Hearing Aids Cost Too Much
In the USA an estimated 21,000,000 hard of hearing (hoh) do not wear hearing aids. Why?
Various reasons are advanced to explain this. Among them are: The Stigma. The unavailability of professional help. And most of all: THE COST.
The average cost in the USA for a pair of aids with local fitting services is estimated at between $2400 and $4,000 with some sold for as much as $6500 a pair.
Hunter's Ears and cell phone Blue Tooth in the ear earphones which have the same electronics as high priced hearing aids, sell for $50 to $400 each. These devices are self adjusting and are sold over-the-counter without fitting services.
What's going on here? Ed
Actually I think your figures are a little conservative. I believe the last figure I saw was that the average cost of a single hearing aid in the US is $2,400, which would make the AVERAGE cost of a set more like $4,800. I can also tell you that some sets of hearing aids have been sold for $9,000 - $10,000 for a pair.
So you ask why this is so. Hunters Ears, and Blue Tooth devices sell in the millions. They can be mass produced and have a massive market of people who may buy them. The people who sell these products are often earning minimum wage plus a small commission and usually have no more than a high school diploma. Also I'd wager that these devices you ask about are mass produced in a foreign country by ultra cheap labor.
So first off with hearing aids, apart from post aural devices they are custom built. Each hearing aid is a different shape. A technician has to literally design each and every aid on an individual basis. This technician will usually have several years of experience and be relatively well qualified. He is not some kid working in a sweat shop abroad; he is a person working here in the USA.
Then there is the technology that goes into the hearing aids. All the other devices you mention simply have to amplify sound. Hearing aids are custom amplifying the sound to match a hearing loss. That’s like the difference between a set of prescriptions glasses, and a magnifying glass.
Speaking of technology the companies I work for recently spent $40m over four years to produce their latest hearing aid system. Clearly they need to get back their $40m from the people that buy their products. Just like when you buy your medicine, it didn’t really cost $5 to make that pill, but it may have cost millions to figure out how to make that pill.
Next is the professional services. Most hearing aid centers have adopted the business model that everything is rolled into the price up front, rather than nickel and dime people to death over a period of time. So in my office when I sell a hearing aid system, I must make enough profit to cover my wages, my assistant’s wages, my rent, advertising, utilities and my other business expenses. Unlike other electronic devices, it is not uncommon for people to keep a hearing aid system for 10 years or more. During that time, I may see my patient as many as 3-6 times per year for routine free maintenance and adjustments. So from my one sale I have to consider that I will incur expenses for as long as 10 years before that patient will give me any further money. Research has shown this business model to be better because my patients are not afraid to come back for routine service or adjustments. If they had to pay every time they saw me, they would be reluctant to come back and thus be less happy with their hearing aid system.
Of course keep in mind that I may provide world class service to my patient without any additional charge, for ten whole years. One day they see an interesting ad from one of my competitors and go in and buy a new hearing aid system from them. So I’ve given them ten years of quality service, adjustments, cleaning and other work all included in the original cost, and when it comes time to replace their hearing aids, they spend their money elsewhere.
You also have to consider that insurance rarely pays a penny for hearing aids. Not Medicare, nor private medical insurance. So the entire cost has to be covered by the patient. In most other health areas insurance pays a sizable chunk, which reduces a patient expense.
So to summarize, a patient is purchasing a custom product, that costs a fortune to design, from a highly trained, qualified and licensed individual. This professional knows it may be the only purchase for ten years or more from his patient, yet he is going to be expected to see that patient for 40-50 times, for perhaps 15 or so total hours of his time, during that decade of use.
Last edited by ZCT; 09-06-2007 at 03:35 PM.
ZCT: First, the electronics in the more advanced in-the-ear Blue Tooth devices include a DSP chip identical (except for programming) to that in the most expensive aids. In addition these better units include other electronics.
Just because the hearing aid distribution system with its government regulations have grown out of the old days of screw driver adjusments, and hand wired descrete circuit components, doesn't make it the most efficient system for todays high speed electronic industry.
Today, it is possible to build an aid using only one or two chips...sell it through mass retailers for a fraction of the cost of the anachronistic set up we have today.
Simple self-adjusting aids are easily mass produced and mass sold. What's missing is the mass market. The market is there....80% of the hard of hearing do not wear aids....that's 21 million in the USA alone. What's holding it back is old outdated regs that stiffle innovation and prevent mass mfg and mass retailers from creating the market through mass advertising.
ZCT you say that today's commercial hearing aids are custom made. Sorry, but that's not correct. Hearing Aids from the big producers like Phonak, Siemens, Resound, etc are semi mass produced in large quantities. Most of the big producers have some of their aids assembled in China. They are built in modern air conditioned clean factories. The labor is paid the current standard Chinese wages. It is clearly not your sweat shop. That's mostly in east Asia and Central America making shoes and clothing. The only thing custom made is the mold and those are made by numerous small factories right here in the USA.
The majority of the Audiologists use the manufacturer's first fit automatic software to provide the initial adjustment. My 10 year old grandchild could easily handle this step. Of course, tweaking an aid requires skill and experience.
There is a place for the professional....it is servicing the minority.....the children, the infirm, the diseased, those with severe/profound loss, and the affluent. Ed
Last edited by ed121; 09-10-2007 at 09:44 AM.
“ZCT: First, the electronics in the more advanced in-the-ear Blue Tooth devices include a DSP chip identical (except for programming) to that in the most expensive aids. In addition these better units include other electronics.”
- With respect I guarantee that is not the case with the nFusion nanotechnology I fit. The company I work for is the largest of the hearing aid company and it still took four years and forty million dollars to produce this chip. You see hearing aids are not just about amplification, they are about simulating the response of the human cochlear, which is not the same as simple amplification, as you’d get in a device for someone with normal levels of hearing.
“Just because the hearing aid distribution system with its government regulations have grown out of the old days of screw driver adjusments, and hand wired descrete circuit components, doesn't make it the most efficient system for todays high speed electronic industry.”
- The government regulation is in place to protect the patient and to ensure that they are fitted by trained, qualified and licensed people. You appear to be advocating the bad old days of hearing aid salesmen with minimal regard for patient wellbeing.
“Today, it is possible to build an aid using only one or two chips...sell it through mass retailers for a fraction of the cost of the anachronistic set up we have today.”
- The number of microchips is not really the issue. We don’t charge what we charge because the chip is expensive per se, we charge what we charge for the reasons outlined in my previous response.
“Simple self-adjusting aids are easily mass produced and mass sold. What's missing is the mass market. The market is there....80% of the hard of hearing do not wear aids....that's 21 million in the USA alone. What's holding it back is old outdated regs that stiffle innovation and prevent mass mfg and mass retailers from creating the market through mass advertising.”
- Sorry, but the issue is not consumer protection laws. And only the most basic and comparatively unsuccessful amplifiers can be sold as you suggest.
“ZCT you say that today's commercial hearing aids are custom made. Sorry, but that's not correct.”
- How many of these facilities have you personally been to. Because I’ve been to many. And I can personally vouch for the fact that these custom devices are custom made in the USA. The companies you mentioned are foreign, so this may make a difference, but I assure you that when I fit a custom designed hearing aid it is custom built for the patient here in the USA. The same was true when I was working in the UK (the custom aids are produced in the UK for UK patients.)
Now behind the ear hearing aids lend themselves to a little more mass production. But the only thing my company buys from China is the plastic presentation case the hearing aid comes in.
“Hearing Aids from the big producers like Phonak, Siemens, Resound, etc are semi mass produced in large quantities. Most of the big producers have some of their aids assembled in China. They are built in modern air conditioned clean factories. The labor is paid the current standard Chinese wages. It is clearly not your sweat shop. That's mostly in east Asia and Central America making shoes and clothing. The only thing custom made is the mold and those are made by numerous small factories right here in the USA.”
- You appear to be talking mainly about foreign companies (all the ones you mentioned are European) and post aural hearing aids. In the ear aids which still account for well over half of all sales in the US, have to be custom made. I’ve seen how they are designed for each patient on the computer and then using the latest stereo lithography, the shells are produced and the components fitted inside. Again the components are custom assembled and soldered here in the US.
“The majority of the Audiologists use the manufacturer's first fit automatic software to provide the initial adjustment. My 10 year old grandchild could easily handle this step. Of course, tweaking an aid requires skill and experience.”
- Best fit is generally the best place to start, but just as an example modern aids also need to be calibrated for feedback reduction and real ear measurements. I’d say at least 85% of patients require some deviation from ‘best fit’ either at fitting or during the routine follow up visits.
“There is a place for the professional....it is servicing the minority.....the children, the infirm, the diseased, those with severe/profound loss, and the affluent. Ed”
- I believe that this is the area where ENT Specialists and Audiologists are useful. Hearing Instrument Specialists are great for other kinds of loss such as presbyacusis and noise induced loss.
Hearing Aids Cost Too Much
ZCT: You speak with the authority of a technical expert on acoustics and medical professional. And obviously have a degree in electronic engineering or equivalent and that you must have some backgound in physics...no doubt you are a full member of the Acoustical Society of America (ASA). Perhaps you have done acoustic research work at one of the major university acoustic or physics laboratories, so you know what's really going on inside that little Starkey nFusion hearing aid.
As I understand it from Starkey's web site, nFusion is an advertising man's name for a DSP chip and associated firmware and software and perhaps proprietary algorithms. I was not aware that Starkey had the engineers and huge factory capable of making an advanced digital signal processing chip (DSP).
As you know chip making capability is limited to very few specialized companies like Texas Instruments, Gennum, Intel, AMC, ect. and a few Asian giants.
I am sure you are aware that the largest manufacturer of hearing aids in the world is Phonak or Siemens (and their satellite companies).....not Starkey. Given the size of Starkey and their capitalization, I would be extremely surprised if they spent $40 million of their own money developing anything. FYI: all modern DSP chips use tiny 15 to 50 micron internal structure circuits....very nano.
Perhaps you would like to explain to me just what is so unique about Starkey's nFusion aids. As you are a technical expert do not hesitate to describe their system in technical terms. I can assure you that I will understand. Reading their web site, I come away with the impression, perhaps mistaken, that nFusion is simply marketing hype....no different in substance from other highly capable products on the market.
With regard to amplification in hearing aids: I hope you do not think that I meant that is all a hearing aid does. A hearing aid is an amplifier with the transfer function modified to substantially replicate the inverse loss curve. In addition other acoustical properties are introduced to accommodate other loss factors such as recruitment.
Back to customization. You seem to imply that each aid you sell and fit is built from the ground up special for your customers (patients). Simply is not the case. Go out to Starkey's factory and you will see that other than the enclosure, the internal guts are semi-mass produced in modest quantities.
I must compliment you on doing REM (Real Ear Measurements) on your customers. I am sure you are aware that very few Audiologists and virtually no Dispensers do this valuable measurement.
Hope this clears up my position. Ed
Last edited by ed121; 09-12-2007 at 02:44 PM.
I guess I'll just have to ignore the sarcasm and your obvious and blatant disregard for hearing professionals, and try and answer as best I can. I guess my 14 years of helping people to hear is nothing compared with your considerable expertise in this field.
As for Starkey's size. 35 facilities in 24 countries. Just my tiny wing of the company has 2,000 hearing professionals working for it. If they are not technically the biggest in the world, they are still right up there. They are certainly the largest in America, by a long way. Don't forget the other brands they own two such as Audibel, Qualitone, Microtech and so on.
Who knows if they spent $40m developing nFusion. I was told this by two different senior directors of the company, but I guess they could be lying to me and a room full of specialists and franchise owners. Perhaps you have some insight here I don't have. They have never lied to me about anything else in the 14 years I've had a professional relationship with them, but maybe they chose this occasion to lie to me. Maybe you can tell me exactly what they did spend on the technology?
As I already mentioned I have been to Starkey's factory, in fact two of them. I also visited a facility in the UK owned by the Great Nordic group (GN). There I watched technicians taking each component of the hearing aid and inserting it into the custom shell.
The latest process that Starkey use is stereo lithography. They scan the impression I send them into a CAD system. Then the technician figures out the placement of the chip, receiver, mic, battery contacts and other accessories such as telecoil, volume control, and multi memory button. Then a machine sculpts the shell from a special and incredibly advanced and expensive liquid plastic.
The technician then takes all the parts as designed on the computer and assembles them wiring them all up, soldering them, and ultimately testing them in various industry required ways.
Do they buy pre-assembled face plates? Probably. Do they make the chips personally, no. But its certainly enough to call it custom made.
If I buy a custom suit. The factory does not actually make the thread or the material, but it is still a custom suit, just as a custom hearing aid is custom built.
Out of interest, which factory did you visit where you saw them merely working with imported parts from China?
I'm not going to debate nFusion with you. But I can tell you I have fitted about 120 patients with it, with a 99% success rate. I've fitted veteran hearing aid users who think it is the most amazing thing they have ever heard. Including one of my relatives who has worn state of the art hearing aids for 20 years, and claims he has not heard this well in that entire time.
Perhaps the reason you assumed it was all marketing hype is because you clearly have some weird chip on your shoulder about the industry, and also because the web site is basically just marketing to patients. They are not going to describe in technical detail that you would enjoy because probably less than 1% of their patients would understand it. So when you dumb it down, it is going to sound like marketing hype, that's just common sense.
But I can assure you, I am always very skeptical about new technology and I don't blindly accept what the company I work for tells me. When I was working in England I worked for two of the largest independent dispensing companies over there. Both companies were not affiliated with any major brand. So I heard the marketing hype of every new hearing aid on a regular basis. I have certainly learned not to blindly accept marketing nonsense from the manufacturers.
But in the case of these nFusion aids I am noticing a quality of sound that I have not seen in 14 years. Almost no feedback, intelligent adaption to a variety of background noise, and a level of speech recognition that is unparalleled since I began.
I used to spend an hour or so counseling a patient about the long and difficult process of re-learning to hear with a hearing aid. But our top of the line systems are so good, I can pretty much fit them and let them walk out the door. As a precaution I still do counsel a slow and steady learning curve, but most patients are already wearing them full time within 24-48 hours. It's come a long way since the early 90s.
Last edited by ZCT; 09-12-2007 at 09:52 PM.
Hearing Aids Cost Too Much
ZCT: My apologies for the tongue in cheek opening to my last post. I get carried away sometimes.
As I understand the financial side of Starkey, they recently sold their R & D chip development group for $6 million to AMIS. Perhaps AMIS Holdings, Inc. spent the $40 million developing the DSP chip you referred to in previous posts. That would not be out of line. Most of the newer DSP's are generic and can be used in other applications other than hearing aids. Just change the OS program.
AMIS is a bona fide chip maker with a market cap of about $875 million. A small manufacturer in the world of the giant chip makers. Not that they can't make chips for aids.....like the nFusion.
As you say Starkey is a pretty big company with 3300 employee's in the USA alone. But Siemens and Phonak are larger.
Never have been to China. Though my nephew, an endowed chair at Wharton spends half his time in China. My statement on hearing aid assembly mfg in China is based on information from the hoh advocates HA forum and I think that was a year ago that it was estimated that 40% of the aids sold in the USA were actually assembled in China. I'll check and see if MarkeTrac has any newer data on this.
Your achievement of a 99% success rate with the nFusion is remarkable and I must say that has to be because of your professional skill because the industry return rate overall is around 20%.
No, I don't have a weird chip on my shoulder about the pervasive hype in the industry. I and many others with technical backgrounds in acoustics or are EE's, just don't like to see the industry bamboozle and BS the typical hoh. You and I know that much of what is claimed is simply not true or only marginally true. The bells and whistles tacked on to the basic hearing aids are mostly fluff. Most high end features are virtually useless in the real world. What is lacking in the industry, is real scientifically derived double blind tests of these claims.
my opinion, Ed
“ZCT: My apologies for the tongue in cheek opening to my last post. I get carried away sometimes.”
- Well my response was probably equally sarcastic.
“As I understand the financial side of Starkey, they recently sold their R & D chip development group for $6 million to AMIS. Perhaps AMIS Holdings, Inc. spent the $40 million developing the DSP chip you referred to in previous posts. That would not be out of line. Most of the newer DSP's are generic and can be used in other applications other than hearing aids. Just change the OS program.”
- The nFusion project began in 2002 and ended with a product release in 2006. It was my understanding that the project was different to the regular development cycle for regular hearing aids.
“As you say Starkey is a pretty big company with 3300 employee's in the USA alone. But Siemens and Phonak are larger.”
- I guess it depends if you are also counting subsidiaries of Starkey, and Siemens. The latter have their fingers in a lot of pies. But you know, BMW are not the largest car company in the world, but they certainly make a fine car. I don’t think sheer company size is necessarily indicative of quality. If you don’t believe me pick up a Chevy and drive it for a few years.
“I think that was a year ago that it was estimated that 40% of the aids sold in the USA were actually assembled in China. I'll check and see if MarkeTrac has any newer data on this.”
- I can only go on personal experience. I have seen the aids made as I described here in the US. Also I’ve seen the same thing happening in England. It wouldn’t surprise me for one moment that some manufacturers are cutting corners; it seems to be popular among so many industries these days. Perhaps that’s why our toys keep getting recalled.
“Your achievement of a 99% success rate with the nFusion is remarkable and I must say that has to be because of your professional skill because the industry return rate overall is around 20%.”
- Is this more ‘I don’t believe you sarcasm’ or a genuine compliment? I happen to pride myself on my low return rate. Last year I was at 96%. I also had a 91% binaural rate last year.
“No, I don't have a weird chip on my shoulder about the pervasive hype in the industry. I and many others with technical backgrounds in acoustics or are EE's, just don't like to see the industry bamboozle and BS the typical hoh.”
- I’m really not sure that is going on. At a guess I’d bet you 75% of my patients have done no research whatsoever before they buy a hearing aid. They see an ad in the local paper hyping our new hearing aid with class leading feedback cancellation technology, they see my happy smiling face at the bottom, and they book in for a test.
Frankly, it amazes me that people will spend as much as nine grand on a set of hearing aids without doing any market research.
So on that basis, I don’t think any of them are confused by marketing hype or feel bamboozled. Like I said, the vast majority don’t even do the research. Those that do barely scratch the surface. I can think of only two patients I’ve seen in the past 12 months that actually checked out our web sites and some forums like this one prior to booking an appointment with me. They both purchased aids from me. One is crazy happy, and has referred two more patients to me, and their own mother. The other is doing okay, but I could only aid one ear, as he is deaf in the other.
“You and I know that much of what is claimed is simply not true or only marginally true.”
- This is a gross overstatement.
I just went to the Starkey web site. This is the claim they make on the front page:
‘Intelligent. Powerful. Adaptive.
Hear the difference.
Destiny hearing systems intuitively adapt to your ever-changing environment. At work or at play, you'll connect with a whole new world of sound.’
It’s pretty much right. The aid does ‘intelligently’ adapt to the environment the patient is in, in some frankly remarkable ways. It can even detect wind noise and electronically mask it by up to 20dB. My patients who used to wear older aids really do tell me they ‘hear the difference.’
When you click on the more information link you get this summary:
‘Our newest and most automatic hearing instrument provides the power and speed of nFusion Technology, loaded with the most intelligent features ever created. Voice Indicators are helpful if you have difficulty remembering the significance of tones; Self Check, a diagnostic tool, gives you a performance report of the hearing aid's circuit, receiver, and microphone; Reminder tells you when you need to return for follow-up visits and the Destiny 1600 BTE is available in a full range of colors based on skin tone, hair color and lifestyle.’
- As claimed it is the newest and most automatic aid we have. It is powerful, up to 80dB of gain on some models. It has some very ‘intelligent’ features. It does speak to you, to warn you of things. It does have a self diagnostic tool. It does remind you when you need to go back. It is available in a full range of colors.
I’m not seeing any of this BS hype you keep talking about. Nothing claimed here is untrue, nor is it at all misleading.
I’ve just read the rest of the page and EVERYTHING claimed on that page is completely true. I’ve seen it with my own eyes, and observed the difference in patient results.
I don’t really understand what you expect them to say about these aids.
“The bells and whistles tacked on to the basic hearing aids are mostly fluff.”
- Active feedback cancellation, real ear measurement, detection and reduction of specific background noises, self check to alert users of component failure, automatic telephone response (both with and without a telecoil), substantial data logging of patient’s use habits, real ear audiometry direct through aid, low battery warning. How is all this stuff fluff?
“Most high end features are virtually useless in the real world. What is lacking in the industry, is real scientifically derived double blind tests of these claims.”
- It’s ironic that you open this paragraph with a wild and ludicrous erronious statement about modern hearing aids, with no basis in research, science, real world experience, or fact. But in the second sentence you admonish the industry for not being scientific enough for you. How about you back up some of your baseless allegations with real facts before you start criticizing others for doing the same thing you are doing.
You know Ed, I am not trying to gun for you here. But I just find it hard to accept the allegations you keep making. It’s like you know enough of the facts to make you dangerous but lack the perspective and personal experience to see how things work in the real world.
I see patients every day, and I help them to hear. By and large my clients are middle to upper class individuals who don’t mind paying a high price for outstanding hearing aids and great service. Yes it sucks that in the richest nation in the world, there are people that cannot get help with their health or their hearing. But reforming the entire health care industry is certainly not my responsibility. I do my small part by working for the Hear Now program. Low income patients can get a hearing system worth up to $8,000 for a set, for just $200. I donate my professional services for free, and my company donates the hardware for free. The $200 covers the paperwork, postage and impression taking. Since the year 2000, Starkey – this evil (yet too small) corporation you keep slamming has given away 200,000 hearing aids to the needy and hard of hearing around the world.
Last edited by ZCT; 09-13-2007 at 02:50 PM.
a 68% gross margin products is pretty good. One has to be aware that
most of it goes to RD, so this can partially explain why the cost is high.
Last edited by xbulder; 05-10-2011 at 03:43 AM.
what happen to songbird, they were a OTC hearing aid company
it never worked right?
ATIVAN REHAB FORUMS
Last edited by xbulder; 05-10-2011 at 03:43 AM.