earVentureThe Academy of Doctors of Audiology (ADA) has strongly objected to a recent statement from the Hearing Industries Association (HIA) that expressed concerns about ADA’s partnership with IntriCon in the formation of earVenture LLC, a new hearing aid company that manufactures low-cost BTE hearing aids. In its own statement, which appears below, ADA outlines why the formation of earVenture is in keeping with both the goals and objectives of the Academy, as well as in the best interests of consumers and the industry. It also raises its own concerns about HIA’s interference in the matter, asking the industry trade association to “reassess its position towards ADA’s actions, motives or objectives with regard to its relationship to earVenture.”

Hearing Review reported in its September 14 online news that the ADA and IntriCon formed earVenture in an attempt to disrupt the hearing aid market in a manner that allows all hearing care professionals to succeed. earVenture offers two hearing aids, the reVel thin-tube (312) and faVor (10A) BTEs, which are designed as a low-cost high-quality answer to the PSAP (personal sound amplification products), direct to consumer, and mass retail devices currently challenging private practice audiologists. A video on earVenture’s website describes how the new hearing aids will allow audiologists to employ the care model of their choice for exceptional outcomes and value for their patients.

IntriCon, ADA’s partner in the joint venture, is a public company (NASDAQ: IIN) located in the Minneapolis suburb of Arden Hills, Minn. A member of HIA, IntriCon has a long history of supplying the hearing industry with high-quality components and, more recently, in manufacturing hearing aids and PSAPs. The company is perhaps best known as the suppliers of United Healthcare’s hi HealthInnovations’ line of hearing aids, as well as supplying components for the numerous medical device firms in Minneapolis and elsewhere.

Immediately following the launch of earVenture, HIA issued a statement on September 15 that expressed concerns about the propriety of a major professional organization aligning itself with a single hearing instrument manufacturer in an extremely competitive market. The HIA statement also expressed concern that the formation of earVenture LLC raises questions related to potential conflicts of interest for the Academy.

ADA’s Response to HIA’s statement

Today, the Academy issued this response to the HIA statement:

The Academy of Doctors of Audiology (ADA) studied with interest the Hearing Industries Association (HIA) September 15th release, HIA Statement on earVenture, LLC.”

The HIA Statement, which posed provocative questions about ADA’s ownership stake in earVenture, LLC, came just one day after the launch of the innovative start-up company, co-founded by IntriCon and ADA for the purpose of delivering hearing instruments and educational resources that offer unprecedented value for audiologists and their patients. Given the unusual manner, content, circumstances and venue whereby the HIA Statement was released, ADA is compelled to publicly respond.

  •  ADA’s ownership position in earVenture supports ADA’s mission to advance the professional interests of its members, the autonomous practice of audiology and clinical and business best practices.
  • There is no requirement, stated or implied, for ADA members or other providers to purchase devices from earVenture.
  • All licensed audiologists are eligible for membership in ADA, ensuring the same access to discounts for earVenture products and services for the entire audiology community.
  • earVenture is operated independently from ADA.
  • Any profits returned to ADA from its partial ownership of earVenture will be used to advance ADA’s mission, programs and advocacy initiatives, like the 18×18 effort.
  • ADA board members shall receive no private benefit or inurement by virtue of ADA’s investment in earVenture.
Stephanie Czuhajewski

Stephanie Czuhajewski

“ADA assures HIA and all stakeholders that ADA’s participation in the formation of earVenture aligns perfectly with ADA’s mission to advance the autonomous practice of audiology and best clinical and business practices,” said ADA executive director, Stephanie Czuhajewski. “In addition, earVenture beautifully supports some of HIA’s most prominent initiatives and tenets.”

earVenture and its products strengthen HIA’s position against the use of PSAPs for the treatment of hearing loss by removing cost as a barrier to best practices. HIA has repeatedly denounced the use of PSAPs for the treatment of hearing loss, citing consumer safety risks, including potential missed medical conditions when consumers forgo an assessment by an appropriately qualified hearing professional.1

Notwithstanding the HIA recommendations, there is significant demand for PSAPs by consumers with hearing loss and that demand stems from the lower prices offered for PSAPs vs. hearing aids.2 According to a 2014 Consumer Electronics Association (CEA) study on consumer perceptions of PSAPs, cost is a major barrier to consumers seeking help for their hearing difficulties.

In an era when price-sensitive consumers are often forced to choose between unregulated, over-the-counter devices to self-treat their hearing loss, or nothing at all, earVenture offers FDA-registered, low-cost alternatives that encourage best clinical practices and align with the standards of care encouraged by HIA.

earVenture helps mitigate HIA-identified cost barriers to care and supports the rationale for the Hearing Aid Tax Credit. HIA and its subsidiary, the Better Hearing Institute (BHI), have clearly substantiated that the high cost of hearing aids is a barrier to care for millions of Americans. According to HIA Hearing Aid Tax Credit FAQ data, 68% of those with hearing loss cite financial constraints as the core reason that they do not use hearing aids.3 According to the National Institute of Health (NIH), the average price of a digital hearing aid is about $1500, with top-of-the-line devices costing $3000-$5000.4 Today, nearly 75% of the people who could benefit from using a hearing aid don’t wear one.5

ADA, through earVenture, intends to help audiologists serve underserved and never-served populations in a way that actually factors out the cost of the device, expanding access to provider-driven care for price-sensitive consumers who would not otherwise seek treatment. ADA, through this partnership, hopes to help fortify the position of independent practices, which have lost tremendous market share to manufacturer-owned retail chains and big box stores in recent years. Hearing aid manufacturers’ expansion into vertical distribution channels, including clinic ownership, buying groups, and insurance via their ownership of several of the third-party administrators has and may continue to have a detrimental effect on the success of the independent practitioner.6

Kim Cavitt, AuD

Kim Cavitt, AuD

“ADA entered into the partnership with IntriCon to form earVenture in order to advance audiology and patient care,” said Kim Cavitt, AuD, ADA President. “We want to ensure that every audiologist has access to products and resources that will allow them to compete in any environment—and we also want to ensure that the price of a hearing aid is no longer a barrier to access effective, affordable hearing healthcare that includes the comprehensive diagnosis and rehabilitative services that improve outcomes.”

earVenture poses no barrier to entry for other manufacturers seeking to compete in the value market,  and, in ADA’s view, Congress may be more inclined to enact the Hearing Aid Assistance Tax Credit Act if legislators can be assured that the tax credit will more readily cover the cost of a professionally fitted hearing aid for their constituents.

ADA’s partnership with IntriCon to form earVenture is consistent with HIA’s observations on evolving hearing healthcare distribution models. In its 2015 white paper, Patient Care & Positive Outcomes: The Focus Of Hearing Health, HIA states: “In addition, numerous hearing aid distribution models exist and continue to evolve to provide access to care by hearing health professionals without forcing the patient to accept the risks inherent in self-diagnosis and treatment…Hearing aid manufacturers provide hearing aids for all of the markets listed above including those that are considered “disruptive” of traditional distribution channels, without forcing the person with hearing loss to forego evaluation and fitting by a hearing professional.”7

earVenture epitomizes this evolution in hearing aid distribution and fills a critical void for which market demand has existed for many years, but where the demand has not been sufficiently met by existing competitors. This demand is well documented, most recently by the Institute of Medicine (IOM) Committee on Affordable Accessible Hearing Care8 and Hearing Technologies Discussion at the President’s Council of Advisors on Science and Technology (PCAST).9

ADA expresses concerns regarding HIA comments, given the dominant position of HIA and its controlling members in the industry. HIA’s stated mission to “protect and enhance the environment in which its members manufacture and sell their products,” may be affected by earVenture, at least as to the large manufacturers who control HIA.

HIA notes in its statement, “HIA members produce the vast majority of hearing aids sold in the US on an annual basis.” In fact, the six largest HIA member companies, collectively known throughout the industry as “the Big Six” (none of which is IntriCon), manufacture nearly 98% of the hearing aids available worldwide. Such a concentrated industry creates a climate ripe for antitrust mischief. Each of the “Big Six” companies has representation on the HIA Board of Directors. As such, HIA must go out of its way to avoid taking positions that could deter new competition.

ADA requests that HIA retract the comments contained in the HIA Statement, which could be perceived as an attempt to intimidate or malign ADA in an effort to discourage earVenture, a new competitor, from entering and competing in the market.  HIA should also retract its comments that could be perceived to encourage HIA members to sever existing relationships with ADA, to refuse to do business with ADA, now or in the future, or otherwise to threaten ADA with anti-competitive behavior as a result of its co-ownership of earVenture.

ADA applauds HIA for its interest in creating a culture of objectivity and transparency by trade and professional associations in the hearing healthcare arena. As such, ADA strongly encourages HIA to reassess its position towards ADA’s actions, motives or objectives with regard to its relationship to earVenture.“We hope that when HIA carefully considers all of the facts, particularly in the context of its controlling members’ dominant competitive position within the hearing industry,” said Czuhajewski, “that HIA will ultimately determine that it is best to take a supportive position on this matter, if it takes any position at all.”

ADA has been a staunch supporter of HIA and its initiatives, including the Hearing Aid Tax Credit and efforts to ensure appropriate consumer protections. ADA and its 1,400 members look forward to our continued partnership.

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References

1 http://hearinghealthmatters.org/hearingnewswatch/2014/hearing-aid-establishment-psap-makers-clash-proposed-fda-regulations/ (accessed on September, 27, 2015), http://www.regulations.gov/#!documentDetail;D=FDA-2013-D-1295-0006 (accessed on September 25, 2015)

2 http://www.ce.org/CorporateSite/media/Government-Media/GLA/Report-Personal-Sound-Amplification-Products-A-Study-of-Consumer-Att.pdf (accessed on September 25, 2015)

3 http://hearingaidtaxcredit.org/faqs.cfm (accessed on September 25, 2015)

4 http://report.nih.gov/nihfactsheets/viewfactsheet.aspx?csid=95 (accessed on September 26, 2015)

5 http://www.nidcd.nih.gov/health/statistics/pages/quick.aspx (accessed on September 26, 2015)

6 http://hearinghealthmatters.org/waynesworld/2015/the-independent-hearing-aid-dispenser/ (accessed on September 27, 2015)

7http://www.hearing.org/uploadedFiles/Content/HIA_Updates_and_Bulletins/HIA%20White%20Paper%20on%20Hearing%20Health%20-%202015.pdf (accessed on September 27, 2015)

8 http://iom.nationalacademies.org/activities/healthservices/hearinghealthcareforadults.aspx (accessed on September 25, 2015)

9 https://www.whitehouse.gov/administration/eop/ostp/pcast/meetings/past (accessed on September 25, 2015)

10 http://hearinghealthmatters.org/hearingnewswatch/2013/research-firm-analyzes-market-share-retail-stores-prospects-of-major-hearing-aid-makers/ (accessed on September 27, 2015)