Managed Vision Care – Their Place in the Eye Care Marketplace

As eye doctors open the New Year of 2012 in a few weeks, there is much anticipation among about the future direction of managed vision care plans (VCP). Faced with decreasing reimbursements and ever more onerous rules and regulations, doctors are rebelling by withdrawing from VCPs, although in dribbles at this point. What doctors cannot do, legislation might.

First, the upcoming Affordable Care Act of 2006 (ACA) excludes standalone VCPs from each state’s health insurance exchange. Without participation, VCPs will need to market more directly to employers, often outside the combined marketing for regular health benefits. Under this scenario, VCPs could see an increase in marketing and sales costs.

Second, the ACA’s individual mandate for insurance could reduce the demand for vision benefits. As an afterthought, the allure of a vision benefit might be less if an individual had to bid for vision benefits.

Lastly, vision benefits have long been a pre-tax benefit because it is paid before taxes are deducted from the paycheck. Under the current environment for budget reform, reclassifying vision to after-tax would significantly curtail participation by employee beneficiaries. The tax advantage might even individual professionals to band together to offer vision benefits that can successfully compete with VCPs.

In summary, VCP are at a crucial tipping point in the market place. By legislation or by market forces, their positions are likely untenable in their form. Unfortunately, much of their outcome is neither in their hands nor in the hands of panel doctors. It is likely that the VCP with the deepest pockets, more efficient operation and more varied integration (both vertically and horizontally) will survive.

About Richard Hom OD, MPA

Dr. Hom holds Doctor of Optometry and Masters in Public Administration degrees and practices family eye care and consults on public policy, health information technology and program evaluation.
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