Add this to the growing list of COVID-19 pandemic consequences: a surge in nearsightedness caused by people retreating indoors and onto their screens. Numerous recent studies associate the pandemic with increasing myopia rates among children and adults. The rise of addictive apps such as TikTok and general smartphone use is also partly to blame.
As a result, tens of millions of Americans need eyeglasses for the first time or new specs with stronger prescriptions. That means dealing with wildly inflated eyewear prices.
Is there a more obvious example of price-gouging in today’s economy than the cost of eyeglasses? Consumers are routinely charged a few hundred dollars for a pair of glasses whose raw materials cost a few dollars to make.
I recently purchased a new pair of glasses that cost $700. My vision insurance brought the out-of-pocket price down to $400. Yet the optical shop was also offering a two-for-one sale for $700 — exclusively for those not paying with insurance. I left the store thinking: What’s the point of spending hundreds of dollars a year in vision insurance premiums if eyeglasses cost roughly the same outrageous amount out of pocket?
Bipartisan legislation set to be reintroduced in the House of Representatives can reduce these prices by breaking up the vision insurance and eyeglass maker cartel responsible for them.
Patient groups often cite “vertical integration” as a primary culprit for outrageous health care costs. Even with a simple definition of this concept (the corporate consolidation of the medical supply chain), it can be confusing to follow. The American eyesight correction industry offers a clarifying microcosm of the problem.
The top two vision plans in the nation — EyeMed and VSP — cover approximately two-thirds of Americans. These plans have acquired or opened eyeglass stores, laboratories and frame manufacturers, allowing them to dominate the entire production chain.
These plans force eye care providers to use their frames, labs and middle players in return for being considered “in-network” and receiving covered customers. Unless optometrists agree to vision plans’ terms, they can lose customers to plan-affiliated competitors.
This industry control allows these vision giants to control doctor and patient behavior and overcharge. By reducing choices and increasing costs, vision plans extract more money from patients and siphon profits away from eye care providers.
“There is no competition in the industry, not anymore,” longtime industry expert Charles Dahan says. “Luxottica [EyeMed’s parent corporation] bought everyone,” including Lenscrafters, Sunglass Hut, dozens of brand-name designer frames, and major lens manufacturers. “They set whatever prices they please.” A Luxottica spokesperson admitted that its vertical integration is “one of the competitive advantages underpinning the group’s past and future successes.”
As a result of this market domination, approximately 1 in 10 Americans report being unable to afford their glasses.
Forty-four states have passed legislation to prevent such inflationary and restrictive health plan contractual arrangements with optometrists. Yet a federal law known as ERISA, for Employee Retirement Income Security Act, preempts state rules for most health plans.
The Dental and Optometric Care Access Act, co-sponsored in the last Congress by Buddy Carter, Georgia Republican, and Yvette Clarke, New York Democrat, in the House and Kevin Cramer, North Dakota Republican, and Joe Manchin, West Virginia Democrat, in the Senate, would free optometrists and patients from the vision cartel and allow them to choose the best supplies at the lowest cost.
“It is past time we balance the scales and give doctors more choice in deciding the direction of care by allowing them to choose their own materials and lab services and by increasing fairness in doctor-insurer agreements,” Mr. Cramer explains. Mr. Carter tells me he plans to reintroduce this legislation in the House in the coming months.
The vertical integration problems plaguing vision care persist throughout the U.S. health care system and must be addressed to reduce crushing patient costs. The eye care example can help ordinary Americans see this crisis more clearly, even if everything else around us is a little more blurry.
• Terry Wilcox is the executive director of Patients Rising and co-host of the “Patients Rising” podcast.