RELATED CONTENT

RANCHO CORDOVA, Calif.—Focusing on complementary (medical and vision) channels of “patient access” to optometry with a view toward unifying several lines of its business to benefit members and providers, the senior management of VSP Global is positioning the company for continued growth in the rapidly changing health care landscape, in 2017 and beyond.

Daniel Mannen, OD, FAAO, chairman of VSP Global (l) with Jim
McGrann, president and CEO, VSP Global.
The momentum of managed vision care benefits coverage in the U.S.— now an important part of more than 60 percent of the eyewear purchase transactions in the U.S., according to the latest VisionWatch consumer stats—continues to crescendo. As millions of patients/consumers/members across the country are both using and still exploring their benefits options, thousands of eyecare providers continue to grapple with the process and the impact of managed care on their practices’ top and bottom lines.

Vision Monday has learned that VSP Global is forecasting 2016 revenues at $5.1 billion. Today, the not-for-profit organization is interacting with 57,000 clients worldwide, 37,000 providers and 82 million members worldwide (77 million in the U.S.). The group is also heading to a noteworthy membership milestone in 2017, where VSP execs pointed out that one in four Americans will have VSP coverage.

In an exclusive and first-time joint interview, VSP Global’s chairman of the board, Daniel Mannen, OD, FAAO, along with president and CEO Jim McGrann, brought their perspectives to a discussion that ranged from insurance trends and vision’s role in patients’ overall health and wellness to VSP’s affiliate provider initiatives, and its still-evolving Premier program for eyecare providers.

McGrann took on his current role in October 2015, succeeding Rob Lynch who held the post since 2006. The move followed three years in his role as president of VSP Vision Care. Prior to joining VSP Global in 2008 as president of Eyefinity, McGrann served as senior vice president and chief information officer for nine years at Marchon Eyewear, Inc. In 2010, he became VSP Global’s chief technology officer and CEO for Eyefinity.

Mannen was named VSP Global chairman of the board for a two-year term in March of 2016. Mannen is the first-ever returning chair, having served a two-year term previously from 2006-2008. Mannen has been in private professional practice in Oregon for 30 years. He has been affiliated with VSP Global for 20 years and first joined the board in 1997.

Vision Monday: Daniel, based on your experience as a practitioner and your involvement with VSP in various roles, you recently returned to chair the board. Can you help our readers understand your vision for VSP Global? What’s the most important thing that independent ECPs need to know?

Daniel Mannen, OD: We need to make sure we create patient care opportunity. What VSP does best is create opportunity for doctors to provide care to patients and create a conduit for the patient to find a doctor. We consider access, utilization and opportunity. Certainly, VSP has been active in creating mechanisms for patients to find doctors and in terms of utilization, once a patient comes through the door, this maximizes the opportunity for the doctor and the practice.

We see that independent optometry is blessed with two complementary access channels, the managed vision care channel and the medical or health plan channel. For many practices, including my own, the original touchpoint for a majority of patients is through their vision care plan. After that introduction, and assuming I am a participating provider on the patient’s medical plan, I have a golden opportunity to also provide their medical care.

Of VSP’s 77 million members in the U.S., almost 15 million are covered through health plans. Nearly 200 health plans contract with VSP to provide vision benefits, including Cigna and Aetna. We expect continued growth in both the managed vision care channel and the medical or health plan channel. We see both as critically important in today’s independent optometric practice.



VM: Can you discuss the relative access of both?

Mannen: With managed vision care, we have open access; if doctors qualify, they can participate. There’s no upper limit as to how many doctors can take part, it’s their choice. An important element of the story, though, is utilization and with managed vision care, there is very high utilization. In the last few years, employers have been gradually shifting the cost of the benefit over to the employee. Despite that change, patients have been signing up in record numbers. Why? Because of the value proposition, and because vision continues to be one of the most valuable employee benefits.

Optometry’s other opportunity which is with the medical or the health care channel. Optometry has made tremendous inroads over the last few years, gaining access to medical panels, and many more of us are members of medical panels than ever before. There are certain geographies where doctors have limited access, but overall, optometry has certainly come a long, long way. It was a difficult challenge to gain the ability to participate; it’s changed our practices and continues to be a focus.

The utilization side within the medical channel, though, is different. It can be difficult to get access and there are a few examples of that with my own practice where I participate on medical plans and see a few patients that come in through that route, but overall, way more people are coming in as managed vision care patients.

Regardless, once they are there, the opportunity is in building a confidence and relationship with patients which then leads to other full service care.

A third possible way a patient might access my practice is the cash-paying patient or the patient without benefits, and that’s the most challenging one. That’s the one that’s difficult to get and difficult to keep. In today’s climate, that’s hard work.

My vision for VSP is that we need to be keep creating all those opportunities. It’s not easy to get that person through the door. But once they’re there, the ball’s in our court.

Jim McGrann: Employers are learning more and more about the value of that comprehensive eye exam that the eye doctors perform and the value of that to the overall health costs they pay. That’s specifically because we educate them about the role of vision care in the early detection of such diseases as high cholesterol or diabetes.

Today, employers see that the high utilization of managed vision care plans, or ‘stand-alone’ plans, generates higher utilization for their employees. But our medical plan participation is growing; we want to participate wherever we can—we’re also selling an increasing number of plans directly to individuals if that’s what they want for themselves or their families.

Mannen: Access is important in its own right. Optometry needs to have those patient opportunities no matter how they’re created. In the grand scheme of things, it doesn’t matter in my own mind if a patient begins as a managed vision care patient and uses a bridge to become a medical patient—or, if he comes in as a medical patient who also needs vision services—we end up at the same point in the care continuum.

The two access channels are complementary; vision doesn’t exclude medical and vice versa. In fact, both are building blocks—medical helps build my vision practice and vision helps build my medical practice.



VM: Is vision care regarded differently today by employers and benefits decision makers than it was 10 or 15 years ago? In what ways?

McGrann: The awarenesss of eye health management is building. In the U.S. we see an increased awareness of the value of a comprehensive eye exam. More people want to take care of themselves and are more focused on wellness ideas. In this past year, my first in the role of CEO, I’ve also had the chance to visit locations outside the U.S. and there is an enormous opportunity for that.

The industry as a whole, The Vision Council, the AOA, and many companies and organizations are all communicating about eye health issues to the public.

Mannen: In this election year, where there’s been a lot of discussion about the impact of the Affordable Care Act (ACA) and overall health costs, optometry finds itself in a situation where we need additional access and additional utilization within medicine. Optometry is in a tremendously advantageous position. We provide access to patients outside traditional medicine and we have options.

We have a section of our business focused on the ACA business, we have that data. Utilization in that slice of our business is so low and most people are not even aware they have a benefit. We have to continue to work together to raise awareness about eye health, increase access and build utilization.

VM: Jim, how would you describe this past year in your new role at VSP Global?

McGrann: We are continuing to grow that member base and access. Within the year, we’ll be close to having 60,000 clients, more than 82 million members (77 million in the U.S.). Those 77 million VSP members equal nearly 18 million eye exams per year. We’re very close to being able to start the new year by saying that VSP provides vision coverage to one in four Americans in the U.S.

For me, too, a key learning point has been the support I get from the VSP board of directors. Seven of those 13 board members are practitioners from all over the country. That team and their perspectives have been really helpful; we could have a more traditional board with business executives from outside the industry but having these doctors’ views is a tremendous advantage.

VM: You’ve talked about a priority to ‘unify’ VSP’s business units. Can you elaborate?

McGrann: We’ve been trying to simplify our mission and make sure that our five lines of business are working toward the same goals. Our network is primarily focused on private practice doctors with support from our affiliates as needed, when demanded by clients. And our integrated product strategy around frames, lenses and lens manufacturing, are all supported by our technologies via our software business.

VM: VSP has made several moves this year that raised eyebrows among many eyecare providers. Can we talk about the status of CVS, announced a year ago, and VSP’s role in their 5-location test for vision services?

Mannen: It’s important to go back to the beginning…CVS had undertaken, as part of its own global health care initiative, to take tobacco out of their stores. That was a major revenue change for them and one of the things they’d considered to replace this with was adding vision care going forward. CVS has been a long term client of VSP’s and so it was natural for them to ask us to help them with this pilot.

We’ve been kind of vilified by that to some degree, because doctors don’t like the association with them. But the alternative, had we said no, is that they probably would’ve just found somebody else. In the final analysis, the pilot is still ongoing, (it’s a 15-month pilot), and I don’t know exactly what the end result will be and I really don’t know what CVS will decide to do going forward.

What I will say is that we do feel there is a benefit in us observing what’s happening and being close to it so we can have some play into it and I think it’s been a learning situation for us and it’s yet to be discovered exactly what that client itself is going to do.

VM: What’s the current role of “affiliate providers” in the network?

Mannen: The affiliate provider program was designed to help fill a gap in access and meet a client’s request for specific retail provider. The program has helped us win or retain clients and millions of members.

Clients who are authorized to see affiliate providers have a choice to see either a VSP network doctor (we also call them independent ODs) or affiliate providers. Eight percent went to see an affiliate provider while 92 percent of those patients still went to an independent, VSP network doctor.

McGrann: With our various lines of business, from Marchon and Altair to VSP lenses, VSP labs and Eyefinity our goal is to make ourselves a strong company and make doctors stronger through the support we give them. When VSP was primarily VSP Vision Care, it was important to diversify the lines of business. In 2008, the company acquired Marchon, for example, and started to develop its own lens products to make sure the group was able to protect the overall financial model that VSP was set up to deliver. It also helped to expand the global footprint which would offer opportunities for growth outside the U.S.

How can frames, lenses and software product revenues help the membership and also help private practice thrive? Those are the questions we’re asking. The world has changed and you’ll see us try new partnerships. But these are to offer members and doctors more choice and any monies generated from there get invested back.

VM: VSP acquired Marchon eight years ago. Are other acquisitions on the near term horizon for VSP?

McGrann: While there’s no news to share specific to your question, we’re interested in new technology, strategic partnerships, or other offerings that can help us expand access to eyecare, and drive more contact between the patient and their eye doctor beyond the exam visit.

A recent example of this would be our investment in Vizzario earlier this year. That technology tracks visual acuity, eye strain, sports vision performance and even traumatic brain injury. We’re exploring offering those visual performance indicators through an app for VSP members. If the patient were to choose to share that data with their doctor, it can potentially be layered over their eye exam data for richer insights.

VM: How has VSP’s data mining efforts changed over the years? What’s important about that capability to providers and to members?

McGrann: We think there are some other exciting ways a patient can use their own data to enhance their life and strengthen the connection to their eye doctor. What we’re talking about is ‘contextual health,’ which is all about personalizing traditional medical records with context from a person’s daily life. By doing that, the patient is empowered to make choices that lead to better health outcomes.

An example of this is Level, our wearable product that integrates health-tracking technology into an optical frame. We’ve partnered with USC’s Center for Body Computing for an academic study on Level, focused on the technology and user experience.

While results of the study won’t be ready until next year, and the path to market isn’t ready to share yet, we know doctors will play an important role in further development and eventual release of a device like Level. It’s important to remember that the individual is the sole owner of their data, and they will always have the right to choose when, where and how they want to share it, if at all.