Audiologists in Industry – Wayne Staab Part 7

Hearing aids for profit – from Non-ethical to Ethical – Overnight

 

Developmental History:

Audiologists Can Sell Hearing Aids – But Not For Profit

At the 1971 ASHA convention in Chicago, discussion had already taken place about a plan that would allow audiologists and hospital clinics to sell hearing aids on a non-profit basis.  Proponents contended that this would reduce the cost of hearing aids by 300% or better, while assuring consumers of professional care and fitting {{1}}[[1]] Cut urged in cost of hearing aids, New York Times, Nov. 27, 1971, 28[[1]].  This actually showed how little audiologists at that time knew about business.  (Essentially, they were saying, “we are better trained, and as a result, we should sell hearing aids for less,” completely ignoring such “non-essential” items as operating costs, insurance, overhead, equipment purchases, bad debt, benefits such as medical plans and retirement, business taxes, etc.) 

A task force was authorized by the Executive Board of ASHA to prepare a draft of Guidelines to be followed by audiologists dispensing hearing aids.  The Ethical Practice Board (EPB) reviewed these Guidelines, and then prepared a resolution to revise the Code of Ethics, contingent upon approval of the Guidelines by the Legislative Council.  However, in 1972, the Guidelines were referred back to the Task Force by the Legislative Council and the resolution to modify the Code of Ethics was tabled.  The stumbling block related to how fees would be accounted for;, or, in other words, profit was a bad six-letter word. 

 

Non-Profit Guidelines

In April 1973 ASHA drafted, for discussion purposes, Guidelines for Audiologists and Centers Engaged in the Dispensing of Hearing Aids {{2}}[[2]] Guidelines for Audiologists and Centers engaged in the dispensing of hearing aids, Revised, April, 1973[[2]] that allowed  the sale of hearing aids, but not for profit.  This draft was prepared for discussion at the 1973 ASHA meeting in Detroit.  The discussion at the meeting was lively and showed a distinct difference in opinion between practicing audiologists and those in academic institutions – the latter primarily believing that audiologists should not dispense hearing aids, and if they did, that their practice should be controlled closely by the Ethical Practice Board (of the nine members at the time, two were audiologists and seven were speech pathologists).  The EPB disapproved the revised Guidelines, suggesting Guidelines changes but no change in the Code of Ethics.  It was the latter that practicing audiologists wanted action on.  The ASHA Legislative Council then passed Resolution 58 at that same Detroit meeting, thus reaffirming its endorsement of the view that audiologists may dispense hearing aids under conditions considered ethical by the Ethical Practice Board and endorsed by the Executive Board.

In September 1974, the ASHA Executive Board passed a revised resolution, Principles Governing the Dispensing of Products to Persons with Communicative Disorders, which the Ethical Practice Board resolved was consistent with the Code of Ethics.  Individual members, and their employers, if any, who elect to dispense such products were expected to follow the principles in order to conform with Section C.1(c) of the Code of Ethics {{3}}[[3]] American Speech and Hearing Association Executive Board Report, ASHA adopts principles for dispensing products, October 1974, pp 631, 640[[3]].  This resolution allowed for dispensing of products (this was changed from hearing aids to cover all products that ASHA members were involved with so that it did not appear that hearing aids and audiologists were being unfairly attacked) under the following conditions:

  1. Products associated with the member’s professional practice must be dispensed to the person served as a part of a program of comprehensive habilitative care.
  2. Insuring objectivity in professional decisions concerning dispensing of products necessitates that:
    • Fees for professional services be independent of whether a product is dispensed,
    • Cost of the product to the individual served not exceed that charged by the supplier, and
    • Additional charges related to dispensing provide only for recovery of costs directly attributable to the dispensing process.
  3. Other principles of ethical professional practice that must be adhered to in the dispensing of products include:
    • Providing to persons served a freedom of choice for the source of services and products,
    • Providing to persons served a complete schedule of fees and charges in advance of rendering services,
    • Presenting to persons served a statement that clearly differentiates between fees-for-services rendered and costs of products dispensed, and
    • Evaluating the effectiveness of services rendered and products dispensed.

In April 1976, the ASHA Ethical Practice Board issued a set of interpretive statements designed to supplement the Principles Governing the Dispensing of Products to Persons with Communicative Disorders, primarily because audiologists working in clinics, agencies, or other institutional settings argued that hearing aids may properly be sold at a profit through such centers because no part of the profit was converted into salary or benefits accruing to any individual member on the staff.  The EPB considered three possible approaches to a not-for-profit dispensing system that allowed recovery of directly attributable administrative costs.  They decided on the following:

Recovering operating costs only through adjusted fees for all professional services rendered, resulting in a two-item bill to the person served – that is, listing the professional fees charged and the supplier’s invoice price of the hearing aid and any accessories {{4}}[[4]] Your Committees in Action, Issues in Ethics, An open letter to audiologists: hearing aids and dispensing service charges, ASHA, Vol. 18, #12, Dec. 1976, pp 854-855[[4]].

 

U.S. Supreme Court Changes All of This

These Guidelines remained in effect until 1978.  On April 25, 1978, The US Supreme Court ruled in National Society of Professional Engineers v. United States that a professional society’s code of ethics could not prohibit competition among Society members, even where the prohibition was designed to protect the public’s welfare and ensure ethical professional behavior {{5}}[[5]] Supreme Court of the United States, No. 76-1767, National Society of Professional Engineers, Petitioner, v. United States, April 25, 1978[[5]].  The decision was the Court’s second major application of antitrust law to professional societies during that time.  In a 1975 decision (Goldfarb v. Virginia State Bar), the Court said that the “learned” professions were not immune from antitrust law.  The Court ruled in Goldfarb that an agreement among Virginia attorneys to charge identical prices for property title searches was illegal under the Sherman Antitrust Act. {{6}}[[6]] Goldfarb v. Virginia State Bar, 421 U.S. 773, 1975[[6]].

On May 22, 1978, ASHA dropped its “non-profit” dispensing policy.  This was disclosed in a resolution to the Antitrust Division of the U.S. Department of Justice.  The resolution announced also that the ASHA Code of Ethics requiring “non-profit” dispensing would not be enforced, pending action by ASHA’s Legislative Council.  The resolution stated that this was being done against their will and believed that the “court’s rapidly changing views on the application of the antitrust law to learned professions will ultimately operate to the public’s significant disadvantage {{7}}[[7]] ASHA drops “non-profit” dispensing policy, Hearing Aid Journal, page 32, July, 1978[[7]].

On May 27, 1978, the Executive Board of ASHA recommended a change in the Association’s Code of Ethics that would permit audiologists to engage in the retail sale of hearing aids, and therefore, comply with the ruling of the US Supreme Court.

 

Today

Today’s audiologists find that working in the hearing aid industry carries with it a certain amount of prestige.  Few, if any, know or even care about what the audiology pioneers endured in providing the foundation for the easy and unquestioned acceptance of their employment today by professional organizations.  The reader will note that in 1974, ASHA begrudgingly allowed such work only in an educational, scientific, or consultative nature – a far cry from administration, sales, marketing, advertising, and management that many audiologists are involved with currently.

My next blog post, and previous posts by the early audiology pioneers, describe how some of the transitions started to occur to embed audiology legitimately into the hearing aid discipline.  So, since about 1974, audiology’s  position within the hearing aid industry was accepted, albeit tenuously, by the audiology professional organization. However, it still took a few years for the momentum to build and solidify to the role audiologists  that play in the hearing aid industry today.

About Wayne Staab

Dr. Wayne Staab is an internationally recognized authority on hearing aids. As President of Dr. Wayne J. Staab and Associates, he is engaged in consulting, research, development, manufacturing, education, and marketing projects related to hearing. Interests away from business include fishing, hunting, hiking, mountain biking, golf, travel, tennis, softball, lecturing, sporting clays, 4-wheeling, archery, swimming, guitar, computers, and photography. Among other pursuits.

1 Comment

  1. As someone who entered the field to primarily dispense hearing aids and open a private practice one day, I found your series extremely interesting. I’ll never forget in 1982 when I was trying to figure out where I wanted to go to Grad school, one of my younger undergrad professors told me “whatever you do don’t tell them you want to get into hearing aids or they won’t let you in”. After I got in, during my first semester, I had an aural rehab class. After a several weeks I foolishly asked the question “why do we spend so much time on learning things that you admit don’t really work that well, and no time on hearing aids that provide much benefit?” The professor (who later became my major professor and friend) got up from his chair, pointed his finger directly at me and said, “the problem isn’t aural rehab, Trychel. The problem is you!” Welcome to higher “education”.

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