Major Eye Centers in Expansion Mode

Should independent practices in their orbit be concerned?

By Jerry Helzner, Senior Editor

It is a simple axiom of business that almost any entity that has worked diligently to build a widely known and well-respected “brand” will seek to leverage and expand that positive brand recognition into new and profitable areas.

The expansion may come in the form of new and related products, as with Nike and Bic Pen, or it may come in the form of expanding into new geographic areas, as with hotel chains, restaurants — and major eyecare centers.

There can be no doubt that the leading eyecare centers in the United States are currently in expansion mode, often moving into areas where independent practices have previously only had to compete with each other. Are the major centers a threat to independents? Or are they a regional resource, providing such complementary services as 24-hour emergency room, a wide range of highly specialized expertise to assist with complicated cases and broad educational opportunities for local ophthalmologists? To provide an idea of the scope of this expansion, here is just a brief snapshot of how major centers are growing their presence within the United States.

► The Wilmer Eye Institute at Johns Hopkins Medicine has built what amounts to a statewide presence in Maryland, with six satellites and campuses as far away as Frederick in the northwest corner of the state, says Richard Thomas, Wilmer Eye Institute administrator. Mr. Thomas says the growth has been strategic, well-planned by a series of visionary leaders and “based on an insatiable demand” for Wilmer's services.

The Wilmer Eye Institute at Johns Hopkins may be based in Baltimore (main building shown here) but this nationally-recognized eyecare center now has a statewide network of patient-care facilities.

“Johns Hopkins operates a number of multi-specialty medical facilities around the state, with ophthalmology being one of the specialties offered,” says Mr. Thomas. “Having family practice physicians, internists, pediatricians, ophthalmologists and other specialists at a single site provides convenience for patients and also generates referrals among the specialties.”

Recently, Johns Hopkins established an out-of-state presence by purchasing Children's Hospital in St. Petersburg, Fla. It is expected that eye care will be offered at that location.

The Wills Eye Health System operates a network of eye-focused ASCs throughout the tri-state region encompassing eastern Pennsylvania, southern New Jersey and Delaware. The facility pictured serves South Philadelphia.

► The Wills Eye Health System, based in Philadelphia, has been active in recent years in enlarging the scope of its network of affiliated ophthalmology practices and increasing the number of Wills-owned surgery centers that stretch from northeast Pennsylvania, through the Philadelphia area and into southern New Jersey and Delaware.

“The expansion has been strategic in nature, always keeping in mind a patient care orientation,” says Joseph P. Bilson, executive director of the Wills Eye Health System. “With Wills being a brand name, especially in the tri-state area, we have tons of folks coming to us seeking an affiliation. Unlike some of the other major eyecare centers, we will partner with private practices that we believe are the best of the best.”

In terms of future expansion outside of the tri-state area, Mr. Bilson says Florida is appealing. “The snowbirds know the Wills name so that is an area we would consider in the future,” he notes.

Bascom Palmer opened a large eyecare center in Palm Beach Gardens several years ago and has been steadily expanding across south Florida.

► Bascom Palmer Eye Institute of the University of Miami Miller School of Medicine has had a presence in Palm Beach County for more than 15 years and made a major expansion into that county in 2006 when it opened a 40,000-square-foot medical building and a 10,000-square foot ASC in Palm Beach Gardens. Bascom Palmer now has patient care centers in southeast Florida in Coral Gables, Plantation and Palm Beach Gardens and on Florida's west coast in Naples.

“Expansion throughout South Florida makes it easier for both patients and referring ophthalmologists to have access to Bascom Palmer physicians. With the rapid growth of the population in Florida and the resulting traffic congestion, it had become increasingly impractical for our older patients to make frequent visits to our main location in Miami,” says Michael Gittelman, Bascom Palmer's executive administrator. “Our satellite centers in Palm Beach Gardens, Plantation (Fort Lauderdale), Naples and (upcoming) Coral Gables, help relieve the burden of our patients driving long distances for their tertiary care,” he adds. “Our focus is on providing service excellence at our satellite facilities, with senior faculty rotating through the satellites.”

Due to increased patient demand, Bascom Palmer is currently expanding its facilities in Plantation and in Naples, while also looking to expand its main facility in Miami with plans for a new hospital, research center and educational complex. Mr. Gittelman says Bascom Palmer currently has no plans to expand outside the state of Florida.

► The Mayo Clinic, headquartered in Rochester, Minn., offers eyecare at its large Jacksonville, Fla., campus and also in Arizona.
► The Cleveland Clinic's Cole Eye Institute provides eyecare at seven facilities in northeast Ohio and at one hospital in Florida.

Views of a “Surrounded” Independent

If anyone should be able to assess the pros and cons of being an independent ophthalmologist who finds himself in the orbit of a major eyecare center, it's Alan B. Aker, MD, of the Aker Kasten Eye Center in Boca Raton, Fla. For those unfamiliar with south Florida geography, Boca Raton is a bit south of Palm Beach Gardens, north of Coral Gables and somewhat northeast of Plantation.

“If our practice was in its infancy, I would probably have greater concerns about being able to compete with Bascom Palmer, which surrounds us on our north and south,” says Dr. Aker. “They have tremendous name recognition and the ability to advertise extensively in a number of ways. We do not advertise and our practice strength is based first on patient referral as well as on a large number of referring ophthalmologists and optometrists. Because we are an established practice, the move by Bascom Palmer to directly compete with independent practices is perhaps not as much of a threat to us as it might be to the younger, newer practices in our area.”

Dr. Aker says the plus side of Bascom Palmer's close proximity is that “we respect their highly skilled subspecialists that can complement the care we provide to our patients. Because of long-standing relationships, mutual respect is evident during these encounters.”

But on balance, does Dr. Aker see Bascom Palmer as a friend or a foe?

“Never as a foe, but certainly we are aware of the competition,” he asserts. “Because of the extremely friendly and professional staff at our center, we feel we can compete toe to toe with BP. Over the years, we have developed a patient scheduling grid that enables us to almost always ensure that patients are seen on time and without any inordinate delays during any given visit.” That, he says, is an advantage over not only BP but also many other practices in the area. “In terms of our practice focus, which is routine, premium and complicated cataract surgery, we feel our outcomes and reputation enable us to comfortably compete with BP.”

A Consultant's Advice

Michael Malley, founder and president of the Centre for Refractive Marketing, advises independent ophthalmology practices that compete with major eyecare centers in Florida and New York City. Here's his approach to responding to the presence of “brand name” competition:

“When an educational institution or non-profit center with a reputation of eyecare excellence enters a market, it does change the landscape,” says Mr. Malley. “Their reputation alone usually ensures them a quick and sizable portion of the market.” Their partnerships with eyecare and eyewear service providers can also direct a significant portion of business their way, he notes. “In these situations, we never try and market head-to-head against these types of institutions. We also do not try and outbuy them in terms of technology, lasers or media buys either. Our approach is to market within the ‘wave’ they create in a market and hope that a personalized approach and boutique style of service is enough to maintain market share.”

Mr. Malley says that from a marketing standpoint, it is actually wise to “embrace” the competition from high-profile eyecare institutions in a positive manner. He says the old adage that “a rising tide floats all ships” still applies in 2011.

“Increased competition increases overall market awareness of the product,” says Mr. Malley. “Competing against larger entities also enables our smaller clients to be a bit more nimble with their marketing messages. We can easily tweak or change our entire marketing message within a few days, if necessary, whereas our much larger friends take a bit longer to turn their ships! Our approach against the Goliaths of the world is to simply nibble at the edges and take whatever small percentage growth we can get, which can eventually grow into a significant portion of the market,” Mr. Malley says.

In terms of marketing messaging, Mr. Malley usually localizes his clients' messages and gives them a bit more of a personal appeal than a standard national message. He also prefers to promote specific doctors, which is sometimes in contrast to the majors' approach.

When Worlds Collide

In a series of interviews conducted for this article with both independent ophthalmologists and administrators of major eyecare centers, Ophthalmology Management found that the overwhelming and prevailing view is that the proximity of a nationally-known center can often be a “win-win” situation for all parties.

In addition to the significant world-class “back-up” and support services that the large centers can provide to independent ophthalmologists and their patients, the nationally-known centers also have numerous alumni who retain ties to the institution where they received their training.

“We are fortunate to have many alumni who stay in the area to practice,” says Mr. Bilson of Wills Eye. “The value of the Wills name resonates with the patient population and our alumni maintain their affiliation with us in a variety of ways.”

However, even in an area in which Wills has made its expertise and its surgery centers highly accessible to independents, Mr. Bilson noted that “competition has gotten more aggressive” in the wake of Wills's expansion.

Occasionally, a major center using its “branding” clout will ruffle the feathers of nearby independent ophthalmologists.

In Cleveland, for example, a Cleveland Clinic (Cole Eye) billboard campaign touting Cole as “number one” in eye care in Ohio has irked a local independent.

“Those billboards bother me,” says the independent. “First of all, the vast majority of eye care isn't performed in hospitals. Second, when you claim to be number one in anything, you are implying that everyone else is not as good as you are.”

Cole Eye declined to be interviewed for this article.

William Trattler, MD, practices independently in close proximity to Bascom Palmer's main facility. He maintains an excellent relationship with Bascom Palmer, appreciates the special skills offered by Bascom ophthalmologists, consults with Bascom Palmer on cases in which his own expertise is valued and enjoys the use of Bascom Palmers “excellent” microbiology lab.

“As long as the major institutions work closely with the community doctors, like Bascom Palmer has in Miami, then not only does everyone get along but our patients benefit by everyone working together in a positive manner,” he believes.

But he does see the possibility for conflict in these sensitive relationships.

“I have thought about this and to me the main issue in (fouling) these relationships is overly aggressive marketing,” asserts Dr. Trattler. “Negative advertising, such as saying ‘we are better doctors than your doctors’ should be a no-no. Fortunately, we have not seen that kind of advertising from Bascom Palmer in Miami.”

Michael Gittelman of Bascom Palmer says he is well aware of the sensitivities of the independent ophthalmologists in the south Florida area.

“We don't go in for billboards or big ads,” says Mr. Gittelman. “We strive to maintain good relations with the independents and I believe most are thankful that we are in their backyard, though a small percentage resist Bascom Palmer's growth plans.”

Mr. Gittelman says Bascom Palmer currently has about 25% market share in the areas of South Florida in which it has a presence.

“Patients often come to Bascom Palmer's main facility in Miami as referrals for a second opinion,” notes Mr. Gittelman. “We are usually not their first stop.”

Centers Pursue Different Models

As institutions that place a high priority on research, both Bascom Palmer and Wilmer are focused on hiring full-time doctors who are directly employed and hospital-affiliated, though exceptions are occasionally made.

“We do have some part-time faculty who have private practices,” says Richard Thomas of Wilmer. “These doctors have strong ties to Wilmer but we're only talking about a handful of people. We prefer to have full-time physicians.”

Though Wills's ophthalmologists also conduct a great deal of research, Wills is more apt than the other two institutions to offer partnership affiliations to ophthalmologists who are also in private practice.

“I have an office in the Philadelphia suburbs and an office at Wills in center city,” says Richard Tipperman, MD, a Wills-affiliated ophthalmologist. “I consider the arrangement a ‘win-win’ relationship. We can market the private practice as Wills Eye-affiliated and myself as Wills-trained. The patients can actually choose whether they want me to see them at the Wills Eye office or at my suburban office.”

Though Dr. Tipperman enjoys the nature of his relationship with Wills, he does see where some independent ophthalmologists may view Wills as a competitive threat.

“Wills has established this eyecare-focused, very well-run ring of ASCs in the region and this presence could cause community hospitals to lose out,” he says. “Or you might have some independent ophthalmologists who build their own ASC and then Wills comes into the area with their big red “W” logo and the Wills signage. That's going to have an impact on the independent ASC.”

Independents Should Plan Ahead

It is difficult to fault the nationally-known eyecare centers for their desire to grow and expand. They are sensitive to the fact that by moving into new areas they may be competing with their own alumni and they seem to be taking pains not to offend or demean the competition. However, in speaking to the administrators at several nationally-known centers, it becomes clear they believe that with the aging of the baby boomers there are enough patients to go around. Especially in so-called “retail refractive” where the major centers have shown little interest.

“It's a big pie,” says one administrator. “I don't think we need to feel guilty about expanding.”

Independent ophthalmologists whose practices are located in proximity to a nationally-recognized eyecare center should be aware that they may one day have a behemoth as a competitor. However, as this article attests, other independent practices have been able to deal with the competitive environment and even thrive in it. The large eyecare center may have the brand name, but the smaller, nimble, more personal independent practice still has the capability to largely control its own destiny. OM