Direct-To-Consumer Products: Is Disruption Really A Bad Thing?

by | Feb 4, 2020 | Operations

The FDA’s draft guidelines for over-the-counter hearing devices (OTCs) are expected in late fall or early winter of 2019. However, this harbinger of an industry disruptor doesn’t need to be a cause for alarm.

In fact, as an independent hearing care practice, you’re in a unique position to lay out a strategy that capably navigates the OTC disruption.

How We Got To This Point

The President’s Council of Advisors on Science and Technology (PCAST) and the National Academies of Science, Engineering, and Medicine (NASEM) independently released reports indicating that (1) the prevalence of hearing loss in the U.S. is high but the treatment prevalence is low, and this is because (2) price is cost-prohibitive and (3) the service-delivery model doesn’t allow for timely product acquisition.

Each group recommended that the FDA implement a new device category for over-the-counter wearable hearing devices for mild to moderate hearing loss. Soon after,

the FDA Reauthorization Act of 2017 was passed, and the FDA was tasked with making this recommendation a reality.

What You Can Do Now

When the FDA releases the guidelines in late 2019, it will be an open public draft. The guidelines will cover everything from service delivery to consumer safety to electroacoustic measurements. Read the document and send the FDA your feedback. You can’t stop OTCs — that ship has sailed — but you can offer your feedback as a hearing care professional.

Review the guidelines from the perspective of your patients’ safety and your medical integrity. Think about the electroacoustics. These devices will end up in patients’ hands, and they’ll effectively be fitting their own hearing aids — inform the conversation all you can at this point, so you and the patient are protected.

Once they’ve considered and incorporated feedback, the updated guidelines will be released in August 2020 as a law, at which point the FDA will start testing and approving devices.

This is also the point at which you can get your hands on these devices to test them so you understand the strengths and limitations of these products, should someone come in with one and ask you for help.

What The Model Might Be

The general case

We can’t know for sure what the model will be, but we do have indications of what a general protocol might look like. The user will either take an online hearing assessment — which is causing some controversy — or the OTC hearing aid will, in effect, conduct a hearing assessment in your ear. In either case, a profile of your listening ability will be generated, which can then be turned into a prescriptive formula for you to follow.

Custom devices

As for custom products, one model is already in place in the world of personal sound-amplification products (PSAPs). These products — which are not regulated by the FDA — are for those with normal hearing who want to accentuate certain environmental sounds, such as bird watchers. Nuheara’s PSAP is very much like a hearing aid, and the consumer’s programming capabilities are much like an audiologist’s.

When a Nuheara customer takes an online test, the results are reviewed by a Nuheara in-house audiologist. If the results warrant it, the audiologist might recommend the customer pursue a custom device from someone Nuheara contracts with.

Charge accordingly

Most audiology practices only bill for time. What we have forgotten is that other professions — such as legal attorneys and other medical fields — charge for both time and complexity. What would it look like for us to charge for complexity?

Let’s classify the PSAPs presently on the market as class one, class two, and class three, where class one is the easiest. When someone comes into your practice with a PSAP, you charge a time value and, if applicable, a complexity value. The more parameters, the greater the skill set needed to fit the device.

If the product is a simple class-one product — there’s not a whole lot of manipulation to it — you charge the hourly fee. If it’s a class-two device, it’s a little bit more complicated, so you charge them the hourly fee, but you also include a charge for the added complexity. And the same thing is true in the class three.

Leverage staff

Some states don’t allow audiology assistants. Even in states that do, they may not allow assistants to touch OTCs and PSAPs. But assuming you’re in a state that allows for assistants work on these products, you could add schedule blocks in which assistants could see patients that use, for example, class-one and -two devices, freeing you to only work on the devices of greater complexity. You would still check in with each patient to build rapport and check on the assistant’s work.

How OTCs Will Impact The Market

Different needs for different people

The hearing device market is like any other, so we will see an impact. Every market includes a product or service for individuals who want something quick and inexpensive that they can pick up on their own. But there’s also a category of service that comes at more of a premium price for those who will pay for the service because they know it’s going improve their quality of life.

Consider your car: When the brakes on your car are making a funny noise, you could purchase the parts, take apart the brakes, and replace them yourself. There are those out there who have the time and know-how to buy the parts and repair their own brakes. But do you have the time to do that? And would you feel safe driving with those brakes later? You, like me, probably prefer to pay a qualified individual who’s going to provide quality service and ensure that the brake pads are put on correctly, it’s done safely, and you don’t have to deal with it.

That is where many of our independent practitioners are in the market. It’s a matter of conveying to prospects that the hearing aid itself is not going to be the silver bullet —  it’s the expertise in programming that device, it’s delivering a quality patient experience, and it’s engaging with your patient to make sure that they’re successful on their journey to better hearing.

But you have to successfully convey that in your marketing and your community outreach.

Patient Loyalty Starts Now

As mentioned, we will see an impact: Some individuals who might otherwise pursue a traditional device are going to go down the OTC path. To what extent, we can only guess. If I were a practice owner, however, to maintain a revenue stream, I would add some blocks to my schedule devoted to providing services to OTC and PSAP customers.

You might even start now, with PSAP wearers. Though they’re intended for people with normal hearing, many are being worn by hearing-impaired individuals. This would allow you to capture some of that revenue, but it also gives you an opportunity to show a new client base the benefit of quality care and service. They’ll see that you helped them with their Corolla, so to speak, and when they’re ready for a Camry or a Lexus, they’ll be loyal to your practice.

The same thing happened with reading glasses: American Optometry Association data show that of the 18 million reading glasses sold each year, six million of those customers become LASIK, contact lens, or prescription glasses patients within 18 to 24 months.

In Conclusion

Right now were in a holding pattern, because we’re waiting for the FDA to release the draft. Don’t waste time worrying and strategizing yet. Just like in other industries, it will start bumpy and end up beneficial.

If you’re an Audigy member, stay tuned — we’ll be looking closely at the guidelines once they’re released and offering our recommendations about best practices. We’ll help you weather the coming storm. You’re not alone.

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