The bigger picture: Protecting lab networks
MVCs determined to protect quality lab networks from legislation aimed at dismantling an industry business innovation
The lab network is one of the managed vision care industry’s most powerful innovations. And EyeMed’s lab network is among the best, designed as a win-win-win solution for all stakeholders.
Not every lab network follows the same design principles. Some MVCs have created lab networks without concern for network providers or members. That’s not the way we do business, but EyeMed supports the National Association of Vision Care Plans’ (NAVCP) position: Provider objections to specific lab networks should be addressed with the benefit companies who operate them rather than imposing blanket regulation on the MVC industry. Crippling the power of a good idea to protest a few outliers recalls a familiar idiom involving babies and bath water.
Top performing lab networks deliver for all stakeholders
- Members save on quality eye care and enjoy consistent quality guarantees and quick turn-arounds on standard orders.
EyeMed members spend less on prescription eyewear and their premiums are generally more stable year to year.
- Providers realize more revenue and enjoy a range of lab options, preserving their freedom to recommend the optimal eyewear solution for MVC members.
EyeMed’s network providers enjoy more than 100 lab options. Also, providers make $7.50 more, on average, through the lab.
- In exchange for negotiated discounts, participating labs can tap into a large pool of orders and better project volume.
Like any manufacturing operation, the ability to guarantee a minimum level of orders is critical to profitability. And the ability to better project orders ensures labs invest appropriately in the right equipment and personnel.
- And the benefits companies that design these lab networks improve their own bottom lines.
EyeMed has enjoyed 4 consecutive years of record profitability while remaining the nation’s fastest growing vision benefits company. One reason is the lab network, launched in 2013. The company’s share of the savings continues to boost our net operating profit, allowing us to encourage utilization in vulnerable populations and offer competitive rates in every market.
Click here to unpack the economics of a well-designed lab model.
- To date, 10 states have passed legislation aimed at prohibiting MVCs from requiring lab network participation as a contract condition. These states are Arkansas, Florida, Georgia, Kansas, Maine, Missouri, Oregon, Texas and Vermont.
- In 2017, 6 lab bills have been introduced in 5 states. NAVCP succeeded in convincing legislators to defeat bills in Washington and Mississippi. Bills remain under active consideration in New Jersey, Pennsylvania and Ohio.
A personal perspective on the business impact
“The providers who complain the most about lab networks are not targeting EyeMed. Our lab network literally puts more money in their pockets and lets them choose from more than 100 of the best U.S. labs with the most advanced technology and operations, including the Oakley lab. Plus the quality and service standards our members can count on often reflect as well or better on the provider as on EyeMed. Best of all, our relationships with some of the nation’s top labs – including Essilor – open up more opportunities for innovative collaboration. Our lab network is a competitive advantage, and EyeMed needs to protect it.”
~ Adam Stulberg, director, strategy