In the final year of the 20th century, the United States hearing health care market fell short of its anticipated growth, according to the hearing care professionals who responded to the Hearing Review Annual Dispenser Survey conducted in March 2000. For example, statistics from the survey of 1999 business practices show an overall decline of 15%, from 68% to 53%, in the number of hearing care professionals who reported an increase in the gross revenues of their practices/businesses in 1999 over 1998.

Further indication of the declining market was evidenced in a drop of 22%, from 77% to 55%, in the number of hearing care professionals who reported that hearing instrument sales had increased in their practices/businesses in the past year. Add to that figure the 24% increase in the number of dispensers that reported their hearing instrument sales had remained the at the same level in 1999 as in 1998 and the no-growth/declining sales and revenue status of the hearing instrument marketplace becomes very apparent. Profit levels also continued to drop for all dispensers with 8% more of the dispensing practices/offices reporting profits under $100,000 in ‘99 than in ‘98.

The above statistics, reported by the dispensers themselves (96% of the HR survey respondents were owners or co-owners of practices/businesses), substantiate the rather gloomy picture of 1999 hearing instruments sales reflected in the Hearing Industries Assn.’s (HIA) 1999 sales figures. (See HR articles, “The Hearing Care Market at the Turn of the 21st Century”1 and “1999 Regional Marketing Review”2 for a complete analysis of the HIA market statistics.)

Encouraging, however, is the optimistic attitude of hearing care professionals reflected in their responses to HR survey inquiries as to their expectations for 2000—the first year of the 21st century. After many years of surmounting obstacles such as consumer resistance to the product they market, lack of physician referrals, government investigations and regulatory actions, interdisciplinary rivalries and a declining market, dispensers of hearing instruments continue to believe in the important role hearing instruments can play in the lives of individuals with hearing loss. Even after experiencing a relatively flat year in 1999, an amazing 88.5% of all dispensers said they expected the gross revenue in their practices/businesses to increase 18% in the year ahead and 78% stated that they expected their hearing instrument unit sales to increase by 15% in 2000.

In the past six years since the Hearing Review annual surveys of dispensing practices/businesses were initiated, the HR staff analysis of statistics generated by those surveys has identified numerous factors that have contributed to the slow growth in hearing instrument sales as well as the decline in revenue, sales and profit levels. Outstanding among those factors have been: decline in the number of first time patients, lack of growth in the number of patients/clients under the age of 65 seeking hearing care, slow growth in medical referrals, the small number of dispensing practices/businesses that have long-range business growth plans, the relatively small share of operating expenditures allocated for consumer education and product promotion, lack of product diversification and growth of Health Maintenance Organizations.3,4,5,6,7 (Author’s note: Reports on HR annual surveys of hearing instrument dispensing practices /businesses of ‘94, ‘95, ‘96, ‘97 and ‘98 will be referred to consistently throughout this article and their sources will only be listed this one time.)

In the following pages, the influence of those same causative factors on the 1999 hearing care market, as they are reflected in the statistics generated by the March 2000 HR survey, will be examined.

The State of the Market—1999
Gross Revenue. As noted in the introduction to this article, the number of dispensers reporting increased gross revenue for their practices/businesses in 1999 declined by 15% from the number that reported increased revenue in 1998 (68% to 53%). However, for those who reported increases, the percentage of increase (19.5%) was only .5% over the previous year. The number of dispensers reporting a decrease in gross revenue increased by 4%. The average decrease in ‘99 being -9%. Practices/businesses reporting no growth or loss in gross revenue in ‘99 increased by 11% over ‘98 (33% from 22%).

Sixteen percent more dispensing audiologists (DA) (61%) reported an increase in the gross revenue at their practices/businesses in ’99 than did hearing instrument specialists (45%). The number of hearing instrument specialists (HIS) reporting decreased incomes exceeded DA by 7% with the percentage of decrease being -14% for HIS and only -8% for DA. The percentage of HIS practices/businesses (38%) reporting that their gross revenues remained the same in ‘99 as ‘98 was 9% more than that of DA (29%) (Fig. 2a)

Review of increases/decreases in gross revenues for dispensing offices, as reflected in the annual HR surveys over the past five years, shows that the number of practices/businesses reporting gross revenue increases in ‘99 (53%) is 21.5% less than that of ‘95 (74.5%). This number has fluctuated each year since ’95 with the low coming in ‘96 when only 45% reported an increase in revenue. The very slow progress in hearing health care growth is certainly reflected in the 30% increase from ’95 (3%) to ‘99 (33%) in the number of offices that report that their gross revenues remained the same as the previous year. (Fig. 3)

An in-depth review of the various gross revenue categories for ‘99 versus those of ’98 shows that dispensers reported an 6% (‘99 21%, ‘98 15%) increase in the number of practices/businesses with gross revenues under $100,000, and a 5% decrease in the $101-250,000 category (32% to 37%), the two lowest income categories. At the same time in the upper level income categories, a 3% drop was reported in the $501-$750 category (27% to 25%) and a 4% drop (6% to 2%) in revenues of $751,000 to 1MM. On the positive side, however, there was a 2% (25% to 27%) increase in the number of offices that reported incomes of $251-500,000 and a 4% (4% to 8%) increase in those reporting incomes over 1MM.

Percentages of decreases and increases reported by hearing instrument specialists (HIS) and dispensing audiologists (DA) were very similar. (Fig. 4)

Hearing Instrument Sales. With hearing instrument sales making up 73% of the revenue of the average hearing health care practice/business (Fig. 16), decreases and increases in sales have a great impact on the success or failure of a practice/business. In ‘99, 55% of all dispensing offices reported an increase in hearing instrument sales, with the average increase being 15%. These figures represent a 22% drop from the previous year when 77% of all dispensers reported an increase in hearing instrument sales, with an average increase of 16%. A total of 14% of all dispensers reported having decreased hearing instrument sales in 1999, with the average decrease being -12%. It is specially significant to note the large increase in the number of practices/businesses who reported that their hearing instrument sales remained the same in ‘99 as in ‘98, 31%. This was a 24% increase over that of ‘98 when only 7% reported hearing instrument sales in their offices remained the same as the previo
us year.

A total of 60% of dispensing audiologists recorded increased hearing instrument sales in ‘99 by an average of 14%, while 50% of hearing instrument specialists experienced increased sales by an average of 17%, according to HR survey statistics. A decrease in sales in ‘99 over ‘98 was reported by 16% of HIS with average decrease of -15%, while only 12% of DA said their sales were down by an average of -9%. There was a 6% spread between the number of HIS and DA offices in whose hearing instrument sales experienced neither gain or loss in ‘99 (HIS 34%, DA 28%). (Fig. 5a)

The number of dispensing professionals reporting increases in their hearing instrument sales has declined steadily over the past five years. In ‘95, for example, 85% of the respondents to the HR survey reported that their hearing instrument sales increased over the previous year. In ‘96, 70% reported sales had risen; in ‘97 and ‘98, 77%; and in ‘99 the number of offices reporting an increase dropped to 55%. Reported decreases have not had as wide a variance. Offices reporting that sales remained the same as the previous year remained very low from ‘95 through ‘98. In ‘99, however, the number of offices reporting no increase in sales over the previous year (31%) jumped by 24% from the 7% of ‘98. (Fig. 6)

Profit Levels. Decreased revenues and sales also mean a drop in profits and HR survey statistics for ‘99 showed that 8% more dispensers said their profits in ‘99 fell into the under $100,000 category (72%) than that reported for that category for ‘98 (64%). The increase in the number of HIS whose profit levels dropped into the $100,000 category (12%) was twice that of DA (6%). Overall ‘99 profits were less than in ‘98, with the exception of a .5 % increase in the over $1MM category. (Fig.7)

HR survey statistics have reflected a downward trend in the profit levels of hearing instrument dispensing practices for the past five years (‘95 through ‘99). The number of practices/offices reporting profit levels under $100,000 has increased every year, with the exception of ‘97. In ‘95, only 55.5% of the survey respondents reported having a profit level of under $100,000. In ‘96, that number increased to 72%. A drop to 59% was reflected in ‘97, however, the number increased again ‘98 when it rose to 64%. The all-time high was again reflected in the ‘99 statistics when almost three-fourths of all practices/businesses (72%) reported their profit level as being under $100,000. This was the same percentage level as that reported in ‘96 when the hearing health care industry also experienced a drop in gross revenues. (Fig. 8)

The “never give up”attitude of hearing care professionals was definitely reflected in their responses to HR survey questions about anticipated gross revenues and hearing instrument sales in 2000. Despite experiencing a relatively flat year in ‘99, 88.5% of all dispensers said they expected their gross revenues would increase in the first year of the 21st century with the anticipated increase being 18%. Only 4.5% of the survey respondents said they expected their gross revenues would remain the same in 2000 as in ‘99, while 7% indicated they anticipated a -12% decrease. (Fig. 2b)
All dispensers, HIS and DA alike, (78%) expect an improved hearing instrument market will prevail in 2000 with the anticipated increase in sales being 15%. Only 5% expect decreased sales and 17% stated they felt the hearing instrument sales in their offices would remain the same. (Fig. 5b)

The Hearing Instrument Dispenser—1999
A typical hearing instrument dispenser in the first year of the 21st century, based on responses to the current HR survey, could be either a dispensing audiologist or a hearing instrument specialist (54% of the survey respondents were HIS, 46% DA). (Fig.1) They would own the practice/business in which they dispensed hearing instruments (84% were owners, 12% were co-owners, only 4% of respondents were employees). Hearing instrument dispensers of ‘99 are well educated; over 50% of all survey participants have post graduate degrees (53% post graduate degrees, 17% college degrees, 22% some college and 8% high school diplomas).

The largest number of survey respondents (68%) were 41-60 years of age (41-50 35%, 51-60 33%). There were more HIS survey respondents who were over 70 years of age (11%) than DA (0%). Only 3% of all surveys were completed by individuals under 30 years of age, while 10% were in the 31-40 year category.

Almost three-quarters (73%) of the dispensers who participated in the HR survey this year reported that they had dispensed hearing instruments for 16-20 years or more (16-20 24%; 20 years and over 49%). A total of 54% of the DA who participated in the current HR survey stated that they had dispensed hearing instruments for over 20 years, while 44% of the HIS had been dispensers over 20 years. Only 12% of all dispensers had 10 or less years of experience. (It should be remembered that a large majority of the HR questionnaires were completed by owners of practices/businesses who would in most cases be older and more experienced.) (Fig. 9)

Fixed salaries are the most common type of compensation in hearing instrument dispensing offices with 56% of the offices reporting their employees have fixed salaries. About 28% receive a salary plus a commission, while 13% receive commissions only. A few employees receive expenses in addition to their commissions. (Fig.10) The HR survey did include inquiry as to average compensation for HIS and DA, however, only about one-third of the respondents provided this information. Those responses varied widely with HIS average being $35,000-$50,000 and DA averaging about $40,000-$50,000.

The Dispensing Practice/Business
Location. Offices in which hearing is tested and hearing instruments are selected, fitted and sold are found in varied locations. The largest number are in some type of office building (59%), while 23% are located in retail centers like malls. Medical settings, such as clinics and hospitals, are home to 16% of the dispensing offices. Three times as many HIS offices are found in retail-type locations (34%) as DA offices (12%), while about three times as many DA offices (24%) are found in medical locations (HIS 7%). (Fig.11)

Seventy-one percent of the dispensing offices covered in the current survey are located in cities with populations from 25,000-500,000 (DA 78%, HIS 64%). Only 8% of the practices/businesses have their main offices in cities with populations under 25,000 and 12% have chosen cities with populations of over 1MM as the site of their main offices. (Fig. 12)

þ Number of Offices and Staff. A majority of the practices/businesses (59%) have only one office (HIS 64%, DA 54%); however, several practices reported having offices in as many as 12 locations. Numerous respondents stated their practices/businesses maintained satellite centers throughout the regions they served. (Fig. 13) Over 50% of the dispensing offices (59%) have only one DA or one HIS (HIS 52%, DA 66%) on their staffs, 23% have two, 5% three and 13% four or more staff members. (Fig.14)

The number of practices/businesses reporting that dispensing audiologists and hearing instrument specialists worked side by side in their offices (HIS 28%, DA 26%) almost doubled from that reported for ‘98 (HIS 12%, DA 14%). Ratios of HIS/D
A working in these offices varied from 11 HIS/1 DA to a one-on-one ratio in offices owned by HIS. In DA-owned offices, ratios varied from 7 DA/1 HIS to 1 DA/1 HIS. (Fig.15)

Revenue Sources. As has been true in all previous HR dispenser surveys, Hearing instrument sales accounted for the largest percent of the revenue (73%) in all practices/businesses (HIS 79%, DA 67%). Hearing instrument repair accounted for 9% of revenue (HIS 10%, DA 7%). Audiological testing produced the third largest percent of income (8%), with Batteries yielding 4%; Earmolds and Ear plugs, 3% and ALDs only 1%. (Fig.16)

Expenditures. Over one-third of a dispensing practice’s gross income is spent for purchasing products (34%). Variance between DA and HIA cost for product was minimal (DA 35%, HIS 33%). Salaries accounted for 19% of business expenses, Operations (17%) and Taxes and Ads/promotion both 9%. Net profit was reported to be 12% in ‘99, a 2% drop from that reported for ‘98 (14%). (Fig.17)

MCOs. National Dispensing Networks. The number of dispensers who reported that their offices had contracts with Managed Care Organizations grew by 6% in ‘99 over ‘98 (48%). Almost twice as many DA-owned practices/businesses serve MCO patients (61%) as do those owned by HIS (35%). (Fig.18) Despite the increasing number of dispensing offices being purchased by national dispensing networks, only 3% of the respondents to the current HR survey said the office in which they practiced was owned by a national dispensing network. (Fig.19)

The Patients/Clients
Patient/Client Age Levels. While they are not large, some changes in the reported patient/client age levels are reflected in the ‘99 statistics. An 8% increase occurred in the number of patients who are 45-65 years old (‘99 21%, ‘98 13%); a 2% drop in those over 65 (‘98 68%, ‘99 66%); a 5% decrease in those 30-44 (‘98 12%, ‘99 7%). There was no change in the percentage in the 18-29 age level and the number of patients under 18 dropped by a percentage point. Certainly a matter of concern is the fact that research indicates ongoing increase in the number of younger individuals with hearing loss, yet growth in hearing instrument use by this segment of the population actually has declined in the past nine years. In 1980, for example, 30.5% of patients/clients who were 40-55 years old sought hearing help while in ‘99 that number (even with a 7% increase over ‘98) was 9% lower. The reported number of patients/clients under 18 years of age in ‘99 is less than one-half of that in ‘80 (‘80 9.1%, ‘99 3%). (Figs. 20 & 21)

The patients/clients that visit dispensing offices on any given day may be either female or male as patient/client mix was reported as 51% male, 49% female. (Fig. 22) They can be expected, on an average, to purchase new hearing instruments every 5.25 years. (Fig. 23)

þ Severity of Loss. An examination of the reported degree of loss of patients/clients as reported in the HR March 2000 survey reveals a 3% increase over ‘98 statistics in the number served who have losses over 70 dB (28%); a 1% decrease in the number having a moderate loss (53%) and a 2% decrease in those with mild losses(19%). Dispensing audiologists reported that 5% more of their patients had mild losses than did hearing instrument specialists. (Fig. 24)

Patient/Client Motivation. In response to a HR survey question as to who were the primary motivators that helped bring hearing-impaired patients/clients into their offices, dispensers rated the individual himself or herself or the individual’s spouse equally (28%). Physicians (18%), sons and daughters (12%) and their friends (8%) followed in order of their influence. (Fig. 25)

First-time Users. To experience growth in market penetration, the hearing instrument industry, like all industries, must experience an increase in the number of individuals who are first-time purchasers of the products they produce. This growth has been slow in coming for hearing care providers for many of the reasons noted earlier in this article. In 1999, HR survey respondents reported that the number of first-time hearing instrument users grew by 1% over the previous year (48% to 49%), yet the potential market for hearing instruments was at an all-time high in ‘99. A 3% growth was reported by HIS while DA new hearing instrument user numbers dropped by a percentage point from ‘98 to ‘99. (Fig. 26) Fifteen years earlier in 1983, 75.6% of the individuals purchasing hearing instruments were first-time users, 26.6% more than that of ‘99.11 The number of first-time purchasers in ‘99 is exactly the same as that reported five years ago.11 (Fig. 27)

Referrals from other satisfied customers are the largest source of first-time patients for dispensing offices (40%), according to the HR survey respondents. Other influencing factors listed were: Advertising (30%), Medical Referrals (18%) and Health Maintenance Organizations (5%). Dispensing audiologists receive a larger percent of their patients from medical referrals (DA 28%, HIS 8%) and HMO’s (DA 8%, HIS 2%), while HIS credit more of their client visits to customer referrals (HIS 43%, DA 37%) and advertising (HIS 38%, DA 22%). (Fig. 28)

Following a visit to a dispensing office, 20.5% of the patients/clients opted not to purchase a hearing instrument, according to HR survey responses. (Fig. 29)

Selection/Fitting of Hearing Instruments
Circuitry. Focus of both the media and consumers on the availability of digital signal processing (DSP) and programmable circuitry in the hearing instruments of the ‘90s has accelerated growth in the sales of instruments with these capabilities. Statistics from the HR March 2000 survey of show that in 1999, sales of DSP and programmable instruments accounted for almost one-half (49%) (Programmable 32%, DSP 17%) of the total hearing instrument market, a 6% growth in market share over ‘98 (44%). DA reported fitting twice as many DSP instruments as did HIS (DA 23%, HIS 11%) and 12% more programmable instruments (DA 38%, HIS 26%).

Reported non-programmable linear instrument usage has declined each year since ‘96 (‘96 48% to ‘99 30%) and non-programmable, non-linear circuitry instruments fittings have dropped from 38% in ‘96 to 21% in ‘99. Programmable instrument sales have risen from 29% market share in ‘96 to 32% in ‘99. Most noticeable growth in usage has been in DSP instrument usage which has moved upward each year, from only 6% of the market in ‘96 to 17% in ‘99. (Fig. 30a & 30b)

Types of Hearing Instruments. There were only minimal changes in sales figures for the various types of hearing instruments from ‘98 to ‘99. For example, total ITE-type instrument sales dropped by only one percent. Variance in the reported number of BTE instruments fit by DA and HIS in ‘99 is, however, of interest (DA 20%, HIS 12%). (Fig. 31) Comparison of the changes that have occurred in the past six years illustrate the growth of CIC sales (‘96 7% to ‘99 21%). Traditional ITE-type instrument sales declined from 47% to 32% in that same period. (Fig. 32)

Number of Instruments Fit Per Month. Little variance can be noted when comparing the number of hearing instruments the dis
pensers reported they fit per month in ‘99 and in ‘98. Every category declined slightly or remained the same, with the exception of 21-30 instruments and 41-60 instruments which both gained 3%. (Fig. 33)

Comparison of the average number of hearing instruments fit per month that have been reported in HR surveys over a six year period (’94 through ‘99), however, does reveal a contributing factor in the decline of hearing instruments—individual dispensers are marketing a smaller number of instruments each month than they did in previous years. In ‘94, only 49% of the dispensers reported that they fit 20 or less units per month. In ‘99, that number grew 10% (59%). In that the same six-year period, the number of dispensers who fit a larger number of units per month, 20-60, dropped 10%. The number of dispensers fitting 60 units per month or more is the same in ‘99 as it was in ‘94 (7%). (Fig. 34)

Patient/Client Visits Per Fitting. A total of 67% of dispensers reported that their patients/clients made from 3-5 visits during the fitting of their hearing instruments (DA 77%, HIS 56%). Two visits were the average in more HIS offices than DA offices (HIS 34%, DA 18%). (Fig. 35)

Binaural/Monaural Fittings. Reported Monaural/Binaural ratio for hearing instrument fittings did not change from ‘98 to ‘99 (32% Monaural, 68% Binaural). The percentage of binaural fittings has steadily increased over the years growing from 59% in ‘95 to the 68% of ‘99. (Fig. 36) When a historical look back 30 years is made, an interesting comparison between binaural and monaural hearing instrument fittings emerges. A dispenser survey in 1971 reported that 83% of all hearing instrument fittings in 1970 were monaural and only 17% were binaural.13

Test Instrumentation. Audiometers are used in all offices included in the ‘99 HR survey and 9% more have sound booths/rooms than did the dispensers participating in the ‘98 survey (‘99 76%, ‘98 67%). An increased number of offices reported having all other types of equipment listed in the questionnaire with the exception of real ear measurement instruments where statistics were the same in ‘99 as in ‘98 and Impedance instruments where a 10% drop occurred in reported numbers. Inclusion of ENG and ABR instrumentation in their test equipment were each reported by 3% more offices and 2% more had OAE. (Fig. 37)

Hearing Instrument Prices. While prices of medical care and many products utilized in providing health care have risen in the past year, average ‘99 prices reported in the HR survey were lower for some types of hearing instruments than those reported the previous year. Average ‘99 ITE prices were $26 less per unit. Programmable instruments were reported at $14 less and even DSP instruments prices were down $7 per unit from those reported for ‘98. Price increases in ‘99 over ‘98 were evidenced in the survey for BTE instruments of $31 more per unit, CICs which recorded the largest increase of $136 per instrument and ITCs with a $51 increase per unit. Comparison of trends in average hearing instrument prices reported in HR surveys for the past six years (average DSP prices have only been included since ‘97) indicate that prices for all types of hearing instruments have remained relatively constant throughout the period. (Figs. 38 & 39).

Itemizing/Bundling. Charges for testing and fitting are combined (bundled) with the cost of the hearing instrument itself in 76% of the dispensing practices/businesses. Only 24% of the dispensers reported itemizing the costs for the various services. More DA itemized testing and fitting fees than HIS (DA 40%, HIS 8%). (Fig. 40)

A new question included in the March ‘99 HR survey yielded interesting information as to how many dispensers offer follow-up fitting services at no charge in their offices and if special fitting fees are charged, what those charges are based upon. A total of 80% of the survey respondents said follow-up fitting services were offered at no cost in their practices/businesses; 16% stated they were usually free; 2% based fees on the service rendered and 1% based fees on the type/cost of the instrument fit. (Fig. 41)

Number of Brands Offered. About four-fifths (78%) of the dispensers participating in the HR survey of dispensing practices in ‘99 reported that more than one hearing instrument brand was offered in their offices, with 31% carrying 2-4 brands, 25% offering instruments manufactured by 5-6 different companies and 11% listed 7-10 brands and 11% over 10. (Fig. 42a)

While 78% of the survey respondents reported that multiple brands of instruments were offered in their practices/businesses, 68% of the hearing instrument sales in those offices were from one specific brand of instrument. (Fig. 42b)

Returns/Exchanges
The overall return rate for hearing instruments remained the same (8%) in ‘99 as in ‘98 and ‘97, with DA reporting a 9% rate of return and HIS 7%. The 9% return rate reported for CICs in ‘99 was 3% less than in ‘98 and the return rate for DSP instruments (12%) increased 1% over ‘98. The reported number of patients/clients making no purchase after returning hearing instruments (23%) was 4% lower than the previous year; while the number of patients/clients exchanging their original instruments for another type/model (27%) rose by 4%. DA reported a 7% higher exchange percentage than HIS (DA 31%, HIS 24%). (Fig. 43)

Management/Marketing
Almost one-half of the dispensing practices/businesses (45%) participating in the HR survey reported that a pre-developed market plan was utilized in their offices (HIS 53%, DA 37%). This was an increase over the three previous years (‘98 36%, ‘97 42% and ‘96 39%). (Fig. 44)

The use of a Website was reported for the first time in the current HR annual survey with 22% of all offices listing the use of this marketing tool. The number of dispensers who include direct mailings (50%) in their market plans dropped 10% from the previous year, with the drop occurring primarily in HIS offices (‘98 72%, ‘99 59%). (Fig. 44) Overall dispensing offices utilized 9% of their gross income for marketing (HIS 10%, DA 8%). (Fig. 17)

Most dispensers (91%) reported that they purchase the hearing instruments sold in their practices/businesses directly from manufacturers (HIS 98%, DA 84%). The remaining 9% are purchased through co-ops and buying groups (DA 16%, HIS 2%). Quality and dependability of the products are the prime factors considered when making purchasing decisions with ease of fitting, design and size following in that order.

Dispenser responses to a new question that was included for the first time in the HR survey this year provided insight into which manufacturer support services exercise the greatest influence when dispensers are making their purchasing decisions. Volume Discounts were rated as the most important factor. The provision of Educational seminars was rated second. Cooperative advertising, National advertising and Sales leads followed in that order. Trip incentives were rated as least important. HIS and DA responses were very similar, however, DA rated Sales leads and Trip incentives as more important than national advertising. (Fig. 45)

More than one-half
of the test instruments purchased by dispensers are bought directly from manufacturers of the product (55%), while 43% of purchases are from special instrument distributors. A larger percent of DA purchase their instrumentation from special instrument distributors (63%) than do HIS (22%). (Fig. 46)

Factors considered by dispensers when choosing a manufacturer of earmolds and ear plugs to serve their offices remained the same in ‘99 as in ‘98 with quality, fit and service ranking first, second and third. Cost and turn-around time were placed fourth and fifth. HIS considered cost more important than did DA. (Fig. 47)

Five percent more dispensers report that they purchase the batteries marketed in their offices through hearing instrument manufacturers with whom they do business (45%) than directly from battery manufacturers (40%). The remaining 15% are purchased from wholesalers or other sources (wholesalers 14%, other 1%).

Dispensers reported that 45% of the batteries they sold in ‘99 were labeled with the name of the manufacturer of that battery, 36% the name of the practice and 19% carried a hearing instrument manufacturer’s name. (Fig. 48)

Computers play an ever-increasing role in hearing care offices. They are used in the testing and fitting of hearing instruments in 81% of all offices (DA 93 %, HIS 79%). Other uses reported in the HR survey were: maintenance of patient records in 73% of the offices (DA 75%, HIS 71%); for sales records and bookkeeping, 67% (DA 69%, HIS 66%); Internet/E-mail, 52% (DA 59%, HI 45%); Patient/referral correspondence, 51% (DA 57%, HIS 44%); and in marketing projects by 48% of all dispensers (DA 50%, HIS 45%) . (Fig. 49)

Use of Internet and e-mail also is increasing in dispensing offices. Of the dispensers who said their offices were on-line, 73% reported that they use these computer services to correspond with colleagues, 52% use Internet to secure product information, 30% to order products and 27% to contact their customers. (Fig. 49)

The closing paragraph of the HR analysis of the dispensers perspective of the 1998 hearing instrument market7 concluded with the following sentence: “Hopefully, the continuation of a healthy economy and an increased acceptance of digital signal processing instruments in the U.S. will make 1999 a banner year in the history of the hearing care marketplace.” The U.S. economy did hit unprecedented highs in the final year of the 20th century and the share of market for DSP hearing instruments did move upward 4%. (Fig. 30) The statistics from the HR survey of the ‘99 hearing instrument market as well as HIA hearing instrument sales reports, however, provide evidence that the expectations for that banner year for hearing care providers did not materialize.

This HR analysis of ‘99 statistics attempts to highlight some of the causative factors for the slow growth of hearing instrument sales by carefully examining dispenser responses to specific HR survey questions. Comparisons to statistics from industry surveys of previous years are presented in an attempt to identify specific business practices that are negatively impacting market growth. It is the hope of the HR editorial staff that information from this study will assist hearing care professionals, both hearing instrument manufacturers and dispensers, as they work together to make 2000 the ‘banner year’.

Acknowledgements
Appreciation is extended to every hearing care professional who participated in the current HR survey. The HR staff fully recognizes that completion of the four-page survey with its 56 individual questions, many requiring detailed information, requires lots of research and hours of time. As one of the survey respondents humorously commented at the end of his/her survey form this year, “It was more than a one cup of coffee task.” The willingness of these individuals to share information about their practices and businesses provides guidelines which all hearing care professionals can find useful. Thank you! Thank you!

The author also gratefully acknowledges the many hours that Karl Strom, HR’s editor, and Shirley Brandt, HR’s managing editor, spend helping me prepare the questionnaires, the mailings and the art work and layouts. Their willingness to share their interpretations of the statistics plays an important supportive role as well. Thank you both.

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