Strategic Practice Management and Business and Procedural Considerations: Interview with Robert M. Traynor, MBA, EdD
Douglas L. Beck, AuD, spoke with Dr. Traynor, co-author of Strategic Practice Management, Business and Procedural Considerations, Second Edition, about his new book as well as perceived value, bundling versus unbundling, the art and science of dispensing, best practices, and much more.
Academy: Good morning, Bob. Always a pleasure chatting with you!
Traynor: Hi, Doug. Good to speak with you, too!
Academy: Before we get into the new book, I was trying to think about how long ago it was that you and Robert G. Glaser, PhD, published the first edition?
Traynor: The first edition came out in 2008. Frankly, we never thought we'd be assembling a second edition so quickly, but the profession and business protocols have changed rapidly, and so we thought we needed to get this done. And it's really been very satisfying for us as we approached this as a collaborative project. That is, you'll find some of my stuff in Bob's chapters, and some of his stuff in my chapters, and we invited co-authors and collaborators from across the profession so contribute within their area of expertise, and we're very happy with the end product.
Academy: I agree. The second edition represents a natural expansion from the core topics and chapters in the first edition, and as I read through it, the greater depth and cohesion was apparent. In fact, at the end of this interview, I'll list the chapter titles and the authors. In the meantime, I'll bet one of the motivating factors driving the second edition is the increase in audiology-based private practices?
Traynor: Yes, the growth in private practices has been huge. The AuD has had an incredible impact and we're seeing audiology-based private practices grow at rapid rates across the country. And, of course, as new practices get established and grow, there's a lot of knowledge required to sustain and promote business growth. In fact, to maintain and promote growth, we need to be proactive.
Academy: And by "proactive," I suspect you're speaking about the need to market in new and innovative ways, and to increase the service/professional aspect of practice?
Traynor: Absolutely. The business environment has changed dramatically in the last 10 to 20 years, and one either leads and adapts, or is left behind.
Academy: Agreed. You're not seeing the lop-sided dependence on yellow pages and newspapers that once dominated our profession, and the competition isn't just across the street, or across town!
Traynor: That's right, as the landscape changed, so, too, did successful business practices. Personal service and personal/professional relationships matter a great deal. In the old days, all we needed to do was present ourselves and our credentials to differentiate ourselves from sales-based and retail models. Now, we have a huge cadre of qualified competitors and the landscape has changed. It's not just about price, it's about expertise, personal service, quality, and perceived value. That's the key in 2013 and will remain so as we move forward.
Academy: Sure, that makes sense. In fact in my presentations on hearing aids, I talk about the old thought process that hearing aid dispensing is art and science and I totally dismiss that. To me, hearing aid dispensing (done well!) is 100 percent science (based on best practice models) and the art is your personal/professional relationship with the patient. However, best practices dictate a scientific protocol as well as verification and validation with regard to hearing aid dispensing.
Traynor: That's correct, and when you assemble and present all of that art and science, the patient perceives a value—and that value is what they balance with respect to their out-of-pocket monetary cost. In fact, if the product and service aren't perceived as having a real, tangible and beneficial value, they might as well (and they do!) buy their hearing aids on the Internet.
Academy: Excellent point. I tell professionals the best way to keep the product itself from being commoditized is to actually do what we know how to do with respect to science and art. That is, from a scientific perspective, we need to understand and define the listening problems the patient is having (such as speech in noise) and solve that, as opposed to simply making sounds louder! In fact, I'll wager 90 percent of all hearing health-care professionals don't measure speech in noise. And, of course, the number one problem of all time is speech in noise. If we simply measure it at baseline (that is, using their old hearing aids, or unaided) and show improvement in speech in noise after auditory rehabilitation or via new hearing aids, the value of our therapy or products becomes obvious as we manage and solve the problem through directional mics, noise reduction, FM, remote mics, and more.
Traynor: Sure, and as a profession, we also need to understand and manage the personal/professional relationship. Professionals walk a fine ethical line between sales and professional fiduciary services. If we step beyond that line on either side, we'll have business and ethical problems. However, when we do it well, and we address generational issues, human issues, personal style issues, and more, we add value to the product itself.
In fact, in chapter seven (Optimizing Pricing Strategies) we address adding value through pricing strategies. We don't talk about assigning a price point specifically, but we talk about how to determine the price. And of course, the reality is that from a global perspective, we're not selling a product, we're selling hearing, listening, communication, and interaction—and when we approach it from this perspective, we're adding value and the baby-boomers assign it a much higher value, than simply purchasing a hearing aid. In fact, people want to be treated as special. They want to feel like the professional knows them better than anyone else and that you put their needs first. And so it's really important to get to know the patient as a person, as well as their hearing and listening problems, and to be able to measure and solve those listening problems—and again, that's the art side of the equation.
Academy: The excellent chapter by John Greer Clark (Supporting Practice Success—Counseling Considerations for Patient and Employee Management) also addresses the art (or human side) of the equation, too, and adding value to the patient—often accomplished by listening!
Traynor: I agree. John is a gifted author and very well known for his insights and knowledge with regard to counseling.
Academy: Bob, if you don't mind, I wonder if you'd specifically address "bundling" and "un-bundling"?
Traynor: That's a huge topic! Specifically, patients don't really care very much about hearing aid features (unless we make those features an issue), what they really care about is benefits! And so basically, I see bundling and unbundling as useful and advantageous at the right moment in time—there are advantages and disadvantages to both approaches.
Frankly, for many of us, we're used to buying things that are bundled. We buy houses on lots that already have driveways, roofs, plumbing, and electrical systems, and we buy cars that are fully loaded, too. We don't usually say okay, I'll pay this much for the 4 cylinder or the hybrid, and I'll pay that much for the automatic transmission or the power windows. For the most important purchases, we usually buy bundled packages and patients appreciate knowing service packages and warrantees are included to meet our needs.
Another example is surgery. If you're getting a knee or hip replacement, you don't generally consider the prosthetic itself, the anesthesiologist, the gases and drugs administered by the anesthesiologist, the surgeon's services, the nursing services, the sutures, the drapes, the electrocautery—it's the whole package, the total services and products as a package, creating a perceived value to address the individual's needs.
Academy: Right, and so perhaps one would argue that for the most substantial purchases, bundling is the norm?
Traynor: Yes, and it makes sense as long as the perceived value is there. If the product is sold as a commodity, like a tire, a book, a CD, or a computer, across the Internet or through mail order, then the buyer looks for features and shops based on getting the most features for the lowest price.
Academy: And so it seems that strategic practice management would argue rather than selling a specific hearing aid product or feature, one should present an entire package based on lifestyle and/or the needs of the patient? For example, it seems to me if you're selling a pair of hearing aids for $6,500, the best thing to do is to include a remote mic into the package—as the hearing aid system will be so much more useful in the most difficult listening situations (i.e., speech in noise).
However, if you make the remote mic an add-on, particularly after the patient has spend $6,500, I believe most patients will say "I don't really need that" and they will experience many challenging situations in which their hearing aids aren't as successful as they would be with a remote mic. However, if the remote mic is bundled in, and you demo it a few times, they'll very quickly understand the remote mic has a huge value in the most difficult listening situations.
Traynor: Right, again, patients don't care very much about features, what they really care about is benefits! Your example of remote mics is a good example. The patient probably won't want the extra hardware—but they will want the benefit of being able to listen more clearly in noise. However, bundling is an enormous topic, and it does cut both ways. One has to consider each situation and the pros and cons from the business perspective, and from the patient perspective, too. And again, the bottom line is very likely addressing the needs of the patient.
Of course, there are other business aspects and considerations in bundling and unbundling, such as when a national insurance company or association or a government entity dictates that I should reveal my true costs and discounts for a particular product to the patient or the insurance company, that seems to me to be anti-business, invasive, and frankly, that gets pretty frustrating!
Academy: I agree. I've never understood that perspective. I don't see anyone telling Walmart to share their true costs with the consumer, or Costco, Microsoft, or Apple, Ford, Mercedes or General Motors. But then, that gets us into a whole other area of discussion!
Traynor: Part of what we do is indeed, product sales, but the other part is a fiduciary evaluation and services on a professional level. And as professionals, we're not unlike the dentist who sells whiter and straighter teeth as well as bridges, braces, and caps. We are not unlike the surgeon who promotes spinal instrumentation, cochlear implants, middle ear implants, pacemakers, knee and hip replacements, and other prosthetic devices, which are amazingly beneficial, and usually quite profitable, too.
So as licensed health-care professionals, I think we have to be cautious, reasonable, and responsible for our behavior and decisions. As I said earlier, professionals walk a fine ethical line between sales and professional fiduciary services.
Academy: Bob, it's always a pleasure speaking with you. I believe the second edition of the book is wonderful, and I congratulate you and Bob Glaser on another exciting and important accomplishment! I suspect the second edition will quickly become the standard strategic practice management text for educating the next generation of audiologists.
Traynor: Thanks, Doug. I appreciate your time, too, and thanks for your endorsement!
Robert Traynor, MBA, EdD, is the co-author of Strategic Practice Management, Business and Procedural Considerations, Second Edition.
Douglas L. Beck, AuD, Board Certified in Audiology, is the Web content editor for the American Academy of Audiology.
Chapter Titles and Authors
- Prologue: Leadership and Successful Practice Management by Robert G. Glaser.
- Chapter 1. The Economic Realities and Competitive Landscape of Audiology Private Practice by Robert M. Traynor
- Chapter 2. Strategic Business Planning by Robert M. Traynor
- Chapter 3. Legal Considerations in Practice Management by Glenn L. Bower and Michael G. Leesman
- Chapter 4. Ethical Considerations in Private Practice by Jane M. Kukula
- Chapter 5. Fundamentals of Marketing the Audiology Practice by Robert M. Traynor
- Chapter 6. Effective Marketing: Developing and Growing the Practice by Kevin D. St. Clergy
- Chapter 7. Optimizing Pricing Strategies for the Practice by Robert M. Traynor
- Chapter 8. Fiscal Monitoring: Cash Flow Analysis by Robert M. Traynor
- Chapter 9. Coding, Reimbursement, and Practice Management by Debra Abel
- Chapter 10. Policy and Procedures Manual by Robert G. Glaser
- Chapter 11. Patient Management by Robert G. Glaser
- Chapter 12. Supporting Practice Success: Counseling Considerations for Patient and Employee Management by John Greer Clark
- Chapter 13. Referral Source Management by Robert G. Glaser
- Chapter 14. Personnel Management by Robert G. Glaser
- Chapter 15. Career Management: What It Takes to Make It by Patrick N. Mangino
- Chapter 16. Compensation Strategies by Robert M. Traynor
- Chapter 17. Hearing Instrument Manufacturers and Suppliers by Robert G. Glaser
- Chapter 18. Practice Management Considerations in a University Audiology Clinic by Gail M. Whitelaw
- Chapter 19. Transitions: Optimizing Entry and Exit Strategies by Gail M. Whitelaw