In a recent letter to VSP providers, VSP says:
a) It's a competitive market (duh!)
b) They've lost some business to "retail friendly plans" (read EyeMed)
c) To compete, they're dictating some changesin reimbursements (ie: you're going to suffer)
VSP's solution is to increase the discount on 2nd pair sales for eyewear purchases on the same day as an exam from 20% to 30%; Move more contacts to tiered pricing; and eliminate the $2 case fee and the patient supplied frame fee.
Oh…the good news is that they did promise to allow you to provide in-office finishing for select programs beginning in early 2010 (no details). Perhaps VSP is reading my blog:)
What VSP is really saying here is that, because they want their premium income to rise and they're challenged to sell against a price competitor, Providers are, once again, going to take it in the shorts.
What's interesting is that these changes appear to have little impact on VSP premium pricing. They're modifications that will be perceived by employers and consumers as enhancements but which seemingly carry little cost toVSP…they come from the Provider.
VSP, if you're really worried about competition, why not simply reduce your employer 401k contribution from an outrageous 15% of payroll to the more standard 3%. Based on just that action, my simple math indicates that you could roll back premiums to employers by about 2%. Then, add in the $75,000 company cars for management and all the other outrageous benefits that you give your employees and I'll bet you could roll back premiums by as much as 5% WITHOUT TAKING A DIME FROM YOUR UNDERPAID AND UNAPPRECIATED PROVIDERS.
This reminds me of the scene from Fiddler on the Roof in which the beggar is shouting "alms for the poor" and the rabbi hands him one Kopeck. The beggar says, in response, "but Rabbi, last week you gave me two Kopecks" The rabbi retorts "I had a bad week"…to which the beggar responds, "so you had a bad week, why should I suffer!"
VSP, it's time for you to suffer along with your Providers. Tighten your belt, just as you have continually forced belt-tightening on your Providers. It's time to share in the pain instead of operating like Fat Cats and living off the largesse of your Providers.