Watch For Expansion Opportunities
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“Watch For Expansion Opportunities”
Enhance your core business rather than straying from it.
Launched in 1996 and recently acquired by TLC Vision Corp. for $17.5 million, TruVision is a third-party administrator that offers laser surgery, contact lenses, hearing tests, hearing aids and cosmetic surgery through healthcare plans. These are elective benefits that aren’t covered by insurance, but because of TruVision’s buying power, health-plan members receive significant savings.
Although TruVision has an extensive list of services today, it began as a mail-order contact-lens business. Atwood soon decided to move into laser-assisted in-situ keratomileusis (LASIK) eye surgery, and he contracted with laser centers and doctors around the country to provide services to TruVision’s health-plan partners.
But the new business floundered, primarily because TruVision had outsourced patient scheduling to another company. “At best, we had about a 3% completion-to-surgery on incoming calls, which was horrendous,” Atwood explained at a TEI Presidents’ Forum. Faced with unhappy investors who wanted to retrench, Atwood borrowed $1 million on his own to fund the business and searched for a way to improve profitability.
Inspiration struck in the middle of the night, and Atwood got out of bed and “white charted” a Web-based system that would connect TruVision with laser centers across the country in real time. This scheduling, tracking and outcome-analysis system enabled the company to handle patients from beginning to end. “Now we really had something to deliver,” says Atwood, who filed for patent protection on the Web-based system along with TruVision’s business model.
Today TruVision has more than 100 million heath-plan members under contract throughout the United States and generated about 6% of the nation’s LASIK business in 2004, which it plans to grow to 14% by 2006.
Having stabilized the laser business, Atwood looked for new ways to capitalize on TruVision’s infrastructure. He launched LASIK Link, which offered scheduling services for laser-surgery centers that were not part of the TruVision network. Patient Link, a similar service, handled patient scheduling for other types of surgeries, such as gastric bypass procedures.
But after about a year of operations, Atwood pulled the plug on both divisions. “Although they were performing well, it was a distraction from growing our core business,” he explains.
Another experiment, hearing aids, got off to a rough start, but has been a keeper. Interested in creating a new distribution channel, Atwood tried to market hearing aids directly to family-practice doctors and their patients rather than through health plans. To do so, he introduced self-diagnostic equipment into doctors’ offices that cut audiologists out of the supply chain.
After pouring considerable money in this venture with lackluster results, Atwood regrouped. He began to market hearing aids through health plans, TruVision’s proven distribution channel. Today the TruHearing division has 25 million members with revenue growing rapidly.
“The endorsement of health plans gives you tremendous credibility,” Atwood says, noting that this has been a critical factor in TruVision’s success with LASIK surgery. “During tough times with the economy, everyone else was off 35% or 40% with the LASIK business, but we grew 28%.” In fact, the LASIK business has been so good that TruVision is opening its own corporate laser centers around the country and should have 13 centers operating by the end of 2005.
Advice: If you want to diversify, diversify into your core business, not out of it,” Atwood says. “Utilize what you have instead of going off in a strange arena. Where we’ve been successful is diversifying product offerings with the same distribution model.”
Practicing what he preaches, Atwood recently launched a cosmetic surgery division, TruReflection, which continues his company’s growth while offering its health-plan partners even greater value. What’s next? Moving beyond health plans to offer TruVision’s services to a similar audience — large, self-funded employers.