Timberline Health

Timberline Health, an integrated delivery system serving

residents in five counties in eastern Washington, is considering

new opportunities to increase community awareness of the

organization’s outpatient health services. As the new business

development manager of hearing health services, Jack Andrews

is responsible for evaluating the feasibility of marketing

activities for the hearing service line and must allocate resources

to promotional activities that forecast positive return on

investment. One option under consideration is to sponsor the

health and wellness pavilion at the Spokane County Fair.

Research from comparable markets has shown

that wellness fairs are not only effective at educating

communities about potential risk factors for health problems,

including hearing loss, but also increasing consumer awareness

of new or existing health services provided by local health

organizations. These activities are essential to Timberline

Health’s mission within the community.

Since little is known about the hearing status of residents in the

market area, Jack enlists the services of his organization’s

epidemiologist, Dr. Ruth Litchfield, to help him evaluate the

potential return on investment for this marketing campaign. Dr.

Litchfield incorporates several factors into her analysis. She

reviews public health data on hearing loss, occupational and age

distribution data for local residents, as well as a query of

Timberline Health’s patient databases. Based on this research,

she estimates the prevalence of hearing loss in the five-county

service area at 18 percent, slightly higher than the national

average (NIH, 2010). Jack receives information from the fair’s

sales and marketing department to help in his calculations.

Specifically, sponsorship consists of an investment of $50,000

for the design and production of promotional materials and

rental of pavilion space for the duration of the twelve day fair.

Data from the previous three years shows on average 250,000

people attend the fair, of which 1% visit the wellness pavilion

and participate in health screening services.

If Timberline Health is to offer mobile hearing screening, the

organization must invest in new portable audiology equipment.

Jack receives a quotation from his supplier and estimates the

total investment in new audiometers and audiometric booths at

$16,000. Timberline Health will use existing diagnostic

equipment to test people who have failed the initial screening

(i.e. test positive for hearing loss), so it is unnecessary to invest

in additional equipment for the hearing centers. Vendor

specifications for the screening and diagnostic equipment are

indicated in Table 1.

Table 1

Vendor equipment specifications

Equipment Sensitivity Specificit

y

Portable audiology equipment for free screening 90% 96%

Clinic-based audiology equipment for follow-up diagnostic

testing

99%

99%

Furthermore, Jack calculates that he must provide coverage for

three 6-hour shifts per day and each shift must have three

audiologists to meet demand for screening tests. He anticipates

hiring nine people to provide coverage for the duration of the

fair. The hourly rate for audiologists is

$37.50.

People who fail the initial screening at the fair are referred to an

audiologist for a diagnostic test. Jack assumes in his calculations

that all people who are referred for diagnostic testing follow up

with an audiologist in one of Timberline Health’s hearing

centers. Initial screening tests at the fair are free; however,

Timberline Health charges $57.00 for a diagnostic hearing test,

which costs the organization $24.00. Using past sales data and

industry metrics, Jack forecasts that of

the total number of people diagnosed with hearing loss at

hearing centers only 20% will purchase hearing aids (NIH, 2010).

He reviews sales and margin data from the prior year to identify

the product mix for his calculations as indicated in Table 2.

Table 2

Sales and margin data

Hearing Aids Unit Price 2015 Sales Margin

Low-end $1,000 $400,000 25%

Mid-range $2,500 $1,250,000 45%

High-

end

$4,000 $400,000 60%

Reference

National Institutes of Health (NIH) (2010, October 1). Fact Sheet:

Hearing aids. Retrieved from

U.S. Department of Health and Human Services: National

Institutes of Health:

https://report.nih.gov/nihfactsheets/viewfactsheet.aspx?csid=9

5

Write a Memorandum (no more than 2 pages) addressed to your

faculty on the Subject of: Statistical Data representation in the

Timberline Health case study

1. Construct a 2-by2 contingency table to determine the total

number of people who fail the screening test and will be referred

for diagnostic testing in the hearing centers.

2. Construct a 2-by-2 contingency table to determine the total

number of people who fail the diagnostic test, which represents

the target market for hearing aid sales.

***For each table: list what data (and calculations) you used for

the table

3. Explain the significance of Sensitivity and Specificity of

Portable audiology equipment and Clinic-based audiology

equipment.

4. Explain why Sensitivity and Specificity for the Clinic-based

audiology equipment for follow-up diagnostic testing is higher

than for

Portable audiology equipment for a free screening.

**When appropriate, refer to credible resources following APA

format.

Note:

There is an underlying assumption in this case that the

screening and diagnostic tests are independent, such that the

first test does not affect the results of the second test even

though this is generally not true with a series of tests. The

resulting cohort of people who test positive for hearing loss

represents the target market or total number of prospects for

hearing aid sales from the proposed marketing campaign

As a guideline, a 2-by-2 contingency table is constructed in

Table TN-1:

Table TN-1

Contingency table construction

Test result Disease (D) No Disease

(NoD) Total

Positive

(a)

True Positive

(b)

False Positive

(a + b)

Negative (c)

False Negative

(d)

True Negative

(c + d)

Total (a+c) (b+d)

(a+b+c+d)

(prevalence) (1 – prevalence)