Some Starter Questions . . . THE ART OF INDEPENDENT Do you include - PDF document

10/17/2016 Some Starter Questions . . . THE ART OF INDEPENDENT  Do you include hearing aid dispensing as part of PRACTICE IN TODAY’S your professional scope of practice? CORPORATE/COMMODITY  Are you an employee or an owner?  Is your monthly salary tied to hearing aid sales?  Is your monthly salary tied to hearing aid sales? CULTURE CULTURE David J. Smriga, M.A. President AuDNet, Inc. MAC Conference 2016 Initial Premise Key Word Definitions  Success for an independent audiology  Success: practice hinges on its ability to sustain  Your business model allows you to:  Provide high quality hearing and balance competitive consumer value. p care in your community i i  Provide for yourself and your family  Sustain both of the above as outside forces change Key Word Definitions  Independent audiology practice  Not owned by a corporation/manufacturer  Can make unencumbered business and purchasing decisions h i d i i  The practice’s net profits are the provider’s net profits Independent Audiologists/ Dispensers 1

10/17/2016 What Tom Said in 2012 Asleep At The Wheel 1 Audigy Feedback Magazine, Vol. 2, 2004 Asleep At The Wheel 2 Key Word Definitions  Competition:  Manufacturers  Corporations  Internet  Both products and characterizations of what you do  Consumer Electronics  Cost of goods http://www.audiologyonline.com/articles/we-still-asleep-at-wheel-809 How Can We Achieve Our Premise In Key Word Definitions Today’s Business Environment?  Value:  Def: “The regard that something is held to What We What We deserve Sell Buy  Synonyms: Usefulness, benefit, gain, merit, good How We How We Sell Buy 2

10/17/2016 Products What We Sell  First Indicator  Remains the primary income source  Second Indicator  Advertising/Marketing  Advertising/Marketing What We Wh W Sell Products What We Sell  First Indicator  Remains the primary income source  Second Indicator  Advertising/Marketing  Advertising/Marketing  Third Indicator  Bundled Pricing Price What We Sell  First Indicator  We offer patients options  Second Indicator  We advertise price  We advertise price 3

10/17/2016 Price Third Party Participation What We What We Sell Sell  First Indicator  First Indicator  We offer patients options  Participation  Second Indicator  Second Indicator  We advertise price  We advertise price  Participation at inadequate reimbursement rates  Participation at inadequate reimbursement rates  Third Indicator  Third Indicator  We fear Costco and PSAP’s Which of These Are YOUR Value Initial Sound Quality Indicators? What We Sell  First Indicator  Product  You ask the question  Price  Second Indicator  You make adjustments based on the answer to that  You make adjustments based on the answer to that  Third party participation question  Third Indicator  Initial sound quality  Trial period  Fourth Indicator  You don’t verify Key Part of NAS 12 Recommendations  Recommendation 2: So, what’s the alternative?  Develop and promote measures to assess and improve quality of hearing health care services  Align and promote best practices and core competencies across the continuum of hearing health care, and implement mechanisms to insure widespread adherence  Research, develop and implement a set of quality metrics and measures to evaluate hearing health care services with the end goal of improving hearing and communication focused patient outcomes 4

10/17/2016 Best Practices Guidelines – AAA 2006 Best Practice (Modified by AuDNet Patient Care Excellence Program) What We Could Sell  Provider Guarantee  Fitting & Verification  First Indicator  Auditory Assessment  Hearing Instrument  Solution-based counseling Orientation *  Second Indicator  Auditory Needs Assessment Assessment  Counseling & Follow-  Counseling & Follow-  Verification that treatment goals have been reached  Verification that treatment goals have been reached Up AR  Third Indicator  Non-Auditory Needs Assessment  Outcome Assessment  Validation that treatment has delivered a beneficial outcome  Hearing Instrument  Patient Care Audit Selection * Communication Focused Patient Outcomes Treatment Package Problem Mitigation What We What We Could Sell Could Sell  Example  Initial fitting  Objective verification of speech cue audibility improvement  Starter settings and goal settings  Structured auditory therapy  Builds neural connections needed to utilized restored speech cues comfortably and effectively  Improvement Validation  Objective measurement of performance enhancement delivered as a result of the above  Ongoing performance and condition monitoring Bundled Pricing How We Sell  Definition:  You bundle all of your hearing aid product and service costs, as well as your professional fees, under one, singular, price (code) How We Sell Amlani, Cavitt, Sjoblad: “Price Unbundling: A Vade Mecum For Practitioners” Presentation at the 2015 ADA Conference in Washington, D.C. 5

10/17/2016 Why Keep Bundling? Did You Know . . . How We Sell Pros Cons  Price often based on  Easy nothing meaningful  Your bundling habit is being used against you.  What everyone else y  Not how insurance pays p y for things does  Does not reflect your professional time  May be collecting less than your break-even  It’s what your competition does Embracehearing.com Audicus.com How We How We Sell Sell “At the risk of stating the “The comparison is startling, obvious, we submit to you that obvious we submit to you that and should raise questions and sho ld raise q estions these are very high numbers. on whether the industry and hearing aid costs are In our view, it is unlikely that operating at its most hearing aid wearers would be favorable level for the willing to pay per-visit prices consumer.” at these levels, if given a transparent choice.” Unbundling How We Could Sell So, what’s the alternative?  Definition:  Charging separately for each item or service as it occurs occurs. 6

10/17/2016 Why Unbundle? A “Starter Kit” For Unbundling Pros Cons  Collect the amount you need  Does not work with managed to cover costs/profit care plans that take a provider discount or offer  Improved cash flow their own warranty their own warranty  Increased reimbursement with  Will need to change office most manage care policies and procedures  Makes you price competitive  Have to collect money from  Forces a higher standard of patients and be comfortable care with that  Allows for service provision  Will need to change for outside product purchases marketing program Amlani, Cavitt, Sjoblad: “Price Unbundling: A Vade Mecum For Practitioners” Presentation at the 2015 ADA Conference in Washington, D.C. Step One: Examples: How We Could Sell  Calculate Hourly Break-Even Bundled Model  Go to your annual P&L Total Annual Expenses Annual Contact Hours Hourly BREAK-EVEN  Divide expenses by contact hours (including COGS) Rate ÷ $570,000 3360 $170 Unbundled Model Total Annual Expenses Annual Contact Hours Hourly BREAK-EVEN (excluding COGS) Rate ÷ $300,000 3360 $89 Step Two: Examples: How We Could Sell  Calculate Hourly Billing Rate Bundled Model Expenses Plus $50,000  Break-even plus targeted profit Total Annual Expenses Annual Contact Hours Hourly BILLING Rate (including COGS) ÷ $620,000 3360 $184.50 Unbundled Model Expenses Plus $30,000 Total Annual Expenses Annual Contact Hours Hourly BILLING Rate (excluding COGS) ÷ $330,000 3360 $98 7

10/17/2016 Step Three: Example 1 (Initial Fitting Services): How We Could Sell  Calculate Your Payment For Services Procedure Time Billed Quantity Procedure Fee (Minutes)  Fee for each of the services within Diagnostic Evaluation & 90 1 $147 your standard of care Counseling Hearing Aid Fitting & 60 1 $98 Orientation Orientation Probe-Microphone 15 2 $49 Verification Counseling/AR 30 2 $98 Hearing Aid 30 4 $196 Check/Follow-up Electro-acoustic 15 1 $49 Performance Eval. Speech-in-Noise Testing 15 1 $49 Total: $685 Summary Example 2 (Services- Next 4 Years): How We Could Sell Assumption: Professional Services For the Life of the Aids (5 Years) Procedure Time Billed Quantity Procedure Fee (Minutes) Bundled Model Probe Microphone 15 8 $196 Verification Retail Quantity Total Cost Counseling/AR 15 4 $98 Hearing Aids Hearing Aids $2211 $2211* 2 2 $4422 $4422 H Hearing Aid i Aid 30 30 4 4 $196 $196 Check/Follow-up * = Wholesale cost of $1,005 increased by 120% Electro-acoustic 15 8 $196 Unbundled Model Performance Eval Speech-in-Noise Testing 15 4 $98 Retail Quantity Total Cost Repairs: In-House 30 4 $196 Hearing Aids $1362* 2 $2723 Repairs Manufacturer 30 1 $49 Professional Services – 1 Year $685 1 $685 Total: $1,029 Professional Services – Year 2-5 $1029 1 1029 Total = $4,437.00 * = Wholesale cost of $1,005 increased by 35% The “Big Six” What We Buy W What We W Buy http://hearinghealthmatters.org/hearingnewswatch/2013/research-firm-analyzes-market- share-retail-stores-prospects-of-major-hearing-aid-makers/ 8