CareCredit and Hearing Review Host “State of the Industry” Dinner
A dinner presentation held on March 26 hosted by CareCredit and The Hearing Review featured results from a recently conducted survey of dispensing professionals, as well as perspectives from three experts in hearing healthcare: Dan Quall, MS, managing director of the Starkey Hearing Alliance; Brian Taylor, AuD, director of practice development and clinical affairs at Unitron; and Amyn Amlani, PhD, a professor of audiology at the University of North Texas. About 100 attendees from dispensing audiology, industry, and professional and consumer organizations were provided with perspectives on the quickly changing landscape of hearing healthcare on the eve of the first full day of the American Academy of Audiology (AAA) 2014 convention in Orlando, Fla.
Hearing Review Editor-in-chief Karl Strom previewed results from a survey largely comprised of independent private practice dispensers that suggests:
• The average age of dispensing practice owners are older than in previous surveys, with a mean age of 55. 71% of those responding to the survey were age 50+, and 18% were already at retirement age (age 65+);
• On average, lower numbers of units are dispensed per practice than 10 and 20 years ago, although larger practices are dispensing more hearing aids.
• The overall average sales price (ASPs) of all hearing aids and all styles is $2363, with premium, mid-level, and economy aids averaging $2898, $2196, and $1657, respectively. ASPs for US private-practice independents have been relatively flat since 2005, and the total market has probably experienced decreasing ASPs when taking into account the considerable impact of the VA and Big Box retailing.
More results from the survey, which was sponsored by CareCredit, will be featured in the April edition of The Hearing Review and will be available online at www.hearingreview.com.
Amyn Amlani, PhD, presented an overview of his research that involves the inelasticity of pricing in hearing healthcare, the advantages of unbundling the prices of products and services, and how smartphone amplification applications and devices for use as starter hearing aids may reduce the adoption time for consumers who ultimately purchase a hearing aid. Dr Amlani, who has written extensively about these topics in The Hearing Review, showed how larger dispensing offices can take advantage of their scale of economy and generate higher profit margins. He also showed avenues for increasing the perceived value of products and services via the unbundling of product features and pricing.
Brian Taylor, AuD, looked at the unmet needs of individuals with hearing impairment, citing changes in many businesses—as well as economist Joseph Schumpeter’s quote, “All established businesses are standing on ground that is crumbling beneath their feet.” As disruptive technology moves into our industry, says Taylor, it becomes increasingly important to form deep, long-lasting relationships with your community, physicians, and patients through education in what he has characterized as “interventional audiology”: the link between hearing health and physical, mental, economic, and social status. No longer should dispensing professionals view themselves as a “lone cowboy” on the sometimes-isolated plains of the healthcare landscape; instead, they should view themselves as a vital member of a large pit crew that keeps patients engaged and in the race, says Dr Taylor.
Dan Quall, MS, provided a comparison of the fields of audiology, optometry, and dentistry, demonstrating a vital need for audiology to retain its tradition of independent private practices. He says that dentistry has increased its professional standing and its average income; 93% of dentists worked in private practice in 2011. Optometry, on the other hand, has seen its average income fall precipitously, as only 10% now earn their living entirely through private practice ownership. Quall also detailed a number of key performance indicator (KPI) benchmarks—with a particular eye on total expenses (marketing, labor, office overhead, and general expenses), gross margin, and income before taxes (IBT).
Many of the presentations suggested a need for professionals to focus on building their practices to take advantage of economy of scale, increasing efficiency, emphasizing unique audiological services, and considering unbundled or partially unbundled pricing strategies—with an eye on a future that may necessitate dispensing more hearing aids at thinner margins. A lively questions-and-answers session featured comments and observations from many attendees, including David Fabry, Scot Frink, Kim Cavitt, Juliette Sterkens, Edward Aleo, and Roy Sullivan.
“Hearing Review has always served as the preferred media brand for industry information and a forum for innovative ideas,” says HR Publisher Dana Fisher. “CareCredit is a natural partner for us—an astute industry participant and a kind of Switzerland in terms of industry neutrality—when it comes to the most pressing issues facing hearing healthcare. So this was an excellent opportunity to get thought leaders together, both on our esteemed panel of presenters and within the audience.”