A Crisis Brewing: Vision Plans, COVID-19, & The Future of Optometry
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VSP made waves last month

They announced that they were dropping reimbursements...

...by a colossal 50% for doctors who sell “non-preferred” lens products. (This follows an earlier attempt a few years earlier to reduce reimbursements, also by 50%, on non-VSP frames.)

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This puts into perspective a crisis brewing on both sides of the border—putting many optometry practices at risk. I’ll start with a quick disclaimer: We at EyeCarePro don’t take a stand on insurance plans one way or another. Instead, we empower eye practices to achieve stable and meaningful growth regardless of the optometric services they offer or the insurances they take. Or don’t take, for that matter. Basically, we want you to be as informed as possible, and to make the best decisions for your practice.

Want a thriving, growing practice? Talk to us!

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The pros and cons of vision insurance plans is nothing new

But COVID-19 has brought things to a head

The formula is straightforward: Vision plans place limits on per-patient revenue. That’s a fact. And it runs smack into the backside of social distancing, which necessitates that many practices simply see fewer patients per day. 

Capped revenue per-patient + decreased patient volume =  decreased profitability. 

So...what’s in store for optometrists across North America? Spoiler...we don’t actually know!

But here are two dissenting voices from eye doctors in the US, plus an exposé on a similar situation in Ontario, which is putting the very survival of optometry there in doubt.

Dr. Filak’s Story

Leaving Vision Insurance Plans

A longtime client of EyeCarePro, Dr. Lawrence Filak recently discussed with me the reasons he dropped vision care plans entirely.

Do you know your chair costs?

Don’t feed the beast!

“Today I see 50% fewer patients than I did while accepting vision plans...and yet I have the same revenue coming in or more. You see, plans like VSP will convince doctors and say ‘Look, you need us to drive patients. We brought you so many this year! $150k in revenue!’...

But how much is that when you work it all out? It’s like feeding the beast. After all is said and done, you’ve paid staff to handle the insurance claims, plus rent and all operational costs...and that net revenue is actually less than $20K That’s a pretty weak showing for the huge volume of patients I would have to see to earn that. Vision insurance plans frankly diminished my ability to give good care while squeezing me dry. And all the while they make ODs think that we couldn’t do it without them. Well, we can.”

Dr. Filak

Dr. Filak’s journey began first with some insurance plans, but, over time he began dropping all of them.

“It started with Davis. They forced me to use their labs, which often didn’t serve the patient and hurt me financially on every transaction. But they weren’t the only ones. Forced bundling was making me separate comprehensive exams from anything “medical”, often making patients come back multiple times. And I think most OD’s would be familiar with this scenario. It hurts us as ODs and frustrates our patients.”

Whether or not you agree with Dr. Filak’s positions

he is absolutely right that not enough practices look at their net revenue when appraising success

And it’s definitely our observation that insurance issues enrage patients! At least half the negative Google reviews a practice receives are directly due to frustrations with insurance when patients don’t understand their coverage. And who can blame them, right? Insurance is a complex intertwining system of codes and coverage and requires specialist staff to handle at any volume. And that obviously costs a practice a salary or two to maintain, or at least a fair bit of staff time and, probably, frustration too.

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“One year, I had a charge of $2000 in negative billing! decided to pay it... and that started me on this path.

After Dr. Filak dumped Spectera and Davis,

Eyemed followed, and finally...

“One year, I had a charge of $2000 in negative billing! I decided to pay it... and that started me on this path. When you’re ultimately compensated a mere $55 for a comprehensive exam, are hit by endlessly frustrating terms, have to hire and pay staff to manage claims, and balance billing is off the table, well the decision was made for me. I’ve never looked back.”

And the bigger picture: You don’t have to hold on to private vision plans if you don’t want to. Do the math and figure out what works for you! 

And now for something completely different...

Take the Vision Insurance out of

An OD-Led Insurance Alternative

Let’s take a look at a different, less drastic approach

one that could truly be revolutionary

Drs. Beyer and Wilkins of Big Sky Eye Care in Hamilton, MT, are part of an exciting experiment in taking back control. They’re working with other ODs in Montana to offer an Eye Care Savings Plan. The general gist is that families can opt into various plans covering exams, glasses, and contact lenses. There are no copays and no complex billing procedures.

While Big Sky Eye care still takes various insurance plans, the doctors there are enthusiastic proponents of this new plan which allows them to provide the best eye care on their terms, while significantly reducing the total costs for patients. And as it grows, things might change...

And the verdict is...

The Practice Loves It! A Big Sky Hit with Patients

The Eye Care Savings Plan has been a huge success

Patients are signing up and the practice reports that second pair of glasses sales are way up. Patients without vision insurance flock to it for the simple savings. Even amongst the insured, Big Sky Eye Care sees many patients with high deductibles who opt to bypass their vision plan entirely and enjoy better savings with their non-insurance insurance. The benefit goes two ways, as the practice is far more profitable this way.

The irony is that VSP was ostensibly begun to be a an OD-led initiative. And, given the recent news of slashing reimbursements for “non-preferred lenses”, Big Sky Eye Care is now considering dropping VSP entirely! 

For these doctors, the math makes sense. For $14.99 per year the patient gets 40% of the exam, retinal imaging, and 20% off optical accessories. That’s comparable to what the patient would have been paying regardless, and far better margins for the practice.

As soon as Drs. Wilkins and Beyer announced their Eye Care Savings Plan, EyeCarePro got to work to help them marketing it.

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“The staff love our Savings Plan. It’s straightforward and we have control. 

“It’s given us a huge opportunity to help patients without insurance, as well as those with high deductibles. It’s reduced our billing overhead and our staff love being able to offer meaningful discounts without a huge headache. It’s win-win”

-Kelly, Practice Manager.

At the core of the issue

Balance Billing Blues and COVID-19

The Eye Care Savings Plan allows this practice to bill what they feel the exam is worth...

while keeping it feasible and accessible to patients.

It essentially boils down to the fact that balance billing—charging the remainder of what an exam is deemed to be worth onto the patients— is completely off-limits within the strictures of vision plans. 

With the restrictions on patient volume due to COVID-19, Big Sky Eye Care, like so many practices, is questioning the long term sustainability of vision insurance plans. While the Eye Care Savings Plan started well before the current pandemic, it’s proving to be a guiding way forward for a practice that has been feeling the pinch, along with every other eye clinic across North America.

Big Sky Eye Care, like so many practices, is questioning the long term sustainability of vision insurance plans

North of the Border

A Full-Blown Crisis in Ontario

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In Ontario, the provincial insurance plan, OHIP, which covers eye care for children and seniors, hasn’t updated their reimbursement schedule since 1989.

The viability of optometry is in question

It may surprise many US optometrists that some Candian provinces reimburse a fair bit more than private vision plans in the US do and that some provinces, like Alberta, even allow for balance billing on portions not covered by the provincial health plan. In many ways, it’s simply easier and more profitable for eye care clinics in Canada to operate versus their American counterparts...except in Ontario.

A sizable percentage of Canadian optometrists live and work in Ontario. There, the provincial insurance plan, OHIP, which covers eye care for children and seniors, hasn’t updated their reimbursement schedule since 1989. In fact, reimbursements for these services have only increased by about 9% in the past 30 years, while inflation has increased by about 90%. To add insult to injury, Ontario is one of the provinces that strictly forbids balance billing. For the past many years, Ontario ODs have effectively been subsidizing these visits, which cost them about double what they make out of it. 

Now, with the patient volume limits of COVID-19—not to mention months of lockdown and complete lack of interest in supplying PPE for ODs— Ontario optometrists now fear for the very future of eye care in that province.

Fearing the very ability of already bleeding practices to survive

The Ontario Association of Optometrists Fight Back

lobbying the provincial health system

Ontario ODs are now on a work action and social media campaign, #saveeyecare. Essentially, all OHIP-covered patients are being referred out to ophthalmologists, family doctors, etc. The aim is to overwhelm those care channels with services generally provided by ODs until such time as they get the support they need. It’s a gutsy move, intended to galvanize the public in support of the cause. The intent is to make the health system “see”—pun somewhat intended—that there is a critical role that optometrists play within the wider health system. Neglect good eye care at your own peril!

At EyeCarePro, we stand with eye doctors. Period. We, therefore, created a messaging campaign for any Ontario doctor to use in order to explain the OAO work action with patients. It informs patients about what’s at stake and why this is all happening, and it directs them to fill out the OAO petition as well as information to find and pressure local provincial representatives in the legislature.

Profitability

in the Era of COVID-19

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In Both Countries there is Serious Pressure on Revenues

Whatever side of the border you practice in, COVID-19 has certainly put serious pressures on practices everywhere. When it comes to decisions about vision insurance plans, we aren’t making a blanket recommendation. It’s a complex issue, one that raises questions about accessibility, independent decision-making, and, ultimately, financial sustainability.

As digital marketing experts in optometry, we always recommend digging down and looking at the data. Make an informed and data-driven decision about what’s working for your practice and what isn’t. What are your net earnings vs. your gross? Are you vision plans making you more or less profit and how sustainable is that for you? Ultimately, you should ask yourself this: how can you grow and thrive in a challenging environment?

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What’s Your Take?

Please leave us a comment at the bottom of the page and share your thoughts for or against vision plans. Ambivalence is fine too—We don’t claim to have all the answers either!

Look at your Eye Care Marketing!

One area where we really do have the answers is marketing for eyecare. Marketing isn’t a frilly nicety. It’s a solution to a very real business problem. In the case of your eye clinic, it’s how to increase profitability in order to help more patients while making a decent living doing it. 

Ask yourself these questions: 

  • How strong is your online presence? 
  • Are you reaching as many new patients as you could be in your area? 
  • Are you generating the type of appointments you want? Are you able to see higher-revenue patients based on optical sales? How about optometric specialties?

Unless your answer is a solid “Yes, I’m strong and growing!”...Talk to us. Optometry marketing is what we do. It’s ALL we do, and we're pretty darn good at it.

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