at your last statement that "Just because they are no longer tax exempt any longer doesn't mean they can't qualify and call themselves a not for profit company. All that's happened is as they've grown as an organization they no longer meet the requirements to be tax exempt as set forth by the IRS."

First, because they are no longer tax exempt as a not-for-profit they should not be calling themselves as such. Doing so only paints them as something other than what they are. The greater public see's not-for-profit corporations as being altruistic in mission. VSP, although they do have some charity programs, is something very different.

Secondly, The size of a not-for-profit has no bearing on its ability to operate as a not-for-profit. I am sure The Red Cross is infinitely larger than VSP, yet they have never been challenged as to their status. The Red Cross is a $3 Billion organization for reference. (source, http://www.bbb.org/charity-reviews/n...hington-dc-679)

So, after all this, I still maintain that VSP should not be advertising that it is a not-for-profit. VSP is ,by any measure, a for-profit organization. It is wholly owned by VSP Global which in turn is a for-profit organization with holdings in every level of eyecare servicing and delivery. The only difference between VSP and Luxottica Group is at least Luxottica is more honest about their intentions.

[racethe1320]

Hello Racethe1320, I have waited to respond to your comment as I wanted to do some research instead of blurting out a knee jerk response. After some time I can tell you I probably know more about VSP and it's court dealings than anyone should ever know. To your point that VSP still operates as a not-for-profit, I would agree, as would lead council for VSP.

So then in the end you see that VSP is operating and allowed to do so, as a not for profit.

As to your statement that "They do not distribute surplus funds to owners or shareholders, but instead uses them to help pursue its goals and fund the development of their various companies." I can't really respond. The truth is that VSP does not issue financial statements as it is a privately held company. Which of course goes to your statement of ownership.

Not sure how they file or publish financial statements, but I can tell you they are not privately held. Holdings and profits are governed by their 12 board members and ultimately they determine the actions of the companies under the Global Umbrella, not the individual company CEO’s. They are not a private company.

Finally lets take a look at your last statement that "Just because they are no longer tax exempt any longer doesn't mean they can't qualify and call themselves a not for profit company. All that's happened is as they've grown as an organization they no longer meet the requirements to be tax exempt as set forth by the IRS."First, because they are no longer tax exempt as a not-for-profit they should not be calling themselves as such. Doing so only paints them as something other than what they are.

Not true. Just because they are not tax exempt doesn’t mean they are not functioning and able to state they are a not for profit. In the end the profits are not put into anyone or groups pockets. The funds are all funneled back into the company to run and meeting their corporate goals to support private practice.

Secondly, The size of a not-for-profit has no bearing on its ability to operate as a not-for-profit. I am sure The Red Cross is infinitely larger than VSP, yet they have never been challenged as to their status. The Red Cross is a $3 Billion organization for reference.

The Red Cross is much smaller. VSP is just over $4B. in size. That's as of 2009. Not sure yet how they finished in 2010.

So, after all this, I still maintain that VSP should not be advertising that it is a not-for-profit. VSP is ,by any measure, a for-profit organization. It is wholly owned by VSP Global which in turn is a for-profit organization with holdings in every level of eyecare servicing and delivery. The only difference between VSP and Luxottica Group is at least Luxottica is more honest about their intentions.

So it’s your opinion that they are not a not for profit. Okay. I’m fine with that.



VSP global is hardly similar to Luxottia. Not in the slightest. Lux is very clearly a publicly traded company with shareholders to please and who directly benefit from the profits they turn. If you feel they are the same, please share with us the primary shareholders. Please share with me their name they are traded under. I’ll save you time, they are not. Please, share with me where you see similarities.


Lux bought Eye Med to funnel their major target of retail business (frames) to THEIR various corporate stores.

VSP in turn directs their customers and their employees to nearly 28,000 and growing ECP’s that qualify for their panel

Lux partners with Essilor to direct business to THEIR stores.

Eye Med is going after VSP corporate clients and clearly directs their employees to retail NOT ECP’s.

VSP instead reworded their Out of Network offerings and extended a retail “option” to “select” clients so that they would in turn maintain over 95% of those employees within the private practice word.

Esslior acquired an online frame retailer and other business to direct business to who? Certainly not private practice docs.

VSP in turn is creating an online portal that will capture clients already shopping online and direct 100% of them BACK to private practice and will in turn reimburse the practices at a very lucrative rate. Espicially considering VSP is supporting and developing the entire site/sites and marketing behind them.

VSP partners with Esslilor, Zeiss and others to create co-branded products ONLY available to panel docs, thus 100% supportive of their ECP’s.

VSP even has completely private brand products that are available only to their practices.

I could go on and on but I’m still curious as to how VSP isn’t supporting their panel docs.

I understand you’re not a panel member, but that’s nothing to hold against VSP. You knew where you stood when you opened your doors.

Thanks for the good discussion.

[kcount]

So then in the end you see that VSP is operating and allowed to do so, as a not for profit.



Not sure how they file or publish financial statements, but I can tell you they are not privately held. Holdings and profits are governed by their 12 board members and ultimately they determine the actions of the companies under the Global Umbrella, not the individual company CEO’s. They are not a private company.



Not true. Just because they are not tax exempt doesn’t mean they are not functioning and able to state they are a not for profit. In the end the profits are not put into anyone or groups pockets. The funds are all funneled back into the company to run and meeting their corporate goals to support private practice.



The Red Cross is much smaller. VSP is just over $4B. in size. That's as of 2009. Not sure yet how they finished in 2010.


So it’s your opinion that they are not a not for profit. Okay. I’m fine with that.



VSP global is hardly similar to Luxottia. Not in the slightest. Lux is very clearly a publicly traded company with shareholders to please and who directly benefit from the profits they turn. If you feel they are the same, please share with us the primary shareholders. Please share with me their name they are traded under. I’ll save you time, they are not. Please, share with me where you see similarities.


Lux bought Eye Med to funnel their major target of retail business (frames) to THEIR various corporate stores.

VSP in turn directs their customers and their employees to nearly 28,000 and growing ECP’s that qualify for their panel

Lux partners with Essilor to direct business to THEIR stores.

Eye Med is going after VSP corporate clients and clearly directs their employees to retail NOT ECP’s.

VSP instead reworded their Out of Network offerings and extended a retail “option” to “select” clients so that they would in turn maintain over 95% of those employees within the private practice word.

Esslior acquired an online frame retailer and other business to direct business to who? Certainly not private practice docs.

VSP in turn is creating an online portal that will capture clients already shopping online and direct 100% of them BACK to private practice and will in turn reimburse the practices at a very lucrative rate. Espicially considering VSP is supporting and developing the entire site/sites and marketing behind them.

VSP partners with Esslilor, Zeiss and others to create co-branded products ONLY available to panel docs, thus 100% supportive of their ECP’s.

VSP even has completely private brand products that are available only to their practices.

I could go on and on but I’m still curious as to how VSP isn’t supporting their panel docs.

I understand you’re not a panel member, but that’s nothing to hold against VSP. You knew where you stood when you opened your doors.

Thanks for the good discussion.

Obviously you and I will have to agree to disagree.

Interesting your argument has nothing to do with the legal position but everything to do with the marketing.

Good luck in your endevours.

[racethe1320]

Obviously you and I will have to agree to disagree. Interesting your argument has nothing to do with the legal position but everything to do with the marketing.

I simply responded to your comment:
"The only difference between VSP and Luxottica Group is at least Luxottica is more honest about their intentions. "

Guess I'm not sure what you expected. Even looking at comparing VSP to Lux, I can't see any similarities from a legal position.

Feel free to point me in the direction of where you would like to discuss things further if you do. Just here for a good conversation.

[kcount]

I simply responded to your comment:
"The only difference between VSP and Luxottica Group is at least Luxottica is more honest about their intentions. "

Guess I'm not sure what you expected. Even looking at comparing VSP to Lux, I can't see any similarities from a legal position.

Feel free to point me in the direction of where you would like to discuss things further if you do. Just here for a good conversation.

Well, I post a fact based and evidential responce. you post a view point, with no data to substantiate your position. If you want to have a discussion come to the table with data, not opinion. you state that VSP is $4B. Where did this number come from? Your comment that I stated that VSP is not-for-profit is obsurd. The context and conclusion of my post states catagorically that VSP is a for-profit enterprise, marketing itself as otherwise.
The comment that I may have issue because "I understand you’re not a panel member, but that’s nothing to hold against VSP. You knew where you stood when you opened your doors." would denote that I hold a grudge against VSP. The reality is that I am a provider for VSP! My connection to them is as it should be, an independant. I am not owned nor controlled by them. Less than 1% of my gross revenues comes from VSP and as such I am not beholden to them for traffic. I hold no grudge against them, although I wish they would see owner/operators that are opticians as collegues not foes.

KC



Truely racethe1320, I begin to wonder what your relationship is with VSP.

[FVCCHRIS]

We've been operating for about 3-4 years now as a "Not-for-Profit". A few more years like these and who knows what our "status" will be...

Does the I.R.S. have some special deals for us "Workin'-for-Food" companies??

[racethe1320]

Well, I post a fact based and evidential responce. you post a view point, with no data to substantiate your position. If you want to have a discussion come to the table with data, not opinion. you state that VSP is $4B. Where did this number come from?

I think you already know.

Your comment that I stated that VSP is not-for-profit is obsurd. The context and conclusion of my post states catagorically that VSP is a for-profit enterprise, marketing itself as otherwise.

Then we will have to agree to disagree. Trust me when I say as confidently as you would in my shoes, I know I'm right.

would denote that I hold a grudge against VSP. The reality is that I am a provider for VSP!

I never meant to imply you have a grudge, only that you already knew the fact I pointed out.

although I wish they would see owner/operators that are opticians as collegues not foes.

Cool....and now and in the past I've openly agreed about their view of opticians. As I've also said, I think you will find that changing and that many there feel the same.

Truely racethe1320, I begin to wonder what your relationship is with VSP.

Very similar to you.

[DragonLensmanWV]

VSP in turn is creating an online portal that will capture clients already shopping online and direct 100% of them BACK to private practice and will in turn reimburse the practices at a very lucrative rate. Espicially considering VSP is supporting and developing the entire site/sites and marketing behind them.


This is one thing I have a problem with. I'm a VSP provider, but I carry nether Altair nor Marchon frames and never will. As I understand it, this "favor" VSP is doing for us is in reality, only a favor for themselves since apparently their online offerings will be only from those manufacturers. So how are they going to work this if a VSP member picks a Marchon frame and is 100% directed back to me, and I refuse to carry that line, what happens then? Will they be redirected to my competition?
That is what seems to me to be rather Lux-like, as well as Essilor-like to only show their products online, as well as their online web redirections.
This is a good discussion, and I am leaning towards K's assessment.

[MikeAurelius]

VSP in turn is creating an online portal that will capture clients already shopping online and direct 100% of them BACK to private practice and will in turn reimburse the practices at a very lucrative rate. Espicially considering VSP is supporting and developing the entire site/sites and marketing behind them.


This is one thing I have a problem with. I'm a VSP provider, but I carry nether Altair nor Marchon frames and never will. As I understand it, this "favor" VSP is doing for us is in reality, only a favor for themselves since apparently their online offerings will be only from those manufacturers. So how are they going to work this if a VSP member picks a Marchon frame and is 100% directed back to me, and I refuse to carry that line, what happens then? Will they be redirected to my competition?
That is what seems to me to be rather Lux-like, as well as Essilor-like to only show their products online, as well as their online web redirections.
This is a good discussion, and I am leaning towards K's assessment.

My guess would be that if you want the sale, you better carry Marchon frames... in other words, if you want to participate in this program you had better be a good little lemming and do what the master says.