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Impact of the BHI Physician Referral Development Program on Net Hearing Aid Sales June 2004 Washington DC.

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Presentation on theme: "Impact of the BHI Physician Referral Development Program on Net Hearing Aid Sales June 2004 Washington DC."— Presentation transcript:

1 Impact of the BHI Physician Referral Development Program on Net Hearing Aid Sales June 2004 Washington DC

2 Introduction The Physician Referral Development Program was designed to generate incremental referrals from physicians to hearing health providers. The Physician Referral Development Program was designed to generate incremental referrals from physicians to hearing health providers. Development work CY2000 with roll-out starting in January Development work CY2000 with roll-out starting in January A successful program should translate into more HOH people seeking hearing solutions. A successful program should translate into more HOH people seeking hearing solutions. Subjectively dispensers report significant physician referrals and incremental hearing aid sales. Subjectively dispensers report significant physician referrals and incremental hearing aid sales.

3 Objectives This study will objectively validate dispenser perceptions of the effectiveness of the physician referral development program. This study will objectively validate dispenser perceptions of the effectiveness of the physician referral development program. To be fair --- effectiveness is a function of: To be fair --- effectiveness is a function of: The physician referral program per se +The physician referral program per se + The extent to which dispensers ACTIVELY USE the program according to BHI instructionsThe extent to which dispensers ACTIVELY USE the program according to BHI instructions The extent to which the consumer has a positive experience which is reported back to the physicianThe extent to which the consumer has a positive experience which is reported back to the physician

4 Methodology Select test markets meeting 2 criteria: Select test markets meeting 2 criteria: At least 10 dispensing outlets in marketAt least 10 dispensing outlets in market At least 20% market penetration of PRDPAt least 20% market penetration of PRDP Market = Metropolitan Statistical Area (MSA) or county.Market = Metropolitan Statistical Area (MSA) or county. Original sample size = 392 control and 392 PRDP retail outlets.Original sample size = 392 control and 392 PRDP retail outlets. Match PRDP participants with non-PRDP dispensers (controls) by zip code. Match PRDP participants with non-PRDP dispensers (controls) by zip code. Collect monthly net hearing aid sales for CY2001- CY2003 from manufacturers and compile sales at dispenser level. (Achieved 100% participation) Collect monthly net hearing aid sales for CY2001- CY2003 from manufacturers and compile sales at dispenser level. (Achieved 100% participation)

5 Test Markets Asheville, NC Asheville, NC Atlantic-Cape May, NJ Atlantic-Cape May, NJ Beaufort SC-County Beaufort SC-County Benton Harbor, MI Benton Harbor, MI Grand Junction, CO Grand Junction, CO Macon, GA Macon, GA Medford-Ashland, OR Medford-Ashland, OR Redding, CA Redding, CA Santa Cruz-Watsonville, CA Santa Cruz-Watsonville, CA South Bend, IN South Bend, IN Yakima, WA Yakima, WA Boise City, ID Boise City, ID Deschutes OR-County Deschutes OR-County El Paso, TX El Paso, TX Eugene-Springfield, OR Eugene-Springfield, OR Fresno, CA Fresno, CA Johnstown, PA Johnstown, PA Little Rock-N Little Rock, AR Little Rock-N Little Rock, AR Mansfield, OH Mansfield, OH Modesto, CA Modesto, CA Barnstable-Yarmouth, MA Citrus FL-County Fayetteville-Springdale, AR Punta Gorda, FL Vallejo-Fairfield-Napa, CA Albuquerque, NM Saginaw-Bay City-Midland, MI Stockton-Lodi, CA San Antonio, TX Providence-Fall River, RI-MA Fort Myers-Cape Coral, FL Tucson, AZ Charlotte-Gastonia, NC-SC Riverside-San Bernardino, CA Denver, CO Portland-Vancouver, OR-WA San Diego, CA Los Angeles-Long Beach, CA Boston, MA-NH Chicago, IL

6 Methodology Measure net hearing aid sales trend prior to the PRDP (start month = Feb. 2002). Measure net hearing aid sales trend prior to the PRDP (start month = Feb. 2002). Not enough complete information to seasonally decompose sales history at the dispenser level.Not enough complete information to seasonally decompose sales history at the dispenser level. Use the dispensers average hearing aid sales for CY 2001 as their baseline.Use the dispensers average hearing aid sales for CY 2001 as their baseline. Three controls: Three controls: Manufacturers blinded on PRDP participationManufacturers blinded on PRDP participation Sales trend prior to PRDP program (baseline)Sales trend prior to PRDP program (baseline) Control peers within same metropolitan statistical area.Control peers within same metropolitan statistical area.

7 Methodology Use statistical regression to isolate the effects of the PRDP program: Use statistical regression to isolate the effects of the PRDP program: Pre-PRDP baseline sales (average monthly sales for CY2001)Pre-PRDP baseline sales (average monthly sales for CY2001) Time in the PRDP (months)Time in the PRDP (months) 1-22 months for participants 1-22 months for participants 0 months for control 0 months for control Industry sales trendsIndustry sales trends Year and quarterly CY2002-CY2003 Year and quarterly CY2002-CY2003 Important to remove economic recovery in latter part of CY2003. Important to remove economic recovery in latter part of CY2003.

8 Methodology Data cleaning – exclusions of dispensing outlets Data cleaning – exclusions of dispensing outlets Not possible to isolate the ship-to and bill-to locations (conversations with manufacturers).Not possible to isolate the ship-to and bill-to locations (conversations with manufacturers). CY2001 baseline data missingCY2001 baseline data missing Average month hearing aid sales <4 for either the baseline or the outcome months (CY02-CY03)Average month hearing aid sales <4 for either the baseline or the outcome months (CY02-CY03) Removes small remote offices Removes small remote offices Targets established practices that are known to most manufacturers Targets established practices that are known to most manufacturers Removes outlet translation problems (e.g. differences in direct mail and manufacturer database identifiers) Removes outlet translation problems (e.g. differences in direct mail and manufacturer database identifiers) Questionable records involving duplication of records, address confusion (11 outlets).Questionable records involving duplication of records, address confusion (11 outlets).

9 Cumulative PRDP Enrollment in Final Test Markets

10 Final Samples Dispensing Outlets Dispensing Outlets 201 controls201 controls 264 PRDP participants264 PRDP participants 465 total465 total Monthly analysis Monthly analysis 5,007 control months5,007 control months 2,220 PRDP months (< year in program)2,220 PRDP months (< year in program) 3,721 PRDP months (> year in program)3,721 PRDP months (> year in program) 10,948 total months10,948 total months

11 Results

12 Average Hearing Aid Sales Prior to Statistical Modeling and Controls TimePRDPControlPRDPControl Mn Diff. Q Q Q Q Q Q Q Q MeansSample sizes

13 Statistical Model (Prediction of Monthly Hearing Aid Sales Rsq=.56) Variable Model #1 Prob. P< Model #1b Prob. P< Model #3 Prob. P< Intercept Baseline sales Q Q Q Q PRDP< PRDP> Model 1b shows impact of increasing sample size by 60 outlets for PRDP participants in program less than one year.

14 Results of Model Model #1 Model #1 PRDP participants < 1 year in the program contribute one half hearing aid per month. (85% confidence level)PRDP participants < 1 year in the program contribute one half hearing aid per month. (85% confidence level) If the sample size were increased by 60 outlets (model 1b):If the sample size were increased by 60 outlets (model 1b): New PRDP participants contribute.71 hearing aids New PRDP participants contribute.71 hearing aids At 93% confidence level At 93% confidence level PRDP participants >= 1 year in the program contribute.91 hearing aids per month. (99.9% confidence level). The probability of this finding occurring by chance is 1 out of 1,000 studies of a similar nature.PRDP participants >= 1 year in the program contribute.91 hearing aids per month. (99.9% confidence level). The probability of this finding occurring by chance is 1 out of 1,000 studies of a similar nature.

15 Results of Model Model #2 Model #2 Assumes no contribution of PRDP participants with less than a year of experience, because the probability is 15% that the positive finding is due to chance.Assumes no contribution of PRDP participants with less than a year of experience, because the probability is 15% that the positive finding is due to chance. PRDP participants >= 1 year contribute.71 hearing aids per month (99.5% confidence level)PRDP participants >= 1 year contribute.71 hearing aids per month (99.5% confidence level)

16 Results of Model Recommendation is to accept model #1. Most likely the weaker finding for the newer participants is due to the small sample size (n=99) versus mature participants (n =163). Recommendation is to accept model #1. Most likely the weaker finding for the newer participants is due to the small sample size (n=99) versus mature participants (n =163). Assuming an average retail price of $1,810 (HR June 2003) the incremental retail impact based on 1,729 participants as of 12/03 is: Assuming an average retail price of $1,810 (HR June 2003) the incremental retail impact based on 1,729 participants as of 12/03 is: CY03: 3,521 units, $6.4 millionCY03: 3,521 units, $6.4 million CY04: 15,954 units, $29 millionCY04: 15,954 units, $29 million

17 Recommendations Communicate findings to HIA members and also non-HIA members who participated in study. Communicate findings to HIA members and also non-HIA members who participated in study. Prepare this study for publication for dispenser community. Prepare this study for publication for dispenser community. Communicate results through direct mail campaign with PRDP flyer and reprint to dispensers as a means of: Communicate results through direct mail campaign with PRDP flyer and reprint to dispensers as a means of: Motivating new participants to joinMotivating new participants to join Getting old non-participants to become active in the referral program.Getting old non-participants to become active in the referral program.


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