Hearing Economics

HEARx entered the 21st century after a wild teenage life of excess, with lots of revenues, growing debt, a burgeoning central office, and negative profits.  HEARx was growing up and needed to get serious and find a life partner. Meanwhile, Helix Hearing, Inc. was incorporated in Cumberland, Canada in 1996 under the direction of Steve Forget (President), Jeff Giegel (CFO/VP), and Gino

Those of you attempting to follow this series may have concluded what I have about HEARx:  like Dracula, it just won’t die!  As one insider put it,  “It was a publicly traded company but most of the stock was not owned by the public. They always showed a loss and just kept issuing more and more shares” {{1}}[[1]]Support for this view comes from HEARx itself: 

As last week’s post wound down, HEARx was hurtling toward  200 retail “hearing aid stores,” 14% US marketshare, and multimillion dollar profitability  by 1991. They didn’t make it.  By 1995, the company was a penny stock (NASDAQ Bulletin Board OTC: EARS) with  only 20% of the stores projected for 5 years earlier.  HEARx wasn’t nationwide and it wasn’t profitable, although top management continued to pull down

Part 2 of this series looked at the original HEARx vision in which ENT Medical Directors, guided by a 7-member Medical Advisory Board, were set to legitimize audiology within the healthcare industry and among consumers.  Today’s post describes the strategies for developing and underwriting this endeavor, as described in the original HEARx Marketing Plan{{1}}[[1]]HEARx Marketing Plan, internal document, 1986[[1]]. All quotes in this post

… the hearing industry has been … loosely organized … lacking defined standards of quality in both the provision of testing services and in product performance.  Consumers…have not developed a confidence about audiology in general as being a serious aspect of health care and concern.{{1}}[[1]]HEARx Marketing Plan, internal document, 1986.  Unless otherwise noted, all quotes in this post come from

“The Company’s strategy includes immediate public differentiation from all existing hearing centers.”{{1}}[[1]]HEARx Marketing Plan, internal document, about 1986.[[1]] Thus began one man’s corporate vision to revolutionize hearing care in the US and Canada, and also make a bunch of money. Based on current headlines, it seems the vision has been achieved.  The corporation–currently known as HearUSA  for a few more months

 If any investors believe that the SEC’s enforcement actions drove insider trading out of the markets, they are beyond mere legal help.{{1}}[[1]]http://www.professorbainbridge.com/professorbainbridgecom/2010/04/is-insider-trading-bad-if-so-why.html[[1]] Back in April, we reported on possible insider trading in the hearing aid industry and promised some educational discussion of fiduciary duty and the stakeholder paradox in a follow-up post{{2}}[[2]]https://hearinghealthmatters.org/hearingeconomics/2011/hearing-aid-insider-trading-big-time-or-bush-league/[[2]].  It’s not stuff we get in graduate school,

Economics is all about data collection–lots and lots of data.  To what end, you may ask?  The idea is that if you have enough data on all possible responses in the market, you can probably develop models that will predict consequences of what you do right now.  For instance, wouldn’t you like a model that lets you know the consequences of raising

  Back to the Future:  Current Thinking at the FDA and in the Marketplace The burden of regulation continues to haunt the hearing aid industry and cost consumers.  Notwithstanding the entrenched regulatory mentality described in Parts 5 and 6 of this series, there were two interesting Citizen’s Petitions that were filed with the FDA in 2003.  Their purposes were to

The 1977 Final Rule Revisited… Revisited… Revisited …and Kept   Technological progress and market needs moved the industry forward, but the Final Rule remained as stated in 1977.  For example, in 1985, the FDA approved the Nuclear 22 Channel Cochlear Implant system for general use in adult patients with profound hearing loss after the device had spent 10 years in