1. New Research From the BHI (Part 1) Best Practices = Good Outcomes Sergei Kochkin, PhD.

2. Agenda Detailed look at the impact of the audiologist on hearing aid user success (4/2010 HR).Detailed look at the impact of the audiologist on hearing aid user success (4/2010 HR). –Updated with new data on benefit and quality of life changes associated with hearing aid usage (6/2011 HJ) First summarize MarkeTrak VIII trends:First summarize MarkeTrak VIII trends: –25 year trends in the hearing health market (10/2009 HR) –Customer satisfaction with hearing aids (1/2010 HJ) 2

3. 25 Year Trends in The Hearing Aid Market October 2009 Hearing Review

4. Are we really on the fast track? Original cover for the first MarkeTrak VIII publicationOriginal cover for the first MarkeTrak VIII publication Changed to Headed for the Fast Track?Changed to Headed for the Fast Track? 4

5. Led to funny editorial …or Slow Train Coming? and some alternate titles Are we on the right track?Are we on the right track? Are we on the track at all?Are we on the track at all? Are we headed for derailment?Are we headed for derailment? Throw Mama on the train!Throw Mama on the train! Why isn't there anyone under 70 on this train?Why isn't there anyone under 70 on this train? The train has left the station leaving behind three-quarters of its passengersThe train has left the station leaving behind three-quarters of its passengers People are in denial about their need to get on the train; it takes them 3 to 8 years just to get aboardPeople are in denial about their need to get on the train; it takes them 3 to 8 years just to get aboard Why are train rides so expensive? Why can't we deduct them from our taxes?Why are train rides so expensive? Why can't we deduct them from our taxes? Some still believe the train is too big and noisyand the whistle drives them crazy!Some still believe the train is too big and noisyand the whistle drives them crazy! My family doctor told me trains don't workMy family doctor told me trains don't work One of my friends told me that the train ride stinksOne of my friends told me that the train ride stinks 5

6. MarkeTrak Methodology

7. Method National family opinion panelNational family opinion panel –80,000 households –Balanced to 9 key census variables –Used since 1984 starting with HIA survey. –Does not include institutional settings. Screening questions–Phase I(11-12 /2008)Screening questions–Phase I(11-12 /2008) –Hearing loss –Hearing aids –Tinnitus –Physician screening for hearing loss –Detailed employment status beyond NFO panel data –Traffic accident data 7

8. Method Screening survey:Screening survey: –Returns – 46,843 households –Identified 14,623 people with hearing loss and or tinnitus –Response rate: 59% Detailed survey - Phase II (1/2009)Detailed survey - Phase II (1/2009) –7 page legal size survey –3,779 hearing aid owners (total population) –5,500 adult non-owners (random sample) –Response rate 84% & 79% respectively –$1 incentive 8

9. The Hearing Loss Population

10. Incidence of hearing loss per thousand households There is no hearing loss epidemic only the aging of America 10

11. For more than a generation the incidence of HL has been about one in 10 people HIA* * Adjusted by +.7% to account for multiple hearing-impaired per household 11

12. Key HL population data Incidence of HL in U.S. population = 11.3%Incidence of HL in U.S. population = 11.3% –Up from 10.7% (2004) Admitted HL population = 34.25 million peopleAdmitted HL population = 34.25 million people –Up from 31.5 million people (2004) 6 out of 10 are male6 out of 10 are male 60% are below retirement age60% are below retirement age 12

13. The Hearing Aid Market

14. Key hearing aid owner population data Current hearing aid owners = 8.41 million peopleCurrent hearing aid owners = 8.41 million people Up from 7.8 million (2004)Up from 7.8 million (2004) HA adoption now 24.6% primarily due to VA and direct mail growth.HA adoption now 24.6% primarily due to VA and direct mail growth. 14

15. Hearing aid adoption rates are now in 1 in 4 people with admitted hearing loss Growth primarily VA and direct mail 15

16. Whats the REAL market for hearing aids? Used subjective measures to segment marketUsed subjective measures to segment market –Number of ears impaired –Subjective view of HL –Gallaudet scale –BHI quick hearing check (based on revised AAO- HNS 5 minute hearing loss screener) –Difficulty hearing in noise Created single HL index (factor analysis)Created single HL index (factor analysis) Divided total HL population into 10% HL segments called decilesDivided total HL population into 10% HL segments called deciles –Decile 1 = Lower 10% of HL – mild –Decile 10 – Top 10% of HL – severe to profound 16

17. Hearing aid adoption heavily dependent on degree of hearing loss Decile 5-10= 83% hearing aid owners 43% non-adopters 17

18. Hearing aid opportunity by age group. The viable hearing aid market in the U.S. is about 11 million more people with untreated hearing loss Deciles 5-10= 6.98 Mil. HA owners 11.1 Mil. non-adopters 18

19. Hearing aid adoption rates redefined One in four people with admitted hearing loss own hearing aids.One in four people with admitted hearing loss own hearing aids. 40% of people with moderate to severe hearing loss40% of people with moderate to severe hearing loss 9% of people with milder hearing losses9% of people with milder hearing losses 19

20. We are at the right place at the right time The hearing loss population is growing at the rate of 1.6 times the general population growth– primarily aging population.The hearing loss population is growing at the rate of 1.6 times the general population growth– primarily aging population. Digital technology and the supporting software is superb – and it will get better.Digital technology and the supporting software is superb – and it will get better. We have the capability of meeting the needs of the vast majority of people with hearing loss.We have the capability of meeting the needs of the vast majority of people with hearing loss. 20

21. So why are we on a such a slow moving train? Explore customer satisfaction with hearing aidsExplore customer satisfaction with hearing aids Explore audiologists role in user successExplore audiologists role in user success 21

22. Customer Satisfaction with Hearing Aids 2008 January 2010 Hearing Journal

23. Key HA satisfaction measures 23

24. Satisfied & very satisfied customers have not grown during the digital revolution 24

25. Dissatisfaction has dropped to 14% but…. 8% of new hearing aids are in the drawer 25

26. Hearing aids in the drawer Varied between 11.7% and 17.9% historically.Varied between 11.7% and 17.9% historically. More than half are <= 5 years of ageMore than half are <= 5 years of age Current rate: 12.4%Current rate: 12.4% –New hearing aids (</=4 years) : 7.5% –Brand new HA: 5.2% 1,040,000 customers never use their hearing aids.1,040,000 customers never use their hearing aids. Why do so many people spend $2000- $6000 for a product that does not meet their needs?Why do so many people spend $2000- $6000 for a product that does not meet their needs? 26

27. 30% of new user fittings are probable failures 27

28. Causes for hearing aids in drawer Poor benefitPoor benefit Poor fit and comfortPoor fit and comfort Poor performance in noisePoor performance in noise 28

29. Majority of patients will not repurchase current brand of hearing aid 29

30. Customer satisfaction with hearing aid signal processing and sound quality hearing aids are <= 4 years old. 30

31. Customer satisfaction with hearing aids in various listening situations hearing aids are <= 4 years old. 31

32. Customer satisfaction with hearing aids in various listening situations (continued) hearing aids are <= 4 years old. 32

33. Hearing aid multiple environment listening utility (MELU) is not impressive. 33

34. Multiple environment listening utility (MELU) is highly related to brand repurchase and positive word of mouth advertising. 34

35. Satisfaction with benefit is highly dependent on the number of listening situations hearing aids work …and Somewhat satisfied is hardly an endorsement 35

36. Changes since MarkeTrak VII (2004) Practical (at least 5% point increase) and statistically significant improvements (p<.001 or better):Practical (at least 5% point increase) and statistically significant improvements (p<.001 or better): –Whistling and feedback (12% points) –Sound of chewing and swallowing (9% points) –Wind noise (7% points) –Use in noisy situations (7% points) –Comfort with loud sounds (5% points) 36

37. The Impact of the Audiologist on Hearing Aid User Success Co-authors Sergei Kochkin, PhD (BHI) Douglas L. Beck, AuD (Oticon) Laurel A. Christensen, PhD (GN ReSound) Cynthia Compton-Conley (Gallaudet U) Brian J. Fligor, ScD (Harvard) Pat B. Kricos, PhD (U of Florida) Jay McSpaden, PhD (Retired audiologist - Oregon) H. Gustav Mueller, PhD (Vanderbilt) Michael Nilsson, PhD (Sonic Innovations) Jerry Northern, PhD (Starkey) Thomas A. Powers, PhD (Siemens) Robert W. Sweetow, PhD (U of C) Brian Taylor, AuD (Unitron) Robert G. Turner, PhD (LSU) Reviewers Harvey B. Abrams, PhD (VA) Ruth Bentler, PhD (U of Iowa) Vic S. Gladstone, PhD (ASHA) Larry Humes, PhD (Indiana U) Michael Valente, PhD (Washington U) 37

38. THESIS Audiologist has Direct Control Over Hearing Aid User Success Hearing aid quality control prior to fitHearing aid quality control prior to fit Fit and comfort of hearing aidFit and comfort of hearing aid VerificationVerification ValidationValidation Optimal amplification within the residual auditory area of the consumer given current technology & softwareOptimal amplification within the residual auditory area of the consumer given current technology & software Vast array of counseling toolsVast array of counseling tools Measureable BENEFIT GUARANTEEMeasureable BENEFIT GUARANTEE Best PracticesBenefitLife Changes 38

39. Method Measured 17 items of the hearing aid fitting protocol.Measured 17 items of the hearing aid fitting protocol. Measured 7 real-world success measuresMeasured 7 real-world success measures Related use of protocol items to real-world success.Related use of protocol items to real-world success. Related total weighted protocol to successRelated total weighted protocol to success Related unweighted protocol to success (e.g. simple counting of steps performed)Related unweighted protocol to success (e.g. simple counting of steps performed) 39

40. Protocol items measured Hearing tested in sound boothHearing tested in sound booth Real ear measurement verificationReal ear measurement verification Subjective benefit measurementSubjective benefit measurement Objective benefit measurementObjective benefit measurement Patient satisfaction measurementPatient satisfaction measurement Loudness discomfort measurementLoudness discomfort measurement Auditory retraining software therapyAuditory retraining software therapy Aural rehabilitation groupAural rehabilitation group Received self-help bookReceived self-help book Received self-help videoReceived self-help video Referred to self-help groupReferred to self-help group 40

41. Protocol items measured Fit and comfort of the hearing aid (single Likert scale item)Fit and comfort of the hearing aid (single Likert scale item) Achieved sound quality :Achieved sound quality : –clearness of tone/sound –whistling and feedback –use in noisy situations –natural sounding –sound of voice –ability to hear soft sounds –comfort with loud sounds –single index from Factor analysis. Proxy for: Optimal amplification of residual auditory area of patientOptimal amplification of residual auditory area of patient Functionality of hearing aid (quality control pre-fit)Functionality of hearing aid (quality control pre-fit) 41

42. Protocol items measured Attributes of the audiologist:Attributes of the audiologist: –knowledge –professionalism –empathy –creation of realistic expectations –explained care and maintenance of hearing aids –quality of service during the fitting process –quality of service after the hearing aid fitting –all measured on a 7 point Likert scale –single index from Factor analysis 42

43. Protocol items measured Attributes of the hearing healthcare office:Attributes of the hearing healthcare office: –front office staff –hours of operation –attractiveness and comfort of the office –ease of access to the office –convenient location –all measured on a 7 point Likert scale –single index from Factor analysis. 43

44. Protocol items measured Counseling:Counseling: –the amount of time spent in hours explaining care and maintenance of the hearing aids and –the hours spent in aural rehabilitation –total counseling hours spent in the first 2 months of the new hearing aid fitting. The number of visits to get the hearing aid working just right for the patient.The number of visits to get the hearing aid working just right for the patient. 44

45. Success measures Hearing aids in the drawer and hearing aid usage in hours.Hearing aids in the drawer and hearing aid usage in hours. Benefit.Benefit. –Satisfaction with benefit (7 point Likert scale) –Perception of % hearing handicap reduction in 10 listening situations. –Multiple Environmental Listening Utility (MELU). The percent of 19 listening situations in which the patient was satisfied or very satisfied. Quantified Client Oriented Scale of Improvement (COSI) measure.Quantified Client Oriented Scale of Improvement (COSI) measure. Only situations for which patient had need to hear.Only situations for which patient had need to hear. 45

46. Success measures Patient recommendationsPatient recommendations –Would recommend the audiologist –Would recommend hearing aids to friends –Would repurchase current hearing aid brand Overall success.Overall success. –A composite measure of success derived from factor analyzing the above variables –Converting to factor scores and standardizing to a mean of 5 and standard deviation of 2 (stanine scores). 46

47. Consumer perceptions of hearing aid fitting protocol received comparing new and experienced users. 47

48. Summary of statistically significant relationships between outcome measures and protocol items for new and experienced users 48

49. High-low analysis Compare patients experiencing below average (-1 std) and above average (+1 std) real-world success.Compare patients experiencing below average (-1 std) and above average (+1 std) real-world success. Lets look at the patients experience during the hearing aid fitting process!Lets look at the patients experience during the hearing aid fitting process! 49

50. A comparison of above average (+1 std) and below average (-1 std) hearing aid success as measured by subjective real-world outcomes showing protocol received based on consumer perceptions. 50

51. A comparison of above average (+1 std) and below average (-1 std) hearing aid success as measured by subjective real-world outcomes showing protocol received based on patient perceptions. 51

52. A comparison of above average (+1 std) and below average (-1 std) hearing aid success as measured by subjective real-world outcomes showing protocol received based on patient perceptions. 52

53. A comparison of above average (+1 std) and below average (-1 std) hearing aid success as measured by subjective real-world outcomes showing protocol received based on consumer perceptions. 53

54. A comparison of above average (+1 std) and below average (-1 std) hearing aid success as measured by subjective real-world outcomes showing protocol received based on consumer perceptions. 54

55. High-low analysis #2 Use high/low difference scores from past analysis to weight protocol received.Use high/low difference scores from past analysis to weight protocol received. Sum weighted scoresSum weighted scores Compare top and bottom 15% weighted protocol scores.Compare top and bottom 15% weighted protocol scores. Now lets look at the patients real world outcome!Now lets look at the patients real world outcome! 55

56. Impact of Best Practices on Consumer Success Comparison = bottom and top 15% of Best Practices 56

57. Total hearing aid user success achieved as a function of a weighted fitting protocol (in stanines, n=1,613) Correlation =.70 57

58. Other findings Factors explaining less than 1% of variance in the hearing aid fitting protocol:Factors explaining less than 1% of variance in the hearing aid fitting protocol: –Age of the patient –Gender –User (new versus experienced) –Size of city (rural to metropolitan) –Price of hearing aid –Style of hearing aid –Degree of hearing loss Occupation of person (Audiologist/HIS) fitting hearing aid explained < ½ of 1% of the protocol used OR real-world hearing aid user success.Occupation of person (Audiologist/HIS) fitting hearing aid explained < ½ of 1% of the protocol used OR real-world hearing aid user success. –Confirmed by the Hearing Industry Association Consumer Journey Study. –Audiologists and HISs are equivalent in both protocol and ability to generate successful hearing aid users. 58

59. Conclusions What occurred in HHP offices has a very strong relationship to real-world success.What occurred in HHP offices has a very strong relationship to real-world success. Evidence that a weighted protocol is better predictor of success then simple count of steps performed.Evidence that a weighted protocol is better predictor of success then simple count of steps performed. Variability of protocols performed and the distribution of patient success is massive in America.Variability of protocols performed and the distribution of patient success is massive in America. Consumer Reports estimates in a small scale study that 2 out of 3 hearing aids are misfit.Consumer Reports estimates in a small scale study that 2 out of 3 hearing aids are misfit. Anecdotal reports from expert fitters indicate that many NEW hearing aids brought in to their practice were programmed incorrectly.Anecdotal reports from expert fitters indicate that many NEW hearing aids brought in to their practice were programmed incorrectly. 59

60. Quality control at the point of sale is critical to user success & industry growth Not all consumers are tested in a sound booth.Not all consumers are tested in a sound booth. Many hearing aids are not tested for functionality prior to the fitting.Many hearing aids are not tested for functionality prior to the fitting. The majority of audiologists fail to verify the hearing aid fitting with REM.The majority of audiologists fail to verify the hearing aid fitting with REM. –Considered by the industry intelligentsia to be unethical and unprofessional Many audiologists do not validate the fitting pre/post with objective or subjective benefit measures.Many audiologists do not validate the fitting pre/post with objective or subjective benefit measures. –We just dont want to know (Ignorance is bliss!) –What should we do if we cant find benefit – refund the customers money? (greed and unethical) Ultimately we take the short term sale and sacrifice the long term growth and our reputation in our community.Ultimately we take the short term sale and sacrifice the long term growth and our reputation in our community. Aural rehabilitation is virtually non-existent.Aural rehabilitation is virtually non-existent. 60

61. Opportunities Establishment and enforcement of a standardized and comprehensive hearing aid fitting protocol (similar to Optometry) with a measureable benefit guarantee will result in:Establishment and enforcement of a standardized and comprehensive hearing aid fitting protocol (similar to Optometry) with a measureable benefit guarantee will result in: –Massive market share shifts –More positive word-of-mouth advertising –Tapping new markets –Greater brand (hearing aid and distribution) loyalty. –Transforming the lives of many more hard of hearing people, after all isnt this our REAL business? –And believe it or not stigma will evaporate for most people when they achieve SUBSTANTIAL BENEFIT. ULTIMATELY QUALITY WILL WIN!ULTIMATELY QUALITY WILL WIN! 61

62. Benefit & Quality of Life Changes Associated with Hearing Aid Usage June 2011 Hearing Journal In Press

63. Method Consumers rated on 0-100% scale hearing handicap improvement in 10 acoustic environments due to their hearing aids.Consumers rated on 0-100% scale hearing handicap improvement in 10 acoustic environments due to their hearing aids. Consumers rated 14 QOL changes in their life due to hearing aidsConsumers rated 14 QOL changes in their life due to hearing aids N=1,900 for hearing aids <= 4 yrs of ageN=1,900 for hearing aids <= 4 yrs of age 63

64. Hearing handicap improvement (%) Mean = 55% 64

65. Hearing handicap improvement (%) for the U.S. population in 10 listening situations 65

66. Quality of life changes attributed to hearing aid usage by hearing aid owners 66

67. Quality of life changes attributed to hearing aid usage 75% of hearing aid owners experience improvement in at least 1 of 14 QOL issues. 67

68. Consumer satisfaction with QOL changes attributed to hearing aid usage 8 of 10 people are satisfied with QOL changes in their life due to hearing aids. 68

69. Hearing handicap improvement (%) segmented by composite best practices ranking scored in percentiles 69

70. QOL changes attributed to hearing aids by hearing aid owners segmented by composite best practices ranking scored in percentiles 70

71. Overall consumer success (mean=5, std=2) by level of composite best practices ranking scored in percentiles Highly vulnerable to disruptive technologies: over- the-counter, direct- mail and personal sound amplifier Products (PSAP) 71

72. Summary The average benefit (hearing handicap improvement) achieved by patients with recent hearing aid technology is 55%.The average benefit (hearing handicap improvement) achieved by patients with recent hearing aid technology is 55%. The upper bounds of hearing handicap improvement may be in the 65-70% range.The upper bounds of hearing handicap improvement may be in the 65-70% range. Wireless revolution and inductive looping should improve this figure.Wireless revolution and inductive looping should improve this figure. 75% patients report at least one area of their life was improved through wearing hearing aids.75% patients report at least one area of their life was improved through wearing hearing aids. 8 out of 10 hearing aid users are satisfied with the changes that have occurred in their lives due to hearing aids8 out of 10 hearing aid users are satisfied with the changes that have occurred in their lives due to hearing aids 9 out of 10 patients are projected to experience significant improvements in their QOL once they experience a 70% reduction in their hearing handicap.9 out of 10 patients are projected to experience significant improvements in their QOL once they experience a 70% reduction in their hearing handicap. Strong relationship between quality hearing healthcare, benefit and quality of life improvementsStrong relationship between quality hearing healthcare, benefit and quality of life improvements 72

73. New BHI Research (Part 2) Impact of hearing aids on income and employmentImpact of hearing aids on income and employment Impact of mini-BTEs on the marketImpact of mini-BTEs on the market Impact of Direct mail and PSAP on private practicesImpact of Direct mail and PSAP on private practices Validation of the BHI Quick Hearing CheckValidation of the BHI Quick Hearing Check –Co-author Dr. Ruth Bentler –11,000 subjects Thursday 4:30-5:30 pmThursday 4:30-5:30 pm 73