The last monologue post, back in October, presented Plan B — palliative pricing in an unbundled traditional dispensing model–as a spring board for treatment, if not cure, of audiology’s “cost disease.” The disease metaphor was coined by famous economist William Baumol to frame the price problem faced by industries/professions where cost of technology decreases over time, thanks to innovation, but cost of connected services increases inexorable over time, no thanks to inflation and absence of innovation.
Plan B, unbundled pricing, and Plan A, traditional pricing, only work if a crucial assumption is met:
Assumption #1. People will continue to need and want personal services by licensed hearing professionals. So long as there is demand for our services in the market, we have a chronic but livable disease.
It’s fair to say that the audiology community as a whole likes Plan A and hasn’t warmed to Plan B, which remains more concept than reality in traditional dispensing circles. No problem, on to Plan C.
Plan C: The Less is More of Perfect Pricing
It’s also fair to say that technological innovation, consumer demand and regulatory changes have skipped right past A&B on their way to Plan C. That plan (glossed briefly in a prior post) proposes to use:
…data-driven measures to provide the right services to the right people at the right time. Metaphorically, the cost disease would diminish as cost of services corresponded more closely to value received.
And right before our eyes, Plan C brings Assumption #1 under fire as service-driven cost remedies are held up to the light and embraced or discarded while the market adjusts to a new equilibrium.
Assumption #1 Revised: People will continue to want hearing optimization delivered by efficient means, paying “no more no less” than needed for services delivered. So long as there is a demand for hearing optimization in the market, we have a chronic but livable disease.
And how might Plan C manifest in real dispensing life? As usual, the roles of device and provider are bound tightly and have to be teased apart, but broad overlapping categories for Plan C include Technology, Remote Fitting (aka telehealth or teleaudiology) and Artificial Intelligence. Here are some examples, along with a grocery-store metaphor that seems apt. 1
Plan C is already here or on the way in the form of self-fitting and over-the-counter hearing aids (SFHA & OTC respectively). Those devices get a lot of discussion in a variety of forums as US regulations adjust, but Staab’s excellent 2017 summary hits the key points and remains a fresh read. Here are just a few key clinical research findings (paraphrased from referenced studies) to remind readers how these fit as candidate components of Plan C:
- A “significant proportion” of those with hearing loss can self-adjust hearing instruments to closely approximate “widely used threshold-based prescription.” (Mackersie et al, 2018)
- “Technical performance of SFHAs was a stronger determinant of outcomes than who drove the fitting process. ” (Keidser & Convery, 2018)
- “OTC hearing aid delivery model for older adults with mild-to-moderate hearing loss reported a similar level of benefit as participants who purchased the same hearing aids through an audiologist following best practices” (NIDCD summary of Humes et al 2017) 2
- “outcomes (on selected measures) with self-fitting of the Bose Hearing Aid are comparable on average to those with professional fitting of the same device” (FDA 10/5/2018 announcement)
The Metaphor: Think of these self-fit devices like the self-checkout machines at grocery stores, Home Depot and Costco. Instructions are given on a screen, you’re given feedback and direction as you proceed, you receive confirmation and verification when you’re finished. If you’re a quick study or have done it before, you can probably navigate the “device” to your satisfaction without additional assistance. But if you need it, there’s help in the wings.
Remote Fitting/Telehealth Platforms
Help in the wings is a hot investment path right now, as OTC regulatory definition looms in our near future. Bear in mind that companies and investors are evaluating assets, which include intellectual property and intellectual expertise. A few audiologists and their kin are stepping into new roles.
- Lively.com already caught the fancy (or aversion) of the media and many in our field before it officially debuted this month. Piggybacking on prior success in self-fitting orthodontics by its parent company, Candid Co, Lively’s package is a bundled $2350 containing a “pair of ‘technically advanced’ instruments, 2 yrs audiology services, 7-day/wk support with trained specialists, 1 year of batteries, 2 years L/D/R.” A good deal of the immediate appeal seems centered on the credentials of two well-respected audiologists who comprise the present team–Drs. Harvey Abrams, Director of Research, and Christina Callahan who heads up clinical audiology and supervises fittings in multiple states in which she is licensed.
- iHear Medical self-describes as the “world’s first web-enabled hearing aid system, targeting tech-savvy consumers seeking alternatives to over-priced conventional hearing aids.” Founder Adnan Shennib has a patent- buttressed history of innovative endeavor in hearing, iHear recently launched an online self-testing module (iHeartest) and announced distribution in China.
The Metaphor: Back to the grocery store checkout. What if you can’t read the screen, hear the prompts, or find the scan code on that bunch of celery? What if you just want to buy a couple nails at Home Depot? What if you can’t lift the 40 lb bag of bird seed onto the scanning table? So many ways to go wrong here. That’s why there’s always at least one experienced employee manning the self-check area, waving an alternative scanner and quickly intervening to maintain your check-out momentum and your sense of well-being.
Just so, the worth of online hearing solution companies such as Lively and iHear Medical is only as much as their ability to anticipate and quickly solve consumers’ flummoxes with SFHAs and OTCs. And just so, the solutions take the form of experienced audiologists, or at least their voices or written instructions, delivering quick and tailored solutions to consumers.
Back to Revised Assumption #1, that consumers expect efficient service and satisfactory outcomes and are willing to pay for just that. Having a few top-notch audiologists running an automated show is probably an excellent way to accomplish this, so long as the show itself is programmed fully for all variations in the task. But even professional top-notch personnel can fall ill, leave, forget, get distracted, get overloaded, miss something or simply not have the skill set to integrate all the information. There’s help for that, too.
You can’t think of everything, but maybe AI can, or at least do it as well without getting sick or distracted. With so many emerging AI technologies,3 it hardly seems worthwhile to list a ranom few, except to point out self-driving vehicles as the obvious example of many things AI has to do on a non-stop basis to emulate and improve on the cognitive processes required to navigate a vehicle safely and accurate. AI IQ depends on a host of factors, such as ability to anticipate motivations and behaviors; ability to share information and conclusions. Data-driven devices that monitor and recall wearer behaviors, real-time psychophysical measures of individuals — these are a few examples of underlying processes that will help make AI work for us in our ears.
The Metaphor: It’s great if the grocery self checkout speeds you through but even greater if it remembered what you usually buy, suggested things you may be needing soon, brought you new things you might like to try, and drove your cart for you, all without having to wait for the floor expert to come help. Even better if it did all of this while you were elsewhere and then made a home delivery. That would be one smart AI system and it would be smart because it studied you and your environments and learned your preferences and idiosyncracies. You would like it and probably you’d be happy to skip being there in person and spending time with the floor expert as they helped you out.
Just so, hearing devices and platforms with exceptionally high IQ AI could be preferred by many consumers as they become available and easily accessed. The better and more seamless AI becomes in SFHAs and ear devices in general, the less need for instruction sets, manuals, office visits and…service costs of audiologists. But at this point, AI still needs to consult with an audiologist to get better at what it does. And some consumers will need or want personal assistance from those top-notch audiologists. There will still be service costs, just not as much or as many.
Plan C moves us from the office-and-menu-of-services concept to a consumer market of ever-improving goods. As for Baumol’s cost disease, Plan C goes a long way toward a cure by transferring many services to embedded or cloud-based smart technologies. This trend will grow along with AI capabilities. The best audiologists will thrive in Plan C by assuming roles in AI development and serving as remote advisors and directors for patients in the field. Our hearing aid reps -already picked for their demonstrated expertise as audiologists –already do this for audiologists in the field, so why not extend the protocol to include patients? What do you think? Can Plan C work for some, for many?
Stay tuned for the last monologue post, which moves from Plan C to Plan P. P stands for Perfect device systems which are better than normal hearing. It’s a thought!
1 Although not in keeping with the disease metaphor on which this series has hung its hat. The health analog of the grocery store self checkout metaphor is probably out a year or so.
2 Not a complete summary. Satisfaction and benefit did not exactly covary exactly; W2P (Willingness to Purchase) was higher for those in the audiologist following best practices
3 See monthly patent lists for examples in audio and hearing.
Humes L, Rogers S, Quigley T, Main A, Kinney D, and Herring C. (2017). The effects of service-delivery model and purchase price on hearing-aid outcomes in older adults: a randomized double-blind placebo-controlled clinical trial. American Journal of Audiology, Vol. 26, 53-79.
Keidser G & Convery E. Outcomes with a self-fitting hearing aid. Trends in Hearing (22), 5/1/2018.
Mackersie, C, Boothroyd, A & Lithgow, A. A “Goldilocks” Approach to Hearing Aid Self-Fitting: Ear-Canal Output and Speech Intelligibility Index. Ear & Hearing, vol XX, 2018, pp 1-9.
National Institute on Deafness and Other Communication Disorders (NIDCD). U.S. Department of Health & Human Services, National Institutes of Health (NIH). Model approach for over-the-counter hearing aids suggests verifiers similar to full-service purchase. March 2, 2017. (Referring to Humes research funded by NIDCD)
Holly Hosford-Dunn, PhD, owned and operated a dispensing audiology practice in Tucson and was active in management of HearingHealthMatters.org through 2017. She holds BA degrees in Communication Sciences, Psychology and Economics; MA in Communication Disorders; PhD in Hearing Sciences. Following post-doctoral work at Max Planck Institute (Munich, DE) and Eaton-Peabody Auditory Physiology Lab (Boston), she joined the Stanford medical school faculty as director of audiology. She has authored/edited numerous text books, chapters, journals, and articles and taught Marketing and Practice Management in a variety of academic settings. She continues to consult and write on topics related to hearing health care vis-à-vis consumer demands, professional training, technological advancement, capital investment, industry consolidation, regulatory control, product and service distribution, and strategic pricing.