How Should Audiologists Compete with CostCo?

In the hearing healthcare industry CostCo is associated with negative feelings. This most likely attributable to their ability to undercut independent hearing healthcare practitioners in the market. In contrast it becomes quite obvious that consumers/patients are quite satisfied with CostCo per majority opinion in these forums. The latter rather than the former is what I would consider the gold standard for determining what is best for the end user. On the positive side for CostCo, I have heard that CostCo practitioners are required to performed both verification (i.e., real ear measures) and validation (e.g., APHAB or COSI) measures which I think is fantastic as they are too often omitted by independent hearing healthcare practitioners. Both verification and validation contribute positively to patient satisfaction.

The negatives to CostCo are few but notable. They are more likely to employ hearing aid dispensers rather than audiologists. This, on average, would affect the knowledge base, in terms of both depth and breadth, of the hearing healthcare practitioner as well as their association with a clinical versus sales perspective on hearing aids. The former is rather straightforward while the latter is more so my opinion.

I realize that my intro has been somewhat long-winded but please bare with me. I am interested in the hearing aid user’s opinion of what independent hearing healthcare practitioners need to do in order to allow them to better compete with CostCo for the hearing aid client. The obvious answer to this is cost and I agree that independent practitioners need to more aggressively negotiate with their manufacturers so that they can lower their cost of sale to the end user. However, I also know that it is not feasible at this point in time for independent practitioners to fully match the price of CostCo. So my question is what would you, or the average hearing aid user, like to see in the independent hearing healthcare practitioner that would increase your willingness to pay more (e.g., $1000 to $1500/pair) for their services and product.

This could include hours that are kept by the clinic, speed with which the client can get you in to have problems resolved, knowledge and/or education of the practitioner, counseling abilities, time spent with you, superior fine-tuning abilities, etc. Please share whatever you think is most important here.

I am coming at this from the perspective of an audiology educator who views CostCo as a positive force for the consumer but negative, in the short-term, for the hearing healthcare professions. Obviously we must adapt but I think it is not clear as to what that looks like so I am hoping to solicit feedback from you so I can gain a better understanding of how we can better meet the needs of the hearing aid user.

Thank you!

I’m pretty new here, and here’s my 2 cents. I’m just starting out with hearing aids and chose to go to a full service office that is very close to my house. I know that I’m paying more to use them.

The benefit I am getting is that they are very generous with their demo program. I’m still in the process of deciding between one or two HA’s. (that’s a separate post!). After my first visit I walked out of the office with a free demo HA to try out for a week. After one week I decided to order it. They let me keep the demo for the second week while waiting for mine to come in. On my 3rd visit I picked up my HA, and the audi reconfigured the demo so that I can have a week to try wearing two. I’m sure if I wanted, I could have started the whole process with two demos.

Having the extra time has been great. I need to be in different sound situations to figure out how well the HA is working.

Judy

This could include hours that are kept by the clinic, speed with which the client can get you in to have problems resolved, knowledge and/or education of the practitioner, counseling abilities, time spent with you, superior fine-tuning abilities, etc. Please share whatever you think is most important here.

I had four audiograms by four different audiologists/HIS. The most comprehensive test that I received was at Costco. I had a test, tried a couple of hearing aid models and was then asked if the aids helped and would I be interested in purchasing a pair. No pressure to buy at all. The routine for the other audiologist/HIS was to schedule a hearing test. Take the hearing test. Be told that I definitely needed aids and they did have an appointment available in the next couple of weeks to be fitted for an aid.
Costco approaches this issue like the patient’s time is important and they make the whole purchasing process easy and straightforward. I got the feeling from the other offices that their schedules and time were more important than my time.

If I had a difficult to fit loss would I go to Costco? That depends on the audiologist/HIS. So far I have not complaints about the professionalism skill of the practitioner at Costco. Some people have indicated that they would not use Costco because their are good and bad practitioners in Costco. I agree, but I got pretty good at taking these tests and noted that some practitioners were better than others. For me Costco has delivered the same or better performance than the other practitioners. They have hours set up so you don’t have to take time off from work for an appointment. Several days a week, they have hours until 8 pm. I have never felt rushed. Costco also does a huge volume and the audis/HIS probably perform a lot of audiograms and tests every week. Practice makes perfect.

At one of the practitioners, it was like a production line. I was registering and my registration process was interrupted because the audiologist needed to get the test started right now. After the test I waited 20 minutes to see the ENT, then offered an appointment in a couple of weeks to discuss hearing aids, then I waited another 15 minutes for the receptionist to deal with other clients so I could pay for the services received. The behaviors tell me the practice is focused on their needs, not the patients.

Many of the practices seem to hide the cost of services. Check out some practitioner’s websites and see how much information that you can acquire about expected costs, brands, models, etc. Costco has prices, sets expectations for the process, discusses warranty, etc. in a very open fashion. Many of their competitors are afraid to discuss their prices and services. As a customer you want to find value in your purchase. Not necessarily the lowest price, but the best value. Right now the way most practitioners communicate on their websites, value is not able to be determined. Published prices gives the customer an advantage. You can check prices, ask why the prices are higher and what value do I get with the higher price or discover that the service is the same from two practitioners offering different price points for the same price.

Costco brings competitive pricing, outstanding customer service, and convenient access to services (hours, location). If you travel around the U.S. then Costco offers you the option of service without having to return to your home and your audiologist. I also realize that Costco is selling premium instruments, but they have some features turned off compared to their better known major brand. Frequently, these are one version behind the current brands available from independent audiologists.

In addition to what Brad 109 responded, when I went to see a neighborhood audiologist (I did not end up purchasing there), I was tested then brought into a quiet office and told which aids would be best for me. She set up a pair right then and talked to me in that quiet office with her assistant. I was pressured to purchase then- almost $6000, please. When I declined to commit, I was offered a pair that had been a demo for a small bit less. Felt like a used car dealership. As everyone has said, there are good and bad audiologists and hearing aid specialists, but if you can get the same or better value/service for half the price, why wouldn’t you? I can’t afford $5-6000 every five years or so, but I could do $2-3000.

I think private audiologists need to change their service model to decouple the price of the hearing aids from the service and offer better prices for hearing aids. Also, it would be nice if there was not such great pressure to buy. I got a feeling of the 3 audiologists I visited that they each preferred a specific manufacturer, perhaps more for their own benefit than mine, and tended to get an attitude of patronization mixed with irritation if I, as an informed customer, disagreed or asked too many questions. Also, I thought there was a weird attitude of every audiologist when you returned a pair of aids that you were trialing that you could only deal with the receptionist and the audiologist didn’t want to bother with you anymore.

I concur with all the problems pointed out in previous posts (except the one about only seeing the receptionist when returning aids; in my case I saw the audi again and got a talking to about how foolish I was being). My regular doctor was the one whose urgings finally pushed me to do something about my hearing, although I was ready for it because it was becoming more and more of a problem. He told me to go to Costco, so I made an appointment at Costco but between my schedule and theirs, the appointment there was for several weeks out, and I decided in the meantime, since I was exploring HAs, I’d go whole hog. I keep getting those offers in the mail from audis saying, $500 off or free this and that, so I took a couple of them up on it.

First I admit that a lot of what happened was my own fault. I should have done the research that led me here before going to the first audi, but I didn’t. She did the tests and then fitted me with aids, not mentioning price (again, my fault, but I had it in my head the touted discount would mean a price of about $3,000). When I finally asked about price and found out the “discounted” price was $6,100, I about ripped them out of my ears. Told her I could not and would not pay that. So she made reassuring noises about how there were less expensive models, refused to give me prices for those but said they wouldn’t help quite as much, and sent me off for my 2-week trial.

What was bad about that experience:

  • No transparency about price. In fact resistance to giving me prices.
  • Attempts to frighten me into going along with those aids (research shows hearing like mine if not corrected leads to dementia).
  • Trying to keep me away from Costco by saying the reason their prices are so low is they’re selling 10-year old technology. To me an exaggeration at that level is no longer an exaggeration but an outright lie.
  • A follow-up attempt to sell me aids that were in my budget but were old technology, admittedly not 10-year-old, but very basic.

For the second private audi I had made an appointment with, I was up front with her about the first experience, and she was very decent. Told me she could not match Costco’s prices, that the manufacturers will not give her and other small practices the same discount they give Costco. Was helpful in telling me which local Costco had an audi she knew was good and telling me about helpful things for my problems with the telephone. If my Costco tests don’t work out, I’d go back to her, although I had a couple of objections to that experience:

  • The appointment was made through some kind of central phone call center that obviously didn’t know much about the practice and was reading off a script. They almost lost me right away when they told me I had to bring someone else to the appointment with me in case I “couldn’t understand” things. IMO that’s insulting, and I was ready to hang up when they backed off that.
  • When I arrived for the appointment, the audi was visible in her office, alone. I still got to sit in the reception area for 15 minutes before she ambled out. Maybe I’m too b!itchy, but as far as I’m concerned if a previous appointment goes over, that’s an understandable reason for making someone wait, but screwing around with paperwork, etc., isn’t.

In the meantime, when I went back to my regular doctor with the KS6’s in place, he told me his ENT friends aren’t happy with him, but his patients who get aids from Costco are all happier with them than the ones who get them from private audis. That may just be a function of price, of course, but there it is. I’m not wild about the KS6’s and am going to start trialing the Trax 42’s Saturday.

Thank you all for your responses. However, I think we are deviating a bit from the goal I had in mind. I do understand that many of you have had much better experiences with CostCo than with private practitioners. In many cases the descriptions of the non-CostCo hearing aid practitioners are appalling and I would never think to defend that type of behavior. What I was hoping to get at here was that if the practitioners at CostCo and private practices were equal at the outset, what would you want from the private practitioner that CostCo can’t or doesn’t provide in order to make up for the price disparity. Following up on that, what is the maximum additional dollars you would pay for this additional service, item, etc? So essentially, what is the maximum tolerable price disparity? The first respondent listed some suggestions that seemed quite sensible–location and time spent with her/demo usage. Let me provide some additional examples.

  1. A practitioner that is more knowledgeable and/or educated (e.g., PhD) which allows them to better fine tune your aids
  2. An office that is able to always get you in the same day to resolve your problems
  3. Relationship with hearing care practitioner
  4. Ability to deal with more complex issues (e.g., loss related to Menieres, musician, tinnitus patient, BiCROS, etc)

Thoughts anyone?

If you spend the time you will see any number of stories similar to these. In one of my lives I did consulting to retail. I might accept 1 in 10 or so of the existing dispensaries. I’d have too great a failure rate if I took just any of them. I really don’t see 1 in 10. In any other field, most of these small shops would be defunct.

  1. They can get by on very limited sales.
  2. They have no sales knowledge or ethics.
    That is going away.

There are multi location facilities that will survive the transition to a competitive marketplace Most won’t.

All I would suggest is the book Give the Lady What She Wants. It is often available use. It is the story of Marshal Field. It will make a heck of a contrast.

I would consider your item #4 separately. More complex issues may need to be handled by someone more specialized just as you might need a cardiologist rather than your general practitioner. As for items 1-3, your original post asked what would entice the average hearing aid user to spend $1000-1500 more per pair of hearing aids. I think i fit the “average” profile and I would spend more for the services you mention in items 1-3 for similar technology. But we find that we are being asked to pay 2 to 4 times more and that is a problem.

This is only one person’s opinion, of course, but to answer the original question bluntly: nothing. I’ve known for years my hearing was bad and I needed to do something about it and just made do because of the cost of hearing aids. No extra conveniences or frills are going to induce me to pay twice as much for something I already consider too expensive. I think the private audis do have the market cornered for those wanting tinnitus relief, but I don’t need that. Someone advertising himself as a PhD when Costco has mere audiologists (and in my area that’s what they have) wouldn’t move me. My gut instinct is that like many other professions after a certain level of education, experience and natural aptitude become more important. I can’t imagine a hearing aid problem where getting in to see the audi that day would be worth thousands. Admittedly my thousands come slow and hard. People in different situations may react very differently to what is basically a financial question.

25 years ago they said I needed $4000 hearing aids, equal to $6500+ today. If they had been $2000 I would of got them. Today I know I’m way past due for HAs…and have to pull the trigger. Have Costco appointment on Sept 11th.

For most of us, why would we say that we would pay $1000 more for a non-Costco pro if the results are the same?

I guess the concept of distributed affluence enabled by the high-street presence offering convenience, expertise and service on your doorstep is lost in the home of corporate big-box culture.

Well, there’s culture and culture in this case, Um. Big box is all about replacing inefficiency or over pricing with the economy of scale. From what I gather, Siemens – having problems – broke the old refusal system. Costco saw the 1-200% profit margins Even Sam’s Club’s clout failed to pull that off. Once the other manufacturers saw the volume, they couldn’t resist.

But, looking at the old model, it was due to be broken. For every quality shop like yours, there is a dozen sub-standard shops. You’ve been in an industry that was set up for a failure at some point. In England, you’ve long had to compete against the low price option of “free” aids and obviously succeeded. You are the example of quality still have a place in the market.

In my searching for the right HA…I’m completely astonished at the number of hearing aid store fronts…and I haven’t found one I can due business with yet. First…the store fronts look like remodeled old gas stations or houses 50+ years old, using Google maps drive bys. These give the whole industry a shoddy feel. Second…cost.

I’ve talked to three non Costco providers. One from Connect Hearing contact…they pushed Phonak…surprise Connect Hearing is owned by Sonova, pricing very high. One local Rebound/Siemens providers, saying they can’t even come close to Costco’s pricing. One from Choice contact…and even though Choice list several brands, here again a Resound/Siemens provider, very partial to those brands. (I’m not ruling this last one out, since Choice [ricing is much close to Costco’s…and this last provider, very professional.) Next stop will be Costco, and if not satisfied, I will revisit that last contact.

So…HA at MSRP, you won’t compete. Get pricing down to Choice’s advertised prices, I think you can will professionalism. However, I’ve yet to measure that from Costco. I’ll know more in a couple of weeks.

For me service and relationships make it worth going to my audi. Also my audi is associated with my ENT and I trust him implicitly. That’s enough for me to justify spending the additional dollars. Also the fact that Costco doesn’t offer the latest and greatest models and features helped make my decision. Who knows? I may feel differently in 5 years when I plan on upgrading these hearing aids but for now my experience has been very good for my first pair.

Not England ;).

It just seems strange that you’d happily spend your dollar at a big box which returns only .80c to the local economy rather than elsewhere that returns $3-4 to the local economy. This includes providing a service for those who can’t drive 40 miles to the Costco.

I’m not standing in defence of the industry pricing, which perhaps needs an overhaul, just the big store approach which only helps the central part of the bell curve at the expense of the margins.

In order to compete with Costco you have to deliver services that Costco can’t:
Um Bongo mentioned that in the UK he makes house calls. I don’t know of a audi in the U.S. that makes house calls.
Loaner hearing aids when yours need service. I think that most people with hearing issues become very dependent on their aids. Even being without your aid for a week is way too long.
If I am traveling and need service on my aid how is that handled? Perhaps a coalition of service providers that will support each others clients when not at home. Think snow birds. Those people who travel south in the winter and north in the summer. Where do you decide to buy your aids? Costco because they can be serviced at any Costco location.
Why would a customer focused retail operation want to conduct a hearing test, have the patient return in a week for a hearing aid fitting, and then return in another week when the hearing aid arrives. What in the sales models keeps you from scheduling an appointment, hearing test, and fit an in-stock hearing aid?
I have worked with many health care professionals. They complain about patient behaviors. The patient has a pain for a month and when they decide to do something about the pain, they expect an appointment the same day that they call. I think people with hearing issues behave the same way. You may spend several years but once you decide to solve the issue, immediate gratification would be a big factor in where I would go to buy hearing aids.

I was willing to pay more for:

  1. Audiologist rather than HA fitter - referred to her by someone I trusted.
  2. Choice of all brands of HA are available through that clinic
  3. Audiologist recommending the HA not paid commission on the sale of aids therefore I knew the advice was truly independent.
  4. Accessible location ( but would prefer better parking options at times ).
  5. Willingness to fit me into their appointment schedule at short notice when I have problems.
  6. Free trial of HAs for two weeks without money up front - this was one brand but was enough for me to know I really did need HAs.
  7. Someone willing to teach me about my hearing loss and the technology to treat it. Willingness to answer my difficult questions and treat me as an intelligent patient with individual needs. Willingness to try to accommodate my requests for program changes to suit my needs. Willingness to give me a printout of all my HA settings after each programming session and willing to listen when I found something I wanted changed or revised. Willingness to reset from scratch if setup not working.
  8. Must be courteous and have good communication skills.

I may have to revise the criteria one day when I retire and will not have the income to choose.

I have to agree about giving back to the local economy. I much prefer that. At the same time, though, I do pay Costco’s membership fee and have been doing so for years. I just didn’t get my hearing aids there… :slight_smile: