Internet Purchase vs Local Audi

I have been wearing Starky Endeavour CIC’s for 5 years with mild to moderate hearing loss. The Starky’s have 3 programs and have done an OK job but I am ready to try something better.

I have been reading this forum for the last 6 months and have found it very informative and helpful in narrowing my search for the best HA’s based on my job demands (lot of business meetings in restaurants and convention centers).

I have narrowed it down to 2 models, Siemens Centra Active or the Phonak MicroEleva.

My problem is, Why should I pay a local Audi over 2 times more for either model?

I can purchase a pair of the Siemens Centras for $2399 (with charger and wireless remote) on the internet with 60 Day money-back guarantee, professional read of my test results and programming. If they need adjustments, any HearUS will do it for $50.00 a visit or the provider will make adjustments for a year for free if I send them back. My Audi wants $6000 (with an $1100 discount) for the same aids plus $158 for the charger and another $161 for the remote.

No ear molds are necessary, I had my ENT do my current test and from all I have read in this forum, the newer digital aids are easier to “fine tune” with all the auto-features and 16 discrete channels to work with.

I understand my local audi has an overhead to pay but I find it hard to justify almost $4000 more for the same hearing aids.

Can somebody tell me why I should pay such a premium? I could understand a $1000 or even $1500 more…but $4000…???

i would look for an alternative audi, with more control costs…
perhaps costo could be an alternative…
if phonak is what you want … Phonak extra should be good with moderate costs…

by the way, dont get caught by the 16 channel falasy…
do remember speech understanding gets maximize with 4 channels or so…

bear in mind, the distinction between a gain handle and a channel…
last time i check the phonak software, you dont really get to modify any of the 16 independent channels at your will…


Magneride

JJRay

I just went thru a similar scenario. I had tested a pair of Oticon tego pros that I really liked with a local audi. She wanted $4900 with what she called “complete care” for five years. This meant that she would supply me with batteries and adjustments for 5 years.

During the trial period, I got a mailing from another audi that offered good discounts on most brands of HAs. After testing a pair of Siemen generic HAs that I din’t like, I wound up getting the same Oticon Tego Pros w/five years of batteries and adjustments for $2700.

When I returned the first set to the audi, she was extremely upset that I had gone to someone else for the lower price and said that the person was running a low overhead operation and she was not able to match his prices but if I had contacted her she would have “met me halfway”.

There was a difference of $2200 on a set of mid-range priced aids between two local audis. This gives me an idea of what the mark-up must be on hearing aids in general. My advice to people is to shop around locally and try to find the audi that knows his/her business but is not looking to make a killing on every sale. And don’t be afraid to haggle with the audi on price - they usually have a lot of room for price adjustments.

Just my two cents---- TomF

If you think hearing aids are expensive, you should see what people charge for cochlear implants, that is real crazy expensive…

Yes, regarding who makes a mark up, it is somewhat unfair to say dispenser drive prices up…

if you look at the income statement for phonak or Oticon you will get a big
surprise as their cost of sales is about 25% of sales…

In other words if a hearing aid cost 25$ they charge it on average 4 times what the cost are… and this is an industry thing, you can check phonak or William demand or even the inefficient sonic In ( they make a bit less,)

Some dispensers do charge a lot, but competition drive prices to its fair value… As a professional, i believe we dont charge $400 hr just like
lawyers or other professional do…


California medical marijuana

Just to put everything into perspective, all companies that manufacture products strive for a sell price that is 4 times cost to manufacture. So if an top end hearing aid costs $250 to manufacture, they need to sell it wholesale for $1000. Once R&D, Marketing, Warranty costs and all manufacturing overhead is applied, this manufacturer is lucky to bring 12 to 14% to the bottomline.

Now the audi buys this wholesale for $1000 and tries to sell it for $3000 or more which is way out of line compared to most other industries. The computer industry retailers start with a 15% margin and go down from there. Car dealers look for 18% margins. TV industry averages 18% margins.

A business associate of mine just got a pair of Starky Destiny 1600’s for $2200 because he knew an audi who was willing to sell it to him for cost plus $200 (10%).

So, bottom line… We would not be wearing hearing aids if we didn’t have to. We also do not like being taken advantage of…It’s like being kicked when you’re down.

Most of us that have to wear hearing aids are more than willing to pay a reasonable price for the service a qualified audi can provide. I would be happy to pay an $800 to $900 (per aid) premium. I would also be happy paying $200 a year to this audi for service/adjustments.

Who knows, it could be interesting frachisable business plan.

The reason Aids cost so much is a combination of a number of factors.

Aids are not truly mass produced and mass retailed like the almost functionally identical in- the-ear BlueTooth cell phone devices. These sell for $50 to $400 retail.

Aids are returned for credit 20% of the time and the return cost is very high.

Government regulations restrict the sale to expensive quasi-medical channels or licensed dispensers thereby eliminating ordinary retail price competition to a large extent.

Manufacturers have only one customer type…the audiologist/dispenser. Therefore aids are engineered and designed for them not the end user. As a result aids …guess what…require the fitting services of their customers…the pro. Most mfg’s restrict the sale of aids to the professionals thereby keeping their pro customers happy.

The entire industry is geared to this antiquated method of distibution. It’s almost as if Aspirin required a MD’s examination and the MD would administer the aspirin tablets. Imagine what a 2 cent tablet would cost under this scenario.

And lastly, the government regs have stifled true innovation. With today’s technology, simple self adjusting aids for the mild and moderate loss could be mass retailed for $100 to $400. But the mass market doesn’t exist as long as these regs dictate the method of sale by professionals only.

World wide get rid of these government regs and in a couple of years WalMart would sell aids over the counter for $100 that self adjust with a little hand held remote. For the vast majority of hoh they would perform equal to or better than any aid available today. My technical opinion…Ed

The reason Aids cost so much is a combination of a number of factors.

Aids are not truly mass produced and mass retailed like the almost functionally identical in- the-ear BlueTooth cell phone devices. These sell for $50 to $400 retail.

Aids are returned for credit 20% of the time and the return cost is very high.

Government regulations restrict the sale to expensive quasi-medical channels or licensed dispensers thereby eliminating ordinary retail price competition to a large extent.

Manufacturers have only one customer type…the audiologist/dispenser. Therefore aids are engineered and designed for them not the end user. As a result aids …guess what…require the fitting services of their customers…the pro. Most mfg’s restrict the sale of aids to the professionals thereby keeping their pro customers happy.

The entire industry is geared to this antiquated method of distibution. It’s almost as if Aspirin required a MD’s examination and the MD would administer the aspirin tablets. Imagine what a 2 cent tablet would cost under this scenario.

And lastly, the government regs have stifled true innovation. With today’s technology, simple self adjusting aids for the mild and moderate loss could be mass retailed for $100 to $400. But the mass market doesn’t exist as long as these regs dictate the method of sale by professionals only.

World wide get rid of these government regs and in a couple of years WalMart would sell aids over the counter for $100 that self adjust with a little hand held remote. For the vast majority of hoh they would perform equal to or better than any aid available today. And then the 20,000,000 hearing impaired in the (USA) would, through mass advertising, be brought into the market.

My opinion, Ed

i think most manufactures make more than 12-14 % bottom line,
i think even phonak makes well over 20% which is ALOT…

regarding the RD, even the HA which are consider obsoltete (example,
oticon Atlas, which is a product with over 5 yrs in the market) is not
whole sale at a sufficient lower price… therefore, I still think
Manufactures do not sell products sufficiently low enough…

While US sales are significant, other countries do not have return for credit
policy… An interesting discussion is to see who much does the same cost
across the world

I know for example the Delta 4000 sells for about $900 to 1000$ in China,
and about $1300 in South america… I have met a gent from USSR which told me Audis make as low as 100 to 150$ per aid…

Does anyone know the cost in say india or Asia?


WENDIE 99

The 12 to 14% also happens to be pre-tax. I have been in electronics manufacture for over 30 years and know even the best Fortune 500companies would be extremely happy with a 12 - 14% pretax (so would their stock-holders).

And the product life cycle in electronics is less than 2 years.

Anyway, this is a very interesting topic and I too would be interested in hearing aid costs in other countries. May be worth a vacation trip to the lowest cost country. It would be like getting a vacation for free (vs paying the higher US prices).

Happy New Year to all!

Don’t you think that the reason manufacturers can only realize 12% to 15% on their products is because they must sell to a market of informed buyers. There is healthy price competition for most products. Most company professional buyers are trained to get the best deals.

Hearing aids are sold to the audiologists and dispensers who naturally want to make as much profit as possible (just like every other business or profession). Therefore they want the best quantity discounts and those free dinners at the conventions. Dispensing hearing aids is a business just like any other small retailer even if they try to wrap it in the mantle of the medical profession. Ed

Hi All

ed121 said “Don’t you think that the reason manufacturers can only realize 12% to 15% on their products is because they must sell to a market of informed buyers.”

The margin a manufacturer receives is based on market forces: supply and demand, how good is their marketing, how good is their product, how good is their competition, etc. They adjust prices based on how much the market will bear. Actually, an informed buyer might be willing to pay more for a product, based on quality.

JJRay said “May be worth a vacation trip to the lowest cost country.”

From xbulder’s comment, the lowest priced country might be China. Would you actually trust anything you bought in China as being authentic? I’d rather pay for the vacation, and the hearing aid, and know for sure what I was getting. My 2 cents.

ed121 said “Dispensing hearing aids is a business just like any other small retailer even if they try to wrap it in the mantle of the medical profession.”

So is an audiologist any less part of the medical profession than say an optometrist, a dental hygienist or a physical therapist? Sorry, but you seem to be making an implication that these folks are some sort of snake oil salesmen, and I think your out of line.

Dag

there are only 2 chinese companies which manufacture hearing aids.

Newsound and Lisound, they are quite far from producing something

remotely like an audeo, pulse or delta…

while they have produce their 1st generation open fit product its still not

cheap enough… so I woulnt be to fearfull about the autencity of a well branded

producty there…


612 scaglietti

I am not calling anybody names and I don’t think this “Spirited” discussion is aimed at anyone or any group in particular.

This started out looking for reasonable answers to the question about purchasing hearing aids on the internet and so far, I have not seen enough convincing reasons to pay over double for a quality pair of hearing aids from a local audi.

And by the way Dag, A good Optometrist can give me a full exam and put me into a top quality pair of glasses and restore my vision to 20/20 for less than $500. Heck, you can get Lasix surgery for you eyes at $2000 per eye (still less than a $6000 pair of hearing aids).

I am willing to pay a local audi a 50% margin based on his/her expertise and the service they provide. But when they are looking to make a “killing” with 70-80% margins, I have to question why?

I think every hearing aid wearer should research internet prices and confront their local audi with what the same aids can be purchased for online. Maybe they will start to get the message and become a little more competitive.

$2000 per lasik cirgury, you can get it done in Mexico brand new machine for @ least 1/2 the price… I think they do make a very handsome profit…


Suzuki rg150

Yes, the Lasix doctors do charge a lot for their service but they also have pretty hefty malpractice insurance premiums.

This has obviously been a “HOT” topic on this forum (over 100 views in a couple of days).

Let us hear (no pun intended) your thoughts on this subject.

Post a reply. Tell the professional hearing aid dispensers how you feel.

A think as a industry we are making progress. I have read a while ago an article basically stating that the problem is a distribution- basically stating that the reason where are not really growing (worldwide) is the lack of distribution and hence the lack of competition…

Perhaps, if the OTC hearing aids get approve, the competition will intesify and
would drive prices lower… Does any one know what happend to the song bird? (the disposable hearing aid?)…

Hi JJRay

I agree with a great deal of what you’re saying, and I absolutely enjoy a ““Spirited” discussion”. I just took exception to the “… even if they try to wrap it in the mantle of the medical profession.” comment. That seemed to me to imply some level of deception from the Audi or dispenser.

Any small business has a right to make a profit. In fact they can make as much profit as the market will bear. That’s why it’s called a free enterprise system. Capitalism at it’s best! If a manufacturer charges too much, competitors will come in to take business away. If a dispenser charges too much, customers will go elsewhere. If you don’t like the prices, find someone with better prices. It’s not a monopoly.

I don’t think I’d be happy with an internet purchase, because of the turn around times to make adjustments. Losing the use of my hearing aids for several days each time I need something tweaked isn’t attractive to me, even if I can save some money. I like the idea of having someone local I can go to. Obvioulsy, that’s less important to you. I’m currently struggling with an Audiologist that doesn’t seem to have a handle on adjusting my Phonak microElevas. Each “tweak” has been worse, not better. If it continues, I’ll turn them back in and go to Costco. Better price and still get local service (just not an Audiologist). I originally went with the Audi, because it’s my first set of aids, and I figured I’d go with the “A-team”, at least until I knew more. If I’d been doing this via snale mail, I’d really be frustrated. <sigh>

Dag

Dag: Prior to 1977 the principle professional organization representing Audiologists, the ASHA, categorically stated that the sale of aids by Audiologists was “unethical” and a prohibited practice. In 1977 the FDA, in their infinite wisdom, classified hearing aids as a “Medical Device”. Then the door was opened to the profession to sell aids at whatever price and profit the market could stand. What has changed since 1977. If it was unethical then is it still unethical?

The problem in my mind, is that most Audiologists and Dispensers derive most of their income from the sale of goods…just like any other retailer. Presenting the profession to the essentially uninformed public as a part of the medical profession becomes a useful device to avoid direct meaningful price competition. It manifests itself as the powerful Audiologist lobbies in most States that have pushed the State legislatures into promulgating restrictive laws and regulations that have shut down over-the-counter sales of what is essentially a miniature audio amplifier. The rationale presented to legislatures was that as a “Medical Device” aids could only be adjusted/fit by a trained specialist…otherwise the hard of hearing might suffer severe damage. (Of course the same could be said about un-prescribed Aspirin or reading glasses.)

I don’t think audiologists or dispensers are bad people. On the contrary. From my 35 years of using aids I have found the 6 audiologists I consulted to be mostly competent and honest. What’s wrong is the overall system. Human nature and needs being what they are, when any product is sold at retail, without effective price competition, then all sorts of abuses can and will creep into the transactions. Audiologists are essential to serve the moderate/severe/profound, the children, the infirm, the diseased, and those sufficiently affluent to afford special hand holding and attention. The 80% (USA) of the hard of hearing not using aids are poorly served by this antiquated distribution scheme. Just my personal opinion, Ed

Hi ed121

Thanks for the background. I wasn’t aware of the history. Is it inherently unethical for an Audiologist to sell hearing aids? I guess I’d have to say no, but I can see there there could certainly be the appearance, if not the actual occurance, of conflict of interest. It sounds like you don’t think Audiologists should sell HAs (although you didn’t say that explicitly). You said that in 35 years most Audis and dispensers you’ve used were competent and honost, yet you seem to want to condemn the entire industry. You say there is no meaningful or effective price competition. There seem to me to be three different levels of competition: local dispenser, local discounter (Costco or a discount dispenser) and the internet. A phone call or email will get you current prices. How is there no price competition, especially on the internet? The 80% of HOA not using aids aren’t being served by the system at all, and that’s mostly by choice. I know several people who should be wearing aids, but they won’t even talk to me about it. Change the image of hearing impaired people, and that 80% would go way down. I think Oticon (Delta), Phonak (Audeo) and Bernafon (Brite) are on the right path. Make it a fashion statement, not something old people wear. I guess I don’t think the system is broken, although I’m sure it’s far from perfect. What’s broken is the public perception of hearing impaired people.

BTW, current digital aids are way more than just a miniature amplifier. There is more technology in a digital hearing aid, than in your iPod, and more processing power than in early desktop PCs. Embedded processor, analog to digital, digital to analog and a bunch of DSP. Not to mention the packaging technology. I think the real difference is that HAs can’t take advantage of the economies of scale those other devices can. If Oticon or Phonak could sell a million units a month, I bet the price would come down closer to that iPod.

Dag

Now, this is what I mean about “Good Feedback”. Where else could you learn so much??

I don’t think anybody is condemming the industry. I think it is more frustration. Wanting the best chance to hear better and maybe can’t afford it. Also, hearing loss not being recognized as a medical condition and being covered under insurance plans (at least most that I am aware of). And the ones that do cover hearing aids are locked in with a specific brand which may not be in the patient’s best interest.

My audi who I believe is very honest and has really tried to program my current digitals to the best of his ability, has already made almost $5000 off me over the past 5 years is trying to get me to spend another $6000 for a new pair. That’s a lot of money no matter how wealthy you are.

And the cost in hearing aids is in the micro-electronics. The company I work for manufactures 1000 watt patented digital fishfinders that have PC quality processors, digital to analog and analog to digital converters, more complicated DSP than you can imagine (has to see fish at 3000 feet deep) and we sell it retail for $780.00. And the volumes in my market are 1/10 the size of the hearing aid market. So the price of hearing aids is whatever the market wants to charge.

I hear you regarding the local service to get the programming right. Good point… well taken.

What does however bother me is reading all the posts on various threads on this forum which seem to indicate repeated trips back to the audi seem to make results worse and worse (same thing happened to me, we made so many changes to original settings, we ended up back to original programs). It is like they are learning as they go with all this new technology?? Just an observation.

JJ