What the Essilor-Vision Source deal means for you

September 1, 2015

Essilor recently announced it had acquired independent optometric service alliance Vision Source, raising questions about the future for thousands of Vision Source members and Essilor customers across the country.

Dallas-Essilor recently announced it had acquired independent optometric service alliance Vision Source, raising questions about the future for thousands of Vision Source members and Essilor customers across the country.

The initial reactions have been mixed in the eyecare community. 

"I think the purchase is a big win for independent practice," says Scott Schachter, OD, Vision Source administrator in Pismo Beach, CA. "Essilor has been an excellent partner to Vision Source for many years, providing proprietary products at exceptional value. In addition, Essilor has supported our practices with staff training and education, sponsoring the Vision Source Representative program for many years, and more."

Previous acquisition deals have several ODs cautious about what the Essilor acquisition of Vision Source means for independent optometry. 

"Virtually every time something gets a big foothold in optometry, it screws us," says Steve Nelson, OD. "That's true whether it's Luxottica or VSP. They virtually all start out as a 'partner to optometry' and all end up getting too large to be a good partner to us and end up with a business model using optometry to generate huge profits.

"At that point, we are too invested to back away and we just have to take it. I'm not saying this will screw us because maybe this time will be different, but history certainly suggests we should view this with a fair measure of skepticism," he says. 

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But Vision Source Administrator Ed Melman, OD, of Voorhees, NJ, disagrees. 

"Essilor has always been a major partner with Vision Source and apparently felt that increasing its involvement was a worthwhile investment," says Dr. Melman. "This is nothing like Luxottica's buying spree where it exerts almost total control over its stores. Vision Source doctors retain control over their practices but have more options available. It's no secret that Vision Source is trying to market quality care and network training to attract contracts with good plans. It remains to be seen how this move will affect our ability to increase our market." 

How the deal came about

In an exclusive interview with Optometry Times, Glenn Ellisor, OD, executive chairman and founder of Vision Source says the company was looking for a long-term partner in order to allow the company to make long-term investments.

“When we wanted to partner with someone who had a lot of resource, industry experience, and insight, when we looked at all the different companies available, hands down the best choice for us and our members was Essilor,” he says. “It’s really fantastic to partner with the leader in the industry. We really believe that Essilor is committed to independent optometry. It’s 30-year track record with independents I think speaks for itself.”

And Essilor saw an opportunity for growth, says Howard Purcell, OD, FAAO, senior vice president of customer development at Essilor.

“Let’s be honest: as the independent does well, so does Essilor,” he says. “If we can support the independent to grow for the future, we believe this is one of several vehicles that we can support that will be enabled for that. I don’t think anyone has done a better job than Vision Source has of achieving that with independent optometry.”

Next: What it means for you

 

What it means for you

“This is tremendous opportunity for our members and optometry,” says Dr. Ellisor. “In last three to four years, my biggest personal initiative is to make sure that Vision Source landed a in long-term place so that our vision could realize its potential and take care of the 4,500 doctors who trusted to join us to date. I’m passionate about independent optometry. It’s been the foundation of the company. To protect the profession is my number-one driver.”

While not everyone within the eyecare industry thinks Essilor has independent optometry as a priority, Dr. Purcell points to campaigns such as Think About Your Eyes as evidence that the company does care.

“We spend millions of dollars in consumer advertising for products that drive consumers into independent eyecare practitioners’ offices,” he says. “We invest in all kinds of education to help independent practitioners. I truly believe-honestly, I wouldn’t be at Essilor if I didn’t believe this-that if anyone can demonstrate the focus we have on the independent, it’s us.”

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Vision Source will be set up as a separate division, and the company’s leadership will continue to stay involved over the next few years. Dr. Ellisor says that Essilor has encouraged Vision Source to continue to run the business just as it always has.

“We are absolutely committed to making sure the management group stays in place. Without them, this would not be as interesting to us in any way, shape, or form,” says Dr. Purcell.

Dr. Ellisor says one of the attractions to Essilor was the company’s investment in resources to develop programs and tools to grow Vision Source members’ practices. He says he believes the new partnership will allow Vision Source ODs to have access to even more programs and resources.

“Essilor is interested in helping independents engage in healthcare reform and integrated health systems. That’s one of our major initiatives,” says Dr. Ellisor. “They’ve been trying to help us with that with their expertise and consultants for the last couple years. We think that the new relationship will help us take that to the next level.

“We want to change the patient experience that patients have with their offices and give them the ultimate experience both in the office and at home. Their technology solutions, consultants and resources will help us develop that model far faster than we would on our own,” he says.

Next: The big questions

 

The big questions

The main question in the wake of the acquisition is whether Essilor will require Vision Source members to purchase Essilor lenses. Dr. Ellisor says that even if it wanted to, the company couldn’t contractually make that demand-but it doesn’t want to anyway.

“We’re about independent optometry in this relationship. We couldn’t force our members to do that if we wanted to,” he says.

He points back to the company’s previous relationship with TLC Laser Eye Surgery Centers and says that the company didn’t try to force its members to send their LASIK patients to TLC.

“I think what will happen is because of the tremendous opportunities we have to work together, more members will choose to partner with Essilor, but it will be absolutely choice,” says Dr. Ellisor. “The relationship will be pretty much like it is today in that as an organization we’ll have to earn those preferential programs like we have today.

“We’ll have to deliver volume for Essilor if we expect the fantastic pricing and programs they offer. On the other hand, they’re going to have to earn our members’ business,” he says.

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Dr. Ellisor says Vision Source members will have all the same choices they do today. 

"We already visited with Essilor’s competitors and explained the situation," he says. "They can still earn the business. It could very well offer some of those organizations more opportunity because together I think we’ll be able to grow the business and grow our practices greater. If our members choose to partner with others, I think they’ll be winners. I don’t see limitations at all."

Dr. Purcell says that Essilor faced similar concerns when it began acquiring labs more than a decade ago.

“I think there were some similar concerns of ‘Gosh, you’re buying these labs and now you’re going to force everyone to use your products and people who were not part of your lab network aren’t going to be good partners anymore.’ We’ve proven that it isn’t the case and we can deliver on that,” he says. “We are very committed to making sure that whatever the choice, be it to join Vision Source or to join another alliance or to not, Essilor will continue to support you in the best way we can.”  

But will Vision Source doctors have access to a deeper discount on Essilor products? Dr. Ellisor says that if Vision Source delivers the right value to Essilor, it’s a possibility-but it won’t be granted a discount just because of the acquisition.

“We’ll have to earn [Vision Source business] as well. We’ll have to make sure to deliver the products that Vision Source members and others are going to want to use,” says Dr. Purcell.

Will Vision Source ODs be forced to display Essilor products? Absolutely not, says Dr. Purcell. 

“We’re investing millions of dollars in consumer advertising, and we hope we can encourage those who support our products to put point-of-purchase materials and merchandise in a way that maximizes the opportunity that consumer advertising brings,” he says. “We can’t force anybody to do anything, we don’t intend to, but we hope to encourage people to want to do that for reasons we think are very sound.”

After the acquisition, Vision Source ODs also raised concerns that Essilor would have increased access to their practices’ financial information, but Drs. Purcell and Ellisor shut down the rumors.

“If Essilor tried to come in and institute policies that didn’t sit well with independent optometry, our model and business would go away. Why would they buy our business if that was their intent?” says Dr. Ellisor. “We are going to continue to practice the same way we always have in terms of making our members our number-one priority and respecting them as optometrists.”

Next: Still have questions?

 

Still have questions?

Dr. Purcell says he’s open to hearing the questions and concerns of Vision Source ODs, so Essilor has created an e-mail address specifically for that purpose: tellhoward@essilorusa.com.

“I’d love to hear from people. I understand that some really love the idea,” says Dr. Purcell. “I understand that some have lots of questions. I want to make sure that we’re available to answer those questions so we can tell our own story, and everyone will have to decide if we walk the talk as we expect to and if we achieve the things we expect to achieve.”

If a member doctor is unhappy with the new deal, they will still have to give 18-months notice before exiting their contract. 

"We would hope that even those who may not be lovers of Essilor would at least give us a chance. I hope they wouldn’t make a knee-jerk reaction," says Dr. Purcell. "Even those who haven’t been able to be convinced by hearing our story will at least wait and see. I think that’s all we could ask for. Give us a chance for us to prove how this relationship can be and for us to deliver. If we’re not able to, I wouldn’t expect anything but the challenge of why."