Hearing aids at cost business plan

I am an clinical and dispensing audiologist and am developing a business plan to offer hearing aids at my cost - absolutely no mark up - and charge only for my professional services for performing audiologic evaluations, hearing aid fitting and follow up appointments. This ‘unbundling’ of services is not a new concept, but is little practiced. I find it unfortunate that most dispensing audiologists play the role of hearing aid salespeople who rely on sales commissions for some or all of their income, which is paid out of the substantial retail mark-up on hearing aids.

I would welcome your comments on my preliminary plan outlined below.

There would be an initial hearing/communication assessment for $250. This would include: (1) a battery of audiologic tests, including often overlooked speech-in-noise tests that give a much better sense of how someone copes in real world listening situations; (2) a detailed discussion and history on where the problems in communication seem to be occurring at home, work, social activites, etc.(a hearing handicap assessment); (3) development of a personal communication plan that would include counseling and communication strategies (ideally involving other family members), appropriate assistive listening devices (amplified phone, tv ears, FM system, etc.), and a recommendation for hearing aids if warranted.

If a hearing aid trial is appropriate, a $250 fitting fee would be charged that would cover the initial fitting appointment and all follow-up visits for the 45 day trial period. The patient would purchase the recommended hearing aids from me at my cost.

After the 45 day trial period, subsequent visits would cost $35 each time, or the patient would have the option of purchasing a year’s worth of service for $200.

This plan frees me up as an audiologist to give the appropriate testing and counseling without regard to the commission I will make on a particular hearing aid – I am essentially being paid only as a fee-for-service consultant, and not as hearing aid salesman.

For example, after a communication assessment, Oticon Delta 4000 hearing aids are recommended as part of the personal communication plan, and the patient decides to do a 45 day trial. They pay $250 for the initial assessment, $250 for the fitting fee, and $700 for each Delta 4000 (so $1400 for the pair), for a total cost of $1900. Say the patient decides to keep the Deltas and also buys a year’s worth of service for $200, so now they have paid $2100. The regular audiology or HA dispenser practice will charge around $1800-1900 for each Delta 4000, so the same patient would pay $3600-3800 ---- $1500 - $1700 more than the $2100 under the new plan. The difference widens with higher priced hearing aids – a pair of hearing aids costing $8000 could be fit and purchased under this new plan at around $3700 total.

I see no ethical reason why an audiologist should make more money on dispensing higher priced hearing aids when the time it takes to do the initial fitting and follow-ups is the same. In fact, the better the hearing aid, the more satisfied the patient and the less problems to address at follow-up appointments.

As audiologists, we are trained to assess hearing loss and offer professional advice on a wide array of strategies to cope with hearing loss. Hearing aids are only a part of the solution, but with audiologists’ incomes tied to sales commissions, there is tremendous economic pressure for hearing aids to be presented as the only solution.

I apologise for the length of this post. I would greatly appreciate input from both hearing aid users and dispensers. I see a tremendous value to the patient who not only saves a lot of money on hearing aids, but also gets an unbiased professional opinion on what to do about a hearing loss.

i have seen unbundling in china. in fact i have seen that they put up the prices in a board along with the cost of earmolds, all the models and tests.
Just like a bid board in a restaurant where you see the menu…

If you really want to sell aid to the masses, go to china -xiamen
buy hearing aids (digital) at$100 and sell it at cost.—


GLASS BONG

Scrap this plan…you will starve!

I agree that charging for services that may or may not be utilized by a client is the equivalent to an insurance plan. Some customers will “make a claim” and others will not.

I like your plan as would prefer to pay for the actual level of services that I will need as opposed to services that I might use. Would you happen to be in southern California?

some may be turned off by the fact that they have to pay $35 each time they come in, and if it is a difficult fit, they may be racking up costs in the long run by paying for office visits…also…some patients will not come back in and pay $35 each time and say…“my hearing aids don’t help me, there in the drawer, the audiologist doesn’t know how to help me” even though it was no fault of your own…

The difficult fit patients should probably take advantage of the the $200/year service with unlimited visits. Not all patients are going to be happy, no matter what delivery system you use. But at least the disgruntled user who puts the hearing aid in the drawer does not pay up front for years of ‘free’ service that he is now never going to use. Paying for service as you go is the most common medical provider model, so $35 each time for adjustments, cleaning, etc, would be in line with doctor’s visits where you don’t expect the doctor to not charge you for a 2nd office visit because you are still not better. It comes down to whether audiologists see themselves as salespeople or service providers. Thanks for your post.

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If you opened up in within 100 miles of my location, I would be your first customer.

When my local audi wants over $6000 for a new pair of Centra Actives, your business plan looks better and better.

If you open up in a location with a lot of retirees, like FL, you will have more business than you could handle.

Good Luck!

I congratulate your iniciative…

why dont you start a NPO so that it could charge 0 for the aids and just

offer you a reasonable salary… Perhaps even a salary based on contributiuons

of a NPO, my good friend works for a NPO shae gets pay reasonabke salary


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As a UK new member (not realising I was joining a USA forum) I have been following many discussions and exchanges with interest.

I have long held the view that the private HA industry whether in the UK or elsewhere is a rip-off against the elderly, and other, often vulnerable people with a desperate need for a better quality of hearing. It is a view that is bound to be challenged or dismissed by those representing the industry whether as retailers or manufacturers, excusing their exorbitant charges to customers as the result of hugely expensive research costs, the high manufacturing cost of state-of the-art miniaturised components, plus the care/aftercare needed to satisfy the customer over a period.

When the UK’s NHS became the biggest single purchaser of digital HAs some 4 years ago, it was then said that they could purchase high spec aids at around £150 ($300) each, when even then they were being privately sold for over £1000 ($2000) each including tests and aftercare. A high-spec pair could be more than $10,000.

Audi101, who proposes using a cost-based system reckons $700 each for an Oticon Delta 4000 which has a pretty good specification and compares favourably with my new aids (Phonac) which cost £400 ($800) each. Except that mine are supplied by a UK-wide high street organisation (Specsavers) better known originally for spectacles but who have added HAs to their services. That $800 includes a 60 day no quibble trial, full aftercare and a 2 year unconditional warranty. But they are not allowed to put the maker’s name on the aid itself which carries Specsaver’s name and model. They do come in a pouch with the Phonac name on, and other well-known makes can be similarly supplied. Their range of 9 models starts at $400 each going up to $3700. I had previously paid $2000 (SieTech), then $3000 (GN ReSound) each aid, from earlier private audiologists. Neither was up to the mark after long trials/adjustments and well beyond their trial periods.

Xbulder states that China can supply digital aids for as little as $100 though not saying what spec this provides, and while the public are the least likely to be informed where their aids are actually manufactured, and with the knowledge that China can and does produce a huge range of quality products bearing familiar brand names, it would not surprise me that some of the branded aids also originated from there.

The point of my response to Audi101? If he reckons he can make a reasonable living from his venture, I say good luck to him, and may many others take up the challenge and do likewise. His charges look reasonable, and $200 for a year’s adjustments is good value. It is time the HA industry was put in its place, made more competitive, to give the long-suffering hearing-impaired customers a better deal and value for money. Better still, perhaps that a high street chain in the US can do something similar as here in the UK – it is naturally proving very popular here.

I must say I like the idea of one piece of information given by another Member, that he obtained his aids from an on-line source www.americahears.com where they provide software that the user can connect to a home computer to gradually adjust their own aids in their own time, or get step-by-step online help to make adjustments. All for a $995 starting price. OK – this is not for those who are not good with computers but is exactly what I would wish to do if available over here.
No appointments, no hassle trying over weeks/months to fine-tune by explaining to the audio what needs adjusting. At least I would feel that I was in control of my own problem, in my time, and at a very reasonable all-in cost.

Sorry to have taken up such space – will be interested to see what others think of my views.

I’m going to be a little negative here.

It all sounds like an interesting idea, in theory. But it would hinge on you being able to make a good enough living off of professional fees. So based on your concept you would make $35 for a 30 minute follow up appointment and $250 off a test. So if you test five people a week, and run ten follow up appointments, and work 48 weeks a year, you are going to make $76,800.

That’s a nice income, especially in some parts of America. But from that you have to pay your rent, utilities, secretary, advertising, equipment maintenance and supplies. So where does that money come from? A typical office is going to cost $2,000 a month, depending on location. Staff costs are going to be another $2,000 or so. Then other miscellaneous stuff and advertising at least $1,000. So at the very least you are looking at $60,000 in expenses, in which case your income would be less than your secretary. You’d be living on about $8 an hour. Would you be okay with that?

But let’s say it gets really good. Your low prices attract as many people as you can see. So now you are testing 10 people a week. For all the extensive testing you like to do, that is going to take you at least two hours, so that’s four hours a day five days a week. Let’s say you also fill the rest of your day with follow up appointments at $35 per half hour, eight per day. So now that’s $187,200 per year. That’s much better. Take off your overheads of $60,000 and you walk away with $137,200 in income. The only issue however, is I find it hard to believe that you are going to be that busy. Ten tests a week, and forty follow up visits a week is a pretty tall order. And that’s not taking into account the money you lose by offering unlimited follow ups. I’d argue that you’d need to be advertising a LOT to generate that kind of business. And that’s going to probably swallow a lot of that income. I’d also argue that if your office were that busy, you’d probably need another member of staff. So by the time you spend all that extra money, you are back to making a fairly low income.

Also you might have to check with the factory about revealing cost prices to your patients, as many have a confidentiality agreement that would make it wrong to provide this information.

Finally, and this is where I get a little negative. Some of your post seems a little sanctimonious. Audiologists are not doctors. They are just people who did a two year masters degree after their (usually unrelated) undergraduate degree. The way you are talking is if selling hearing aids is beneath you, and that if your job were commission only it would force you to make unethical choices based on personal greed. Well sorry, but I’ve worked in the industry on straight commission before, and it never caused me to be unethical, or recommend treatment that was not necessary or detrimental to the patient.

I’ve worked in the UK system for many years, and I have to say I disagree with your point of view, and would suggest that it is a typical English mistrust of the private health care industry.

You point out that the NHS became the biggest buyer of digital hearing aids a few years ago, and I’ve also read that statistic. Clearly when you buy as much as they do, you have a lot of leverage.

However, I also read that in a recent survey there were two hospitals in the UK with a FIVE YEAR waiting list to fit hearing aids. It is not terribly unusual to have a wait time of over two years. Hardly the model of efficiency.

Now you then go on to make a very dubious comparison of the price the NHS pay for a ‘high end’ digital aid with what a patient would pay from the private sector.

Let’s be real here. If you go to the NHS you get what you are given, pretty much, and you can wait over two years. So the level of service is clearly not the same as the private sector where you can typically be seen and fitted within a couple of weeks.

Let’s also not ignore the overheads. The NHS does not have a team of audiologists working for them for free. These people all get paid. Equipment is purchased, maintained and replaced. Supplies are purchased. If you are going to compare apples to apples, you need to look at the cost to the tax payer for the entire process, not just what the aid itself cost.

The last statistic I read about the cost of dispensing on the NHS was that it was about £500 ($1,000) per patient. But that was over a decade ago, before digital, before computers were used to program aids on the NHS. That was for one analog BTE hearing aids worth about 5% of the total cost of dispensing the aid.

So if the same holds true today, which it may well, given the equipment and training needed to deal with modern digital aids, it would mean that your £150 ($300) aid would actually cost the taxpayer £3,000 ($6,000) PER AID. So on that basis the private sector is actually outperforming the NHS in terms of price despite paying more for the aids, and seeing fewer people (often in free home visits).

So really I’d like to see the real facts and figures before we leap to the kind of conclusions you have.

I hold a Doctor of Audiology degree, which is now required as the entry level education for all new audiologists (beginning in 2007). Your statement is inaccurate regarding undergraduate work as well. The VAST majority of audiologists have a B.S. or B.A. in either Speech Pathology and Audiology OR Communication Sciences. If they do not, then additional coursework is required from the graduate program. A Doctor of Audiology degree IS non-medical, but requires 4 years of graduate study often including thesis (or something of larger scale) work and defense. This level of education is equivalent to optometrists, physical therapists, occupational therapists, etc.

I also have to completely disagree about your statement on ethics and commission. Before my education, I worked for a Beltone on commission. I know for a fact that many individuals on commission make inappropriate and unethical decisions and practices.

No and yes. The plan I like, but you are right the prices quoted are way low. I would think you would need to be billing at least $200/hour to keep the doors open. This rate would still offer substantial savings to most clients.

The pricing issue is a big dilemma - I’ve been doing my head in trying to come up with a model that makes hearing aids accessible to people while still making enough to live (and pay the rent and the staff and buy up to date equipment etc etc)… I’ve been thinking about unbundling too… but there are a few issues.

Many people just don’t value service and will perceive that you rip them off regardless. The cost price of hearing aids will still seem too high for some people and the fact that you charge every time you see them will just annoy them…btw- you need to charge more than you quoted to pay the bills and make an income… and don’t undervalue the expertise and benefit to your clients that you can offer

Also, you might run into problems justifying charging people everytime they come in - we all have our clients who need extra help - e.g, would you charge someone more because you have to visit them in a nursing home? What about the client who can’t change his batteries or always get wax blockages?

Another option (that I’m doing) is just to make the same markup on all hearing aids sold - then there will be no perception that you’re trying to sell people more expensive hearing aids etc - it’s entirely up to the client. It’ll compress prices (base hearing aids are more expensive and top end hearing aids less so)…

If people are purely focused on price they can always find things cheaper elsewhere … competing purely on price is counterproductive to offering good advice and service…

With price sensitive consumers you could offer different options such as referring them to the internet or better still selling DIY America Hears hearing aids - that way they have the choice whether they want your service or not…

good luck

To solve the problem just offer both. As a example… in the construction/remodeling business a lot of contractors will bid a total job at a specific price, or if you want/need it done on a piecemeal basis they’ll do a T&M (time and material)… with the option given to the customer.

Shi-Ku Chishiki

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Those defending the status quo are ignoring the enormous saving when a product is semi-mass produced and sold at the Walmarts of the world. (In the USA alone there are an estimated 28,000,000 persons that could benefit from aids but have not purchased them.)

Also they are not factoring in the large savings from innovation possible in self-fitting aids. The technology is there…it’s being held back by an anachronistic system of forcing the majority of deaf to buy aids designed to require fitting by a trained professional or licensed dispenser. The manufacturers must produce aids that require professional fitting services because the pro is their only market under the present system.

I am talking about the majority. Those with uncomplicated SNHF loss. Aids should cost no more than what the Radio Shack retails the similiar BlueTooth in the ear devices. Ed

manufacturers (Oticon, Phonak, etc) had been buying practices and turn it into
dispensing chains. Phonak had also started to buy their international distribuitors- for example in brazil they bought the siemens rep (leaving them without a dealer overnight)

It is unlikely that some of the big manufacturers will develop a fit yourself product
in light of what it seems to be their strategy (vertical integration)

Sign me up! Your business plan would require that you be proficient in recommending and programming the best aid for your customer’s hearing loss so as to not waste your time! You would not be recommending one particular manufacturer based on the “perks” received from the manufacturer.

Hi,
I like your plan, what you have incorporated are really helpful. If you need any information regarding writing a business plan, hire a business plan consultant that helps in number of ways.
Best of luck
Mariam
www.bizplancorner.com

Firstly, mods please delete that spam post.

The main point is not if unbundling is ethically pure or a financial bargain … but simply will the majority of customers go for it?

The answer has been found to be NO.

Many elderly people want to take out that $NNN from their savings and simply buy a product and service to fix their hearing.

They phone you and ask ‘How much is a pair of mid-range hearing aids?’.

They want a single price … not a lecture on how they can modify the price according to this, that and the other.

Sooo … if you want to free all those poor people from the wicked, evil, over-charging dispensers then simply start a discount dispensers.

Note: There ARE unbundled models that DO work … but they usually include 2 or 3 free fine tuning sessions as part of the package.