truth about hearing aid industry

The hearing aid industry’s inconvenient truth: A wake-up call for the independent practitioner

In the following Hearing View, Joe Ficarra expresses some strong opinions that are likely to stimulate equally strong reactions, pro and con. We invite readers to submit your comments in response to Mr. Ficarra’s post.

–David H. Kirkwood


By Joe Ficarra

We all read articles, newsletters, and e-mails regarding the onslaught of competition from UnitedHealthcare, Costco, the Internet, mail-order companies, etc., etc. The above advisements all suggest in one way, shape, or form that somehow all of the above entities pose an unfair, illegal, and/or unethical form of competition to the independent hearing aid dispenser.

However, the biggest threat of all is never discussed at any meetings, in any trade journals, or in professional organizations’ newsletters!

The inconvenient truth is that all the major hearing aid manufacturing companies are in the retail hearing aid business, through ownership of hearing aid dispensing, audiology, and/or ENT practices. In addition, they own many of the buying groups and various web sites. These are all our direct retail competition.

 

A Look at Some Facts About the Hearing Aid Field:

 

• As this year began (2012), it was estimated that 77% of all hearing care locations in the U.S. (excluding the VA) were owned by or affiliated with corporations. In other words, fewer than a quarter of all practices were independently owned, fully autonomous businesses.

• Hearing aid manufacturers own many of the buying groups and some of the Internet web sites that take business from the independent dispenser.

• Manufacturers have vertically integrated many facets of the hearing aid industry.

• When you purchase hearing aids from a manufacturer that owns practices and buying groups in your area, the manufacturers know exactly what is sold in your market and could easily mount a marketing campaign against you using the dollars you are providing them by buying hearing aids, accessories, and batteries from them.

• Your purchases enable company-owned and affiliated practices to run full-page newspaper ads, conduct direct-mail campaigns, and do other marketing for your competitors.

• Manufacturer-owned practices can sell hearing aids for less than you can because they pay less for them.

• Who is to say that at some point these same manufacturers won’t withhold their newest technology from you but provide it to their own practices to give them a competitive retail advantage over you?

 

Where is the Outrage? 

 

In any other industry, there would be a ground swell of outrage by independent retailers if a manufacturer competed directly against retailers who buy its products. Why not in the hearing industry? Why are we being systematically conditioned to think that only entities from outside our industry are a threat to our survival?

Do we think that hearing aid companies are our friends, allies, mentors, and protectors who have our best interest at heart? We all gladly accept dinners from them and go to manufacturer-sponsored events featuring popular performers and other celebrities. But isn’t this like accepting a gift certificate from Jack Kevorkian for his services?

The next time you get a communiqué from a manufacturer or professional organization regarding the threats to our dispensing future, take it with a grain of salt because they may be more interested in protecting themselves than helping your business.

If you think you will find the truth in our trade publications, think again. Without the advertising from hearing aid manufacturers, these journals would not exist. So there is not going to be any hard-hitting investigative journalism about the industry in these publications.

Our state and local conventions are largely funded by the hearing aid manufacturers, so the organizations that hold them are afraid to risk offending the companies that provide this revenue stream.

 

My reason for writing this is certainly not to demonize or vilify the hearing aid manufacturers. All of these companies provide us with wonderful products that enable us to help people. I want this Hearing View to serve as a catalyst for the creation of an honest and open dialogue that will ensure the continuing survival of the independent practitioner.

I feel strongly that we, as independent hearing aid dispensers, independent audiologists, and independent ENT physicians, may very well be an endangered species when you consider that we are competing against cash-rich, global hearing aid conglomerates.

 

 

Recognize Your Assets and Capitalize on Them!

Despite the challenges that autonomous practitioners face from manufacturer-owned and affiliated competitors, independents have some major advantages.

• You are an entrepreneur competing against bureaucracies run by committees.
• You always want to look good to your customers. People who work for big companies are more concerned with not looking bad to their supervisor.
• You understand your market and the hearing-impaired consumer.
• You can operate like a speedboat compared to the slow-moving battleship of a huge conglomerate. You can be fast, fluid, and flexible.
• As a family or individually owned practice, you give your clients empathy, caring, and outstanding service. Who gets that from a corporation?
• You are a one-man/woman focus group; you don’t need surveys to tell you about the business that you live and breathe.
• The bigger a company the more average its average employee is. Entrepreneurs are not average; if doing what you do were easy, everybody would do it.

If you want to be prepared for the future, you need to create the future according to your own design.

 

Joe Ficarra is head of sales for Audio Energy, a wholesale hearing aid battery company, as well as being co-owner with his son of five retail hearing aid centers in South Florida. He has spent 46 years in the hearing industry, including 25 years as an executive of hearing aid manufacturing companies.


4 Comments

  1. I am totally agree with you Audiologist. This problem of hearing loss is vastly increasing today. In most of the cases the deaf or hard of hearing person has to face biggest harassment because of having this hearing loss.

  2. Joe,

    Thank you for this wake up call! Unfortunately, many of my audiologist colleagues are oblivious or apathetic to the implications that corporate influence is having on the industry as a whole. One has to wonder if the substantial increase in wholesale cost of hearing aids to dispensing professionals over the past few yearse is not directly linked to the manufacturer’s desire to begin opening more corporate stores and D2C channels (i.e., efforts by United Healthcare) in order to cut out us “middle men” that are supposed to be looking out for our patient’s best welfare.

    As Jerry Northern recently wrote in the Hearing Review, the “Secret is Service” and we all have to remember that–but we also cannot put our heads in the sand and sit back as the manufacturers overtake our industry and force independent practices out of business at the expense of high quality patient care. Otherwise, we will all find ourselves as an endangered species sooner than we think…

  3. This problem has only gotten worse over the past few years as the manufacturers continue to consolidate and buy up independent practices. It’s almost impossible to buy hearing aids without funding your competition–we should all be outraged! Thank you for this article!

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