If you’ve listened to the most recent SUMMIT TALK Podlecture, you know the question of Yes or No on Vision Plans? is a hot topic; heavy on colleagues’ minds this day-and-age within private practice. That’s been the case for some time, of course, but I’m asked about this a good bit more these days than ever. That question – yes or no – definitely seems to be coming to a head for many frustrated colleagues.
And I’m glad of that. I’m totally OK with this coming to a head. The question of Yes or No on Vision Plans?, when properly considered, causes us to fully engage what I call The 4 A’s of Great Decision Making:
1. Anchor – designate the specific practice outcomes on which you will base this decision.
2. Accumulate – gather the data for those indicators (involving the team as able).
3. Analyze – determine what this information is telling you relative to the question of vision plans.
4. Affect – make the decision(s) and take the action(s) that will favorably impact your practice.
That said, to compliment the recent Podlecture, it strikes me that some reiteration of recent HELP DESK discussions might help ALL OF US execute on The 4 A’s relative to the question of vision plans. I gladly share that with you here and feel it will be very helpful for you and your team.
EDITOR’S NOTE: The following reiteration consists of considerable HELP DESK conversations with three different colleagues, reduced and combined into one dialogue we’ll cover in two blog posts, in hopes of ‘best use’ regarding your time and attention.
Colleague: “Tom, we’re just not sure what to do about these vision plans. I sense we’re losing money on them, and some days I feel like dropping them all. What are you advising clients on these plans. Do we stay with ‘em, or dump ‘em?”
Tom: “A good and very strategic question. In what vision plans do you participate? Can you rank them in order of desirability, and can you get input from team members on that? “
Colleague: (colleague names five plans from most-to-least desirable based on team input)
Tom: “First things first, do you have metrics on what portion of your patient base is on a third-party vision plan?”
Colleague: “I don’t have the exact number. It’s high and has been increasing while reimbursements have been decreasing.” (sound familiar?)
Tom: “This is something we need to know in determining whether or not to drop a plan or plans. Let’s sick a team member on going back through the last two months of the doctors’ schedules and see what percentage were on a vision plan. And let’s start keeping this metric going forward. To make these decisions, we need reliable data. What percentage of your patient base is private pay?”
Colleague: “6%.“
Tom: “That really is low based on the overall U.S. population. That in mind, according to the Vision Council VisionWatch US Consumer Study for Q1, 2020, 50.3 percent of the U.S. adult population – approximately 130 million people – have some type of vision insurance or managed vision care (MVC) coverage.
That statistic established, I actually believe this number to be a good bit lower, if you take into account people who “opt out” of the vision benefit for which they are eligible rather than having additional dollars withheld for benefits. My wife, who teaches kindergarten for Lincoln Public Schools (Lincoln’s second largest employer next to the University of Nebraska), is one such person. The LPS vision benefit inclusion is optional, and we’ve never opted for it because after considering the additional withholding, we’d much rather be private pay patients in our chosen family eye doctor’s practice.
Regardless of the exact number, the question is clearly a simple one, right? If roughly 50% of adults in the US have no vision benefit, where are all those private pay patients going? With the heavy presence of industry in your area, I would expect the private-pay patient percentage in your practice to be lower than some, but I think a reasonable objective for the practice would be more like 15 – 20% private pay patients. I believe that to be very attainable, even there, but doubling or tripling your current number would take both a decision and a deliberate marketing effort. Cherry-picking vision plans likely increases your private pay percentage, but we have some initiatives to take first.”
Colleague: (very good sport about these comments)
Tom: “Are you keeping and reporting the Appointments Booked metric (percentage of available comprehensive exam slots booked AND for which the patient showed up)?”
Colleague: “We don’t track that data yet, but are going to start with MetCHECK. But I can tell you the owner doctors are fully booked two months out, the associate doctor more like a month. Each doctor sees 8 – 12 comprehensive exams per day and 4 – 8 follow-up or medical appointments.”
Tom: “This is impressive booking, and bodes well for cherry-picking vision plans – dropping the one you like least (or perhaps better said, “dislike most!”) first, seeing how that goes for a tracking period (I like 6 months), then making decisions about others. That said, we would typically not be dropping plans if one or more doctors are not completely booked (although there are exceptions), and I’m hesitant to drop plans without at least a quarter’s worth of team reporting on this metric so we’re all on a definite same page. I know we’re busy, but I always want to know exactly how busy we ARE, rather than how busy we FEEL. And busy doing EXACTLY WHAT?“
Tom: “Are you limiting the number of vision plan patient appointments you see in a day? And are you keeping a waiting list of patients wanting in sooner that you can call when you have a cancellation?”
Colleague: “No on both counts. We’ve talked about these things, but we haven’t actually implemented anything.”
Tom: “Given the apparent condition of your Appointments Booked metric and your booked-out status, this is a good place to start for you (barring plan specifications stating otherwise). As step one, you could pick a date after which you only book up to a certain number of vision plan patients and see what happens to your Appointments Booked metric (which we should start reporting immediately) and booked-out time. Watch this for eight weeks to follow. I’d love to see what impact this has on bookings before full-on dropping a plan or plans, as a patient in the chair is likely a better thing for the practice than an empty chair (although not always).”
Colleague: “OK, I’ll talk with the team about this.”
Tom: “Is the associate doc as booked-up as the other doctors?”
Colleague: “He is usually booked solid, but not always and not as far out as the other doctors.”
Tom: “So if he has surplus capacity in his schedule, more likely than not (although not always), we’re better to wait on dropping at least some, if not all, of the plans until he’s fully booked. In the meantime, we can certainly steer new patients to his schedule. But if he’s fully booked, that makes us much more ready to take affirmative action on vision plans.”
Tom: “Also, what is the overall growth rate of the practice the last three years and does growth feel back on track after the COVID impacts?”
Colleague: “We’re been averaging 10 – 15% growth. We’re still not back to full patient volume from COVID, but overall, growth seems to be coming back on track.” (Editor’s Note: It continues to both fascinate and encourage me that we see practices growing revenue on lesser volumes!)
Tom: “Great, and are you tracking and reporting the New Patient metric?“
Colleague: “Yes, we’ve started tracking that and we’re seeing about 30% new patients.”
Tom: “Holy cow! With that kind of new patient percentage, and given patient retention is on track, I’m pretty confident in the practice’s ability to continue growing, even if we drop some plans. This metric in your practice bodes well for at least some cherry-picking and perhaps even eventually dropping most of the undesirable third-party vision plans.”
Tom: “How about revenue-per-patient. What’s the trend there?”
Colleague: “The way we’re tracking this one, it’s around $270. We’ve just starting to track that for MetCHECK.”
Tom: “This is one metric I think we target for significant increase, and is likely being negatively impacted by the lesser vision plans driving reimbursements lower. But it will take much more than just that. It will take bringing the team closer to mission (the patient’s quality of life), and a commitment to recommendations that align with that mission.”
Tom: “What portion of total practice revenue comes from product sales?”
Colleague: “About 30%.”
Tom: “So here’s the million dollar question: Does this percentage go UP by dropping vision plans, or DOWN? I’ve actually seen both. My experience is that the answer depends on the decision made by the Team. If we drop vision plans and the result is lower volume of filled prescriptions, this percentage likely goes down. But if we make the decision to increase our Capture Rate and increase multiple functional needs fulfillment (some call that “second pair sales”), it can and will go up. You guys are doing a good bit of medical optometry, which is great, but I think we could target an increase in eyecare product sales given your excellent product resources. We certainly have plenty of Rx’s being written in this practice to do it. The key is we fill them. Again, not wanting to sound redundant here, but I REALLY want to be tracking the Capture Rate metric (another one of the 4 MetCHECK metrics we’re keeping, and for good reason!), and as mentioned, I believe you can proficiently be doing that as a TEAM in a matter ow weeks (which is the only way to do it – don’t just have an Office Manager keep this number).”
Tom: “And what portion of revenue is coming from medical optometry?”
Colleague: “About 38%.”
Tom: “Great. Freeing up more profitable time by dropping some plans (when we are at full Appointment Capacity) can actually improve both these numbers by having more time in the schedule for that medical optometry, as well as having a lesser percentage of our vision care appointments being taken by patients on third-party vision plans.”
Tom: “How about pre-appointing? Are we pre-appointing patients as the rule and not the exception?”
Colleague: “We’ve started doing more pre-appointing, but still more the exception.”
Tom: “The best way to combat uncertainty is with certainty. And this, provided we have the right doctor participation, is the most certain form of patient retention there is. Period. I want that fully in place if I’m going to be dropping vision plans that could impact patient volume. Before we do that, let’s make sure we’re pre-appointing 100% of certain patient types/categories, and let’s define those patient types/categories clearly. With our new patient percentage as high as it is, if we take care of patient retention, particularly for given patient categories, I’m confident we can come out on the positive end by dropping one or even several vision plans in this practice. Can we make pre-appointing at that level and in this way an initiative for this quarter?”
Colleague: “I think we can, and I’ll talk with the group.”
Tom: “Also, does the practice have a vision benefits program it offers companies that don’t have vision benefits for employees? And how about a preferred patient/VIP savings program private pay patients?”
Colleague: “No, but you definitely have my ear. I know you’ve mentioned this, but we don’t have anything up and running.”
Wow. Great conversation, Colleagues. I hope you find this helpful moving forward. So let’s pick it up RIGHT THERE in the next BOWEN’S BLOG post.
Talk to you then!