earVenture – Part 2 Interview with Delain Wright Continued
During the past few weeks, much focus and discussion has been on the business venture between IntriCon Inc. and the ADA (Academy of Doctors of Audiology), called earVenture. Wayne Staab of HHTM (Hearing Health and Technology Matters) contacted Delain Wright, Vice President of Business Development for IntriCon for additional information. This is Part 2 of that interview.
HHTM: What has first month been like for earVenture?
Delain: We are very happy. Our objective was to launch the company, and from that moment, be able to deliver products. We have done that. To date, we have set up between 350 and 400 accounts, which was in excess of what we expected. We had a very positive response at the recent ADA annual conference in Washington DC. earVenture hosted an oversubscribed forum with audiology opinion leaders and provided them with input as to how earVenture can be used in their practice.
HHTM: Who are these accounts that have enrolled in the program?
Delain: These are primarily ADA members. The product is available to ADA members, but is also available to any hearing aid dispensing professional. ADA audiologist members receive a better purchasing discount. However, traditional hearing instrument specialists can purchase, but cannot become ADA members and receive their discounted price.
HHTM: HIA (Hearing Industries Association) of which IntriCon is a member, has made a public statement unfavorable to this venture. Other than this, how has HIA reacted to one of their own forming such an unprecedented alliance?
Delain: Suppliers coming together with a manufacturer to serve the needs of the public is not new in other professions: dentistry, optometry, or others. It is difficult to understand why anyone would question the relationship. We are members of HIA and plan to continue our membership. The key point is that there is a lot of change happening in the market, and what we need to do is to understand, as an industry and as a trade association, how we will best serve and meet the needs of the change. Otherwise, change may occur without us taking a leadership role. If we want to look and see where the big threat is, it is not IntriCon linking with ADA through earVenture, it is the fact that there are significant movements to enter into the hearing aid space from the CEA (Consumer Electronics Association), and possibly others. And, those movements are not in the best interest of the professional and certainly not in the best interest of the patient. We need to take a larger view and accept that changes are coming and make sure that we are a part of it as an industry and a profession. I think that once the dust settles and everyone gets over the fact that IntriCon has developed this alliance with ADA, maybe they will think that outside interests may actually cause more harm to the patient and professional.
HHTM: Was any of this thought influenced by your previous association with the NHS (National Health Service) in the UK?
Delain: I have been around this entry level approach for a long time. When in the UK, I saw things in a different light. For example, for all the criticism of the NHS, they probably don’t realize that they have perhaps the best example of outcome based efficiency, certainly of the hearing aid industry, and perhaps even of some other areas within the NHS system. I learned a lot from that. Let’s make certain that whatever gold standard we are suggesting here in the U.S. is in the best interests of all involved – patient and professional. I also came away with my experiences there that in the best interest of the patient, it is necessary to have someone who can help and guide them through the fitting experience. You can’t provide the same standard of care for everyone at a low price. But, you certainly can say that someone may not have the same concerns as one who requires lots of attention. We know that people do get satisfaction from hearing products that have not been provided through the professional, but maybe we want to find a model that allows the professional to be in the process from the beginning, and that means you have to meet the consumer needs.
HHTM: It seems that some of where you think the future is going coincides with the President’s Council of Advisors on Science and Technology (PCAST), focusing on removing barriers to care for the millions of Americans with hearing loss.
Delain: Absolutely. There definitely is a storm brewing that will affect change, but it can also afford new opportunities. Change not only for patients in terms of channels of entry over time, but if you look at PCAST, and most likely what will come from the IOM (Institute of Medicine) meetings, I believe a lot of those recommendations are going to be followed. So, I think we will see significant change – including the FDA regulation or deregulation.
HHTM: IntriCon has this current venture with ADA, but in the long term, do you see the earVenture product going to Big Box stores? Some Box Stores employ audiologists.
Delain: earVenture is completely dedicated to working through and for the professional. That is absolute and a focal point of this venture. IntriCon has a much broader role in that it sells through different channels. My personal opinion is that we need to keep the professional involved, and we will do that as much and for as long as we can. That is the way to open up the market. As for Big Box stores buying earVenture product, our only requirement is that we sell only to licensed professionals. In the current system, Big Box stores already get low prices that independent dispensers cannot get. earVenture allows smaller practices to purchase at wholesales pricing competitive with Big Box stores.
HHTM: How can earVenture open the market, as you suggest?
Delain: There are lots of reasons why government and insurance should be paying for hearing care for people. It’s a cost/savings, but these groups are not going to pay at the existing reimbursement/pay structure. earVenture can be a tool.
A marketing position that was emphasized at the ADA meeting (as well as in our discussions with other dispensers) was that this product is not an item presented as an entry level product. earVenture is really looking at the needs of the market, and so we have a product roadmap that will continue to offer value-minded products in the coming years. One thing earVenture is focused on is looking at hearing aid product that improves the results for the patient and only adding those features so we can offer products at the best price and value.
HHTM: Will IntriCon continue to manufacture PSAPs for other individuals/groups?
Delain: Yes. We have a broad-based business. Aside from PSAPs, for example, we just purchased the PC Werth business in the UK and will go after the UK market as well as the other European markets. I believe that some of the business systems we’re involved in can be merged. At some point individuals need to move into more professional care. For example, most people may start with eyeglass readers, but eventually go to the optometrist because they may need progressives. What they had was of value, but perhaps not meeting current needs.
HHTM: You purchased PC Werth, can we anticipate more purchases and expansion like this moving forward? Is this a part of a long-range plan?
Delain: I would think that is a fair assumption.
HHTM: Are there any other companies that IntriCon has its sights on currently for acquisition of venture operations?
Delain: This is a question better answered by Mark Gorder, our CEO.
HHTM: Is IntriCon still a member of HIMPP? And, what has been the group’s reaction?
Delain: Yes, in fact, we met with them this past month in Germany at the EUHA (European Union of Hearing Aid Acousticians) meeting. The Big Six were all represented.
HHTM: Did they put you in a corner with a dunce cap?
Delain: No, but I am sure some may have wanted to.
However, I challenged them instead to consider what we had done, but their response was that they also have entry level products. Still, I don’t believe any of them has introduced it properly, with EarVenture as one proper model. earVenture offers professional dispensers a product with better specifications, in a unique housing, at that same, or better, discounted price point than other manufacturers offer to their purchasers for their entry level instruments. And, quite often, the entry level instrument they offer has a price point based on volume purchasing.
What earVenture offers is not the same as purchasing 20 units from a manufacturer and receiving a discounted rate, or purchase x number at x dollars, and the product will be sold to the dispenser at a discounted price. earVenture offers a low given price, regardless of the quantity purchased, every day of the week, not just a sale to get rid of no- or slow-moving products from inventory. With earVenture, there is no need to consider the product mix that allows for a purchase to be made at a low price point.
The response from the industry is probably an indication that we have hit a nerve, and what we are doing embraces the idea that there is a storm brewing that wasn’t there 4-5 years ago when we complained to the FDA about PSAPs. But, things have changed. The professionals I have talked to are very supportive, saying “Wow! We needed something that allows us to compete.” The forward thinking ones will embrace it and say “here’s how to fit this into our practices.”
HHTM: Does IntriCon still consider itself an OEM for the global HA industry?
Delain: This is a key activity, but perhaps no longer the primary role because IntriCon does much work with Medtronics and other medical device companies. But, as we look forward, the value of hearing health will be a primary growth area.
HHTM: Where is IntriCon manufacturing currently?
Delain: Our Asian base has been Singapore, but we have low cost manufacturing in Indonesia as well.
HHTM: Delain, thank you for giving this Interview.