Interview with Steve Barlow Management Team Member, AVADA LLC
Share:
AO/Beck: Good evening Steve. Thanks for joining me tonight. I've read a little about AVADA, and I'd like to learn more about AVADA. Please tell me, who and what is AVADA?
Barlow: Hi Doug. AVADA is made up of a core of people with careers spanning from ten years to over thirty years in the industry. The average member has some twenty plus years in the industry. All of the AVADA core members are leaders within their local areas as well as on the state level. We joined together initially to improve patient care and satisfaction. We also wanted to explore and create new and additional revenue streams to add to our profitability.
AO/Beck: OK very good. Before we go much further, please tell me whether there are any audiologists involved?
Barlow: Yes there are. Our business model includes dispensers and audiologists and all of the practices are 'audiology-based'. Our practices may have audiologists available by contract service agreements, or they may have as many as seven audiologists available on site as full time audiologists on staff.
AO/Beck: Do you use the name 'AVADA' in the offices? Or, is AVADA a corporate name which refers to the corporate grouping of the offices
Barlow: AVADA is the name that we use for our dispensing model. HHM (Hearing Healthcare Management) is our corporate name that serves as our umbrella.
AO/Beck: How long has AVADA existed?
Barlow: AVADA practices started in 16 markets during the year 2000. However, Hearing Healthcare Management has been in the development stages for three years and is now ready to go into an expansion mode by continued formation of our network and through acquisitions.
AO/Beck: What does the word 'AVADA' mean?
Barlow: The name was created by some of our shareholders to be an easily recognizable name. In years to come it will be a name that is associated with quality hearing healthcare throughout this country.
AO/Beck: What markets are you in currently?
Barlow: We have offices in the following states; Washington, Arizona, Texas, Minnesota, Illinois, Pennsylvania, Wisconsin, Kentucky, Indiana, Ohio, Florida, Massachusettes, Maine, Vermont, and North Carolina.
AO/Beck: How many employees do you have?
Barlow: We have about 400 total employees.
AO/Beck: How many individual office locations do you have?
Barlow: We have about 160-165 locations across the country.
AO/Beck: What can you tell me about the growth phase your'e in?
Barlow: We are still growing. We would like to have offices across the entire country. We have a sizable fund dedicated for expansion and acquisition. It may be a few months before we grow aggressively, but before the year is out we will add significantly to our network through network affiliates and additional company owned practices.
AO/Beck: Who do you envision as ideal candidates for acquisition?
Barlow: We are looking for people with philosophies that are similar to us. We will insist on working with good quality people and dispensing practices with a good history in the community with a good reputation. The number one asset we look for is quality. We want to increase and protect the quality of the practice. Our model includes varied exit plans for individuals depending upon their needs. We want to provide an opportunity for people who have worked for years in their practices to be able to see the fruits of their labor. We also have models that would allow for individuals to continue with their practice in a management role, should they not be ready to retire.
AO/Beck: What is the philosophical model under which AVADA operates?
Barlow: Our model is to provide unparalleled patient care and satisfaction. It includes outstanding employment work environments and immediate opportunities for audiologists. We intend to promote growth and acceleration of the industry through extensive clinical experience and business expertise. Our model includes a network of quality audiology based practices, as well as corporate owned facilities.
AO/Beck: I've read that AVADA has a unique relationship with Oticon as the supplier of your hearing instruments. I think we'll probably see more and more of these relationships as consolidation continues. Can you tell me a little about that?
Barlow: Sure. We have a 'primary supply agreement' with William Demant Holdings group. Through the agreement, we buy a lot of their instruments. However, we are not bound by a 100 percent purchase agreement with them. As needed, the clinicians can buy other instruments to address the needs of specific patients. Of course, this agreement allows us a better purchase price and a better relationship with the supplier. So in essence, William Demant is our primary supplier, but they are not at all our exclusive supplier.
AO/Beck: Do you find your sales by product classification are the same or different from the national trends? That is, are you selling the same percentages of analog, digitally controlled analogs (DCA) and digital signal processing (DSP) units as the national trends, or does your purchasing power allow you to sell more of the high end products, such as the DCAs and DSPs?
Barlow: Yes, we do have buying 'clout', and I think our offices trend towards the high end products. However, the trend towards the high end is not due to the pricing. It is primarily due to the progressive nature of the centers and the belief that the best technology provides a better opportunity for the provider to fulfill the needs of the patient and ensure a more satisfied patient. In other words, our buying power is not the reason we sell more high end products. Our belief in quality solutions and patient satisfaction are our primary drivers in patient care.
AO/Beck: What do you see as the main issues which impact 'patient satisfaction'?
Barlow: Well, as you know there are several issues which interact. The first is a high quality product. Additionally, we need to have qualified, caring professional dispensers/audiologists. Of course you also need a systematic approach to fitting hearing aids and aural rehabilitation. You also need quantifiable measurements of your fittings. There are other factors too, but those are the primary issues.
AO/Beck: How do you quantify the success of the fittings?
Barlow: We use most of the traditional methods; real ear, sound-field measures and client surveys.
AO/Beck: Is AVADA privately held?
Barlow: Yes. The company includes the founding 16 owners and other investors too. The company has been formed, developed, and will be managed by these dispensers who have the practical business expertise to grow this business.
AO/Beck: What do you think the industry will look like in five years?
Barlow: I think the industry will change, but I think there will be a role for both the traditional dispenser and the audiologist. I think the consumers and the products will continue to change too. The practice locations will need to more 'upscale' than the current typical office. The future office will probably blend clinical issues and sales issues more transparently than is currently done, with more of a 'medical' look and feel in the future. With more and more audiologists moving into the industry and profession, and with more and more dispensers on the way out, the trend has to go towards the clinical orientation.
AO/Beck: What about the role of the traditional dispenser in five years?
Barlow: Again, I think there will be a role for the traditional dispenser. Perhaps the dispensers in five or ten years will operate as an 'audiology assistants', or some as of yet un-named assistant role. The reality is that with managed care, and with clinicians seeing more patients for less money and in less time, there will be a need for a less expensive trained person who can take over some of the functions of the audiologists to assure that the patients are seen and that their (the patient) needs are met.
AO/Beck: What do you think about the impact of disposables over the next year or two?
Barlow: Great question. I know lots of folks who aren't giving them much of a chance. Then again, disposables might generate a lot of interest in hearing health care. I hope they do. If the disposable is the first step in moving into a custom made product, that's better still. I really can't say with any certainty how disposables are going to impact us, but they potentially offer a great opportunity to expand the market.
AO/Beck: What clinical services do the AVADA offices offer the public?
Barlow: We range from basic office settings that provide hearing tests and hearing aid dispensing to a more broad, more comprehensive practice setting. AVADA audiology is one of our business models. The other model which has been incorporated into our locations includes full diagnostic testing and treatments under the name of Audiology and Balance Centers of America. Those practices have programs which provide full diagnostic services including ABR, OAE, vestibular tests and rehabilitation, tinnitus management and tinnitus retraining therapy.
AO/Beck: I think it's exciting to see audiologists moving more into their full practice abilities and knowledge base. As you know, audiologists have skills and a scope of practice that goes far beyond hearing tests and hearing aid dispensing. Unfortunately, I think it's rare to see audiologists with the equipment and referral basis needed to incorporate the full range of diagnostic and rehabilitative skills for which they are licensed and trained. That's a real plus for AVADA.
Barlow: Thanks. I think these are all growth areas for us and we are developing them as best we can. They have become a very nice addition to our audiology based practices.
AO/Beck: How many Audiology and Balance Centers of America are out there?
Barlow: I think we have a dozen full centers out there currently and we'll be introducing more. We run these parallel to our dispensing practices. They are run as separate businesses with separate identities and separate protocols. As you know, often times, if the patient needs and uses the hearing test side of the business, they are possibly candidates for the tinnitus and the balance end of the business too
AO/Beck: Thanks very much for your time this evening. I congratulate you on the early success and creativity of AVADA. Let's talk again in a few months to see how it's going.
Barlow: Sure Doug, let's do that. I'll look forward to it.
Barlow: Hi Doug. AVADA is made up of a core of people with careers spanning from ten years to over thirty years in the industry. The average member has some twenty plus years in the industry. All of the AVADA core members are leaders within their local areas as well as on the state level. We joined together initially to improve patient care and satisfaction. We also wanted to explore and create new and additional revenue streams to add to our profitability.
AO/Beck: OK very good. Before we go much further, please tell me whether there are any audiologists involved?
Barlow: Yes there are. Our business model includes dispensers and audiologists and all of the practices are 'audiology-based'. Our practices may have audiologists available by contract service agreements, or they may have as many as seven audiologists available on site as full time audiologists on staff.
AO/Beck: Do you use the name 'AVADA' in the offices? Or, is AVADA a corporate name which refers to the corporate grouping of the offices
Barlow: AVADA is the name that we use for our dispensing model. HHM (Hearing Healthcare Management) is our corporate name that serves as our umbrella.
AO/Beck: How long has AVADA existed?
Barlow: AVADA practices started in 16 markets during the year 2000. However, Hearing Healthcare Management has been in the development stages for three years and is now ready to go into an expansion mode by continued formation of our network and through acquisitions.
AO/Beck: What does the word 'AVADA' mean?
Barlow: The name was created by some of our shareholders to be an easily recognizable name. In years to come it will be a name that is associated with quality hearing healthcare throughout this country.
AO/Beck: What markets are you in currently?
Barlow: We have offices in the following states; Washington, Arizona, Texas, Minnesota, Illinois, Pennsylvania, Wisconsin, Kentucky, Indiana, Ohio, Florida, Massachusettes, Maine, Vermont, and North Carolina.
AO/Beck: How many employees do you have?
Barlow: We have about 400 total employees.
AO/Beck: How many individual office locations do you have?
Barlow: We have about 160-165 locations across the country.
AO/Beck: What can you tell me about the growth phase your'e in?
Barlow: We are still growing. We would like to have offices across the entire country. We have a sizable fund dedicated for expansion and acquisition. It may be a few months before we grow aggressively, but before the year is out we will add significantly to our network through network affiliates and additional company owned practices.
AO/Beck: Who do you envision as ideal candidates for acquisition?
Barlow: We are looking for people with philosophies that are similar to us. We will insist on working with good quality people and dispensing practices with a good history in the community with a good reputation. The number one asset we look for is quality. We want to increase and protect the quality of the practice. Our model includes varied exit plans for individuals depending upon their needs. We want to provide an opportunity for people who have worked for years in their practices to be able to see the fruits of their labor. We also have models that would allow for individuals to continue with their practice in a management role, should they not be ready to retire.
AO/Beck: What is the philosophical model under which AVADA operates?
Barlow: Our model is to provide unparalleled patient care and satisfaction. It includes outstanding employment work environments and immediate opportunities for audiologists. We intend to promote growth and acceleration of the industry through extensive clinical experience and business expertise. Our model includes a network of quality audiology based practices, as well as corporate owned facilities.
AO/Beck: I've read that AVADA has a unique relationship with Oticon as the supplier of your hearing instruments. I think we'll probably see more and more of these relationships as consolidation continues. Can you tell me a little about that?
Barlow: Sure. We have a 'primary supply agreement' with William Demant Holdings group. Through the agreement, we buy a lot of their instruments. However, we are not bound by a 100 percent purchase agreement with them. As needed, the clinicians can buy other instruments to address the needs of specific patients. Of course, this agreement allows us a better purchase price and a better relationship with the supplier. So in essence, William Demant is our primary supplier, but they are not at all our exclusive supplier.
AO/Beck: Do you find your sales by product classification are the same or different from the national trends? That is, are you selling the same percentages of analog, digitally controlled analogs (DCA) and digital signal processing (DSP) units as the national trends, or does your purchasing power allow you to sell more of the high end products, such as the DCAs and DSPs?
Barlow: Yes, we do have buying 'clout', and I think our offices trend towards the high end products. However, the trend towards the high end is not due to the pricing. It is primarily due to the progressive nature of the centers and the belief that the best technology provides a better opportunity for the provider to fulfill the needs of the patient and ensure a more satisfied patient. In other words, our buying power is not the reason we sell more high end products. Our belief in quality solutions and patient satisfaction are our primary drivers in patient care.
AO/Beck: What do you see as the main issues which impact 'patient satisfaction'?
Barlow: Well, as you know there are several issues which interact. The first is a high quality product. Additionally, we need to have qualified, caring professional dispensers/audiologists. Of course you also need a systematic approach to fitting hearing aids and aural rehabilitation. You also need quantifiable measurements of your fittings. There are other factors too, but those are the primary issues.
AO/Beck: How do you quantify the success of the fittings?
Barlow: We use most of the traditional methods; real ear, sound-field measures and client surveys.
AO/Beck: Is AVADA privately held?
Barlow: Yes. The company includes the founding 16 owners and other investors too. The company has been formed, developed, and will be managed by these dispensers who have the practical business expertise to grow this business.
AO/Beck: What do you think the industry will look like in five years?
Barlow: I think the industry will change, but I think there will be a role for both the traditional dispenser and the audiologist. I think the consumers and the products will continue to change too. The practice locations will need to more 'upscale' than the current typical office. The future office will probably blend clinical issues and sales issues more transparently than is currently done, with more of a 'medical' look and feel in the future. With more and more audiologists moving into the industry and profession, and with more and more dispensers on the way out, the trend has to go towards the clinical orientation.
AO/Beck: What about the role of the traditional dispenser in five years?
Barlow: Again, I think there will be a role for the traditional dispenser. Perhaps the dispensers in five or ten years will operate as an 'audiology assistants', or some as of yet un-named assistant role. The reality is that with managed care, and with clinicians seeing more patients for less money and in less time, there will be a need for a less expensive trained person who can take over some of the functions of the audiologists to assure that the patients are seen and that their (the patient) needs are met.
AO/Beck: What do you think about the impact of disposables over the next year or two?
Barlow: Great question. I know lots of folks who aren't giving them much of a chance. Then again, disposables might generate a lot of interest in hearing health care. I hope they do. If the disposable is the first step in moving into a custom made product, that's better still. I really can't say with any certainty how disposables are going to impact us, but they potentially offer a great opportunity to expand the market.
AO/Beck: What clinical services do the AVADA offices offer the public?
Barlow: We range from basic office settings that provide hearing tests and hearing aid dispensing to a more broad, more comprehensive practice setting. AVADA audiology is one of our business models. The other model which has been incorporated into our locations includes full diagnostic testing and treatments under the name of Audiology and Balance Centers of America. Those practices have programs which provide full diagnostic services including ABR, OAE, vestibular tests and rehabilitation, tinnitus management and tinnitus retraining therapy.
AO/Beck: I think it's exciting to see audiologists moving more into their full practice abilities and knowledge base. As you know, audiologists have skills and a scope of practice that goes far beyond hearing tests and hearing aid dispensing. Unfortunately, I think it's rare to see audiologists with the equipment and referral basis needed to incorporate the full range of diagnostic and rehabilitative skills for which they are licensed and trained. That's a real plus for AVADA.
Barlow: Thanks. I think these are all growth areas for us and we are developing them as best we can. They have become a very nice addition to our audiology based practices.
AO/Beck: How many Audiology and Balance Centers of America are out there?
Barlow: I think we have a dozen full centers out there currently and we'll be introducing more. We run these parallel to our dispensing practices. They are run as separate businesses with separate identities and separate protocols. As you know, often times, if the patient needs and uses the hearing test side of the business, they are possibly candidates for the tinnitus and the balance end of the business too
AO/Beck: Thanks very much for your time this evening. I congratulate you on the early success and creativity of AVADA. Let's talk again in a few months to see how it's going.
Barlow: Sure Doug, let's do that. I'll look forward to it.
