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Not a traditional franchise, Vision Source focuses on the private practitioner
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HOUSTON — Many private practitioners prefer solo practice to ensure autonomy in the day-to-day decision-making process; however, this independence does not necessarily ensure access to the best buying and marketing opportunities.
One corporation has sought to change the limitations of the private practice by providing an opportunity for independent practitioners to join forces with other strong practices. Vision Source, a company developed here in 1991, seeks to keep the private practitioner from drowning in a sea of large optical corporations by creating a network of independent optometrists.
According to Glenn Ellisor, OD, Vision Source president, founder and chief operating officer, optometrists in the network can take advantage of reduced costs through negotiations with ophthalmic vendors, exchange practice management ideas and enjoy efficiencies created by pooling marketing dollars. To date, there are 307 Vision Source offices in 23 states, with a combined revenue of more than $200 million. “More than 100 offices have joined the franchise this year,” said Dr. Ellisor.
Kevin McDaid, OD, vice president of vendor relations for Vision Source, said that the group was originally founded in response to market pressure in optometry. “Houston was one of the leaders when it came to commercialization in the industry, and there were many challenges for independent private practitioners to attract and maintain their patient base,” he told Primary Care Optometry News. “We felt we needed to develop a concept that would preserve independent optometry as much as possible, but help the strong, independent doctors compete by providing buying and marketing opportunities and practice management assistance.”
Franchise in name only
Because providing practice management, buying and marketing services falls under franchise laws in two-thirds of the states in the country, technically, that makes Vision Source a franchise. This fact provides a challenge when recruiting practices, Dr. McDaid said. “One of the biggest challenges is making the private practitioner understand it’s a franchise in name only,” he said. “Don’t be afraid that you’re signing up for a commercial-type establishment.”
Vision Source is owned by TLC, who took control of the company in July of 1997 and whose earnout over the past 2 years ended Dec. 31, 1999. Dr. McDaid said that this ownership has proven to be beneficial to the autonomy of optometrists.
“TLC understands the value of the independent private practitioner,” he said. “We have utilized of some of TLC’s relationships to open up doors for us with some doctors in our group. By marketing together, we give doctors synergies and efficiencies within markets. There’s not a requirement for the doctor to be a TLC affiliate, but in markets where TLC has a center and Vision Source has a network, we’re able to work together very effectively.”
The buying process
Vision Source is franchised strictly from a legal aspect because it establishes buying programs with major ophthalmic vendors, Dr. McDaid said. The optometrist pays Vision Source a fee based on a percentage of the practice’s gross. In turn, Vision Source provides negotiated pricing from vendors, cooperative marketing and practice management. The group has programs with ophthalmic, contact lens and frame vendors, several lab groups and a number of equipment companies. New vendors are constantly being added, and programs are always being updated.
“Unlike most franchise models where they make money on their goods, our model is set up so that we can negotiate the best price with our vendor and pass all of that on to the doctors,” he said. “Therefore, the doctors who are doing more business are saving more.”
As opposed to simply buying in bulk and distributing the products, Dr. McDaid said, the group negotiates directly with the vendors on behalf of the doctors. The practitioner, therefore, can maintain his or her relationship with the current vendors.
Terms of contract
When a practitioner signs a 5-year contract, said Dr. McDaid, those terms are renewable forever. Even if the fees are increased at some point, that practitioner will never have to pay a higher fee.
Practitioners who take advantage of the program have no restrictions on the patients they see, said Dr. McDaid. “I like to say it’s an invitation-only country club,” he said. “We screen them before they’re part of our group, because we want to make sure every doctor represents the same type of practice.”
Each franchise office has a protected trade area, he said, which means that another Vision Source location cannot be located within the same area without the approval of the current doctor in the trade area. “As far as marketing outside of the practice or seeing patients outside that trade area, it’s totally up to those practitioners,” he said. “We have established trade areas that are far enough apart so the practitioners are comfortable having someone under a common name geographically close, but not so far apart that we can’t effectively market within a metropolitan area.”
A minimum number of practices may be necessary for a certain area to begin marketing, he noted. “As the area grows, depending on the geographic proximity of the additional locations, they will start to market,” Dr. McDaid said.
The marketing portion of the program involves the practitioner making a separate payment into a fund earmarked for that particular geographic area. A cooperative marketing committee, which decides how to best use those funds, is established for each market, he said. “Cooperative marketing dollars are available from vendors, but a lot of those dollars go unused because the independent practitioner doesn’t have the vehicle to utilize them,” Dr. McDaid said.
The company structure
The company boasts just 11 employees, half of whom are part of the managerial team. Vision Source is made up of Drs. Ellisor and McDaid, Bobby Christensen, OD, vice president of growth and development — western U.S.; Tracy Moody, vice president of growth and development — eastern U.S.; and John A. McCall Jr., OD, director of professional relations. Additionally, Vision Source has contracted with 35 optometrists who serve to establish and administer the concept in each market.
Originally the administrator for Oklahoma in 1995 with 19 practices that grew to 52, Dr. Christensen became a partner in the company in 1996. One of his primary responsibilities now is to generate marketing ideas and plans as well as ensure that the region’s marketing representative can effectively implement them.
“Probably our biggest asset is that we share ideas,” he said. “The group members help each other. The goal is to make a private practitioner recognizable by branding so patients can remember Vision Source and look in the yellow pages to find the nearest Vision Source doctor.”
Dr. Christensen said the goal is “to have a planned and gradual growth of the network so we can take care of the practitioners as they become members and do it in a way that doesn’t overcome our resources,” he said.
Dr. Christensen also assists doctors in establishing Web sites and ensuring consistency with the Vision Source Web site. Some new Web developments include enabling patients to make appointments via the doctor’s site and developing business-to-consumer buying online. He and Mr. Moody are responsible for keeping administrators across the country informed about new developments.
High-quality patient care
Ensuring a positive relationship between practitioners and vendors as well as delivering a high standard of care to patients is the job of an administrator, said Michael Goldsmid, OD, administrator for the San Diego area. “I make sure that the members of the San Diego group are thriving and happy with the services of Vision Source and that a good relationship is fostered with the vendors. I also foster goodwill in the community at large and to our patients to make sure we’re delivering a standard of care that’s above and beyond what’s expected,” he told Primary Care Optometry News. “We have certain guarantees for our patients — if they don’t feel it was the most thorough eye exam they ever experienced, they don’t pay for it.”
Dr. Goldsmid says his group, in addition to supporting national and local optometric societies, donates eye exams through such organizations as the California Vision Project and the Flying Samaritans. “We’re all therapeutics certified and laser vision correction certified, and we are upholding the highest ethical and practical standards,” he said. “We want to differentiate ourselves from the usual chain-store approach, so we’re sort of the ‘unchained chain’.”
More than just saving money
While negotiated vendor programs provide doctors with a reduced cost for many products and services, this is not the sole benefit of being part of the group, said Joe Pfeifer, OD, administrator for the Seattle area. “The emphasis is more to serve as a way for optometrists to merge their talents and help promote private practice,” he said. “Vision Source enables us to put our heads together and figure out a better way of marketing ourselves to the community, with the secondary advantage of the buying aspect.”
Monetary savings are a substantial incentive, however, stressed Dr. Goldsmid. “Vision Source has negotiated out-of-this-world discounts and savings programs for us with various vendors,” he said. “We choose the very best vendors and the very best products. The savings and the marketing clout are greater than you could realize as an individual practitioner. When you put together all the resources of the group, coupled with vendor support, the marketing can be quite extraordinary.”
Dr. Christensen said that consolidation of resources helps market the practice and save money as well. “We can consolidate 14 practices in the Oklahoma City area and get a much better ad in the Yellow Pages for a significantly reduced cost,” he said. “We can partner with vendors for television ads that run messages with eye care products and contact lenses; these are things that would probably never be available to the individual private practitioner.”
Preserving a sense of autonomy
The goal for 2000 is to have 350 practices in the Vision Source network, possibly reaching 450 to 500 in 2001, said Dr. Ellisor. He also hopes that all 50 states will be involved by the year 2005.
With the group making such a formidable impact on the profession, some may fear a loss of control and independence for the solo practitioner. Not so, said Dr. Goldsmid. “It’s just the opposite,” he asserted. “The main credo of Vision Source is to ensure the independence of each optometric practice. We are an independent network of optometrists practicing under an umbrella, but we have never had Houston headquarters tell us what we should do. I have absolutely no fear of us becoming a conglomerate or chain and losing our independence.”
Dr. Pfeifer said that rather than impinging on how the private practitioner operates his or her office, the group seeks to improve the efficiency and quality of the practice as it already exists. “Individual offices have been in practice 20 to 30 years; far be it from me to tell these people how to run a small business,” he said. “I hope to be able to improve subtle things, and that’s where the group helps out.”
For Your Information:
- Glenn Ellisor, OD, is president and COO of Vision Source and is in private practice at 1714 Kingwood Dr., Kingwood, TX 77339; (281) 359-2020; fax: (281) 359-7019; e-mail: vsourcegde@aol.com.
- Kevin McDaid, OD, is vice president of vendor relations for Vision Source and is in private practice at 1714 Kingwood Dr., Kingwood, TX 77339; (281) 359-2020; fax: (281) 359-7019; e-mail: vsourcekmc@aol.com.
- Bobby Christensen, OD, is vice president of growth and development of Vision Source and is in private practice at Heritage Park Vision Source, 6912 E. Reno, Ste. 101, Midwest City, OK 73110; (405) 732-2277; fax: (405) 737-4339; e-mail: bchristensen@mmcable.com.
- Michael Goldsmid, OD, is in private practice at Arena Eye Works Optometry. He may be reached at 3750 Sports Arena Blvd., Ste. 9, San Diego, CA 92110; (619) 224-2879; fax: (619) 224-1311; e-mail: info@optom.com.
- Joe Pfeifer, OD, is in a two-doctor practice at Alderwood Vision Source. He may be reached at 18631 Alderwood Mall Pkwy., Ste. 105, Lynnwood, WA 98037; (425) 771-2662; fax: (425) 670-2333.