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Spectrum Works With Labs to Form Extensive PPO Base

Spectrum Works With Labs to Form Extensive PPO Base

OVERLAND PARK, KS – Working through an extensive network of preferred laboratories, Spectrum Vision Systems, Inc., a two-year-old preferred provider organization (PPO) has built a provider base of 2,300 independent practitioners, giving it the largest PPO provider base in the U.S., according to Paul Disser, chairman of the board, president, and CEO.

The organization also currently has 70 contracts with wholesalers, representing 160 locations in 40 states.

“We are the only PPO with such depth and breadth of contractual relationships with wholesalers,” Disser says. “We work in concert with these labs to identify strong practices in a specific geographic area.”

Spectrum works through closed panels of providers. The number of prospective patients in a given area determines the number of ODs asked to participate in the plan, according to Disser. Ninety percent of Spectrum’s providers are ODs, while 10% are ophthalmologists and opticians.

Currently, the company has 50,000 cardholders, whose families are also eligible for Spectrum benefits. It is too early to track cardholder utilization rate, Disser says, because the company did not start selling memberships until March of this year and has not had a chance to complete a year’s cycle of active marketing.

One of Spectrum’s strong suits is the optical industry experience of its executives, Disser notes. “Two of our top management people (Robert Feher, executive vice president, and Jack Rudd, vice president) have 50 years combined experience at the wholesale and retail level,” he says.

“This means we have the expertise to address the needs and concerns of the independent practitioner. In addition, we have done something that no other PPO has done, and that is to marry optical experts and experts in the benefits field in our management team.”

The provider is the lynch pin of the organization, Disser says. In putting together its payment formula for members, which consists of the wholesale cost of the product plus a dispensing fee, Spectrum considered the needs and sensitivities of its provider base.

“We did extensive research at the lab and retail level in working out a formula that would yield a benefit to both the patient and the doctor,” he says.

In general, providers are content to work with Spectrum’s wholesaler network because “these labs represent the cream-of-the-crop,” Disser says. In turn, the labs serve as a quality control mechanism, ensuring high product standards and informing Spectrum if a provider has a high incidence of re dos.

One provider, Jerry Padfield, OD, Garnett, KS, says, “Working with approved labs is fine with me, because those are the labs I was working with anyway.”

Another provider, however, Alvin Pollack, OD, St. Louis, MO, is less enthusiastic.

“I feel working with approved labs is an imposition because you are locked into a price,” he says. “I might be able to get a lesser price.”

Spectrum’s members include financial institutions, unions, and insurance companies such as The Travelers Companies, Telecredit Marketing Services, Inc., and the Missouri Automobile Dealers Association. In addition, Spectrum works through third party administrators.

Companies that are considering signing contracts with Spectrum generally ask for documentation of its utilization rate, Disser says.

Spectrum Providers’ Labs Form Advisory Panels

OVERLAND PARK, KS – In an effort to incorporate the needs of its providers and approved labs more fully into its administration, Spectrum Vision Systems, Inc., will create two seven member boards of providers and lab principals.

The plan has been approved and adopted by the organization’s board of directors and will be implemented no later than the end of the year, according to Paul Disser, chairman of the board, president, and CEO.

“The boards’ role will be to serve as advisors to Spectrum concerning fees and benefits,” he says.

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