I came across this interview of VSP’s CFO. It’s interesting reading and provides some insight into the thinking of your largest customer (for those readers who are private practice optometrists). Some observations:
a) It’s interesting to note that VSP describes themselves as a “provider.” Funny, I thought they were an insurance company. Not once did the interviewee describe how VSP works with providers. This supports my theory that VSP believes that they own you.
b) Note the discussion about how important their financial control system is. Take a lesson from that…invest in yours. Margins are eroding and those of you who receive timely and accurate financial information will be rewarded.
c) Note the discussion about how their financial control system allowed them to identify unprofitable products and eliminate them. Do you have the same ability? Further, I wonder if they anayze the profit impact of their products on their providers…doubtful.
d) Note that VSP is seeing huge claim volume, and blame it on folks using their benefits before they lose their job. This confirms an observation that I communicated last fall. Eyecare and eyewear will see (and is seeing) strong demand among the independent providers due to Flex Plan spending (at year end) and benefit demand closer to eligibility. In years past, when consumers had more confidence, they likely didn’t use their eyecare benefits immediately as they became eligible. With jobs threatened, this is happening. The inverse of this is the possibility that demand will deteriorate later this year.
What other lessons can you derive from this post?
VSP’s CFO Discusses Budgeting in Uncertain Times
Among the different subjects touched upon in our upcoming Business Finance interview with Patricia Cochran, CFO of Vision Service Plan, we thought Patricia’s comments surrounding budgeting and forecasting may hold special interest to finance professionals at large. Here’s a short excerpt:
Steve Player: Tell me a little bit about what VSP does, for those of our readers who may not know which eye care plan they’re actually using.
Patricia Cochran: VSP stands for Vision Service Plan. We provide eye care as an employee benefit. We’ve been in business a long time