Bundled V Unbundled, Audiology, The Future Delivery Model

  • Written on Thursday, January 29, 2015 by Geoffrey Cooling

Bundled V Unbundled

We have debated the merits of bundled and unbundled for some time, whilst some consider it the way forward, many are still hesitant. There are many reasons put forward for the hesitancy, whilst on the other hand the prime reason given for unbundling is the promotion of services and professional identity. I think the biggest fear for change over is revenue drop. I understand that fear and the arguments that have been put forward to support it. However, I have come to realise lately that I have been slightly blinkered when it comes to the concept of changing business model. I also think that there is a third way that will deliver to both camps

The Subscription Model

The subscription model has been tried and tested by Phonak with the Lyric. It is a model that works with some caveats. The Lyric is most definitely not for everyone and the subscription is at a premium. Imagine though, if Phonak was to offer the subscription model across all of its range with a monthly fee to re-sellers that was fixed. That would allow re-sellers to offer all of the Phonak range for a monthly subscription. Those subscriptions could be changed and adapted into tiers that related to service contracts. This scenario has many possible benefits for both retailer and wholesaler.

The Benefits

A subscription model would allow both retailer and wholesaler better forecast cash-flow and earnings. Something not to be sneezed at for any business no matter how small or how large. Because the cost of the instrument to the consumer is spread over time, pricing can be maximised at both retail and wholesale level. Perceived lower cost of hearing aid ownership and certainly lower cost of outlay for hearing aid ownership could have a dramatic effect on market penetration. Tiered pricing levels at retail can still drive service as primacy and drive professional identity without effecting revenue dramatically. In essence it is the best of both worlds.

Changing Hearing Aids Every Three Months?

Unlike the Lyric model, there is no underlying need to physically change out the hearing aids. The main reason that the Lyric is changed out is because of the sealed battery. That and the fact leaving something stuck in the ear for longer than three months is probably not a good idea.So if we don’t change the hearing aids every three months, what enforces compliance and continued payment? The reason I picked Phonak for this article was because they already have a subscription model of sorts but more importantly, and as part of Sonova, they have a sister company with the software set-up to drive the subscription model I am talking about.

The Unitron Flex Trial Platform

The unitron Flex Trial platform is a ready-made hearing aid platform that could drive the subscription model in retail. Simply set the instruments to turn off in three months and your Patient is coming back, either that or they have pretty but non functional ear jewellery. This strategy actually works on two levels, on a commercial level it ensures continued compliance. And funnily enough on a clinical level, it ensures continued compliance. I am also sure that in order to ensure the hearing aids continued functionality, a physical visit to the office every three months might not be needed. I am sure smarter men, and women, than me could build an app for that.

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