ESCO Financial
Plymouth, MN
Overview:
As "baby boomers" enter the hearing healthcare arena, competent professional management must go beyond the expected clinical excellence. It should include options and alternatives which are acceptable, desirable, sought-after, friendly and familiar to the audience we seek! It can be argued that if we desire to grow our market and our practices, we have a to responsibly inform patients about payment plans - to allow and provide full access to the best hearing technologies we can provide. Of course, this is a difficult task, but without financial options and alternatives for the patient/consumer, acceptance of our solutions will likely remain limited.
Financial issues and healthcare costs are not a trivial issue — it is THE ISSUE! Regardless of your political persuasion, recall the Clinton-Gore campaign slogan of the 1992 election ''It's the economy, stupid!'' Money matters. Healthcare and related financial issues are a topic foremost on the minds of our patients, politicians and hearing healthcare professionals, to say nothing of retirees and other patients.
In the news recently we've heard about Medicare and prescription drugs, healthcare reform, possible hearing aid tax credits and the ever increasing costs of healthcare. Financial options and alternatives are important, they matter a great deal, and addressing them is acceptable to the patients we serve. Consider the ads and marketing efforts you've seen for corrective eye surgery, cosmetic surgery, dental braces and other important healthcare considerations. Offering financial solutions is important, and helps make the products and services available to a wider audience. The financing of desirable services and products is often the key to acquisition. If avenues to acquisition are made available in a fair, non-judgmental, non-threatening manner, the delivery of products and services will increase.
There has been a multitude of changes in the hearing healthcare industry over the past 10 years, but none more dramatic than the cost of products dispensed. Amplification technology is indeed phenomenal - but very expensive. With binaural top-of-the-line hearing aids often priced as high as five to six thousand dollars or more, some patients simply require a payment plan in order to make their hearing aid purchase affordable.
It is very important for you, as a healthcare professional to understand and routinely present payment options to your patients. Almost all other allied health professions have embraced financing alternatives into their practice. Dentistry, orthodontia, ophthalmology, plastic surgeons and other professionals have realized the cost of their products and services has risen dramatically, and payment options are the only way many of their patients can afford their offerings. This is true in hearing healthcare too. It is important for financing to be a part of any presentation to patients who would benefit from amplification. By promoting affordable, low monthly payments, you open the door for many new patients who may not be able to pay ''out of pocket'' for amplification.
The product price is the single biggest obstacle in the mind of the consumer when making the decision to purchase. Consumers often make a decision to buy because a product is presented with an affordable monthly payment plan. This is especially true for products with an average purchase price above $1,000. According to Sergei Kochkin, of the Better Hearing Institute, as published in Market Track IV, the number 1 reason patients delay purchasing hearing instruments is cost!
Simply stated, it is probable that many patients require payment plans to make hearing aids and other amplification systems (FM systems, middle ear implants, cochlear implants, etc.) affordable. Importantly, financial shortcomings are embarrassing, and if you don't offer a solution, the patient/consumer may not even address the issue with you. Many people will likely desire and choose higher quality instruments and products if a financial solution is availed to them. Financing may be the key to making your patients comfortable with what you have recommended for them. By offering payment terms to patients, you will see greater acceptance of your hearing healthcare solutions to their hearing problems.
While many of the patients who enter your practice expect that they are in need of a hearing aid, most probably aren't prepared for the cost of the product that will best meet their expectations. By making payment options available you will make amplification affordable to many more patients. By making payment plans available, comparable health related industries have increased market penetration by as much as 20%. Consider a practice with an average sales volume of 20 hearing aids per month at a gross margin of $1,100 each. The annual effect of a 20% sales increase through financed purchases is 48 additional hearing aids annually, an increase in gross margin of $49,000 per year.
The Emerging Market:
There have been many studies and discussions regarding the emerging ''baby boomers'' entering the hearing healthcare market. Here are the facts:
- 78 million people n America are moving into the segment of midlife-to-older.
- The active boomer lifestyle may not allow for hearing problems to go un-addressed.
- Nearly all boomers - people currently between the ages of 38 and 56 - are still working, and most say they intend to keep doing so past the traditional age of retirement.
Aside from the tremendous growth in the size of this group, these consumers differ substantially in their past experience and in their expectations from your current customer base, in that:
- Most of the consumers within this emerging demographic will be more familiar with credit than their parents.
- Most of the consumers will have more income than their parents did.
- On average, they will have purchased at least 3 computers during their lifetime.
- Most will have owned a cell phone.
- Many will want and need patient financing.
How to present financial options:
Successful offices present payment options to the patient along with product options. Many professionals offer several recommendations to their patients regarding hearing aid choices, typically in a ''good, better, best'' format.
To fully benefit from financing options, it is important to present the monthly payment amount with each option. For example, if you present the ''best'' hearing aid along with it's monthly payment, the patient will often recognize that the ''best'' option is not out of reach. Other patients will be happy to know you do offer a payment program, should they ever need it. Well-informed patients make better decisions regarding their quality of care and an important factor in that decision is the financial obligation that accompanies their decision.
The following diagram illustrates that as the cost of amplification increases, the need for an affordable financing plan increases. Without financing options, the cost of the ''best'' hearing solution may appear beyond the reach of the typical patient/consumer. By offering financing options to your patient, high quality hearing aids are made more accessible through affordable monthly payments.
Recently we reviewed leasing options and the rationale associated (Matejka and Lombardo, 2003) with offering amplification leasing programs to consumers/patients. The primary question was, of course, ''Why would someone lease amplification?''
Three primary answers were revealed:
- The hearing aid industry is continually working on hearing aid innovation. The hearing aid lease allows hearing aid patients to take advantage of advancements in technology through a short-term lease instead of a long- term purchase.
- The average hearing aid has a life of 5.7 years*. Leasing provides the opportunity to upgrade every 3 years, which helps avoid maintenance and repurchase issues later on.
- The cost of hearing aids relative to the average product life expectancy makes the hearing aid an ideal lease product. Like the automobile lease, hearing aid leases provide the lowest possible payment for consumers that wish to use a product, while maintaining the flexibility to change and/or upgrade in the future.
Knowing your patient's financial situation is not part of your professional responsibility. However, offering your patient options for the purchase of hearing instruments is a professional responsibility and allows your patient to make an informed decision regarding the level of care they can afford to purchase.
By presenting payment options you maximize your efforts to provide your patient the best amplification for their situation.
References:
"Hearing Aids: Leasing versus Financing." See www.audiologyonline.com, ARTICLE ARCHIVES, 8-25-2003. Authors; Todd Matejka and Tony Lombardo.
Sergei Kochkin, PhD, MarkeTrak VI, 2001
For more information about hearing aid and amplification warranty programs, leasing hearing aids, financing programs and options and related information, please click here (ESCO).
