Interview with Dave Smriga Executive Director of Aud-Net
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AO/Beck: Hi Dave, nice to meet with you again.
Smriga: Hi Doug. Thanks, good to be here.
AO/Beck: Dave, I think your name is well known throughout the hearing healthcare industry, but for those few people who are not familiar with you, can give us a brief bio please?
Smriga: Sure thing. I'm an audiologist. I earned my master's and my undergraduate degrees from Northern Illinois University at DeKalb. I finished my master's in 1976. Following that, I worked in Canada as a researcher and a clinician for 8 years. Then in 1983 I joined Telex, and after 5 years I joined Hearing Technology. In 1990 I joined Danavox, and I stayed with the GN group until 2001.
AO/Beck: And the new group you've started is called AudNet?
Smriga: Yes, AudNet Inc. is an independent corporation that I have recently founded. The principle goal of AudNet is to provide business and professional support services that sustain the independent practice of audiology in today's diversified distribution environment. AuDNet is targeting such products as network buying, financial services, technology research, profession-based marketing and profession-based media and consumer relations as key elements of its service package.
AO/Beck: What is the relationship between the ADA and Aud-Net?
Smriga: In the AudNet business plan, we have chosen to market our services to ADA members. The ADA members are the entrepreneurs of the profession, with some 1200 members, that probably represents 800-plus hearing care practices. They dispense as many as 20 thousand units per month. The best guess is that ADA members represent 200 million dollars in wholesale sales annually. In addition, ADA members are already positioned to capitalize on the marketing and public relations value of both the profession of audiology, and the Au.D. degree. All of these factors make ADA members the ideal beneficiaries for the services AuDNet is preparing to provide.
AO/Beck: So, is AuDNet a buying group, or something else?
Smriga: AuDNet will provide buying network management services to participating ADA members, but that is only one of the benefits AuDNet will offer. In addition, AuDNet will broker business and employment benefits products on behalf of its members as well, allowing independent practice owners to enjoy corporate-like benefits, and to offer such benefits to their employees economically, without having to be part of a corporation. AuDNet will also be able to secure banking and loan services more economically than an independent practice can obtain on their own, thus reinforcing the long-term viability and sustainablity of the independent practice concept.
AO/Beck: Where does the funding come from for AudNet?
Smriga: The funding comes from fees that are incorporated into the buying network prices.
AO/Beck: Have all of the major manufacturers come on board with this program?
Smriga: Some have expressed interest, and others are still investigating the program. Through surveys conducted earlier this year, we have obtained sufficient feedback at this time to say that there is a strong interest in both the manufacturing and professional communities. However, we're still in the development phase, and it'll take a little while for everyone to fully evaluate their roles and interests in AudNet. We hope to complete the development phase over the summer, and then unveil the completed program at the ADA meeting in the fall.
AO/Beck: Does AudNet have pre-arranged discounts from the manufacturers?
Smriga: No, not at this time. The proposed AudNet pricing model is to be based on the amount of business AuDNet actually does with a manufacturer, not on some arbitrary future prediction of that volume. That is, many buying groups start with a projection, and then they get a price based on their anticipated revenues. If reality falls short of the predictions, that becomes a mess very quickly. What we're exploring is that the discounted pricing AuDNet gets, is based on the sales of products that AuDNet delivers, so the manufacturers concessions are based on real business, not pie in the sky.
AO/Beck: So you don't have to negotiate with the manufacturers based on promises and anticipated revenues, the discount is based on track records and an earned discount for volume?
Smriga: Exactly.
AO/Beck: Is there any tie-in between the Au.D. degree and AudNet?
Smriga: We certainly support the growth of the Au.D. degree, and we want to use some of our revenues to help promote the Au.D. degree, as well as promoting the profession of audiology to the marketplace. The first step is a fairly aggressive national media campaign, which is a little different from an advertising effort. In a national media campaign, we put together compelling stories and newsworthy items about the degree and the profession and we pitch this information to the national reporters and media. I believe we can generate substantial media interest in a message that focuses on health-care delivery rather than retail sales, and on a burgeoning doctoring profession rather than technology.
AO/Beck: Dave, if I recall, your promotional material also talked about a research network, can you tell me a little about that please?
Smriga: Sure. The Independent Research Network (IRN) is another benefit product AuDNet is targeting to develop. What we want to do is organize selected AuDNet members into a research network of clinics, who are available to conduct both proprietary as well as standardized clinical studies. We will have an advisory board made up of clinical experts and academicians to define the tasks, the protocols, and the reporting formats and related issues. The Independent Research Network would serve two functions. First, the network would be made available to the manufacturers to supply them with labs and patients that can be used for their proprietary Beta or clinical testing of their products. This data collected would be owned by the manufacturer. Second, IRN would conduct standardized comparative clinical research on various products. The Independent Research Network would then publish their own comparative results and studies in a professional desk reference to compare products across features, such as noise reduction or directionality etc. We also plan to publish a consumer-based publication to speak generically about the products available, and their legitimate capabilities, and for the first time, the consumers will have an independent and authoritative resource to use in acquiring hearing healthcare products and services information.
AO/Beck: David, this is a large undertaking, and I wish you the best in your efforts.
Smriga: Thanks Doug. I appreciate your giving us this space to help get our message out.
Smriga: Hi Doug. Thanks, good to be here.
AO/Beck: Dave, I think your name is well known throughout the hearing healthcare industry, but for those few people who are not familiar with you, can give us a brief bio please?
Smriga: Sure thing. I'm an audiologist. I earned my master's and my undergraduate degrees from Northern Illinois University at DeKalb. I finished my master's in 1976. Following that, I worked in Canada as a researcher and a clinician for 8 years. Then in 1983 I joined Telex, and after 5 years I joined Hearing Technology. In 1990 I joined Danavox, and I stayed with the GN group until 2001.
AO/Beck: And the new group you've started is called AudNet?
Smriga: Yes, AudNet Inc. is an independent corporation that I have recently founded. The principle goal of AudNet is to provide business and professional support services that sustain the independent practice of audiology in today's diversified distribution environment. AuDNet is targeting such products as network buying, financial services, technology research, profession-based marketing and profession-based media and consumer relations as key elements of its service package.
AO/Beck: What is the relationship between the ADA and Aud-Net?
Smriga: In the AudNet business plan, we have chosen to market our services to ADA members. The ADA members are the entrepreneurs of the profession, with some 1200 members, that probably represents 800-plus hearing care practices. They dispense as many as 20 thousand units per month. The best guess is that ADA members represent 200 million dollars in wholesale sales annually. In addition, ADA members are already positioned to capitalize on the marketing and public relations value of both the profession of audiology, and the Au.D. degree. All of these factors make ADA members the ideal beneficiaries for the services AuDNet is preparing to provide.
AO/Beck: So, is AuDNet a buying group, or something else?
Smriga: AuDNet will provide buying network management services to participating ADA members, but that is only one of the benefits AuDNet will offer. In addition, AuDNet will broker business and employment benefits products on behalf of its members as well, allowing independent practice owners to enjoy corporate-like benefits, and to offer such benefits to their employees economically, without having to be part of a corporation. AuDNet will also be able to secure banking and loan services more economically than an independent practice can obtain on their own, thus reinforcing the long-term viability and sustainablity of the independent practice concept.
AO/Beck: Where does the funding come from for AudNet?
Smriga: The funding comes from fees that are incorporated into the buying network prices.
AO/Beck: Have all of the major manufacturers come on board with this program?
Smriga: Some have expressed interest, and others are still investigating the program. Through surveys conducted earlier this year, we have obtained sufficient feedback at this time to say that there is a strong interest in both the manufacturing and professional communities. However, we're still in the development phase, and it'll take a little while for everyone to fully evaluate their roles and interests in AudNet. We hope to complete the development phase over the summer, and then unveil the completed program at the ADA meeting in the fall.
AO/Beck: Does AudNet have pre-arranged discounts from the manufacturers?
Smriga: No, not at this time. The proposed AudNet pricing model is to be based on the amount of business AuDNet actually does with a manufacturer, not on some arbitrary future prediction of that volume. That is, many buying groups start with a projection, and then they get a price based on their anticipated revenues. If reality falls short of the predictions, that becomes a mess very quickly. What we're exploring is that the discounted pricing AuDNet gets, is based on the sales of products that AuDNet delivers, so the manufacturers concessions are based on real business, not pie in the sky.
AO/Beck: So you don't have to negotiate with the manufacturers based on promises and anticipated revenues, the discount is based on track records and an earned discount for volume?
Smriga: Exactly.
AO/Beck: Is there any tie-in between the Au.D. degree and AudNet?
Smriga: We certainly support the growth of the Au.D. degree, and we want to use some of our revenues to help promote the Au.D. degree, as well as promoting the profession of audiology to the marketplace. The first step is a fairly aggressive national media campaign, which is a little different from an advertising effort. In a national media campaign, we put together compelling stories and newsworthy items about the degree and the profession and we pitch this information to the national reporters and media. I believe we can generate substantial media interest in a message that focuses on health-care delivery rather than retail sales, and on a burgeoning doctoring profession rather than technology.
AO/Beck: Dave, if I recall, your promotional material also talked about a research network, can you tell me a little about that please?
Smriga: Sure. The Independent Research Network (IRN) is another benefit product AuDNet is targeting to develop. What we want to do is organize selected AuDNet members into a research network of clinics, who are available to conduct both proprietary as well as standardized clinical studies. We will have an advisory board made up of clinical experts and academicians to define the tasks, the protocols, and the reporting formats and related issues. The Independent Research Network would serve two functions. First, the network would be made available to the manufacturers to supply them with labs and patients that can be used for their proprietary Beta or clinical testing of their products. This data collected would be owned by the manufacturer. Second, IRN would conduct standardized comparative clinical research on various products. The Independent Research Network would then publish their own comparative results and studies in a professional desk reference to compare products across features, such as noise reduction or directionality etc. We also plan to publish a consumer-based publication to speak generically about the products available, and their legitimate capabilities, and for the first time, the consumers will have an independent and authoritative resource to use in acquiring hearing healthcare products and services information.
AO/Beck: David, this is a large undertaking, and I wish you the best in your efforts.
Smriga: Thanks Doug. I appreciate your giving us this space to help get our message out.
