NEWS FROM VEW IN LAS VEGAS

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AN ENTERTAINING ATHLETE
Pete Rose, the all-time Major League leader in hits (4,256), opened this year’s Optical Lab Division meetings in Las Vegas. Rose, aged 73, is permanently ineligible to join Baseball’s Hall of Fame because he bet on games while he was both a player and manager. In his speech “Be Aggressive and Three Ways to Treat a Person,” he says his favorite part of being a manager was developing the players. As a player: “Hitting and winning were my favorite parts of the game. I miss the competition and hard work,” he states. In 1979, Rose was the highest-paid athlete in sports, earning $810,000 a year. He has appeared on the cover of Sports Illustrated once in each of the last five decades. Muhammad Ali is the only other athlete who can say the same!
 
Two Cincinnati Reds fans meet a local celebrity, Pete Rose. Ron Cooke, director of optical sales for U.S. and Canada at Leybold Optics (left) and his father, Ronald Cooke, OD, president and CEO of Diversified Ophthalmics.
Pete Rose finally receives a Hall of Fame plaque­ – this one from the Optical Lab Division! Billie Lee, who is retired from Rite-Style Optical, has a laugh with Pete Rose. Her late husband, George Lee, was a charter member of the Optical Pioneer Hall of Fame.
 
Luzerne Optical’s New York Territory sales manager Jamie Hansel poses with Pete Rose.  Charles Beddis, analyst, U.S. Government, acted as a moderator.

 

UNIQUE IDENTIFIERS
Rick Van Arnam, who handles regulatory issues for The Vision Council, says he has seen a growth in state regulations impacting the lab industry and he highlighted one of them. The Food and Drug Administration (FDA) is establishing a Unique Device Identifier (UDI) system to adequately identify medical devices through their distribution and use. The UDI requirement for Class 1 medical devices will be introduced by 2018. The question is whether labs are manufacturers of lenses, and if they are, will they be required to provide a UDI on all of their products? Van Arnam said The Vision Council is getting advice about who is responsible for labeling and will be petitioning the FDA that lenses are custom-made devices and therefore labs should be exempt from applying this law. One suggestion is that the Optical Product Code, which The Vision Council administers, might suffice as a UDI.
PEDIATRIC EYE EXAMS AS A HEALTH BENEFIT
Following Pete Rose’s talk, several legal experts gave an update about the Legal and Regulatory Affairs facing the optical lab industry. William Applegate, a federal lobbyist who works with Bryan Cave LLP law firm in Washington, DC, says they have been lobbying for pediatric comprehensive eye exams to become an essential health benefit in the Affordable Care Act. Their agenda on the Hill is two-fold: to protect this pediatric benefit and to find out if people are getting more eye exams as a result of it.
HARMFUL SUBSTANCES
An issue facing optical labs is environmental regulation at the state level, such as Prop 65 compliance, especially in California. The Safe Drinking Water Act safeguards drinking water and lists close to 1,000 substances that could be harmful to health. Certain chemicals in a lab, such as lead, heavy metals, and BPA – which is found in polycarbonate – could have Prop 65 substances in them. “If your products have these substances then you may need to mention a product warning at point-of-sale or warn employees about exposure,” attorney Rick Van Arnam, The Vision Council regulatory counsel, asserted. Products that could fall into this category are plano sunglasses and over-the-counter reading glasses. According to Van Arnam, an option for labs is to remove the product altogether or reconfigure how it is being manufactured. “We’re monitoring the substances which are listed under the act. Employees could file a notice of claim if a lab is using a Prop 65 substance,” he warned.

DO LMS PROVIDERS NEED BUSINESS AGREEMENTS?
Gregory Jacobs, business affairs counsel for The Vision Council, gave an update on HIPAA (Health Insurance Portability and Accountability Act), the federal law that protects personal medical information; OSHA (Occupational Safety and Health Administration); and the appropriate points from the NLRB (National Labor Relations Board). The only noteworthy item this year from HIPAA’s standpoint is the requirement to send vision plans electronically. Jacobs says a topic being discussed is whether Lab Management System (LMS) providers are business providers. If they are, do they need a business association agreement with their lab customers? Labs themselves are covered entities and independently required to comply with HIPAA.  He notes that The Vision Council can counsel labs on how to respond to their ECP customers by saying they do not need to sign a business association agreement with ECPs. Regarding OSHA, there has been a change in chemical label requirements. And finally, the NLRB has seen a lot of new laws related to social media.
MANAGED CARE AND MONEY
In a Thursday morning Optical Lab Division session entitled “Third Party Reimbursements and Managed Vision Care: What It Means For Optical Labs,” a panel of managed vision care experts discussed who would be more impacted by managed care and reimbursements ““ the provider labs or the doctors. While there definitely are a tremendous amount of compliance and regulatory issues, the consensus was that there is an opportunity for independent labs to work with managed vision care companies.

Richard Sanchez, managing partner at Visibility Management, LLC, moderated the session and he asked various questions to the panel of Aspasia Shappet, CEO, MESVision; Andrew Alcorn, president and CEO, Block Vision; Vince Hayes, vice president of managed care at Nationwide Vision; Dave Lavely, OD, president  and CEO, OptiCare Managed Vision; and Dan Levy, OD, chief optometric officer at Avesis.

“We believe as a managed care company everyone is pressured to offer better service, value, and cost containment,” said Shappet. “As a lab, consistent quality is rated very highly and we’re exploring some opportunities with labs.” Hayes added that he believes the vision industry will follow the healthcare industry and continue to see small networks and consolidation. Levy said a provider like Avesis would like to see bulk shipping and bulk pricing. “Working with a smaller lab that would share some of the risk with us would make the best partner,” he explained. Lavely’s opinion was that labs need to create business systems. When Sanchez asked them all if it was feasible for labs to create, market, and manage their own vision care plans, Levy asserted that: “I don’t think that’s a good idea because there are barriers to entry such as sales and marketing and administration services.” In order for a manufacturing lab to get into the sales of managed vision care plans, he added,  they’ll need functionality on the commercial and government sides. Hayes believed two large labs might have capabilities to do so but there could be difficulties regionally because of regulatory issues. “Definitely it’s possible,” Shappet concluded. “But it’s specialized and there would be lots of barriers.”


HELPING LABS TO STAND OUT
Labs need to learn how to differentiate themselves, especially with the new lens designs and digital products they regularly receive, said Michael Karlsrud, president and CEO of the Karlsrud Company. In his presentation: “The Circle of Service: Building Your Brand Through Better Service” to the Optical Lab Division meeting in Las Vegas, he stated, “We’re giving people so much choice they’re getting paralysis from the analysis.” Sales reps have told him that ECPs buy from labs based on price, quality, and service. Everyone sells on price, quality, and service. “You need to know more about your customers than they know about themselves,” he added.

Karlsrud maintained there are three circles of service: Marketing, Sales, and Customer Service. “Customer Service is not an entry-level job. It is an attitude and a function but creating a customer experience is a strategy. So you have to elevate what you do to bring it up to a strategic level,” he noted. Therefore, labs should offer an omni-channel approach that covers chat, calls, web, and mail since research has shown that customers’ preferred channels of experience are: 40% phone, 29% person, 18% email, and 13% online or social media. Nine out of 10 customers expect consistency in service across all these channels.

Companies that focus on the customer experience generate 60% more profit than their competitors, according to Karlsrud. “Customer experience leads to profits only if it is treated as a business discipline like accounting, marketing, sales, or service,” he explained. In order to create an experience customers will require answers to the following questions: “Was it enjoyable? Was it easy? Did it meet my needs?” It takes 12 positive experiences to make up for one negative one and 70% of buying experiences are based on how the customer feels they are being treated.

In general, over 82% of customers stop doing business with a company because of a bad experience regardless of the root cause. About 50% of customers don’t complain, 45% complain to the front line, or 5% complain directly to management. He stressed that a lab’s strategy should be to describe the service they want to deliver to their customers. This should incorporate understanding: Who are they? What do they really want? What do they really need? Governance should entail proactive management and oversight.

Labs should be able to carry out a simple test. Karlsrud summed it up: “Think of a bumper sticker. Your message about your service should be so short, to the point, and meaningful that you could put it on a bumper sticker. The simpler the message, the easier it is to be learned and practiced by everyone in the company. The more complicated the message, the less likely it is to ever be implemented.”

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