Charting patent trends can track technological innovation and stagnation by proxy variables such as geography (countries, metropolitan areas), industry concentration, education (proximity of universities, proportion of PhDs), income per capita, etc. One measure is growth and dominance of patent classes by an industry or company. 

Of interest to the hearing aid industry is its representation in Class H04R patents. That patent class emerged suddenly in 1991 and has surged rapidly since then (see feature image).   H04R patents describe speakers, mics, transducers, etc., for use in a variety of applications1. Within H04R, Subclass 25/00 of H04R is specific to “Deaf-aid sets (constructions of transducers per se; structural combination with spectacle frames; processing of speech signals.” 

 

History of H04R Patent Owners

 

At the time of writing, there are almost 15,000 H04R patents awarded.  Two of the Big 6 hearing aid manufacturers, Starkey and Sonova, rank in the top 10 patent owners for this class. The top 10 also includes several consumer electronics companies eyeing the hearing aid market  (Bose, Samsung and Apple), as discussed in other HHTM posts (click links to go to those stories).  

Figure 1 is not especially compelling: the top companies own less than 15% of all H04R patents.  Bose ranks #2 but only has 2.1% of the patents; Starkey is #3 with less than 2% of the patents.  That’s not much of a story. But that story is about all patents for all time in the class, not in recent years when activity soared (see feature image).

 

A Better Story

 

Figure 2. H04R Patents awarded to two industries by year.

What about the rate of ownership of these patents by industry since the class took off in recent years?  That’s a different, much more interesting story  (Figure 1).

  • Big 6.  The proportion of all H04R patents awarded each year to the hearing aid industry (represented by the Big 6), increased 13 fold from 2.5 percent in 2000 to 35% in 2015.
  • Consumer electronics industry. Looking only at Apple, Bose and Samsung in the CE industry, there was a 15 fold increase in ownership from 2000 to 2015, jumping from from 2.5 percent to over 41%.  
  • 2015:  The Big 6 and those three CE companies accounted for over three-quarters of all patents awarded in this class in 2015.   

Figure 2 suggests that this rapidly increasing dominance over ear device innovation by just nine companies in two industries will continue trending upward.  

 

Is it a Meaningful Story?

 

“….patent data contains information that can be used to understand the relative rate of improvement among technological domains.” (Benson & Magee, 2015)

The science of patent activity analysis is complex and highly statistical, far beyond anything that will ever appear in Hearing Economics.  However, one such paper by Benson and Magee concludes that technological progress in an area of interest is strongly correlated with a few patent indicators such as patent immediacy (age of closest prior art) and patent recency (publication date) of the patents, but is not correlated with patent effort (total number of patents).  There aren’t many H04R patents per year (effort), but most of them that are owned by the Big 6, Bose, Samsung and Apple are distinguished by their immediacy and recency, so perhaps these indicators signal rapid technology progress in this area.

To the extent that patent activity serves as a proxy for economic growth due to technological innovation, then growth in demand for ear level devices may be anticipated. As Demand grows, so goes Supply. And, to the extent that H04R patents are important to hearing device development, these nine companies may hold positions of dominance in the ear device market.

The timing seems propitious if hearing aids go mainstream as over the counter devices to complement traditional medical device distribution channels and offer more consumer choice.

 

Footnotes and References

 

Benson CL & Magee CL (2015). Quantitative determination of technological improvement from patent data.  PLOS ONE 20.1371/journal.pone.0121635

 

 

1USPTO definition of H04R:  Loudspeakers, microphones, gramophone pick-ups or like acoustic electromechanical transducers; deaf-aid sets; public address systems (generating mechanical vibrations in general B06B; transducers for measuring particular variables G01; transducers in clocks G04; producing sounds with frequency not determined by supply frequency G10K; transducers in recording or reproducing heads ; transducers in motors

 

by Harvey Abrams, PhD.

Harvey Abrams PhD

“Peeling the Onion” is a monthly column by Harvey Abrams, PhD.

After the manic flurry of activity during the last quarter of 2016, it seems that we’re in a bit of a lull (in the hearing aid world, at least). As a matter of fact, we haven’t even seen the reintroduction of the Warren-Grassley “Over-the-Counter Hearing Aid Act” in this new Congress .

I’m thinking the good Senators have more important things on their minds these days. I concluded my last post by suggesting that we use this quiet time to consider how we might better communicate the value of our professional services as we prepare for, what appears to be, an inexorable march toward the creation of a new category of hearing aids that can be purchased over-the-counter.

 

A Call (from K) to Action

 

As I was preparing this post, this quiet time was interrupted by an email from someone seeking advice about hearing aids. This serendipitous message turned out to represent a perfect crystallization of the current issues (crisis?) facing audiology and an obvious call to action to change our message.

The individual who sent the inquiry (let’s call her “K”) has been fit with “premium-level” hearing aids by an audiologist in her community which she is wearing on a “trial” basis. It turns out that K has suffered from hearing loss for most of her 30+ years but this is her first experience with hearing aids. Given her impressive education and career accomplishments, it’s apparent that her hearing loss, while certainly an obstacle, has not kept her from achieving her objectives. But she now recognizes the additional effort required to perform at her best in her stressful and fast-paced professional world.

After wearing her hearing aids for several weeks, K poses the following questions to me:

  1. “Are there any better hearing aids likely to come out in the next year that would make me regret this?”
  2. “Would Costco or any other place possibly offer a cheaper purchasing price (they’re offering me these for $5k right now though I intend to keep negotiating).”

 

We’re Baked Into the Hearing Aid, It’s Time to Get Out

 

If K’s two questions do not scream “COMMODITIZATION” I don’t know what does. K’s work requires her to maintain a high-level of social media, print and broadcast news awareness, so if K–with all of her education, responsibilities, and social/business/political awareness–perceives hearing aids as a commodity, what hope is there that the general public will view our profession any differently?  

But then, we shouldn’t be surprised, should we? After all, even the senior scientific advisors to the President represented hearing aids as a commodity in their report

It’s pretty clear how we got ourselves into this situation but what we need to do now is to figure out how we can move forward (if forward means separating the product from the service and communicating the value of those services). The following list is nothing new but it does bear repeating as these best practices represent a good start at moving us in the right direction:

  • Administer standardized income measures such as COSI, APHAB, and HHIE
  • Test speech recognition in noise
  • Screen for cognitive dysfunction
  • Screen for depression
  • Develop a comprehensive treatment plan to include the goals of treatment based on the expressed needs identified in the income measures
  • Select hearing aid styles and features based on the needs and other examination results – not just on the audiogram
  • Conduct quality control (ANSI S3.22-2014) measures to verify that the electroacoustic performance of the hearing aid is within acceptable tolerances of the manufacturer’s published specifications
  • Conduct probe microphone measures to verify the hearing aid gain and output characteristics, including advanced signal processing features, at the tympanic membrane
  • Employ standardized validation measures to measure the outcomes of treatment
  • Provide post-fitting services such as auditory training and group rehabilitation as appropriate
  • Schedule periodic follow-up visits

The perceived value of these procedures seems to have been lost on the PCAST, the press, and the public (as represented by K). But it’s not going to be enough to simply list the professional services we provide in answer to the question, “why do hearing aids cost so much.”

 

This Isn’t a Bundling Discussion

 

The services we provide as part of the hearing rehabilitation process need to be transparent and clearly communicated to each patient at each encounter, preferably through some method of itemization. Note that I purposely avoided the word “bundling” here because bundling is often associated with a false choice – either you charge one fee for everything or you charge a separate fee for everything. There are many ways to separate the product from our services -we are limited only by our imagination.

However, in a recent post to the American Academy of Audiology’s General Audiology Digest, Dr. Roy Sullivan warns us:

Value-added in not an assertion, it is a perception! The “unbundlers” in our field sorely ignore this harsh truth. One cannot justify costs of services detached from cost of product by simply invoking a litany of what you, as dispensing audiologist, promise to provide beyond product. It is the patient’s perception of your intrinsic value-added that drives success or failure of the ensuing clinical encounter and enterprise.

If Dr. Sullivan is correct, and I believe he is, we are faced with a considerable challenge: how to get our patients to perceive what we do as value-added as it is not enough to simply list our services in our marketing material or on an itemized statement. I don’t presume to have an answer to this challenge but I believe we have to begin by changing the language. 

If we don’t want to continue to be seen as hearing aid salespersons or no longer expect patients like K to “negotiate” the cost of the product, we have to ‘pivot’, as Barbara Weinstein suggests, from product to professional service providers. It’s time we start making some noise about that.

 

This is Part 23 of the Peeling the Onion series.  Click here for Part 1Part 2,  Part 3,  Part 4,Part 5, Part 6, Part 7, Part 8, Part 9Part 10,Part 11,  Part 12, Part 13, Part 14, Part 15, Part 16, Part 17, Part 18, Part 19, Part 20,  Part 21, Part 22.

 

Harvey Abrams, PhD, is a consulting research audiologist in the hearing aid industry. Dr. Abrams has served in various clinical, research, and administrative capacities in the industry, the Department of Veterans Affairs and the Department of Defense. Dr. Abrams received his master’s and doctoral degrees from the University of Florida. His research has focused on treatment efficacy and improved quality of life associated with audiologic intervention. He has authored and co-authored several recent papers and book chapters and frequently lectures on post-fitting audiologic rehabilitation, outcome measures, health-related quality of life, and evidence-based audiologic practice.  Dr. Abrams can be reached atharvey_abrams@starkey.com

 

Feature image by Ross Land/Getty