CEO Rothrock: Making Investments for Superior Vision and Davis Stakeholders

BALTIMORE—It’s been a busy first year for the managed vision care company Versant Health. Created by the merger of Davis Vision and Superior Vision in late 2017, Versant Health debuted as the corporate name for the “new” company in May 2018 and, after hitting the ground quickly, the company has continued to work at a steady pace to invest and reshape itself as an adept competitor in the managed vision care space over the past 12 months.

The increased investment was made possible, in part, because of the greater size and scale of the combined company. “Superior was a small company and it had limited resources,” Versant Health chief executive officer Kirk Rothrock told Vision Monday in a recent interview. “When we put the companies together with 33 million members it gave us more resources, more influence and more funding to invest in the routine kinds of things that make our business run.” And, these improvements “will be felt by all of our stakeholders as we roll them out throughout the rest of the year,” he added.

One of the first things the new company did was choose a corporate name that would reflect a new direction and vision. (Superior Vision and Davis Vision were united under a new parent company in late 2017 when the PE firm Centerbridge Partners and a Highmark Inc. subsidiary reached a deal under which Centerbridge purchased Davis Vision and merged it with its own Superior Vision business.)

Kirk Rothrock
“We were very thoughtful about that [new] name and I insisted—as well as those around me—that while we are primarily a managed vision care company, the word ‘health’ had be included in the name of our overall organization,” Rothrock said. This was a way to reflect the increasing awareness of the connection between eye health and wellness as well as overall health and wellness, he said.

Once the Versant Health name was selected, the next step was to clearly explain to the market how the legacy Davis and Superior names would transition to “product” names in the managed vision care market, he said. Versant Health now offers a Superior Vision product and a Davis Vision product and they are designed to build upon their histories and the differentiation previously established in the marketplace.

Currently, the Superior product has “arguably the largest provider network in the country, so there is a significant amount of choice for members,” Rothrock said. It’s also priced a bit higher price than average. Davis plans are lower-priced and have a smaller network than Superior Vision.

“When we put the companies together, we felt like these two products from the two companies were differentiated enough that we needed to maintain that,” he said. (The firm has almost 24,000 providers within its Davis Vision network, and just over 32,000 ECPs within Superior Vision.)

As a result of the merger and the companies’ combination, Versant Health is now the largest administrator of Medicaid vision benefits in the country, Rothrock said. This means significant effort has been directed toward meeting regulatory and compliance aspects. There are substantial demands from a compliance, documentation and reporting standpoint on Medicaid health plans, and they in turn place those same kind of demands on their downstream partners, including managed vision care partners, Rothrock explained.

“We actually believe that to comply with these regulations is not a burden, but in fact a competitive advantage,” he said. “If we can demonstrate compliance at the highest levels with government regulations and if we can pass literally the hundreds of audits that we go through in the course of a year, [then] other Medicaid administrators are more likely to choose us than they would someone else.”

For Versant Health overall, almost one-half of its managed care business comes under the umbrella of Medicaid vision benefits.

Rothrock added, “This has been something not readily seen, but we have put tremendous time and energy into regulatory compliance so we can demonstrate to our existing Medicaid health plan partners as well as prospective health plan partners that they need not worry about our performance if they choose us.”

Another area of focus has been Versant Health’s efforts in the area of eye-health management and treatment of diseases of the eye, including glaucoma and cataracts. Treatment (and the reimbursement) of these conditions typically comes under a “medical” policy, but still Versant Health has set out to develop an expertise in these areas to help health plans effectively manage treatment.

At the core of this effort, Rothrock said, is a data base of “millions and millions of clinical transactions about the appropriateness of care and whether there are alternate treatments that might be rendered.” This is coupled with a large staff of ophthalmologists and optometrists who review the requests for treatment and engage the treating physician about the appropriateness of care.

“We are helping the health insurance company members get the right care at the right time and effectively manage costs,” he explained. “We are kind of working ‘up the line’ in terms of complexity of care,” he said. “We call it vision medical management, and we have a number of large national health insurance companies that have carved out this service to us to help us manage, and we are actually quite good at it.”

Rothrock said Versant Health also has made substantial investments, “tens of millions of dollars over the last year [to fund] new infrastructure” and develop new business tools. For example, the company is in the midst of implementing resources to support new call center technology, which will allow Versant Health to merge the Superior and Davis legacy employees to better handle telephone calls and to dynamically route calls. “We are currently answering phone calls into our shop in 12 seconds, which is pretty darn good and a substantial improvement from where we were,” he said.

Adding electronic payment processes to providers to speed payments and creating a web portal are other areas that have been addressed. “I think many of our competitors do it, but we were paying our eyecare professional partners by check and now we are going to pay them electronically and get the money to them faster,” Rothrock explained.

The company’s new web portal should launch later this year, which will provide members with an “updated way to interact with us electronically, Rothrock said. “Most importantly, our eyecare professional partners are going to have a web portal that is state of the art and works as well as the best internet tools they have available to them for professional or personal use. We are really excited about it, but it’s not there yet. I just got a demonstration last week and I think it’s going to wow eyecare professionals.”

In terms of repositioning the company to customers, Versant Health has been working to communicate that its Davis Vision plan is no longer affiliated with the optical retailer Visionworks. (Davis Vision and Visionworks previously were under the same Highmark Inc. umbrella, until the 2017 transaction with Centerbridge Partners separated the two businesses.)

“While Visionworks is still in our network, they are not a partner or affiliated in any way with the new Versant Health,” Rothrock said.

Behind all of these programs is a new management team, which consists of roughly one-third legacy people from Superior Vision, one-third legacy from Davis Vision and one-third of new people recruited from outside.

“What I would say about this particular group of people is that they come from the health care industry,” Rothrock said. They are people who come from health plans primarily…. and they have added a perspective and a depth of knowledge about health insurance, health plans and how patients are treated overall and [they are] helping us think about how we fit into that.”

The team includes chief operating officer Maynard McAlpin (formerly with Highmark), chief financial officer Jonathan Bicknell, and chief medical officer Mark Ruchman, MD. In addition, the new senior vice president of medical management is Elizabeth Klunk, who was recruited from a health plan, Scott Hamey is the executive vice president of strategy and manufacturing, and former Blue Shield of California executive Jeff Hermosillo is now Versant Health’s executive vice president of sales and marketing.

To further its efforts to support ECPs, in late May Versant Health announced an agreement with Essilor to fulfill lab orders using Essilor’s nationwide lab network. Implementation of the program—which is designed to expand lens product offerings to ECPs—will occur over the next 12 months and begins with a pilot in July, the company said.

Versant Health will continue to operate its existing manufacturing and lab facility in Newtown Square, Pa. Once the new dispensing program is fully rolled out, however, the only ECPs who will place orders through the Newtown Square facility will be those who are dispensing for their Medicaid patients.

Rothrock said the new dispensing agreement “is part of a larger initiative to make Versant Health the most trusted managed vision plan in the market.” He added, “The program gives members access to high quality eyewear using advanced technology and broad choice in lens functionality.”