It’s a Vision Thing: Unraveling HearUSA, part 8

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.  http://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 generate the kind of money needed to buy and control all that’s needed to ensure efficiency now and in the future.  The disparity is on display in an email I sent two weeks ago to a colleague who was bemoaning the “pits” of computers:

I wish I were in a pit instead of a black hole.  I’m at home staring at 3 computers, having left 2 at the office in various states of weirdness and expecting a new one tomorrow that is somehow supposed to integrate the madness. I know it’s going to get so much worse before it gets better.   I now appreciate the stranglehold of regulation that is killing the credit card processing business — not that they all are dying, but they are killing off  innovation and small guys, hitting small retailers with ridiculous fees and compliance hurdles.  Difficult to believe, but I may have to put off this entire installation tomorrow if I cannot get the credit card swiper puzzle piece to fit.  Talk about tails wagging dogs, and talk about expensive tails!

Alas, my email prediction came to pass: I remain in deep phone conversations with Sam, Karphi, Shen, Wendy, Juan, M.J., Nazir, Stephen, Noel, and Hold at Intuit, endlessly repeating 11 digit order and reference numbers, 15 digit license numbers, 6 digit product numbers, and a merchant number that has too many digits to count. Meanwhile, back at the server, Windows 7 won’t work with the Medicare Hyperterminal, Intuit CRM software, or the credit card swiper plug-in. The swiper and Intuit database won’t talk to Intuit accounting software, which runs on Windows 7.  My choices are:  maintain patient records or make transactions, but not both. This situation offers a whole new slant on the “free test” controversy:  I want to charge patients for tests (and products), but my software and hardware won’t let me.  Let’s not even talk about the bill I’m getting from my computer guy.  Am I unethical, inefficient, or both?  Either way, I’m insolvent. The ONLY thing that works, bless its heart, is Noah 4.  Despite our past differences, HIMSA and the Noah support guys are my new best friends – now there’s a good example of controlling hardware and software in a market!

What does this have to do with HearUSA or economics you ask?  More than you may think, based on the past seven posts.  Here’s the thing:  a lot of our best academics and practitioners have invested their valuable time and their good names in HEARx and HearUSA.  Of course they were paid reasonably, but I think it is a sure bet that none crossed to the dark side.  They had good reasons for supporting the HEARx model.

Dr Brown’s vision was audacious in the Apple and Google mode. Harkening back to the original post in this series, I described HEARx as “one man’s corporate vision to revolutionize hearing care in the US and Canada, and also make a bunch of money.” While the vision lacked accounting rigor, it made up for that failing with the breadth of its scope and the means of funding that scope.  As far back as 1986, Dr Brown called for:

1.  Market control and growth through expansion of offices and creation/capture of large insurer contracts as exclusive hearing care provider.
2. Consumer education marketing to increase utilization rates and eradicate hearing aid stigma.
3. Channel distribution control through “Long-term contractual licensing and distribution relationship(s) with selected [hearing aid] manufacturers.”
4.  Branding for Quality via superior training, state-of-the-art equipment, hospital-type accreditation procedures, and coordinated national advertising campaigns.

On the face of it, all are desirable goals for our profession and its stakeholders. But, just as I am stymied in my practice, so too are other independent private practices stymied in their ability to realize such goals by the day-to-day demands of doing business and the formidable cash flow required.

Dr Brown brought Adam Smith’s concept of Specialization through Division of Labor to our industry in a potentially workable way by exploring efficiencies from economies of scale and funding from corporate partners.  The original Marketing Plan called for a HEARx Education Center and a HEARx Data Link{{2}}[[2]]Alas, HIPAA would have shot this one down:  “Using the patient’s social security number in conjunction with a confidential patient code, the audiologist at any HEARx center can access the patient’s test history.”[[2]]at corporate headquarters to streamline training, patient service, and audiologists’ productivity.  Though unmentioned in the original Plan, one insider commented that the behemoth Customer Service centralized at the home office and the exclusive AARP contract were part of Dr Brown’s vision “from the beginning.” In 1986?! Wow.

As I toil away in my black hole, the Promise Land of Dr Brown’s vision continues to shine mightily.  Back in the 1990s and again today, the time and financial demands of rapidly changing technology weigh upon me and my practice.  I yearn for someone to come along and remove the burden, freeing me to spend all my days with as many patients as I can reasonably handle –flexing diagnostic skills, acquiring new hearing aid technological and fitting skills, performing aural rehabilitation as I know it should be done. I want to be on the cutting edge without venturing onto the bleeding edge I occupy as a sole practitioner.  When I’m deep in the hole, I just might fork out that $100,000 originally required to join Dr Brown’s tribe.

The first posts in this series detailed the ways in which poor cost accounting and top-heavy management took the juice out the HEARx vision.  I hold out hope that future good management will resurrect the vision in an audiology-friendly fashion. That gets us back to Siemens and its complicated role with HEARx as supplier, financier, plaintiff, and finally owner of HearUSA.  More on that in future posts.

Photo from: Pixdaus.