Optometry Alliances/Buying Groups – Who to Choose and Why?
Dear ODs on Finance Members,
Last week the OD community got some shocking news in their inboxes. One of the major players in the OD Alliance/Buying Group space - PECAA/HEA, was acquired by a large vision care plan which had recently rebranded.
The acquisition was, well, met with extreme negativity. Doctors expressed chagrin that a company that has a sordid history of undercutting both doctors and patients would take over an Alliance to further gain top-down control. In fact, many doctors publicly declared that they were looking for alternatives.
This of course led to a flood of questions in our inboxes and on our FB Community forum: WHERE do we turn to and who do we go with now?
Here's the good thing: our whole team has been researching Alliances/Buying Groups heavily for over a year now. We have met extensively with leadership from multiple groups, been invited to exclusive meetings as non-biased guests, and talked with many independent ODs that are part of these groups.
Based on our experiences and the feedback of our ODoF members, we are happy to recommend two Alliances:
Vision Source and IDOC
With every Alliance, we realize that both positives and negatives do exist. In the next few paragraphs our goal is to elucidate the pros and cons of each Alliance as transparently as possible. We also want to help you realize the unique offerings of each and whether they fit in with your long term practice vision.
Vision Source
1. What is it?
2. Why is it Awesome?
3. Why is it not so Awesome?
4. Who owns it?
5. Is it for me?
(1) What is Vision Source?
Vision Source is a family of 3,100 locally owned optometric practices collaborating to provide quality professional eye care while maintaining the personal relationship between patients and their family eye doctor.
(2) Why is Vision Source Awesome?
Well it really comes down to three key offerings that VS brings to the table.
- The best deals with participating vendors on equipment, practice services, frames, lenses and contact lenses - Since VS has over 3000 members, it is able to leverage substantial discounts and rebates on products from its participating vendors.
- The Community - Vision Source doctors are a community that help each other grow. Most of our team has had the pleasure of attending Vision Source meetings, and the atmosphere is just different - in a good way! Constant knowledge and inspiration is spread through learning labs and hallways conversations - and that continues outside of big events with smaller local events and individual doctor meet ups.
- The Support - VS exists to help its doctors thrive and it prides itself on having successful private practices that are members. This means you'll have support from individuals at every level to ensure you are maximally implementing revenue boosting strategies that are offered.
- VS members outpace the industry in revenue- When looking at year over- year revenue growth, a $1 million practice typically generates $240K more per annum after five years with VS versus $80K as a non-member office.
(3) Why is Vision Source NOT so Awesome?
A Contract is involved - There are regulations that must be followed as a VS member (some of which can affect insurance credentialing such as Eyemed), as well as a contracted time period that you are a VS member. So read carefully and ask lot of questions!
Cost is usually higher especially for more established practice since it is a 2.5% of your gross revenue each year. But this is capped at $4,000 per month.
While this is great for cold-start practice with smaller revenue in their earlier years, these cost might add up for more established practice. Think of VS as "asset-under-management (AUM)" similar to a financial planner, but for optometry alliance.
(4) Who owns Vision Source?
VS is owned by Essilor/Luxottica. This means that Essilor/Luxottica products are offered with the largest incentives. However, it is important to note that Essilor/Luxottica have intentionally created separation with its consumer facing strategies, and have more or less let VS run as its own entity.
(5) Is Vision Source for me?
VS represents an "all-in" option. With VS, expect yourself to be fully immersed in a community that obsesses over growth and building revenue for all its members. Expect to be surrounded by positivity and to throw yourself into your role as practice owner. Realize that this does come at a cost that is higher than most Alliances, however if your membership is utilized to its fullest - the benefits will far outweigh the initial investment.
There are thousands of VS fanboys & fangirls for a reason!
Want to learn more about Vision Source? Contact Aaron Werner: awerner@visionsource.com
IDOC
1. What is it?
2. Why is it Awesome?
3. Why is it not so Awesome?
4. Who owns it?
5. Is it for me?
(1) What is IDOC?
IDOC is a service-focused alliance committed to the success of all independent-owner optometrists. We offer a full range of products and services designed for competitive advantage and long-term business growth. Our personalized approach, technology expertise and hands on execution sets us apart, freeing you and your staff to spend time with patients and achieve both personal and professional goals.
(2) Why is IDOC awesome?
- (a) Unique A La Carte Services and Tiered Membership - IDOC positions all its offering as pick and choose. Thus, you are able to choose certain services/offerings that fit your individual needs rather than pay a higher global membership fee. Flat-fee monthly cost of $150 for their most basic Essential Plan, up to $450 for their Advisor Plan.
- (b) The best deals with participating vendors on equipment practice services, frames, lenses and contact lenses. Similar to VS, IDOC with its large network of members, is able to leverage significant deals and rebates with select vendors to ensure the best possible pricing for its members.
- (c) Experienced Support/Consultants - IDOC employs a team of consultants across the globe that study the business of optometry and can both relay knowledge and implement systems
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(d) Flexibility with no long-term commitment: Cancel anytime!
(3) Why is IDOC NOT so awesome?
Having options can be challenging when you have not analyzed your practice from head to toe. Being successful with IDOC may require you to be a bit more independent in thought and less reliant on a "community" (but keep in mind that IDOC community of doctors is very strong!).
- Cost: IDOC is well-known for charging a flat monthly fee ($150 for its most basic plan, up to $450 per month) depending on how much service you take advantage with no contract required. This flat-fee structure is the opposite from the "AUM" fee 2.5% structure from Vision Source.
But as a cold-start practice with little or no revenue, these flat-fee can be higher to compared a simple 2.5% of gross revenue.
(4) Who owns it?
The IDOC leadership team together with its partners at IMC make up the ownership group of IDOC. IMC is not a private equity firm that is forced to buy/sell businesses over a designated hold period to satisfy outside investors.
IMC is a privately held company that strives to be a responsible long-term owner of business that make a positive impact on others and are aligned with its ethos of business as a force for good. IMC prides itself on having a 100-year mindset for the growth of its family of companies and is fully supportive of IDOC’s vision to be independent and serve independent optometry. Read more about IMC here.
(5) Is IDOC for me?
If you know what you want, are specific with those wants and have a budget for those wants - then IDOC is the perfect fit for you to grow your practice and make it more efficient. IDOC's unique approach to its presentation of offerings as well as its knowledgeable consultants allow for an experience that is concise and extremely effective.
Want to learn more about IDOC? Contact Nathan Hayes: nhayes@idoc.net
SUMMARY: The World of Independent Optometry is Changing Rapidly, and we are always here to help in every way we can.
Our mission at ODs on Finance is to provide the necessary resources to achieve both personal and professional financial freedom. Embedded in that philosophy is the belief that independent optometry and practice ownership presents the best path towards financial freedom.
For every partner we collaborate with, we attach our own personal OD reputation to the company so we don't take these relationship lightly. No FLUFF, just objective feedback/data. Our responsibility will always be to ODoF members, not our sponsors.
Thus, Aaron & Dat will continue to dig, investigate, jump on calls, and advocate for the independent optometrist. We encourage you to explore the options we have outlined for you in this newsletter. Both Vision Source and IDOC have unique offerings that play to specific needs and personalities.
As always, if you have any questions or comments, feel free to email us.
Sincerely, Dat and Aaron | Co-Founders
Want to learn how to build your own portfolio? Check out The Optometrist's Guide to Investing 101
Want to get a full blueprint on How to start? Buy our Book The Optometrist's Guide to Financial Freedom
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