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An aging population and increasing use of computers in the workplace are prompting many employers to give vision care benefits another look.
While some employers began offering the perk in the early 1990s to make up for the introduction of restrictive managed care plans, other employers -- particularly those in high-tech fields -- now are finding it necessary to provide vision care benefits to keep and attract talented workers in today's competitive employment market.
In an effort to capitalize on the growth in third-party payment for eye care, numerous optometric networks and so-called "managed vision care" plans are sprouting up across the country. And competition for the growing vision care benefit market has triggered consolidation among vision plan providers and retail eyewear chains jockeying for market share.
"It's the demographic wave hitting the beach," observed Steve Swiercz, vp of Aon Consulting Inc. in Chicago. "The baby boomers are aging, so vision care is becoming more important to them. They are telling their employers, and employers are listening."
An estimated 155 million Americans, or 60% of the U.S. population, need corrective eyewear. In the coming years, an estimated 76 million baby boomers will be subjected to middle-age eye problems such as presbyopia, or far-sightedness.
Furthermore, the National Eye Institute predicts that with the aging of the United States, nearly 10 million people may have some form of macular degeneration by the year 2030 -- more than double the 4.4 million diagnosed with the disorder in 1996. Macular degeneration, the leading cause of blindness in the United States, gradually destroys sharp, central vision.
"The other driving force (behind the growth of vision coverage in employee benefit plans) is technology," according to Aon's Mr. Swiercz. "Employees using PCs are complaining that they're suffering from eye strain."
Indeed, "computer vision syndrome" -- eye pain or irritation, headaches, blurred or double vision, and excessive tearing or dry eyes -- now plagues nearly 90% of employees who work at computers, according to the American Optometric Assn.
"In the last year, when employers surveyed employees about their benefits, vision almost always comes back as the No. 1 need," Aon's Mr. Swiercz concurred. "Even employers who already have a vision plan are going back and improving their packages by adding coverage for options such as scratch coatings or increasing frame allowances."
Towson, Md.-based Black & Decker Corp. added vision care to its benefit menu in 1991, at the same time that it rolled out a new point-of-service program, according to Raymond Brusca, vp-benefits. "We took some of the savings and gave it back to employees in the form of an additional benefit," he said.
The plan, which is available to all 13,000 of Black & Decker's U.S. employees and their dependents, makes up less than 1.5% of the manufacturer's total annual health plan costs, he estimated.
The indemnity-style coverage is administered by CIGNA Healthcare, which pays for annual eye exams above a $10 copayment and provides an allowance for eyewear.
The Tampa, Fla.-based Employers Purchasing Alliance, a group of health care purchasing coalitions representing more than 460 employers in six states, recently contracted with Eye Care International to provide discounted eye care services to approximately 1 million employees and their dependents.
For a $28 per-employee annual premium, the five-year-old vision plan based in Largo, Fla., gives members access to a network of more than 10,000 ophthalmologists that provide free or reduced-price examinations and eyewear.
"At a time when insurance programs are reducing benefits, ECI offers a great advantage," said Frank M. Brocato, director of the purchasing alliance.
Redwood Shores, Calif.-based software maker Oracle Corp. has provided vision care as part of its standard benefit package "for years," according to Aldy Duffield, benefits manager.
"It's pretty much expected" in the high-tech industry, she explained. "Benefits are becoming more competitive as employees move from company to company."
Indeed, vision has become a much-sought-after benefit, much as dental care did during the late 1970s and early 1980s, observed William J. Mancini, the recently appointed director of SightCare, Sight Resource Corp.'s managed care division.
Mr. Mancini, who has 18 years' experience managing health plans and products, joined SightCare last month because he sees vision benefits as the next managed care growth area.
"Growth of managed vision care is following the same pattern as managed health care," he said, adding that "vision care is now where mental health, dental and pharmacy benefits were 15 years ago."
Though fewer than half of large employers offer vision care coverage, the percentage that does has grown significantly in recent years, according to surveys by Lincolnshire, Ill.-based consultant Hewitt Associates L.L.C.
In 1997, 47% of U.S. employers surveyed by Hewitt said they offered the benefit, up from just 35% in 1993 (see chart).
Employers in the West are the most likely to offer vision benefits, with 61% doing so, according to the Mercer/Foster Higgins National Survey of Employer-Sponsored Health Plans. These benefits are often included in an HMO's package of services, and employers that offer one or more HMOs are more likely to provide vision benefits, at 43%, vs. employers that don't offer an HMO, at 30%, the survey found.
"But vision is one of the few benefits where the employer can see an almost immediate return on investment," points out Clarke Marcus, president and chief executive officer of Eyecare International. "Offering vision benefits can enhance productivity."
Vision care also can be an integral part of managed care, according to Ric Steere, vp-sales for Rancho Cordova, Calif.-based Vision Service Plan, the nation's largest and oldest vision plan, with 14,500 employer contracts covering a total of 25 million individuals nationwide.
"The eye is your window to wellness," according to Mr. Steele, who noted that an employee is often more likely to visit an eye doctor than a primary care physician.
With more and more employees receiving vision care coverage, the "three Os" -- opticians, optometrists and ophthalmologists -- have started to join more vision plans in an effort to maintain or increase their patient volume, according to 20/20, a vision care industry trade publication.
Today the average vision care provider participates in 11.1 vision care plans, up from 7.3 vision care plans in 1997, 6.1 plans in 1996, and 5.9 plans in 1995, according to surveys conducted by 20/20, which is published by New York-based Jobson Publishing.
In 1996, the American Academy of Ophthalmology introduced PrimeSight, the first national physician-led vision care network.
"Managed eye care is one response to controlling costs. The basic concept is to control utilization by giving the right care at the right time," explained Don Koenes, vp-sales and marketing for the San Francisco-based vision plan.
"PrimeSight was specifically formed for this purpose, responding to the need for medically sound, market-sensitive eye care programs," he explained.
PrimeSight, which is being marketed to both employers and health plans, recently signed a two-year contract with Cole Managed Vision, whose network includes Pearle Vision, Sears Optical and Montgomery Ward Vision Centers.
Competition for the growing eye care market has prompted consolidation and partnering among vision plans and retail chains, as well as among independent eye care providers. For example, Sight Resource, launched in 1995 as a laser-surgery provider, has been on an acquisition fast track for the past three years, buying up existing eyewear chains to secure a place on the retail side of the business, a company spokesman said.
Other recent acquisitions include Cole's 1997 purchase of 163 AVC/NuVision stores; LensCrafters' purchase of 10 Lens Lab units in the East and the Northwest from Paris Miki USA; and Sterling's purchase of 31 Singer Specs locations. Also, the management company that has been operating Texas State Optical acquired the 100-store America's Best Contacts chain.
"The eye care market is strong. With aging baby boomers and a growing senior population, the entire spectrum of eye care needs is growing," summed up PrimeSight's Mr. Koenes.