If you have been in the office recently, spoken with or emailed us or read the newsletters or the blogs, you have heard about the Coop we are working on to start up.
So what’s up with that? How goes it? Let me explain.
After consulting with our attorneys, we have decided to forgo the Coop model. As you recall from your readings or discussions, we wanted to be able to help more people from a remote distance and also to try and get more competitive pricing for the private clinic not affiliated with big-box retailers. The idea is and remains such that in the next few years, the membership would grow and we will negotiate with the hearing aid companies, vendors and manufacturers to get better pricing directly. We were a little ambitious when we thought this would be easy to turn this venture into a Coop, After speaking with the attorneys to set up the Coop, as few issues came to light.
Issues to Start a Coop:
Cooperatives are generally formed for the mutual benefit of their members, so it is important that the members have a common interest. We believe we met those requirements. Kim wanted to have patients and providers as members so that a patient/member would be able to get care anywhere. The lawyer felt providers and patients could not both be members under a Coop since they have conflicting interests. While patients and providers certainly have a common interest, a common goal, they are not on an even footing.
Why we need both members and providers in the same network?
To be fully beneficial to all, we need to make sure that if a consumer buys a product from Hears Hearing & Hearables, they will be able to find service. The service portion of the member’s or patient’s success is really based on the service. There are also laws that patients must be fit by a licensed provider in their state to get a “hearing aid”. And this is not just for providers as that is not the point. The point is to provide products at a great cost to the patient without worrying about another person marking the product up.
So, what is next?
The lawyer suggested we continue to operate as an LLC. An LLC would collect dues and patients would be affiliate members but would not have governance rights. This would be like a warehouse membership. An annual fee is paid, and prices are competitive because of the number of members, but the individual member does not have a voice in the running of the company.
We will begin having our attorneys draft up the membership agreements. We still want to provide discounts, rewards, year-end profits and other fun initiatives to give back when our LLC is profitable.
I hope this helps you see the reasons behind why we have changed our thinking from a Cooperative to LLC. The focus has not changed. It is still all about doing the best for our patients. If you have any questions, please give us a call at Hears to U Audiology, or send a message on the Hears Hearing & Hearable website. Thank you for listening.