Hearing Economics

In 2002, HEARx completed the acquisition of a national hearing care company.  To properly reflect its new position in the industry, the merged entity was renamed HearUSA.  2011 HearUSA advertorial In 2001 Siemens was a supplier–not an underwriter–of HEARx and Helix in the US and Canada.  Neither company was Siemens biggest customer, so it’s legitimate to ask why Siemens extended

In fast-changing technology product markets, there is a real advantage to controlling both the hardware and the software…  {{1}}[[1]]Thomas R. Eisenmann, Professor, Harvard Business School.  https://www.nytimes.com/2011/08/21/sunday-review/google-goes-hardware-shopping.html?ref=todayspaper [[1]] Like Google and other successful corporations, my private practice aspires to “automated efficiency” and functions as a “learning machine.”  Unlike successful corporations, my practice doesn’t score high on the learning curve nor does it

In May of 2001, HEARx and Helix Hearing Care signed a letter of intent to join together.{{1}}[[1]] https://www.audiologyonline.com/news/news_detail.asp?news_id=295[[1]]  Wedding bells started ringing in June when the bride and groom announced a financing commitment from Siemens Hearing Instruments of upwards of $70 million “if Hearx and Helix meet certain business goals” which were breathlessly outlined in typical HEARx press release fashion: {{2}}[[2]]https://www.audiologyonline.com/news/news_detail.asp?news_id=258 [[2]] The arrangement provides

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,