In a recent news release, VSP announced that they’re expanding their “affiliate program” begun with Costco last October. The new agreement is with HVHC’s 545-unit Eye Care Centers of America retail group.
Interesting!
Eye Care Centers of America, which operates stores across 39 states plus the District of Columbia, includes retail brands EyeMasters, Visionworks, Vision World, Dr. Bizer’s VisionWorld, Dr. Bizer’s ValuVision, Doctor’s ValuVision, Hour Eyes, Stein Optical, Eye DRx, and Binyon’s.
Oh…and by the way, the HVHC Vision Group also includes Davis Vision and Viva International Group.
In case you miss the nuance (kick in the head), please allow me to translate…VSP is doing a deal with one of their largest competitors both in vision plans and eyewear. Davis Vision is the third largest vision plan in the nation.
So, why would the largest vision plan provider do a deal with the third largest vision plan provider? Why not a deal with another retailer that doesn’t own vision plans or one of the largest frame companies in the world? Why do a deal with your direct competitor?
It appears clear to me. VSP has reported competitive and growth challenges. As I’ve said in the past…”if you can’t beat them, buy them out.” I predict that this is an engagement that will lead to marriage.
Dear private practice VSP provider,
Why are you still supporting a corporation that has, for the last 10 years, been progressively adopting policies that hurt private practice optometry?
Are you so afraid of losing barely-profitable patients that you are unwilling to make a stand for your profession?
If you continue to provide care for this entity, your practice will end up exactly where you should plainly see it is headed.
Sincerely,
-Donald W. Furman O.D.
So Al, why do you suppose VSP would need to offer ECCA as an option to their clients?
Why would an ECP even care? They couldn’t possibly be hurt by the client going to EyeMed could they? I mean EyeMed directs their clients to private practice right? Who owns EyeMed? Who owns VSP?
So you’re saying that the deal here is with the Retail Group or is with the Davis Vision Insurance Group? How does HVHC Vision Group and Viva International Group all fit into this? Do they? Why are you so unclear on this? You’re more confusing and cryptic than any insurance plan I’ve worked with.
It actually appears that you had that” kick in the head” land right on your temple if you aren’t able to understand the changes in the marketplace that have led to this. You’re probably a little short sighted too if you can’t see how not doing anything would be worse.
So why would VSP need to allow their clients an option to choose ECCA as a possible choice along side the private practice ECP ? You don’t suppose clients were telling VSP that if they didn’t Pony up a comparable offer to EyeMed’s offering that they were out the door do you? Hmmm……have you personally talked to these benefit managers that are part of the program to get their take?
What other retailers would you have suggested Al? Why? What would their benefits be? What about the drawbacks? How would both compare to using ECCA?
It all appears clear to you? Really? I’ve not read too much in the way of facts to support your clarity. I’ve asked a number of questions that beg you to expound upon.
There is little doubt that VSP is feeling the competitive pressure of EyeMed and others. Welcome to business. As to their rationale for choosing ECCA vs. another, I’m afraid I wasn’t included in that decision process. But why not Refac (JC Penneys, Macys, BJs, etc)?
But my blog post wasn’t about the rationale behind VSP’s move. Indeed, if I were VSP and “owned” 25,000 optometry offices, I’d look to “own” a bunch of commercial establishments, too. As I’ve stated before, I think VSP is a genius company, yessir. VSP quietly inserted themselves into private optometry as a non-profit designed to benefit the profession. Then they quietly changed their structure and used their providers’ money to become a big business focused on benefiting their officers, directors and employees. Pure genius!
If you’ll re-read my post, I simply opined that it would appear a logical move for VSP to acquire HVHC. Davis provides a lower end product for VSP. Viva fits with Marchon. And the 800# Gorilla continues to dominate.
I don?t work for VSP to know the inside, but looking at the choices, my guess is they consulted with their clients to find out what they were looking for in terms of specific criteria that would then permit them to offer a ?choice? of a retail provider that would sit along side their panel docs. Makes sense, it?s not what VSP or you or even me wants. It?s the Client. IMO, they made a good choice. 545+ retail shops vs 28k+ docs, many with multiple offices, not a huge threat to to their core ECP?s, yet allows them to bid on contracts and not get shut out. Hmmm?win win.
In the end, if the money is equal isn?t it up to each of us as ECP?s to insure the client chooses us vs them anyway? In the end VSP isn?t promoting retail, they are still standing true to Private Practice and in fact are putting way more efforts in place, rather quickly too, that do just that. Support private practice.
Interesting that you say VSP ?owns? these optometry offices. I bet 28k doctors would disagree with you on that. I certainly do. I own my practice. The other blog sites and message boards are loaded with people touting ?they? decide and ?they? drive patients to their offices.
I also find it interesting that you imply VSP wants to ?own? the ECCA offices. Why? They already have a set of retail outlets that they don?t have to own. Their own ECP?s are their retail partners and the upside is they don?t have to ?own? them in order to support them.
Why would VSP want the hassles of owning a brick and mortar? I?m sure Lux isn?t too happy about the costs and efforts it takes to run and maintain and staff such a retail operation either. In fact that?s why you see so many promoting online as much as they do. Again, I don?t follow your logic in thinking VSP is out to own a retail chain. The cost model doesn?t make sense. I see them as pursing the materials side of the business more and more further up the food chain. Make way more sense all the way around. It also enables them to support their ECP?s a lot more too.
You talk with an interesting slant that borders on the pessimistic side. Why so negative Al? I don?t see how VSP did anything quietly. What makes you use that term? In the many years I?ve been them, I think they have been pretty open and transparent. Although, I?m pretty involved and vocal to ask on things that I?m unclear about.
In terms of their profits, you indicate that their Mgt. Team and Employees are the only ones benefiting. Really? Are they the shareholders? Are their employees the highest paid in this industry? Do they have secret stock options somewhere? Why is it you haven?t shown the many ways VSP has used their profits and earnings to benefit their ECP?s and to battle EyeMed? I know you are smart enough and have enough insight on them, so why not share them?
I did re-read your post and have no comment either way on the logic behind VSP to Acquire Davis on the Insurance side. I?m sure if it offered them a lucrative way of gaining market share on EyeMed and a means to deliver product that would in turn support their core values, then it might be something they should consider. Again, I really have no comment other than I don?t see VSP as the 800lb Gorilla. In fact of all the Gorilla?s they are by far the smallest. Using that number they are really only about 100lbs if that. By far smaller than all the rest. They are also the ONLY one that supports private practice as we know it. Just look over to Europe, Australia, etc.. and tell me what the landscape looks like. It?s scary for those of us that are holding our own. What?s the one thing those markets lack? VSP.
Absolutely brilliant move by VSP. I wholeheartly agree with your comment Al. Looks I’ll need to rethink my position on joining Davis. This may become a backdoor entre to becoming a VSP provider in the future.