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Cochlear's dirty marketing tricks

cochlear.jpgWe've been told that a complaint was filed in USA earlier this year against Cochlear. Upon investigation, we found out that the case focused on Medicare and exaggerated claims made by providers and possible competition practices.

Background

So what's this about? Someone called Brenda March worked as the Chief Financial Officer and Vice President of Cochlear from 1998-2004. She became a whistleblower, and filed a complaint (with the US government) [PDF], via her lawyers. This case has now been referred to the US HHS Office of the Inspector General, by the US Department of Justice.

Whilst this complaint focuses on specific American laws around Medicare, and the fairness of payments, it also contains useful facts about how cochlear implants are sold and marketed.

Incentives to use Cochlear's products (implant CIs)

In 1997 Cochlear established a 'Partners Program' (and subsequent schemes), which gave surgeons 'points' each time they implanted a CI.

A points programme worked in the same way as rewards programmes you would get at your local supermarket. E.g. when you go shopping in Sainsburys you can get Nectar points. Get enough points and you can get some freebies or rewards. Shop elsewhere, and perhaps you can collect Air Miles, AAdvantage etc. The company buys in your loyalty, thus you feel obliged to buy from them. Its a clever marketing technique, and most of us will participate.

The okay thing about all the above marketing, is you are making decisions which affect *your* life, and *your* finances, and that is where it ends. You are fully aware this is happening, thus able to make an informed decision. Secondly, it usually has no direct implications on anyone's health.

The case of Cochlear points, works in a similar way. Surgeons, audiologists and other front line staff would get points each time their service brought a CI from Cochlear. In other words, the more Cochlear implants a surgeon implanted, the more 'points' they would get, and thus bigger and more freebies from Cochlear.

Purchasing these devices for medical staff, was not for personal use, but they would then need to sell the benefits of a CI to a deaf person or parents of deaf children to get rid of the device, so in turn they could buy more CIs from the manufacturer, and get more points or bigger freebies.

Freebies

Freebies included (to woo medics and encourage cochlear implantation):

- golf tournaments
- first class airfares and also for spouses or guests
- exotic holidays
- all expenses flights/trip to Australia twice a year, with significant free time & recreational activity
- payment of salaries of employees, and general operating expenses of clinics (which means more profit for physicians or practices)
- free products (which they could then sell on - device costs £16,500, so that much free money)
- direct cash payments

On a points system, these freebies would increase the more CIs implanted. Implant more, and you get a bigger personal prize.

To quote from the complaint brought by the US government and a former Vice President of Cochlear:

"The express purpose of such payments are and were to encourage Physicians to direct hospitals ... to purchase Cochlear Implant Systems".

Other dubious practices

Other marketing techniques included such people involved must agree to purchase between 5-10 implants to attend an event. You would obviously then need to pass on this purchase decision to a deaf person, by marketing or selling the idea of a CI to them.

In addition, Cochlear required provide certain outcome evaluations i.e. make sure the results were favourable to Cochlear. Perhaps modify statistics or influence these, and lack impartiality.

Unethical?

See the mentality here? Lets sell the benefits of a CI to deaf people, perhaps tap into their vulnerability, so I can have some more freebies. Perhaps tell them they won't get through education (I've been told this) if they don't have a CI. Abuse and play on fear. Perhaps tell parents that alternatives such as sign language is a bad, and their child will never be normal (again I've seen it happen in clinical situations).

The problem with this, is two things:

- there is a conflict of interest between a surgeon getting a reward, and what is in the best interest of the patient. A surgeon might want some freebies, thus could go for a hardcore marketing technique (implant will really change your life etc), whether it is good for the patient or not. This brings the medical profession into disrepute.
- who is in control? When you go shopping at Sainsburys, you make an active decision to do this, and making an informed decision. The process is more transparent. How many end users are aware of the above?

Cochlear has publically stated that it wanted a 20% target growth internationally, and has beaten these targets, thus one can only assume that such aggressive marketing techniques (and what I would call unscrupulous), are happening elsewhere including the UK. For an international company, it would not single out one country in terms of incentives.

Who is protecting deaf people?

Okay, exactly what are deaf organisations doing about this? Pussyfooting around in case they offend someone, as they have done so for years? Too scared to jeopordise their positions, and put their neck on the line?

Do they receive money too or some other incentive to shut the hell up? Balanced information cannot exist just by taking CI information vs cultural information, money and power structures get in the way.

Hmm ...

A good example of money being the root of all evil?

For the record, if an adult wants an implant then they can have 100 for all I care. However, the over marketing strategies has always scared the hell out of me. It plays on fear of being in a minority and seeks to makes millions from this.

As for Cochlear shareholders, you should all be ashamed of yourselves. The sad thing is, due to how society is constructed, these people will probably think its an ethical investment.

Sources:
Complaint: US Court District of Colorado [PDF]
Former CFO Turns In Cochlear Americas
Deafness Research UK: Cochlear Implants

See also:
Cochlear set to grow 20% in 5 years
Cochlear takeover bid by Medtronic possible
Cochlear's aggressive marketing working

Comments (18)

Whatttttttttttttttttttttttttttttttt?! We knew this was dodgy but not THAT dodgy?! I feel naive but cannot quite believe it. Implant 5 kids, get a free holiday to Australia (keep away from Tony N while you're there!)..?!

Jeesh.

(Thanks for reading and summarising the long articles so that we didn't have to!)

Had mouth agape while reading that article! Makes me wonder how many have had CI unecessarily? (mind you there should not be any in the first place!) The freebies make me sick - agree with Jen. It makes me wonder, if this woman did not whistleblow - how long would this have gone on? And how long as it been going on for?

Please keep us updated on what happens with the complaint

Its probably going on everywhere, and will continue to do so. Its not illegal. Unethical it is.

The only reason this got to court, was potentially 'defrauding' Medicare (or whatever the right legal jargon is for the States)?

Whoa!

that is scary !

makes you wonder how many other medical decisions has been influenced like this !

yes please keep us updated x

Finally finally finally someone brings this kind of info to Deaf communitys attention!!!
Thanks!
And FYI...its not MONEY that is the root of all evil but LOVE of money is the root of all evil. I've mentioned many times that Deaf politics must NOT take DIRTY money even when they re poor. Its the most morally damaging experience and we ve gone thru too much.
And u made another excellent point about WHO is protecting the Deaf people?????
Right now I must admit I don't know. And that infuriates me.
And to think of this...certain bloggers have focused their eyes and energy on the Deaf people scathingly criticizing us for various scams (which of course I'd aeful) but these PALE in comparison to what the CI corps are doing!
Let's join together and keep on exposing those companies and their practices even to sweet and fair appearing AUDISM.
And I guess we keep on keep on keep on healing our community from dysconscious audism that paralyzes us from making stand against those actions.

@Ella you are right.

Put it this way. A company makes injections to make Black people white. Goes around telling Black people if they don't have an injection, they will suffer discrimination and won't get on as well in life. They play on any vulnerability that might come with being Black (forget cultural minorities here and the wonderful diversity that arises), and almost a tango with people's fears around inequality. Instead, attention is drawn away from society inequality and channeled into defect. Must fix.

To deliver the above, the injection company sells doctors freebies: sell x number of injections to Black people, and you can have a free holiday, first class travel, etc. All ethics aside, doctors are enticed by these incentives, and go for a hard core marketing technique. To deliver this, they pretend to care, and secondly there is drive towards normalisation: white people are normal, Black people must conform. Abnormal, you aren't going to get on unless you change your physical traits. Forget society structures, attitude etc. Through this drive to sell a product that conforms to all this, there is a need to get medics to play ball, and this is done via monetary technique. Oh, there's a chance you might die too, but lets brush that under the carpet and pretend it doesn't exist. Statistics? No problem, lets provide more freebies to swing it our way to show everyone is living happily ever after.

That's exactly what Cochlear and the medical profession are purporting through aggressive marketing (this is no longer about active choice). Diversity anyone? Sure, if someone wants to go and do a Michael Jackson then so be it, however is that the kind of world we should be advocating?!

Hi I am Deaf yes and I have live in Karachi(Pakistan) and U Uk visa help give to me pls yes and when r visa u help?

Well I think deaf organisation are not consulted or listen to by parents who value so called professional advice than the practical reality of life that deaf people have to offer. A case of truth is bitter. As it is 'if lie run for 20years one day truth will catch up with it' but for a deaf child that will be bitter truth for he will suffer the consequece of 20 year delay and may be unrepairable.

To Alison: It isn't just unethical. It is blatantly illegal under the Federal anti-kickback statute. The fact that the government intervened in the case tells you that the believe it to be illegal and have enough evidence to prosecute. The government doesn't intervene unless they have a strong case.

Also, please note the the orginal Partners Program subtracted credits from physicians that implanted a competitor's device. So it just didn't reward physicians, it punished them as well. Something this blatant is not going on everywhere, as Alison suggested. The Partners Program is an especially egregious types of fraud, which is why Cochlear got in trouble.

This kind of fraud keeps prices artificially high, which as RAND showed in 2002, has actually kept most CI candidates from getting implanted! It directly impacts you the consumer.

I am a CODA and am sick and tired of 'normal' people trying to change the deaf! What a wonderful world we have here with the diversity that we have. I have to say, it would be a extremely boring world if everyone were the same.

The deaf are just as equal as everyone else......with one exception, they can't hear. But they can see more clearly than most people who have ALL 5 senses! And the fact that they can't have an education and become successful is RIDICULOUS!!

My parents both have master's degrees......and I am a product of their hard work. I am now a mother and successful business enterpreneur with a business now worth over $3 million!! I am only 28 years old.........

but, oh, I forgot.......deaf people are 'dumb' and need to be 'normal'??!!?? What????????? That's FALSE and couldn't be further from the truth. Look at me........I am PROUD to have deaf parents and proud to have grown up in a wonderful, unique enviornment that the 'real' world would have never taught and provided me.

FIGHT!!! STAND UP FOR YOURSELVES!! God loves you for who you are...........not if you are deaf, white, black, brown, blind, crippled.............love yourself and others will see that you are a shining example of true love and pride. Power to the deaf!!

I am very proud to be Deaf and I grew up with my grandparents on the farm. I remember that I had a argument with Dr. Krause (who "invented CI") living in Greensboro, NC several times and he offered me free CI during the workshop at CNCSD and I said (I prefer wearing a hearing aid that works fine with me, after that I no longer wore it). I told him that he tried to run out of the Deaf people and being Deaf is very healthy. I said to him that he should have "CI" on his both hands and he became upset with me and no longer invited me to his workshop, the same as Cued Speech. We (my wife who is Deaf and me) have 3 normal children who live with two different worlds - the Deaf and the Hearing and they sign. I am very tired of these trying to win the Deaf people using CI in special ways such as "free prizes" to attract us and we will never (I say "NEVER") wear CI and become the Hearing, we are truthfully proud to be Deaf and we live normal life. Why bothering the Hearing as they try to make us become the "Hearing" again. We are fine being Deaf and what is wrong being "Deaf". A very very small part, the sense of "hear" is a loss and it does not bother the whole body, but bothering the Hearing; especially the CI doctors. Deaf people should not wear CI as it is not necessary to wear CI because of the CI doctors and the prizes. We, the Deaf are like the Indians that white mankind wants the Indians to be like the white mankind. I truthfully respect and preserve the Indians because we took the land away from the Indians a long time ago. Now we, the Deaf are more oppressed by these people and the CI doctors who do not understand us as long as we are very health being Deaf. I tell you CI doctors that I will never be like you and you try to destroy the Deaf in everything. We, the Deaf cannot fix you, the Hearing and the CI doctors to be the Deaf. So leave the Deaf be the Deaf and we do not need CI for all ages. Stand against CI (Cochlear Implant) so do we.

Alison, your comments only confirm how our free enterprise system works. At no time does affect the quality of Cochlear Implants. What ever issues you may have on being deaf should not used against Cochlear Implants and its recepients. Thank you,

Uh? I'm having a go at aggressive marketing tactics here, and wanting to market something at the expense of people's health. Free market systems is not an excuse for ignoring diversity. Even the US with the most right of the centre economics model, does not exist on pure market economics alone and various laws exist.

Not anywhere in my comments above was I attacking recipients, but rather companies wanting to make a fast buck and playing on people's emotions.

E.g. I was once told by an ENT consultant, "If you don't have a CI you won't pass your law degree". (I never had a CI, and got my degree ...!) That kind of comment is quite frankly out of order, unprofessional and plays games with people's emotions.

E.g. 2: I once worked with a child / young person, who was told "if you have a CI you can have a puppy". The medical team were perfectly aware of this kind of blackmail before. Result: kid had an implant, later mental health screwed. (I've worked several kids / young people with CIs).

If we are going to go down the free market path, then would it be perfectly okay for me to set up a business tomorrow, and attempt to make everyone in the world white? Make all gay people straight etc. Market it in such a way, you won't succeed unless you have this. Wider society does not need to address difference. Would that bigotry disguised as an 'economic model' be perfectly acceptable?

The bottom line is, there is nothing wrong with being deaf. God made you that way for a reason. I am very proud of having deaf parents and I would never ever change that, ever! Like my sister Shawna said in her comment, both of our parents have master's degrees and that is more than I can say for a lot of people. I love the fact that I know two cultures and two languages. I feel like knowing sign language is more of a gift, not a talent. Don't judge the deaf just because they can't hear!

Go hell and leave deaf alone.. Don't bother or leave Deaf people alone, what they want to be themself. You, devil want the dirty money, Go Hell.

Stop fool to deaf people like this. febble is not worth less.. leave deaf culture alone!!

Greetings,

I do not understand why doctors and scientists keep working on "ears" only but they ingore deaf people as a "whole". I am postlingually deaf and I am very happy who I am...

Interesting, In general, the society rejects mentally challenged and deaf people but God has His purpose to put diversity of people on the Earth for working as a TEAM... It is so sad that the doctors and scientists keep fixing deaf people to hear... It would be dead boring to see all same colors/kinds of flowers!

All of us (all races, intelligence, deaf, hard of hearing and hearing) are supposed to be proud of ourselves... All of us are unique...

Most of all, I am so proud as a peacock of having both daughters Shawna Poole and Ruth Ann Jenkins... They are very special to me!!

I feel like we, the Deaf are treated as "guinea pigs" and they want to fix us to be like the Hearing, just the same thing as the white man fixed the Indians to be the "white people". Being Deaf is far more healthy than having "CI".

My husband is 55, he is now totally deaf, hearing aids won't work anymore. It is a hard for a hearing person to go deaf. To know that some jerk Dr. and a company is taking advantage of this makes me more than mad

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