Obscene Hearing Aid Profits!

Hearing Aids
#61

The study is not too relevant to the average person in need of hearing aids. Here is my take:

Using an recognized figure for the “average” cost of a hearing aid at approximately $1800, there are 3 groups in the study:

  1. people received FREE hearing aids (full insurance coverage)
  2. people received very slightly discounted hearing aids. Their out-of-pocket cost would be $1400/one aid or $3200 for 2 aids ("In the partial-coverage group, patients have a fixed sum of money ($400) to use toward the cost of hearing aids and they pay the remaining cost out of pocket.)
  3. people paid full price ($1800/aid) - no coverage

"The study shows that patients who had full coverage for hearing aids obtained them about seven years earlier and with better hearing than the other two groups. "

So yes, cost DOES matter as to getting hearing aids.

And $1400-$3200 is still a tremendous cost for a MILD problem. If the goal of the study is to determine the effect of cost on obtaining hearing aids, I think the study would be vastly more useful if:

  1. It included patients with moderate and severe hearing loss (patients more likely to NEED hearing aids to function at a high level)
  2. the out-of-pocket costs should be more like $0, $300, $500, $700 for hearing aids to see if there is a “breakpoint” where people were more or less likely to get hearing aids.

To me, offering a $400 discount is not enough to make a blanket statement that “Lowering Cost Isn’t Enough to Increase Hearing Aid Use”

George B.

#62

Very interesting study. And maybe slanted to enhance the status quo.

No body is going to make me believe that laying out $6,000 for aids is a desirable choice for Mr. and Mrs Average older American. $6,000 when your average take home after taxes s is less than $5o,000…,.

Please don’t obfusicate me with bunk…$6,000 to the average American is a huge outlay.

Add the stigma and the hassle and you have only a few percent of the needing public buying aids.

It doesn’t have to be that way.

Ever wonder why the insurance industry as a whole doeswn’t cover aids?\\

Ed

#63

Ed,
The reason most insurance co. don’t cover HA is primarily price and the fact that the patient will need a new one every 3-4 years. The additional premium cost for HA coverage adds quiet a bit to the monthly cost for the person or company wanting the coverage.

#64

  1. The study DOES include those with moderate to severe losses…the charts in the study indicate thresholds and they are NOT mild hearing losses. The hearing loss thresholds range from 30-40dB thresholds all the way up to 75-80dB thresholds. This is not a mild hearing loss. These are people that need hearing aids to get by in average life.

  2. Many (as significant amount) seniors don’t need to spend $6000 on a pair of hearing aids. If a senior who goes out to eat a few times a month, needs it for TV, family gatherings, and church is asked to spend $6000 on a pair of hearing aids…that’s someone trying to take advantage of them and they should leave.

  3. There isn’t going to ever be a “perfect” study. Take from this what you will. Studies show and experience tells me that simply lowering cost just won’t get the results many people think it will.

#65

I have been dispensing hearing aids for 20 years so I thought I would throw in my $.02. Which is about what opinions are worth : )

When I started in this industry the average cost of a hearing aid was between $800.00 to $1200.00. Of course the results were seldom outstanding as the technology was limited. I have seen the cost continue to rise on hearing aids over the last two decades with a tremendous explosion in cost of goods over the last 5 years. Hearing professionals really do not have much choice when it comes to what the manufacturer charges. Currently it is 10 to 15 times the cost of instruments 20 years ago. Given this cost increase it is up to the individual hearing professional to determine what price they have to charge to run a profitable business and keep the doors open. Different business models have different cost of operations associated with them, and thus, different pricing exists in the marketplace.

Some of the comments I have seen compare hearing aids to different products ie, tv, jewelry, cars, and compare the markup between products. This is an unfair comparison as hearing aids are not a commodity product. By that I mean if you walk into my office, paid me, picked up a new pair of hearing aids, and walked out the door never to be seen again, hearing aids would in fact be sold for much less. It is the bundling of professional services with the cost of the hearing aid that has to be factored in. If we wanted to compare hearing aids to a similar industry I would use dentistry as a logical comparison. I just had a tooth capped for $1300.00. I am not a dentist but I assume that is not what the crown costs. What I in fact paid a greater percentage for was the services and talents of the dentist. A crown is useless without a capable dentist that knows how to install said crown. Even using that comparison, the dentist is not going to provide me check ups, tuning, customizing at no cost. They are going to charge me every time they see me. If hearing aids followed that model and you separated the hearing aid from the service and paid for service, they would indeed cost less. This is why the internet is less expensive. No responsiblity, no service, no overhead. Just ship em out.

Common rules of business apply. There are three things that you can acquire in any purchase.

Best Product
Best Service
Best Price

The rules of business dictate that you can have any two items from that list, but you cannot have all three. You have to make a choice on what is important to you as an individual.

Having said all of that, personally I can find no justification in some of the prices being charged for hearing instruments. My post is to clarify some of the unique challenges of the hearing professional in todays market. It is not an effort to justify prices currently being charged.

In a free market society the market always corrects itself. We are seeing this now with the introduction of hearing aid sales via internet, Costco, Walmart, Best Buy. The current business model for hearing aid sales has already begun to change, and will continue to change in an effort to reach the most hearing impaired, with more affordable options, and avenues for purchase.

A reasonable comparison is that 15 years ago $1500.00 might have bought you a programmable analog hearing aid with a volume control, today the same investment is probably going to purchase a 4 to 6 channel digital hearing instrument, with directional microphones, feedback control, multiple programs, noise reduction. In my opinion (again, not worth much) the same investment is going to serve 80 - 90 % of the hearing impaired with a high degree of satisfaction.

We have gone crazy with technology, when the determining factor should be “Is any additional investment, going to provide me with any additional benefit?” In my experience, in a majority of cases, it is not.

I realize that was a bit more than $.02, my apologies.

#66

Great post EG, thanks

#67

Ah well folks its has been interesting to note that not many end users agree with the professionals on this site with regards to pricing at least! It is also very interesting that no one rebutted my initial estimation on high end aids costing around $200 to produce and as yet, I have yet to read any statement as to why the said $200 dollars equates to around $3500, leaving the HOH with rather deflated pockets! Now you Pro’s on here can wax lyrical all day long about the service the HOH receive, medical products, the FDA, about R&D, equipment, advertisement, trials and returns, etc, etc, etc! But at the end of the day and lets be upfront here, there has to be price fixing between the major manufacturers, they are all around the same average price…does that mean that R&D costs the same, your outsourced production are all similar, your advertising costs are the same and if not, why not? Because your prices are all similar for high end aids!!!

Now ZCT, I think I would enjoy your company and I think would also love to argue with you over a few glasses of my favorite tipple (Malt Whiskey, usually “The Balvenie”:D) But, I have to say your argument are as yet, Not Proven! An unusual jury verdict pertaining only to “Scots Law” I believe? Where 3 verdicts are permissible, Guilty, Not Guilty and Not Proven! Now unless you are going to hit us with actual costs for these high end aids that you all sell for around the same price (Apart from the Internet) then your argument is fundamentally flawed, I mean just to say, that’s how much it costs, believe me no one is making obscene profits and just leave it at that, but you can’t actually tell us or are you not allowed?.. Thank you EarGear for your upfront and honest statement, at last someone willing to speak his mind from the Pro Ranks, I take it you are a HIS, EarGear, states quote; Having said all of that, personally I can find no justification in some of the prices being charged for hearing instruments. My post is to clarify some of the unique challenges of the hearing professional in todays market. It is not an effort to justify prices currently being charged… Now you have the answer folks from one of the Pro’s!

DocAudio, what a loaded study in that link, quote; “Actually, the assertion that decreasing cost of hearing aids would significantly increase sales is untrue”, its totally manipulated to reach that conclusion!!!

Cheers Kev:D

PS, a small edit, I forgot to say methinks Starkeys could probably afford to give away 500,000 free hearing aids per yer, given their profit margin :slight_smile:

#69

Well Kev, I am always pleased to meet a Scotsman that does not hold my Englishness against me. :eek:

I’m sure a debate over a few glasses of your favorite Scottish drink would be much fun, although I got to be honest, my wife is far more of a Scottish Whiskey snob than me :rolleyes:

In any case, there is a reason why I never tried to refute your original claim; it isn’t my place to. For example, what if I told you I had invented a system where I could make a drink in my kitchen that tasted better than a 1976 Glenfiddich Vintage Reserve, yet cost me only $5 a bottle. Surely after making such as assertion, wouldn’t the onus be on me to prove such a claim?

You tore into the board with your hyperbolic headline that hearing aid companies were making ‘obscene’ profits, and cited as evidence for this ‘fact’ the price you think they make the hearing aids for. Yet at no point have you presented any evidence for the obscene profits you claim, or the cost of production (which by the way has no bearing on the net profit of a company). So really, until you do present such evidence there is little more to say on the subject.

Other than that, I did enjoy the chat :slight_smile:

#70

I agree but believe the retailers are the ones running the show.
They are the middle man between the customer & the manufacturer.

In my case the retailer tells me Starkey will not do any further work on my aids without payment & any consultations with an Audi is now costing me also.
I am not sure Starkey have dumped me, I think it might be that it’s now chewing into the retailers profit.
I have had my aids for 6 months & have never had the physical fit right or the programming finalised, now they cannot be returned or adjusted without payment.
There was never a time limit discussed.
The way the sell it is they tell you there’s a full money back guarantee & unlimited support until you are happy with the product, BS!

I have done a fair bit of research & believe HA cost no more than a couple of hundred dollars to produce.
The companies probably spend a lot on R & D etc but the bulk of the money goes to the retailer, the level of service depends on the individual retailer’s greed!!!

Rant over.

#71

I can agree with this to some extent.

Company X sells the hearing aids to Retailer Y, and they then get to decide how well they look after you.

Some retailers will do as little as possible, coax you through the government mandated trial period, and then you are dead to them. Others will work tirelessly with you for free to keep you happy.

Sadly, it is hard for the consumer to know which one they are getting.

Like any other industry there are those who want to try and make a fast buck, and those who are intelligent enough to realize that if you simply take care of patients and make them happy, you’ll get a reasonable income from it.

I’m not going to lie, I make a comfortable living as a hearing professional. But then I really ought to, I’ve been doing this for closing on twenty years, and I work hard to be good at what I do. But I am certainly not making any obscene paychecks. Would be nice, but, sadly it isn’t happening!

If any of you experts can point me to the obscene profits, let me know. Sure could use a 911!

#72

Probably the same reason they let kids die of cancer because of some loophole they found that gets them off the hook.

Remember insurance companies make profits when they DON’T pay, not when they help people. This is why a private for-profit health insurance system has produced such a crappy health care system in America.

#73

Yah, I’ll rebut it. It’s probably closer to $100 :smiley:

I will agree with ZCT that the grunts working for the manufacturers as well as most fitters do not make exorbitant salaries. As with most things medical & regulated, the cartel atmosphere allows an inefficient business model to prosper and this would not happen if it were unregulated. Right now there are too many underutilized/unnecessary people in the chain getting a piece of the pie.

#74

In your opinion.

Oh no, did I just start the who health care thread again. :eek:

#75

I would place these issues squarely ont he shoulders of the person who delivered your hearing aid. I doubt very much that Starkey is telling the dispenser that they won’t work with someone who has a 6 month-old hearing aid, since that hearing aid is still under the manufacturer warranty and should be covered for remakes if the fit is poor, at no additional costs other than shipping and handling.

If you have tried to get the problems resolved through your dispenser and they refuse to help without additional costs and won’t provide any written documentation showing that you agreed to this arrangement then I would contact the regional governing board (licensing, credentialing, whatever it is in your part of the globe) and file a complaint. Then I would call starkey and try to find another provider in the area that works with starkey if you can. You’ll still have to pay office visits but at least you won’t get the “starkey won’t work on these anymore” bunk. FYI…starkey will repair any make/model of hearing aid, no matter how old, so the idea that they won’t work with their own products after merely 6 months is absurd.

#76

It’s not a matter of opinion, America does badly in just above every measure of health care effectiveness, from Infant Mortality to preventable deaths, longevity, availability of doctors, average spend per capita, access to health care, etc. etc. Generally the only thing America kicks ass in is cancer treatment, which of course is only for rich people or those with amazing insurance who manage not to get dumped of their policies when they become too sick.

But it’s not just me saying this, or a personal opinion, you can look up the CIA World Factbook to see how we rank for infant mortality (not even in the top 40 countries any more), you can look at various WHO reports that have come out over the past few year.

Given that America spends more per person on health care than any other nation, you’d think we’d be in the top 10 for a few things, but we are not. And interestingly the one common denominator is that we are the only country in these rankings that doesn’t have a form of single payer health care.

But hey isn’t it easier to just pretend we are number one in our heads than look at the facts? All it costs is a few human lives a day.

#77

Wow this thread goes from silly to sillier. How about some FACTS people?

Now we have hearing aid ‘cartels’ throwing hearing aids together in China for $100, while a bunch of underutilized ‘grunts’ sit around inefficiently doing nothing. And then a bunch of rich executives wandering around making a fortune.

I’ve never seen this at any hearing aid facility I’ve been to. So please let me know where you have seen this, and what actual data you have. Otherwise this is just a work of fiction.

#78

Your anecdotal observations are no better then mine, where the local fitters office always has someone sitting on their hands waiting for something to do.

Someone (probably ed or umbongo) put together a detailed bill of material cost, which is certainly under $100. If you want a hard fact on this one, you can buy the heart of a hearing aid, the DSP through distribution for $20 (here). In moderate volumes you can usually figure paying about 30% of this price.

Generously stated, a <$200 item base manufacturing cost item, delivered to the consumer with ~4 hours of professional service to fit costs >$2000. This does not pass a sanity check.

#79

I refer to your following statement "has produced such a crappy health care system in America ". This is clearly an opinion. One of which I do not agree with.

#80

zafdor,
You sound like you might work for the government or be a retired govt. employee, because they seem to be the only ones that think the U.S. health care system is ok. It’s broke and needs to be fixed and I think the only way it’s going to get fixed is if all the govt. employees and all members of Congress have to get the same health care that the rest of us get.

#81

That’s like looking at the cost of a CPU and saying that a fully functioning computer system should be less expensive than it is now.

You are ignoring the cost of developing the “operating system” program for the aids. That magic programming takes a lot of time, skill, testing, and other resources that cost money.