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About this year’s survey…
In March 2004, The Hearing Review (HR) mailed a 3-page questionnaire to 750 dispensing professionals whose names were chosen at random from the HR mailing list. Dispensing audiologists (DA), hearing instrument specialists (HIS), and medical doctors were included. A total of 19% of the questionnaires were completed and returned to HR (HIS 50%, DA 49%, 1% MDs). Returned questionnaires were received from every state except Rhode Island, Delaware, and Tennessee; 93% of the respondents stated that they had controlling interests in the practices/businesses, with 82% being owners and 11% being co-owners (7% of respondents were employees of the practice/business). |
Dispensing professionals view 2005 more optimistically than they have previous years: they predict better times ahead with higher unit volumes, increased net revenues, and greater profits. This year’s HR Dispenser Survey also indicates that the percentage of first-time users of hearing instruments increased for the second consecutive year (this time, from 43% to 49%), the trend toward using fewer brands of hearing aids in dispensing continues, and hearing instrument prices went down for most types of hearing aids—4.3% for digital signal processing (DSP) devices.
These are only a few of the interesting findings from the 2005 HR Dispenser Survey which is designed to gauge dispensing activity during 2004 and identify new and emerging trends in the hearing industry. Slightly more than 750 surveys were sent to dispensing audiologists (DA) hearing instrument specialists (HIS), and medical doctors (MD) who indicated on HR circulation cards that they dispensed hearing instruments. The mailing was weighted using state-by-state dispensing activity reported by the Hearing Industries Assn (HIA)1 and dispensing activity by profession as estimated by HR’s mailing list and database, as well as by MarkeTrak.2 About one-fifth (19.1%) of the questionnaires were completed and returned (Figure 1), representing 143 hearing care offices and practices in 47 states (there were 12 surveys that were returned but not tabulated for various reasons)—almost exactly the same return figures as last year’s survey.
Survey Respondents and the Average Dispensing Business
Respondents to the 2005 HR Survey were similar to respondents of last year’s survey3 in many respects, but differed in some areas that should be noted by the reader.
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Figure 2. Profile of dispensing professionals |
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As shown in Figure 2, the 143 returned office surveys were evenly split between hearing instrument specialists (50%) and dispensing audiologists (49%), whereas last year’s survey was more weighted toward audiologists (DA 60%; HIS 40%). Additionally, two surveys (1%) this year’ were returned by MDs. HR estimates that dispensing audiologists own 60% of the hearing aid dispensing offices and possess a slightly smaller share of the market than this figure. Sergei Kochkin’s MarkeTrak VI2 indicates that 65% of consumers in 2000 perceived their hearing instruments source to be audiologists, compared to 54% in 1997. However, MarkeTrak VII, which will appear in next month’s HR, indicates that this number could be migrating back toward hearing instrument specialists (as well as being influenced by Veteran’s Administration and Internet sales). The Hearing Journal’s annual survey,4 which has been conducted via email/Internet since 2003, had 71% of its responses from audiologists versus 26% from traditional dispensers. Whatever the actual “mix” of dispensing professionals, it would appear that this year’s HR Dispenser Survey (ie, regarding “total responses”) slightly over-represents the influence of dispensing offices owned by hearing instrument specialists.
The average DA respondent to this year’s survey is a female (51%) practice owner or partner (95%), between the ages 51-60 (42%), with a master’s degree (47%), who also holds a state license and her CCC-A, and has been dispensing hearing aids for 21 years. The average HIS respondent to this year’s survey is a male (81%) office owner or partner (92%), between ages 41-50 (44%), who attended some college (40%), holds BC-HIS certification (52%) and has been dispensing hearing aids for 21 years.
Relative to previous surveys, the major difference relative to the demographics of respondents this year, was education level, particularly regarding HIS office owners. Fewer HIS respondents reported having college degrees (22% , although it should be pointed out that 17% held advanced degrees), and far fewer were board certified in hearing instrument sciences (BC-HIS, 52% versus 64% in last year’s survey). Dispensing audiologists responding to this year’s survey were twice as likely than in the previous year to hold a PhD (24% versus 11%), while 29% held an AuD degree which is about the same (30%) as last year’s survey. Dispensing audiologists were also less likely to hold CCC-A (73% versus 80%) and ABA (19% vs 28%) certifications.
As with last year’s survey, there were two large HIS offices included in this survey that dispensed about 250 units per month plus a third that dispensed almost 175 units per month; also like last year, there was one audiology practice that dispensed more than 100 units per month. Editor’s note: These larger offices do not affect survey numbers significantly in most cases; however, they fact should be kept in mind when looking at the averages for owners’ compensation (Figure 10) and for total hearing aid units dispensed (Figure 13). In these cases, HR has provided both the average and median figures for readers.
Like previous years, respondents were overwhelmingly owners or partners of the office/practice (93%, HIS 92%; DA 95%), although slightly more employees (7%, HIS 8%; DA 5%) responded this year. Similar numbers (88%, HIS 88%; DA 89%) held state licensure, and dispensing experience was about the same as in previous years (20.2 years, HIS 19.8 years; DA 20.7 years).
Part-time vs full-time offices. This year’s survey included a revised question that separated full-time and part-time offices (Figure 3). The results were revealing. In total, 70% of all dispensing professionals reported operating only one full time office (HIS 69%; DA 71%), 19% operated two full-time offices (HIS 14%; DA 25%), and 11% operated three or more full-time offices (HIS 17%; DA 4%).
About an equal percentage of HIS and DAs (45% total) reported operating part-time offices. Forty-five percent of HIS-owned businesses reported having part-time offices, with 23% having one part-time office, 3% having two part-time offices, 10% having three part-time offices, and 9% having four or more part-time offices. Forty-four percent of DA-owned businesses reported having part-time offices, with 30% having only one part-time office, 5% each having two or three part-time office, and 6% having 4 or more part-time offices.
The survey results suggest that, on average, the vast majority (96%) of DA dispensing businesses are constituted by one or two full-time offices, and two-fifths (40%) of those businesses also maintain three or fewer satellite offices. In contrast, four-fifths (83%) of HIS-owned businesses are constituted of one or two full-time offices, and about than one-third (36%) of HIS-owned businesses maintain three or fewer satellite offices. In general, it would appear that hearing instrument specialists are more likely to run businesses having larger numbers of offices, and this is supported by previous surveys.
Most offices/practices were situated in a private practice setting (65%, HIS 55%, DA 73%) or a retail setting such as a mall, shopping center (27%, HIS 38%, DA 16%). A small number were located in medical settings like a clinic or a hospital (6%, HIS 5%, DA 8%) or physician’s office (2%, HIS 2%, DA 3%).
Staffing. Although the average staff of the businesses surveyed was composed of two dispensing professionals per business/practice (Figure 4), the median number remained at one (ie, the most common business situation remains a single owner running an office/practice). But it’s clear that owners don’t always run their practices alone. For every 10 HIS-owned businesses, there are 1.9 full-time and 1.1 part-time dispensing audiologists (3 total), as well as 2.2 part-time hearing instrument specialists; similarly, for every 10 DA-owned businesses, there are 4.5 full-time and 0.5 part-time hearing instrument specialists, as well as 5.6 part-time dispensing audiologists.
In total, this year’s survey indicates that one-fifth (20.8%) of all dispensing businesses in the United States utilize both dispensing audiologists and hearing instrument specialists (Figure 5). This data is supported by HR Dispenser Surveys of the last 10 years.
Office Affiliations. Although national independent networks have made large strides in recent years and the single-line traditional manufacturer networks have appeared to experience aggressive growth in office numbers,3,5 half of all dispensing offices responding to the 2005 HR Dispenser Survey were not affiliated to any network or buying group (50%, HIS 52%; DA 47%), as shown in Figure 6. About one-quarter (28%, HIS 23%, DA 33%) of all offices reported belonging to a national independent network or buying group (ie, AHAA, AuDNet, Marcon, etc). Eight percent more HIS-owned offices reported belonging to an independent network/buying group than during last year.
Offices affiliated with a traditional manufacturer dispensing network (Beltone, Miracle Ear, etc) accounted for 11% of all survey responses (HIS 15%, DA 8%), but only 1% of offices (HIS 2%, DA 0%) were actually owned by manufacturers. Likewise, 7% of the offices (HIS 7%; DA 8%) in the survey reported being affiliated with, but not owned by, national corporate retail networks (ie, Sonus, HearUSA, etc)—down 8 percentage points from the 2004 HR Survey. As with the traditional manufacturer networks, national corporate retail networks were reported to own just 2% of the responding offices (HIS 2%; DA 2%).
Market statistics appear to indicate that traditional manufacturer and corporate retail networks constitute about one-fifth of the US hearing instrument dispensing activity.
Gross revenues and net profits. Gross revenues of all dispensing offices/practices appear to keep moving upward (Figure 7), a reflection of the higher percentage of digital signal processing (DSP) hearing aids dispensed. Since 2001, the percentage of offices with revenues exceeding a half-million dollars has increased from 26% to 32%, and this percentage reached 35% in 2004. During that same period, the percentage of offices breaking the $1 million gross revenue mark remained steady at 10%-11%, but increased to 14% in 2004. Only small differences existed between HIS-owned and DA-owned businesses relative to gross revenues: in total 33% had revenues of less than $250,000, 46% between $251,000-$750,000 and 21% over $750,000.
When asked how their 2004 gross revenues compared to 2003 sales figures (Figure 8), 64% of HIS-owned offices reported that their revenues had increased by an average of 19%, 22% said that their revenues had remained the same, and 14% said their revenues had decreased by an average of -14%. Similarly, 65% of DA-owned offices reported gross revenue increases that averaged 24%, 19% reported that their revenues remained the same, and 16% reported that revenues decreased by an average of 14%.
Correspondingly, net profits reported by dispensing professionals have exhibited the same upward trend as gross revenues, but with more variable results (Figure 9). What is clear is that, from 2001-2004, the percentage of dispensing offices/practices reporting net profits of $50,000 or less has decreased from about one-half (46%) to one-third (32%), while the percentage reporting net profits of $51,000-$250,000 has increased from two-fifths (43%) to three-fifths (57%). Most commonly, offices report net profits of $51,000-$100,000 (30% for both HIS and DA). Thus, despite the higher volumes and margins associated with DSP hearing instruments and the gradual climb in net revenues, the majority of dispensing businesses do not appear to have prospered greatly from these trends: only 6% of all offices/practices reported net profits of $251-500,000 (HIS 9%; DA 4%), and only 4% reported profits of over $500,000 (HIS 2%; DA 5%).
Professional compensation and hiring needs. According to survey respondents, in 2004, the median salary of a dispensing audiologist employee ranged from $52,000-$60,000, while the median salary of a hearing instrument specialist was $48,500-$60,000, depending on the practice, with HIS-owned offices paying higher employee salaries (Figure 10). Average salaries for these same professionals ranged from $55,882-$66,563 and $50,875-$58,265, respectively. (Editor’s note: Due to its personal nature, fewer than half of returned surveys contained information on salaries. Thus, these compensation figures should be looked at with caution, particularly relative to employee salaries. Additionally, see editor’s note regarding larger offices being included in this year’s survey.)
The method of reimbursement for employees was markedly different between office types, as well. An equal percentage of HIS-owned and DA-owned offices reported using “fixed salaries” for compensation (55%, HIS 56%, DA 55%). However, the DA-owned offices relied almost exclusively on “salary-plus-commission” as the second most-frequently-used system of compensation (36%, HIS 31%; DA 42%) while HIS-owned offices relied heavily on both salary-plus-commission and “commission only” compensation systems (15%, HIS 25%; DA 4%). Only 3% of all offices (HIS 2%; DA 4%) used a system of “commission plus expenses.” Due to an increased focus on ethics from all professional organizations, methods of compensation have come under increased scrutiny, with most advocating for the use of fixed salaries in an effort to eliminate any real or perceived conflict of interest relative to dispensing products to patients/clients.
Owners of the dispensing practices had mean declared salaries of $80,000, a 6% increase over 2003 (HIS $75,000, DA $92,500). The average salary of a dispensing office owner was $96,301 (HIS 86,805; DA $105,571), a 4% increase.
Figure 11 shows that approximately one-quarter of HIS-owned offices and one-third of DA-owned offices indicated they expect to hire a professional staff member within the next year (29%, HIS 27%, DA 31%)—an increase of 4 and 8 percentage points, respectively, compared to last year’s survey. Similarly, 48% of all respondents said they expect to hire another dispensing professional within the next 3 years (HIS 49%, DA 48%), a 10 percentage point increase for HIS offices and a 9 percentage point decrease for DA offices. These data have served as a fair barometer of business sentiment and financial health in past surveys.
Dispensing Activity in 2004
There were two separate questions concerning the number of units dispensed by survey respondents (Figures 12-13). Figure 12 shows the responses to the question, “Average number of units dispensed per month in 2004.” For all dispensing professionals, the average response was 29 units per month (HIS 32; DA 24), and it can be seen that the distribution is relatively evenly divided from dispensing levels of 5-10 units per month up to 21-30 units per month (71% of all responses, HIS 74%, DA 68%). Far fewer offices dispense more than 30 hearing aids per month (24%, HIS 21%, DA 27%).
As mentioned earlier, there were three large HIS offices that dispensed 175-250 units per month (ie, similar to the two large HIS-owned offices included in last year’s survey). Deleting these large practices would produce an average of 24.4 units dispensed per month (HIS 23.3 units), but would not affect the median stated in Figure 12.
Figure 13 reflects the answers to the question, “What were the total net number of hearing instruments dispensed in your practice/business during 2003 and 2004?” Responses revealed that an average of 349 hearing instruments (HIS 398 units, DA 292 units) were dispensed by all offices in 2004, compared to 307 hearing aids in 2003 (HIS 348 units; DA 259 units)—a 13.7% increase. This would yield 29.1 units per month for all offices (HIS 33.2 units, DA 24.3 units) in 2004 versus 25.6 units per month in 2003 (HIS 29.0 units, DA 21.6 units).
Again, if you take out the three large HIS offices mentioned above, the average for all offices in Figure 13 would decline to 282 units in 2004 (HIS 273 units, DA 292 units) and 252 units in 2003 (HIS 246 units, DA 259 units), or an 11.9% increase. Relative to units dispensed per month, this would yield 20.5 units for HIS-owned offices and 21.6 units for DA-owned offices.
It is clear that these large offices have a significant impact on the above statistics; however, since larger practices keep reappearing in the HR Survey on a yearly basis, ignoring their overall impact (or relying on median values) on the market may not be wise. In comparing the differences between the answers in Figures 12 and 13, it would appear that when a dispensing professional is asked about the number of hearing aids their office dispenses, a monthly dispensing estimate may not always accurately reflect the total number of units dispensed during that year.
Binaural fittings. In the 3 years between 2001 and 2003, binaural fitting rates increased from 71% (HIS 71%; DA 71%) up to 78% (HIS 75%; DA 81%) and 77% (HIS 75%; DA 79%), respectively, but in 2004 they slid back down to 73% (Figures 14 and 15). Dispensing audiologists reported that 73% of their fittings in 2004 were binaural, while hearing instrument specialists reported a binaural fitting rate of 74%. The above figures appear to suggest that the more recent upturn in binaural rates in the last 2 years have been driven by dispensing audiologists (ie, binaural fitting rates of 81% and 79% in 2002 and 2003).
MarkeTrak2 statistics on binaural fitting rates closely follow HR Dispenser Survey statistics (Figure 15), with all users who had purchased within the survey period having binaural fittings 65.3% of the time in 1994, 65.2% in 1997, and 74.2% in 2000.2
Hearing instrument styles. Relatively large changes appear to be occurring relative to hearing instrument styles, as well as the different utilization rates of these styles by DA- and HIS-owned offices (Figure 16-17). BTE hearing instruments have grown to constitute one-quarter (25%) of the market in 2004 compared to one-fifth of the market 5 years earlier, according to the survey. More impressive is the fact that BTEs are reported to make up one-in-three (33%) of the DA-owned offices’ units but less than one-in-five (18%) of HIS-owned offices’ units. In the 5 years from 1999 to 2004, BTE utilization as reported by the survey has gone up by 6 percentage points (a 50% increase) for HIS-owned offices, and 13 percentage points (a 65% increase) for DA-owned offices.
This difference between professions may be explained by uneven utilization rates in directional microphone systems (discussed below) and, quite possibly, the increasing popularity of open-ear systems. Additional factors leading to increased use of BTEs could include new systems (ie, Sebotek PAC, Vivatone), smaller and more transparent tubing options, greater capacity for processing, FM systems, and a range of new BTE options that often utilize telecoils.5,6 Additionally, the rapidly growing area of Bluetooth, WiFi, and other wireless technologies pouring into the amplification arena (ie, see the HR Tech Topics of the January and April 2005 issues) may help continue this trend for some time to come—and may someday succeed in transforming ear-worn amplification devices into “cool” trendy items.7
Survey respondents reported that they used ITEs for 31% of their fittings (HIS 32%; DA 29%), ITCs for 26% of their fittings (HIS 28%; DA 24%), and CICs for 18% of their fittings (HIS 22%; DA 14%). The only style to go down by 5 percentage points or more in the last 5 years (ie, since 1999) was dispensing audiologists’ use of CICs. Again, this may be explained by the greater utilization of special features in BTEs (as discussed below).
HIA statistics1 indicate that 26.4% of all hearing instruments dispensed in 2004 were BTEs, up from 23.7% in 2003, and 22.8% in 2002. ITEs made up 39.4% of the market, ITCs 19.9%, and CICs 14.3%, according to HIA 2004 year-end data.
In most years, the HR Dispenser Survey has proven to be an excellent gauge in anticipating trends in hearing instruments use patterns (ie, see the new HIA report on BTE use on p 10 of this issue). The overall trends, as shown in Figure 17, suggests that BTEs could soon be rivaling ITEs in terms of market share.
Technology types. As shown in previous surveys, as well as HIA statistics,1 digital technology has essentially taken over the market (Figures 18-19). Dispensing professionals reported using digital technology in 81% of their fittings during 2004 (HIS 79%; DA 83%). Non-programmable linear devices were used for only 1 in 8 fittings (13%, HIS 16%; DA 10%), while programmable analog aids were used in about 1 in 17 fittings (6%, HIS 5%; DA 7%). This year, HR did not ask dispensing professionals for the percentage of non-programmable non-linear aids dispensed as these devices had fallen below 5% in 2003.
HIA statistics1 indicate that DSP hearing instruments made up 83.0% of the market in 2004, compared to 65.8% in 2003, and 44.6% in 2002. The same figures indicate that non-programmable analog and programmable analog technology constituted 12.1% and 4.9% of the market respectively. In the first quarter of 2005, HIA reports that DSP instruments accounted for 87.9% of the market.8
Brand utilization. The number of hearing instrument brands offered by the average office/practice is overwhelmingly 2-4 brands (Figure 20). In the last four years, as shown in Figure 21, the percentage of offices reporting that they carry 2-4 brands has increased from 37% in 2001 (HIS 37%; DA 37%) to 57% in 2004 (HIS 56%; DA 59%). Meanwhile, those offices reporting that they offer 5-6 brands decreased from 37% in 2002 (HIS 30%, DA 46%) to 25% in 2004 (HIS 24%; DA 26%). DA-owned offices were almost twice as likely than HIS-owned offices to offer 7-10 brands in 2004 (10%, HIS 6%; DA 13%); HIS-owned offices were far more likely than DA owned offices to offer mostly one brand (6%, HIS 11%; DA 0%)—the latter statistics probably reflecting office affiliations with traditional manufacturer networks (Figure 6).
Similarly, the percentage of hearing aids that are sold from an office/practice’s most-popular brand has been edging upward during the last 6 years (Figures 22-23). In 2004, the average office used one brand in 75% of its sales (HIS 80%; DA 70%). By comparison, five years earlier in 1999, the average office used one brand in 68% of its sales (HIS 75%; DA 61%).
The number of brands carried and the percentage utilization of the favorite brand could have an impact on the future of the hearing industry. Should dispensing professionals continue to winnow the number of brands they carry (ie, due to product/fitting complexity, software issues, etc), the likely benefactors of the trend will be larger manufacturers with deeper product lines and more sophisticated offerings. This could make competition even tougher than it already is for those smaller manufacturers who concentrate on filling distinct niches and who cater to individual office/practice needs within the market. It could also spur a new wave of consolidation in the industry.
Directional systems. During the last 3 years, DA-owned offices have been almost completely responsible for the surge in use of directional hearing systems (Figure 24). From 2001-2002, directional microphone use among dispensing audiologists went from 29% to 44%, and utilization has hovered at 47-48% during 2003-2004. In contrast, hearing instrument specialists have been fairly resistant to increasing their use of directional hearing systems until 2004, with a static 17% utilization rate from 2001-2003. However, in 2004, HIS-owned offices reported that they prescribe directional systems for 24% in their hearing instruments.
In total, the utilization of directional microphone systems in 2004 stayed the same (36%) as 2003. HR expects this number to continue to move toward the 45% mark, a figure that would encompass virtually all hearing instrument styles except for the smallest aids (ie, ITCs, CICs) that prohibit the installment of directional microphones on a faceplate.
Other hearing instrument options. This year, HR also asked dispensing professionals about their use of volume controls (VC), telecoils, remote controls, and FM boots on BTEs (Figure 25). HIS-owned offices prescribe volume controls for nearly three in four (73%) of their clients. In contrast, DA-owned offices prescribe VCs for only two in five (40%) of the patients that they fit. In total, it appears that 57% of the aids fit feature a VC.
MarkeTrak9 suggests that 75% of ITE hearing aids in 2000-2001 contained VCs. Kochkin has also shown that, although the movement toward automatic gain control hearing aids is a positive trend—one that will ultimately make hearing aid use more satisfying to the consumer—the removal of VCs has almost certainly led to frustration among consumers because of the basic human desire for having control in any situation.9 Surr et al10 found that 77% of consumers still desired a VC even though these people rarely used them.
Telecoils were reported to be used in 39% of all the hearing instruments dispensed in 2004 (HIS 35%; DA 43%), about the same as in 2002 (37%, HIS 30%; DA 44%). As reported by Myers,6 a 1999 ADA Advisory Committee reported that only 30% of modern hearing aids contain a telecoil. Myers also reported on a survey of the “Big 6” hearing instrument manufacturers which led to the investigators’ conclusion that 48% of the hearing aids sold in the US contained telecoils (R Blaha & S Davidson, Hearing Aid Telecoils: Current Numbers in the US Market, AAA 2004 Convention, Philadelphia). With the number of new applications for telecoils and sales of BTEs rising swiftly, HR predicts that telecoil use will continue to increase toward a 50-60% utilization rate.
Remote controls were reported by survey respondents to be used in only 2% of their fittings (HIS 1%, DA 3%), and FM boots were used in only 7% of their BTE fittings (HIS 7%, DA 6%).
Hearing Aid Pricing
Similar to last year’s HR Dispenser Survey, respondents were asked to fill in their 2004 pricing for premium DSP, economy DSP, programmable analog, and analog linear aids relative to each style of hearing aid (BTE, ITE, ITC, and CIC). This yielded 16 different price categories, and mid-level DSP prices were estimated as the resulting mid-point between the premium and economy DSP categories (Figure 26).
What emerges is that, overall hearing instrument prices decreased in most, but not all, of the categories. This year’s survey suggests that overall premium DSP prices in 2004 ranged from $2,509-$2,842 compared to $2,559-$3,041 in 2003. Mid-level DSP prices ranged from $1,960-$2,292 compared to $1,974-$2,374 in 2003. Economy DSP instrument prices in 2004 ranged from $1,409-$1,742 compared to $1,390-$1,708 in 2003. Prices in 2004 for programmable analog instruments ranged from $1,164-$1,440 compared to $1,244-$1,536 in 2003, and analog linear aids ranged in price from $896-1,242 compared to $916-$1,339 for the previous year. Additionally, the prices of hearing instruments between the professions appear to have drawn closer than in previous years.
In the premium DSP category, overall prices declined in a fairly uniform manner by $50-$100 (HIS -$126 to -$234; DA -$17 to -$166). However, in the economy DSP category, overall prices remained fairly static, departing from last years prices by no more than $38. The prices of most analog programmable and linear aids continued to decrease in both HIS-owned and DA-owned offices. Overall prices of these aids fell by $32-$120, except for analog linear ITEs.
When looking at the 2004 prices from a percentage increase/decrease standpoint, all dispensing professionals saw their premium DSP prices decrease by -2% to -6% in 2004 compared to 2003 (HIS range of -5% to -8%; DA range of -1% to -5%). However, price changes for economy DSP devices were more of a mixed bag: all styles of economy DSP aids declined substantially in price for offices owned by hearing instrument specialists (with a range of -8% to -12%), while all the prices for these same aids increased for offices owned by dispensing audiologists (with a range of 5%-10%).
DSP market stratification. Survey participants were also asked “Of your DSP aids dispensed, what percentage were [from the] premium (highest priced) DSP product lines, mid-range DSP product lines, and economy (lowest priced) DSP product lines.” Responses are shown in Figure 27. Dispensing professionals indicated that, when considering their total DSP sales, 31% were made up from their premium product lines (HIS 29%; DA 33%), 44% were made up of the mid-range DSP product lines (HIS 43%; DA 44%), and 25% were made from their economy product lines (HIS 28%; DA 23%). These totals do not depart by more than 5% in any category from 2003 statistics; however, the utilization of premium DSP product lines increased by 4 percentage points, while the utilization of mid- and economy DSP lines each decreased by 2 percentage points.
In general, when speaking with manufacturers, their responses to this question usually range from 15%-20% for premium lines, but they provide more variable answers for the non-premium categories: 40%-65% for mid-level DSP lines, and 20%-35% for economy lines.
Weighted average prices. The statistics shown in Figure 27 regarding premium, mid-level, and economy DSP usage, as well as 2004 statistics from HIA1 regarding the utilization of hearing instrument styles, were applied to the prices found in Figure 26 to arrive at the weighted average pricing for different circuit technologies, shown in Figure 28. Over all the dispensing professions in 2004, the survey suggests that consumers paid an average price of $972 (HIS $966; DA 980) for a linear non-programmable hearing instrument; $1,226 for a programmable analog hearing instrument (HIS $1,274; DA $1,184); and $2,066 for a DSP hearing instrument (HIS $2,158; DA $2,158). In most cases, hearing instrument prices decreased by 1-2%, and the overall price of DSP hearing instruments decreased by 4.3%. However, as previously noted, the percentage of premium DSP lines dispensed fell by 4 percentage points in 2004, and this may have contributed to this decrease in average price.
When considering all hearing care professionals and all technologies and styles of hearing aids, the weighted average price of a hearing aid in 2004 was $1,893—a 5% ($99) increase over the average 2003 price of $1,794. However, it should be kept in mind that the average price did not rise because of higher prices charged by dispensing professionals; rather, the price increase is due to the far greater numbers of consumers choosing DSP products over the more traditional analog technologies (ie, digital hearing instrument market share increased from 66% in 2003 to 83% in 2004).
Figure 29 shows an 8-year history of weighted average prices for linear, programmable, and DSP hearing instruments. Two things should be noted here: 1) the average price of DSP hearing instruments reached its peak in 2000 ($2,496, HIS $2,572; DA $2,496) and has since declined steadily by $430 over the ensuing 4 years; 2) the average prices for analog linear and analog programmable technologies have migrated toward each other. In 1997, the average prices of these technologies were separated by about $700, whereas today they are separated by only $254. This is almost certainly due to the advent of economy digital hearing instruments, devices that are now essentially defining the upper price limits where analog technology can be marketed. It is altogether possible, if not probable, that next year’s survey will be the last in which we address programmable analog market parameters. Indeed, HIA1 stopped tracking this class of hearing instruments in 2005, instead integrating them into one “analog” category.
Bundling and third-party payments. It is important to note that the above prices reflect the predominant practice of bundling goods and services together and reporting them as the “hearing aid price” (Figure 30). In 2004, 81% of all dispensing professionals bundled the prices of their goods and services (HIS 91%; DA 70%). In other words, only 9% of hearing specialist offices and 30% of dispensing audiologists’ offices itemized their billing relative to the hearing aid price and fees for services.
Additionally, the HR Dispenser Survey’s reported prices, in general, do not take into account free, discounted, or third-party payer hearing aids. Figure 31 shows that about one-third (35%, HIS 31%; DA 39%) of all dispensing offices maintain contracts for services with managed care organizations (MCOs) and/or healthcare maintenance organizations (HMOs). Those dispensing offices that do maintain contracts have about one-in-five of their clients/patients covered by the insurance (22%, HIS 21%; DA 23%), and those clients account for 19% of their gross revenues (HIS 17%; DA 20%).
As a reference, MarkeTrak2 indicates that, in 2000, consumers paid $1,197 for a BTE, $1,295 for an ITC, and $1,009 for an ITC.
Hearing Aid Testing, Fitting, and Associated Services
Figure 32 shows that more than half of all hearing care offices that dispensed hearing instruments in 2004 contained an audiometer (98%, HIS 97%; DA 100%), a sound booth (80%, HIS 65%; DA 97%), and a video otoscope (66%, HIS 81%; DA 52%). Additionally, most offices had impedance testing equipment (61%, HIS 27%; DA 97%) and a real-ear measurement system (60%, HIS 44%; DA 77%). Master hearing aids were found in 60% of HIS offices, but in only 22% of DA offices. In contrast, OAE and ABR testing systems were found in one-half (50%) and one-quarter (25%) of DA-owned offices respectively, but in almost no HIS-owned offices (2% respectively). Virtual sound environments and environmental sound simulators were possessed by 24% of all offices (HIS 24%; DA 23%). ENG equipment for the testing of vestibular and balance disorders were found in 18% of DA offices and 2% of HIS offices, and ASSR systems were found in only 2% of all offices (HIS 2%; DA 3%).
When a patient comes to a hearing care professional for a routine hearing assessment and hearing aid fitting, the HR Dispenser Survey suggests that they will almost always (more than 85% of the time, bottom table in Figure 32) receive air and bone threshold testing, word recognition and speech reception threshold testing, and speech UCL/MCL testing. Most dispensing professionals also incorporate into their testing and fitting protocols tympanometry (57%, HIS 30%, DA 85%) and video otoscopy (51%, HIS 75%; DA 27%). About one-third of all offices incorporate tone UCL/MCL measures (39%, HIS 46%; DA 32%), acoustic reflexes (28%, HIS 2%; DA 55%), and real-ear measurement (26%, HIS 16%; DA 37%). A minority of offices use acoustic reflex decay tests (15%, HIS 3%; DA 27%) and OAEs (9%, HIS 0%; DA 18%) as part of their routine testing and fitting protocols.
Speech in noise testing. In addition to the above routine tests, nearly one-half (48%, HIS 31%; DA 65%) of dispensing offices reported that they used some form of speech-in-noise testing in 2004, a decrease from 52% in 2003 (HIS 46%; DA 55%). Specific speech-in-noise testing methods and the percentage utilization of these tests are shown at the bottom of Figure 33. The survey results suggest that, of those professionals who do assess their client/patients’ speech-in-noise performance, 70% of dispensing audiologists rely on one of the standardized testing methods, while only half as many (38%) hearing instrument managed care organizations (MCOs) and/or healthcare maintenance organizations (HMOs). Those dispensing offices that do maintain contracts have about one-in-five of their clients/patients covered by the insurance (22%, HIS 21%; DA 23%), and those clients account for 19% of their gross revenues (HIS 17%; DA 20%).
As a reference, MarkeTrak2 indicates that, in 2000, consumers paid $1,197 for a BTE, $1,295 for an ITC, and $1,009 for an ITC.
Hearing Aid Testing, Fitting, and Associated Services
Figure 32 shows that more than half of all hearing care offices that dispensed hearing instruments in 2004 contained an audiometer (98%, HIS 97%; DA 100%), a sound booth (80%, HIS 65%; DA 97%), and a video otoscope (66%, HIS 81%; DA 52%). Additionally, most offices had impedance testing equipment (61%, HIS 27%; DA 97%) and a real-ear measurement system (60%, HIS 44%; DA 77%). Master hearing aids were found in 60% of HIS offices, but in only 22% of DA offices. In contrast, OAE and ABR testing systems were found in one-half (50%) and one-quarter (25%) of DA-owned offices respectively, but in almost no HIS-owned offices (2% respectively). Virtual sound environments and environmental sound simulators were possessed by 24% of all offices (HIS 24%; DA 23%). ENG equipment for the testing of vestibular and balance disorders were found in 18% of DA offices and 2% of HIS offices, and ASSR systems were found in only 2% of all offices (HIS 2%; DA 3%).
When a patient comes to a hearing care professional for a routine hearing assessment and hearing aid fitting, the HR Dispenser Survey suggests that they will almost always (more than 85% of the time, bottom table in Figure 32) receive air and bone threshold testing, word recognition and speech reception threshold testing, and speech UCL/MCL testing. Most dispensing professionals also incorporate into their testing and fitting protocols tympanometry (57%, HIS 30%, DA 85%) and video otoscopy (51%, HIS 75%; DA 27%). About one-third of all offices incorporate tone UCL/MCL measures (39%, HIS 46%; DA 32%), acoustic reflexes (28%, HIS 2%; DA 55%), and real-ear measurement (26%, HIS 16%; DA 37%). A minority of offices use acoustic reflex decay tests (15%, HIS 3%; DA 27%) and OAEs (9%, HIS 0%; DA 18%) as part of their routine testing and fitting protocols.
Speech in noise testing. In addition to the above routine tests, nearly one-half (48%, HIS 31%; DA 65%) of dispensing offices reported that they used some form of speech-in-noise testing in 2004, a decrease from 52% in 2003 (HIS 46%; DA 55%). Specific speech-in-noise testing methods and the percentage utilization of these tests are shown at the bottom of Figure 33. The survey results suggest that, of those professionals who do assess their client/patients’ speech-in-noise performance, 70% of dispensing audiologists rely on one of the standardized testing methods, while only half as many (38%) hearing instrument specialists prefer to use these tests; instead, nearly half (49%) of hearing instrument specialists prefer to use their own combinations of speech/noise presentation levels to assess their client’s performance in noise, compared to about one-fifth (22%) of dispensing audiologists. The most popular standard tests were the QuickSIN (36%, HIS 13%; DA 45%), HINT (11%, HIS 6%; DA 14%), SPIN (9%, HIS 6%; DA 9%), and SIN (5%, HIS 13%, DA 0%). “Other” tests were indicated by 9% of respondents (HIS 13%; DA 8%).
Hearing aid programming. It will not surprise anyone that the predominant way in which dispensing professionals program and adjust hearing instruments is via dedicated computers and software (Figure 34). Overall, dispensing professionals report that they use computers to fit and adjust 76% of the hearing aids fitted (HIS 67%; DA 85%). However, trimpots and manual adjustment controls are still reportedly used in 14% of fittings and adjustments (HIS 21%; DA 7%). Additionally, proprietary programming devices from manufacturers (ie, “programming boxes”) are used 6% of the time, while 4% of programming parameters are set by manufacturers.
Verification tools. This year, the survey asked dispensing professionals, “Do you use any follow-up tools for verification of benefit or customer satisfaction?” (Figure 35). A total of 71% of dispensing professionals responded “yes” (HIS 72%; DA 71%). The most common method for assessing client/patient benefit was the dispensing offices own survey (46%, HIS 55%; DA 39%), followed by the COSI test (17%, HIS 9%; DA 24%) and the APHAB test (11%, HIS 4%; DA 17%). Six percent of dispensing professionals (7%, HIS 2%; DA 10%) indicated that they use other tests.
Aural rehabilitation groups. A new question in this year’s survey asked dispensing professionals, “Do you offer aural rehabilitation or follow-up group sessions?” (Figure 36). It is interesting to note that nearly one-quarter (24%, HIS 19%; DA 29%) responded positively. Editor’s note: Due to the rather ambiguous wording of this question (hindsight is 20/20), the editor suggests that these figures be viewed with caution.
Patients/Clients of Dispensing Professionals
Overall, dispensing offices report having an average of 1,905 active patient files (HIS 1,955; DA 1,850), with a median of 1,200 active files (HIS 1,000; DA 1,500). Over three-quarters of those responding indicated that they have fewer than 3,000 active patients: approximately one-quarter of the dispensers each said they had “less than 500,” “1,001-2,000,” or “1,001-2,001” active patient files. Nine percent (HIS 7%, DA 12%) said they have 2,001-3,000 active patient files, 7% (HIS 4%; DA 10%) said they have 3,001-4,000 files, and 11% (HIS 11%; DA 12%) said they have over 4,000 active files.
Age of clients. When assessing client/patient ages, the most common age group visiting dispensing professionals is the 65-84 year old group (52%, HIS 58%; DA 48%). As with past surveys, 2004 figures showed that DA-owned offices serve a slightly younger patient demographic than HIS-owned offices. A total of 27% of the customers in a typical DA office are between ages 30-64, while 22% of a typical HIS office is made up of these patients (the age group makes up 25% of all customers seen). DA offices also have 12% of their patient base made up of people younger than age 29, compared to only 3% for HIS offices. Looking at it another way, HIS-offices tend to serve older clients: 17% of HIS customers are over age 85, while only 13% of DA customers are from this age group.
Ethnicity. As with last year, HR asked respondents about the ethnicity of their clients (Figure 37). It has been a general observation that the dispensing field appears to be lacking in people of color, and this could result in under-serving certain ethnic populations. This year’s HR Survey came up with results that closely parallel those of the previous year relative to ethnicity of patients. About 86% of all clients are white/Caucasian (HIS 90%, DA 82%), 6% are black/African American (HIS 5%; DA 8%), 5% are Hispanic (HIS 4%, DA 7%), 2% are Asian (HIS 1%, DA 2%), and 1% are Native American (HIS 0%, DA 2%). When looking at people ages 55 and older, the US population is 82.5% white, 8.6% black, 5.9% Hispanic, 2.5% Asian, and 0.5% Native American.11 As with last year, these numbers appear to indicate that—while the hearing care field could do better in attracting patients of color—dispensing professionals are reaching a more diverse population than what might have been feared.
New Users. There has been a lot of hand-wringing about the statistics on first-time users of hearing instruments (Figure 38) as a percentage of yearly hearing instrument purchasers. In the 1980s, first-time user rates were often in the 60%-80% range, but these rates have fallen off to as low as 41% in 2002. As a slight ray of hope, last year’s HR Dispenser Survey did show that first-time clients in hearing care offices increased to 43% in 2003 from 41% in 2002.
Reports for 2004 bring far better and more reassuring news: as shown in Figure 39, the percentage of first-time customers reported by survey respondents rose to 49% (HIS 48%; DA 50%). Whether this is due to the decrease in hearing instrument pricing, pent-up demand, an aging population, or some other factor(s) is unclear. Whatever the reason, the 2004 first-time user rate rose by 6 percentage points and is on par with those rates experienced during the mid-to-late 1990s (Figure 38).
Of those first-time clients who came into a dispensing office seeking hearing help, dispensing professionals report that 18% (HIS 13%; DA 23%) were deemed not to be candidates for hearing aids (Figure 39).
Severity of hearing loss. As shown in Figure 40, new patients in 2004 were reported by all dispensing professionals to have predominantly moderate (40-70 dB HL) hearing losses (52%, HIS 50%; DA 55%). People with severe hearing losses (70-90 dB HL) constituted 26% of new clients (HIS 30%; DA 26%), and profound losses (>90 dB HL) constituted 8% of new clients (HIS 8%; DA 7%). Interestingly, the percentage of clients with mild losses, as reported by all dispensing professionals, plummeted in 2004 to 14% (HIS 12%; DA 15%) after rising steadily from 17-21% during 1998-2000 to 25-28% during 2001-2003.
Multiple disabilities. Because dispensing professionals see patients who are predominantly over age 65, they often have patients who are dealing with other life challenges (ie, hearing loss and another disability). The most-common, non-hearing-related patient disabilities encountered by dispensing professionals (Figure 41) are patients who require wheelchairs and walkers (16%, HIS 14%; DA 18%), severe vision problems or blindness (10%, HIS 10%; DA 9%), severe dexterity problems including Parkinsons disease or quaking hands (9%, HIS 9%; DA 8%), cognitive disorders including Alzheimers disease (8%, HIS 8%; DA 9%), and great difficulty speaking or the inability to talk (3%, HIS 2%; DA 4%).
Predictions for 2005
The outlook for 2005 by all dispensing professionals is nothing short of enthusiastic (Figure 42). Two-thirds of all dispensing professionals (67%) predicted that, in 2005, they would experience unit sales gains by an average of 14% compared to 2004. A total of 26% of offices believed they would have the same unit sales as in 2004, and only 7% predicted that their sales would decrease by an average of -12%.
Expected gross revenues and profits were very similar to the above. For example, 68% of all dispensing professionals (HIS 66%, DA 70%) predicted that their sales revenues would increase by an average of 16% in 2005, while 24% (HIS 29%; DA 19%) predicted flat revenues, and only 8% (HIS 5%; DA 11%) said they thought their sales would decrease by an average of 9%.
If they are correct, dispensing professionals will prosper in a new era of hearing aid technology full of consumer options. w
Acknowledgements
The editor thanks Christina Jackson, CPA, an accountant in Two Harbors, Minn, for her excellent work in tabulating the survey questionnaires and formatting the survey data.
Correspondence can be addressed to Karl Strom, email: [email protected].
References
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