Thanks for your concern Seb. You can bet that I see my opthamologist very regularly and have the full deal with detailed retina exam and visual fields. You can also bet that I will be just as compulsive about follow up for my fairly mild hearing loss. Even at this level, I didn’t realize how much I missed until I got my hearing aids.
Despite the monomanias of some posters this forum has been a fantastic resource for a newbie.
Your script sounds exactly like the one a good friend of mine who works for Pharma recites…“Without these high prices we cannot fund research”. So we looked up the numbers from his company, for every $ spend on R&D, 4 were spent on SG&A. He works in sales and did’nt like the answer either… Are hearing aids any different? Unlikely, R&D are likely <10& of gross sales. Probably much less based on the following info…
So the single google in did on SG&A on hearing aid companies turns up the followin stats from resound that show a 60% gross profit margin, 3x you number!
While have found this discussion interesting…I’m starting to wonder what the point of the continued arguing is.
Really, all the individuals with such frustration at the cost of hearing aid are preaching to the choir here. I know that I would love to not have to pay what I pay for hearing aids so that I can sell them for less. I imagine most of the other professionals on this board would feel the same way. I guarantee you that we are not paying $200, or $300, or even $700 or $800 for every high-end, premium technology hearing aid we sell.
What is the end goal of this discussion at this point? We, as professionals, can’t change the amount it takes for us to run a business. Nor can we change the amount we have to pay for each hearing aid. So we have to take what we pay and set our prices accordingly. When I have patients who could qualify for programs designed to help those that would have difficulty or be completely unable to purchase hearing aids on their own, I refer them to programs designed to help. I don’t hide that information so that I could make money off them by selling them a product. And I just as easily could. As a health professional, my end goal is to help every person that I can. If that means that I don’t sell them a hearing aid or that I end up receiving far less for the same devices then so be it. I will tell you I basically break even on people who I refer to our Voc Rehab program. I send quite a few people to the Hear Now program and Lions Club when it is obvious that purchasing a hearing aid is completely out of their means. Do I like making money? Absolutely. Would I feel comfortable doing it knowing that my patients were either unhappy or wearing something/paying more for a device that was above what they needed or could reasonably afford? No. Most of the audiologists I know feel the same way. Many of the hearing instrument specialists I’ve met also feel the same way. Unfortunately, it’s the ones that see dollar signs on every patient that make us all look bad.
If you want to change things…railing on and on on this board will get you no where.
It seems the argument is with the hearing aid manufacturer themselves and even though it’s been pointed out that their profit margin is no more than any other major corporation, people refuse to acknowledge it holding firm to the thought that their profits are “obscene”. Why not take it to them? Start a campaign against what they charge to us…I’d love it to be able to sell a high-end product for $1500 or $1600 each. Until my prices decrease to about half (or more) of what they are though…I can’t do that…
So what is the end goal? What, exactly, is the hoped answer to all this arguing back and forth???
Exactly, as I said a week ago we are beating a dead horse. Enough is enough.
Hi DocAudio, thank you for your post, it has been rather timely and I have been waiting patiently for one of you Pro’s to ask, “So what is the end goal?”
My aim for this thread is rather simplistic and simultaneously complicated… I do apologize for the rather sensational title and the slight stratagem; Namely, to force out into the open the actual costs of Hearing Aids, the prices paid by the Audi’s and HIS of this world and highlight this to the HOH public! And thereby, give the HA’s Manufacturers some scope to actually increase their business, not that I think it will move them one iota at present, but it could change their pricing/markup policy in these austere times, it may perhaps make them sit up and listen a little as I am sure they read this forum to gauge the market!
My reasons, tis time to fight back folks as individuals we are nothing, but collectively we could be very strong, we are 1 in 7 of the worlds population and as such we are disabled people whom are being exploited for profit, we have no choice in the matter if we have a severe/profound loss, we have to buy from a market that has went way over the top with regards to pricing policies, many of the HOH needy in the severe threshold are out of this market to the severe detriment of their quality of life and job prospects!
Now perhaps this is a “Pipe-dream”, but some food for thought, so here is the rub; tis time for some of you to become proactive, especially in the larger population areas, there is a niche in the market for starting up your own not for profit organization or charity, perhaps call it, “American Low Cost Hearing Aid Dispensers Society” (ALCHADS:D) employ your own Audi’s and other staff, employ yourself as an admin or better still, get the training and become a HIS as the finest HIS/Audi’s I have come across are those with an actual hearing loss, they understand implicitly your problems! Now, I’m well aware this will put a few noses out of joint on this forum, but I say enough is enough, if the hearing industry cant or will not regulate itself then over time collectively YOU could do it for them! Rome was not built in a day folks and this would take a fair bit of time to set up something like, “ALCHADS”… But, ultimately it could be done! Think of the buying power your individual “ALCHADS” centre would have, when they hooked up with everyone else, if the there were a chain of these in every large city in the States, prices would tumble, that $1200 HA manufacturers price as quoted by a HIS on this thread would at least half? For the more competent end user, you could have training days on self programming on those whom want it, I’m sure the manufacturers would gladly develop some software for the likes of something like “ALCHADS”, if you were giving them a lot of business! On the manufacturers profits, think about it, you would be the only show in town if you could bring these prices down to more affordable levels, say $1500 or $1200 per high end aid or less to the end user, then you are going to be busy as it comes into many more peoples price range and ultimately the demand would be higher, thereby production for the manufacturers would increase, a far smaller price, could actually increase their profits?
You could start a scheme for your members and have a steady cash-flow, say $100 a month, every month, guarantees you a new set of high end hearing aids every 3 years, the used HA’s could go to the 3rd world? Run a free drop in centre/hub for small repairs, adjustments, tubing, perhaps advice and maybe PC’s set up for self adjustments, training, sell far cheaper accessories, cheaper batteries, environmental aids, etc, etc, etc?
Lastly, think of how much joy you would bring to your fellow HOH sufferer, their quality of life and their families, their job prospects would increase and perhaps their outlook in life…
Now, where would this leave you Pro’s if it ever came to fruition, between a rock and a hard place at a rough estimation? You would sink or swim via lowering your prices or change your job? But, I’m sure many of you might join something like this scheme, if your aim in life as hearing aid Pro is to help us HOH, might mean a wage cut though?
So there is your answer DocAudio, I reiterate my apologies for the slight subterfuge!
I’m not sure it would work here in the UK as we have a free NHS service, which might not be ideal or state of the art HA’s, but at least the HOH get some form of hearing aid…
Cheers Kev:D
Yes, that’s the answer. Let’s fire the scientists who invent better hearing aids. Good plan. It’s like the Republican plan of laying off teachers to save money. Because nothing saves money like lowering education standards…
Dude. You are preaching to a liberal! I believe in universal health care for all humans, as a right not a privilege of the rich. I am not pro corporation, I think they need tough laws to stop them taking the piss. And they should be made to pay their fair share of taxes.
Damn, next you’re going to be wanting world peace :eek:
If people want to talk about an issue, what’s the problem? No one has to read a thread that does not interest them.
Funny, I looked at your document, and you clearly need an accounting lesson. Take a look at slide 31. The gross margin you refer to is BEFORE expenses such as R&D and SG&A. So the bottom line was 10.4% for 2010 financial year. Oh what obscene profits!
But hey, don’t let facts or numbers get in your way. Why not send me some more data you don’t understand and claim it proves your point? Or better still just make stuff up.
Hi Kev,
hmmm not sure it is the said HA manufacturer who is exploiting you…you actually buy them from a Hearing aid dispenser…enough said??
Did you tell everybody who you worked for yet?
Because they try to get whatever they can out of you. I worked in a hearing aid office and I seen a set go for $9000 that cost my boss $1500. Other’s would pay about $5000 a set. I now work at HearSource and love the quality and the price, $1990 for a set (for EVERYONE!) AND it includes a programmer so your not making a 100 trips to get them adjusted. Tech calls and service are for the life of the hearing aid. I can truly say I can go home at night thankful that I helped someone hear & didn’t break them to do it!!
I doubt that the hearing aid manufacturers change anything based on the economy. I will tell you that I am easily more busy this year as I was last year…oddly enough the downturn in the economy has not affected hearing aid sales very much. It is one industry that has remained fairly stable.
Everyone is exploited for profit. It’s called capitalism. It’s not limited to disabled individuals. Again, the referral to “way over the top”. Am I correct in assuming that your ideal would be for the hearing aid manufacturer to decrease their sale price to us/the professionals and therefore result in a lower sale price to the public?
Here in the US, individuals who are struggling at work can obtain services through the Office of Vocational Rehabilitation: Vocational Rehabilitation
Individuals who are not working/need financial assistance have a bevy of programs to select from so that they are not cut off from the world or employment like you state. It is illegal to not hire someone because of a disability in the US and there are numerous ways a person can go about getting hearing aids if they need them. This applies especially to children. People who are on government assistance, in a number of states, can also get hearing aids through their medical card.
First, there are a number of programs already out there that are designed to get hearing aids to those who need them. Hear Now, Lion’s Club, HIKE, Voc Rehab, State assistance just to name a few…so why do we need to add another one? Secondly, when have any of you ever heard of prices decreasing? I worked for an office that tried to do just that…sell hearing ads less as to be more accessible and you want to know what happened? It closed in less than a year because the owner couldn’t afford to pay his bills - he was losing too much money.
I’m a bit confused here. Are you saying that the patient could pay $100/month and then in 3 years get a new pair of hearing aids without paying because they had essentially pre-paid for them? The book-keeping on that would be a nightmare. If you’re implying that the person could save $100/month and buy the aids in 3 years…well…we’ve all seen how good people are at saving money or being sensible about their expenses here in the US…lol. Fat chance at that ever occurring on any large scale for the general public. There are 2 manufacturers that I know of right at this second that take their hearing aids (new and reconditioned) and already dispense them to areas that are needy/don’t have regular services all over the world. I’m sure there are more that do the same thing. Third, all these “free” services…lol…that’s what makes the hearing aids so expensive in the first place because they aren’t really free…all those supplies, the support, the space, the tech associated with the things you mention cost money…and a lot of it. Now how are we supposed to have those things for the patients and stay open? Oh yeah, raise prices.
While we’re at it…why don’t we ask the Doctors I work with to lower their surgical prices too? Or better yet, why don’t we ask everyone who works in any goods-distribution category (clothes, cars, groceries) to take a pay cut so that everything we buy is cheaper? It all goes back to that business model that was posted probably 10 pages ago stating that you just can’t have a successful business that has superior service, premium level tech and low prices. Even in systems with completely socialized medicine it just doesn’t exist. Somewhere something has to give.
The thing is that there are programs out there to help just about anyone get hearing aids if they need them. It’s just a matter of finding them.
Really, when it boils down to it…the distributor will end up charging what they need to charge to cover their costs plus a reasonable profit. Each “hand” it passes through will increase the cost until it finally reaches the end-user. It doesn’t matter what the product is…that is going to be the basic plan they follow. So unless you can convince everyone involved to charge less and therefore accept less…well it just won’t go anywhere. It doesn’t matter if an audiologist or HIS decides to do exactly what you suggested…it won’t work. The manu won’t lower their prices because the distributor they buy their parts from won’t lower their prices, all the way up to the people who provide the professional their ancillary services (utilities, rent, equipment, employees) aren’t going to accept less than what is at a minimum, standard reimbursement. In the end, after everyone has taken their piece of the pie…it adds up to about what is being charged in most markets. Fluctuations in those prices will reflect the difference in operating expenses/economy accordingly. Outliers (those people charging $9000 for hearing aids that aren’t worth half that) are anomalies and indicate people who are in it to make as much as they can off every person they see. So here we are at the end of the chain and we are right where we are now.
Some of the posters here earn their living from the existing business model. Can’t blame them for defending the status quo.
At present aids are designed, manufactured, to be retailed and require fitting ONLY by licensed professionals. This is frozen by government regulation starting in 1977 when the industry lobby successfully convinced the FDA to regulate what was a free and open industry. Yes, there were abusive practices in 1977. Most older HOH in those days were little old ladies (just kidding)…
Actually the typical HOH in 1977 was educated before World War I. Zero knowledge of electronics and computers. They really couldnot defend themselves against the rip-off.
Now, here we are in 2011, with electronics and computers everywhere. And with active consumer protection laws working in every state.
Now 2011 we have hearing aids designed to be fitted by the only legal retail system…,the licensed dispenser/audiologist.
This is frozen.
But the technology now exists to provide sucessful self fitting at low cost. No computer necessary. Just intelligent software and a $10 programming remote control.
Of course, severe losses, the small minority, might require professional fitting.
Yes, folks, self fitting by anyone who can work a TV remote, is feasable.
I know the present aids are designed to be professionally fitted…by law who else buys aids wholesale but by law, of course, just the professionals. The big factories won’t even sell direct to a HOH. That’s frozen, by law. So aids are designed and built for their only market,the professional practice. Not designed to be easily self fitted. Of course there are only a few HOH interested in self fitting at present. But, if properly advertised and presented that number would increase year by year to the majority. Ed
Unfortunately,
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Your aids do not have the latest technology features and can only use one microphone at a time.
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Your QA is sloppy. I received one aid that had feedback supression turned on and one with it off. Neither aid was progranmmed the way I had discussed on the phone. I also received tulip domes for RIC aids with my FreeStyle (open fit) aids. I ended up getting one stuck in my ear!
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You charge a fee for trials. Most providers do not charge for trials.
Due to the lack of advanced features, I could not get the sound quality I need without feedback. I also had to pay for return shipping in addition to the fee for trial.
In other words, buyer beware.
I knew this guy who paid $12,000 for his Rolex. A $50 Casio tells better time.
Some people are willing to pay $9,000 for a set of hearing aids, they have the money and the desire to deal with that. They don’t want to go online or self program.
Once again, you are one of those people who are trying to cause shock by such an alleged outrageous mark up, which sure, on the face of it sounds pretty messed up. But you don’t know how much it cost to keep that clinic open, pay all the staff, etc. etc. In any business the price is what the market will bear.
Some hearing aid retailers will sell fewer products at a higher price, like a Rolex dealer. Some will sell at a much lower price, and go for volume. This is simple business 101. You have to decide, as the consumer, do you want to shop at Khols or Dillards? No one made that patient spend $9,000. And one has to assume if they spent that much, they had it to spend. People who are struggling to make ends meet, do not shell out $9,000 for hearing aids. They believed that the technology and professional services were worth that price. They had the option to shop around, call for quotes, get a second or third opinion, visit a forum like this and figure out what would be a good deal. They chose not to. Who are you to blame them for their decision? Who are you to judge the ethics of your former bosses’ business model? He is the guy with his house on the line if he doesn’t make enough money to keep the doors open. Not you.
Everything we buy is marked up to include enough gross profit to pay for the ongoing costs of staying in business. That’s capitalism. I don’t personally agree that capitalism is a good model for health care, but people in this country seem to largely disagree with me on that.
The question though, going back to the original premise of this thread is: was your boss making an obscene amount of money? Was he driving a Porsche, wearing a Patek Philippe, dressing in Prada and Armani, living in a mansion? Or was he just a small businessman making a reasonable living for his skill, qualifications, experience and service? And really does one sale, from one guy, in one profession really give us a fair snapshot or useful set of statistical data for the entire industry anyway?
It’s funny how people have attacked the industry, hearing professionals, hearing aid companies. No one has even mentioned that the government at state level frequently charges close to 10% sales tax on hearing aids. What a scandal, yet we’re focusing on attacking the very companies that are designing amazing hearing aids that help people today in a way that wasn’t even possible five years ago.
You always ignore this question Ed, but I’ll ask it again:
Given how easy you claim it is to make hearing aids, invent self-programming technology, what’s holding them back?
You claim the law, but there is no law against selling personal amplifiers. I saw one in Walgreens today, claims to let you hear from 90 feet away, all for just $19.99.
If what you believe to be possible is indeed financially viable, why hasn’t Nokia, Motorola, Apple, Samsung, LG etc released a $200 personal amplifier you can buy in Walmart? If what you say is true they could sell them by the million, and the HoH community would soon wise up to these affordable hearing aids at rock bottom prices. Do you really believe that simply not using the term ‘hearing aid’ would prevent people from buying them? I see people all the time who bought cheap amplifiers off TV or from a magazine, of course such items are junk, which is why they end up coming to see me. But again, if companies would make them good, why are they not bothering to do so? You claim the market exists, you have told us over and over how easy and cheap it is to throw these things together for $135. Who wouldn’t want to buy something that is normally sold for $2,000 (as you claimed) for $135?
I put it to you that you are missing some pieces of the puzzle, which is why none of these electronic giants have even bothered with this market.
No, Ed has it pretty much nailed. It’s about distribution. Nokia does not have a sales force that calls on audiologists. They would have to hire gobs of people to do this and fight uphill against the established players with the audies/fitters. The distribution model for hearing aids is certainly not capitalism at work, and that is Eds point.
I do not know how the direct marketers (AH, hearsource) avoid government scrutiny, maybe because they’re so small. And yes, I think if best buy were able to call their line of “Personal Amplifiers” “Hearing Aids” instead and market them as such, they would sell a lot more of them.
I’m not talking about the current method of distribution. Ed has always argued that it would be simple for a company that makes, for example, Bluetooth headsets, to make a hearing aid and call it a personal listening device (or similar). They could sell it at Best Buy, Walmart, wherever else they already sell their products. No audiologists, no distribution chain, all the same infrastructure they already use.
Given your assertion that any of these companies that already have deals with Best Buy et al to sell their products, why have none of them ever bothered to make a listening device? We keep being told in this thread how cheap and easy it is. Chinese components that cost mere pennies. The evils of the current system that makes hearing aids so expensive.
So how is it that the brilliant minds at Apple, Motorola, Bose, Sennheiser, Bang & Olufsen etc have not tried to cash in on the 1 in 7 people who need help?
Here’s the thing, I am actually saying that making a modern and state of the art hearing aid is a lot more difficult that some people on this board seem to think. And I think that is the real reason why personal amplifiers you can buy off the TV, Skymall or in Walgreens are just crappy amplifiers of sound.
If it was easy and profitable, the big electronics players would already be doing it. They’d be on the shelf of Walmart today. And the fact they are not has nothing at all to do with government regulation. There are no relevant restrictions on personal amplifiers, you just can’t claim they are hearing aids or that they are intended to treat a medical condition.
- Our hearing aids have all the features that are important. We do have directional microphone as an added feature. I think what matters is being able to hear, not all the “bells & whistles” that specialist try to use for marketing purposes. K.I.S.S. has always been my rule of thumb!
- I apologize, there are a couple glitches with the software which is why we have a new version coming out very soon. The tips, if not put on correctly, can fall off. Discussing “how you want aids programmed over the phone” is not going to to be right on target
(although sometimes they are) which is why we have the self-programmer. Our hearing aids with the programmer I agree, are not for everyone. There are clients that need and should go to a local professional. - We do not charge a fee for trial, we charge a restocking fee. Hearing aids cannot just be thrown back on the shelf.
We have less than a 1% return on our hearing aids, has to say something!