Table of Contents
Key takeaways:
- Congress is investigating a major vision insurance provider for potentially anticompetitive practices.
- There is a growing trend of consolidation and vertical integration in the vision industry that doesn’t benefit patients.
- As a broker, you can help preserve a fair market where patients have access to affordable care by being mindful of the plans you offer.
A major vision insurance company is under scrutiny.
An antitrust subcommittee is currently investigating how a key player in the vision insurance market is utilizing vertical integration. The concern is that this practice is detrimental to competition, limits consumer choices, and ultimately drives up premiums and other costs for consumers.
Consolidation and vertical integration have been a growing trend in the vision industry, and we may see vision insurance antitrust laws take effect in the near future. Here’s what it means for brokers like you.
Vertical Integration: Why It Hurts the Vision Industry
Before going any further, it’s important to understand what vertical integration is and how it affects you and your customers:
- A few large companies dominate the majority of the vision insurance market.
- They’ve been buying or partnering with optometrists, labs, and manufacturers to build a system that controls the entire process, from purchasing insurance to receiving care.
Congress has established a subcommittee to investigate the extent of this practice and assess whether it is anticompetitive. Once an insurance company controls an entire vertical, it can use coverage limitations to force consumers to make the choices that benefit the insurer the most. This can look like:
- Limiting access to independent optometrists in favor of the retailers with which the insurance company has partnered.
- Impose lab restrictions so that consumers must obtain glasses and lenses from the lab owned by the insurer.
With this system in place, consumers are stuck in a vertical controlled by their insurer. This limits choices and competition, and puts the insurer in a position to raise prices.
Why Vision Insurance Antitrust Matters to Brokers
As a broker, you get to pick which insurance companies you work with. Congress investigating anticompetitive vision practices should be a wake-up call if you’re working with major insurance providers.
Creating a market with fewer choices for consumers isn’t in your best interest. At the end of the day, consumers stuck in a vertical and paying more for services will have a low satisfaction rate.
There is an opportunity to build trust with your audience and maximize value by:
- Discussing vertical integration and anticompetitive practices when reviewing plans.
- Offering a wide range of options to preserve consumers’ choices and fair competition in vision plans.
- Prioritizing plans that give your customers access to independent optometry practices.
- Reviewing pricing models carefully to understand coverage limitations for the plans you offer.
- Paying close attention to networks and going over which local practices accept the plans your customers are interested in.
With this ongoing investigation into a major vision insurance provider, anticompetitive practices are getting some attention in the media, and you’re more likely to run into consumers who are aware of the issue. It’s worth noting that this is not the first time Congress has examined the issue, and there has been some pushback from other industry players in the form of lawsuits.
For brokers who position themselves as being against these practices, there is a real opportunity to stand out.
From Controversial Practices to Differentiator
Prioritizing plans from large vision insurance companies can be tempting, especially given their enticing marketing. However, you can stand out from competitors by taking a different approach:
- Build a portfolio that includes plans from smaller insurance companies and alternatives, such as prepaid plans. Providing your customers with more choices will boost their satisfaction.
- Prioritize products that don’t limit choices. It aligns with the patient-centric care trend shaping vision health and encourages your customers to play a more active role in their health journey.
- Protect independent optometry access as much as you can. These small practices provide excellent patient care and are likely to contribute to a high satisfaction rate.
This approach will help you connect with customers who want more choices, care about value, or who have had bad experiences with major insurance providers in the past. It also helps you become a trusted advisor who can assist customers in navigating a complex market where pricing and fairness are growing concerns.
How VCD Supports a Fair Market
Anticompetitive practices affect everyone in the industry. As a broker, you can make a difference and help preserve a fair market where customers have access to affordable care by being mindful of the products you offer.
Vision Care Direct of Oklahoma is on your side with doctor-owned plans that prioritize patients’ needs. We don’t restrict lab choices and give your customers access to one of the largest networks of optometrists in the state, including many independent practices.
Thanks to our negotiated savings model, everything is transparent, and your customers have full control over the care they receive. You can expect improved satisfaction and products that support a fair and competitive industry for everyone.
Learn more about becoming a VCD broker here.
FAQ
What is vertical integration in the vision insurance industry?
Major vision insurance providers have been buying and partnering with downstream businesses. The goal is to force customers to select specific optometrists, labs, and manufacturers, thereby benefiting the insurance company.
How is consolidation hurting patients in the eye health industry?
Consolidation creates fewer choices and limits competition. It means prices increase, and patients may not have access to the care they need.
What can brokers do against anticompetitive practices in the vision industry?
As a broker, you can make a difference by working with smaller insurance companies or alternatives like prepaid plans. Offering diverse options and helping customers understand costs and coverage limitations are also important.
