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Thread: What is the average markup of hearing aids?

  1. Default What is the average markup of hearing aids?

    Greetings,

    After searching, I've noticed many threads bemoaning the cost of hearing aids, criticizing the business model, defending the pricing as well as attacking the pricing. People talk about cost of production, where the overhead is, etc.

    But, beyond all that discussion, what is, typically, the audiologist's markup of hearing aids by brand, without going into the heated discussion of what is justified or not? After all, Swiss watches are sold at retailers for double what they buy them for. Same with shoes. Other items have even much steeper markups. As to the high price, as a recovering audiophile, some will spend enormous amounts of money are a pair of interconnect cables that certainly did not involve the kind of research that went into a hearing aid.

    Anyhow, without getting into the right or wrong of this, can some people tell me what these markups are approximately? This is just curiosity, and interesting information. Thanks for reading.

  2. Default

    Markup is difficult: you have to allow for fitting time, hourly pay rate of dispenser, number of dispenser hours covered by price, rent, taxes, insurance etc.

    Raw trade price is something else - and probably meaningless in most cases.

    If I told you that, say, eye glass lenses cost $7 what use would that information be to you?

    (And, no, trade prices for aids are NOT $7 !!!! $100s or $1000s more like!)
    My professional details can be found in the 'Hidden Content ' section of the forum

  3. Default

    Well, of course I've heard this in most threads, and the point is well taken. This issue is true for a lot of luxary items as well as medical items. A vaccine for a dog costs a couple of dollars, but it will run you $50 at the vet. This is understandable.

    Generally, I'm asking what's the difference in price between the wholesale HA paid by the audiologist and the retail price. Every industry has overheads and hidden costs, but it doesn't mean there isn't a wholesale price, whether it be for cars, jewelry, medication, etc.

  4. #4

    Default

    Quote Originally Posted by zenon
    Greetings,

    After searching, I've noticed many threads bemoaning the cost of hearing aids, criticizing the business model, defending the pricing as well as attacking the pricing. People talk about cost of production, where the overhead is, etc.

    But, beyond all that discussion, what is, typically, the audiologist's markup of hearing aids by brand, without going into the heated discussion of what is justified or not? After all, Swiss watches are sold at retailers for double what they buy them for. Same with shoes. Other items have even much steeper markups. As to the high price, as a recovering audiophile, some will spend enormous amounts of money are a pair of interconnect cables that certainly did not involve the kind of research that went into a hearing aid.

    Anyhow, without getting into the right or wrong of this, can some people tell me what these markups are approximately? This is just curiosity, and interesting information. Thanks for reading.
    you pay what you get, on one hand- you can buy of the internet with minimal to no profesional service to someone who does not only the basic test but also real ear mes. , hint, and counceling to something in between.
    that said, you pay what you get. For some pleople buying of the net is good enought for others, the services are worth the extra cost

  5. Default

    Quote Originally Posted by zenon
    what is, typically, the audiologist's markup of hearing aids by brand, without going into the heated discussion of what is justified or not?
    I am an Electrical Engineer and I have worked in the Medical Devices industry now for over 15 years. My experience tells me that the retail cost of medical devices is anywhere between four to eight (sometimes ten) times higher than the Cost of Goods Sold (COGS). COGS is what it costs to manufacture the goods (parts+labour). The wholesale price is approximately two to perhaps five or six times the COGS.

    A very rough rule of thumb for everyday consumer electronics is the "double-double" rule. Wholesale prices is double the COGS and RRP is double the Wholesale price.

    Note that none of this includes the NRE nor the R&D costs, the latter typically being about 7% of a company's annual revenue.

    regards
    Peter

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    Quote Originally Posted by wire_weaver
    ... A very rough rule of thumb for everyday consumer electronics is the "double-double" rule. Wholesale prices is double the COGS and RRP is double the Wholesale price.
    Yes, this fits well with my experience.

    My SWAG for the COGS of digital hearing aid is about $100, so I compute a fair and reasonable price of about $400 (exclusive of the extensive personal care currently "required" by those with profound hearing loss). This entirely sums up my horror and outrage at seeing hearing aids priced upwards of ten times higher.

    I see a lot of whining on this forum about the low sales volume of hearing aids being the reason for the high prices. However, it is clear that actually, the reverse is true: it is the high prices that are causing low volume.

    For any one with mild to moderate hearing loss, several thousand dollars is a deal killer - a non-starter.

    Those of us with mild to moderate hearing loss simply do not need a high level of personal attention. Open fit units have little or no customization (ear molds, etc.). Mooreover, I resent a market that requires me to make an appointment with a "specialist" to adjust my hearing aid.

    The solution is pretty simple: Recognize that there is a huge market of aging baby boomers with moderate hearing loss that could be tapped with a hearing assistive device priced at several hundred dollars. Make less on each unit but sell many, many times more units. Unbundle support costs from the price of the unit. Provide simple software so the user can adjust his own. We are computer savvy and quite used to pumping our own gas...

  7. #7

    Arrow

    Quote Originally Posted by jchunter
    Yes, this fits well with my experience.

    My SWAG for the COGS of digital hearing aid is about $100, so I compute a fair and reasonable price of about $400 (exclusive of the extensive personal care currently "required" by those with profound hearing loss). This entirely sums up my horror and outrage at seeing hearing aids priced upwards of ten times higher.

    I see a lot of whining on this forum about the low sales volume of hearing aids being the reason for the high prices. However, it is clear that actually, the reverse is true: it is the high prices that are causing low volume.

    For any one with mild to moderate hearing loss, several thousand dollars is a deal killer - a non-starter.

    Those of us with mild to moderate hearing loss simply do not need a high level of personal attention. Open fit units have little or no customization (ear molds, etc.). Mooreover, I resent a market that requires me to make an appointment with a "specialist" to adjust my hearing aid.

    The solution is pretty simple: Recognize that there is a huge market of aging baby boomers with moderate hearing loss that could be tapped with a hearing assistive device priced at several hundred dollars. Make less on each unit but sell many, many times more units. Unbundle support costs from the price of the unit. Provide simple software so the user can adjust his own. We are computer savvy and quite used to pumping our own gas...
    You keep making the same argument over and over again, but it still doesn't make it true.

    In England you can get a hearing aid for FREE, through the NHS. No deductible, no costs of any kind. You just go see your doctor, get a referral to an audiologist, and walk out with a free hearing aid.

    Even with this model in place the average wait from onset of loss to actually deciding to do something about it was seven years, much like it is here in the States. Even with this model in place there is a thriving private sector often charging more than American prices.

    Also, I can tell you right now, there's not a single decent hearing aid I can buy at cost for $400 or less. Which is unsurprising given that Starkey spent upwards of $50m in R&D last year alone.

    But as usual, I'm sure you'll dismiss my information as propaganda and remain convinced that a fair price for a hearing aid is the same as an iPod.

    During my career, I've met a number of patients like you. Retired engineers and similar. They all claim that with a few weeks work in their garage they could cobble together a $100 hearing aid. Oddly, not one of them have ever achieved this, and pricing is little changed since I started in 1994. In fact if anything prices have risen in line with inflation.

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    Quote Originally Posted by ZCT
    ..In England you can get a hearing aid for FREE, through the NHS. No deductible, no costs of any kind. .
    Your reply is irrelevant to my post and off the OP's topic, who asked what the audiologist's markup is for a hearing aid.

  9. #9

    Arrow

    Quote Originally Posted by jchunter
    Your reply is irrelevant to my post and off the OP's topic, who asked what the audiologist's markup is for a hearing aid.
    My reply addressed several of your points, although I agree that your post was largely irrelevant to the original post, since you are neither an audiologist, nor do you know for a fact what hearing aids cost or how they are marked up. You have made numerous erroneous statements on this board regarding what you think things should and do cost.

    I addressed:

    - What you claimed the markup was.

    - Why you are wrong about the volume of hearing aid sales.

    - Your errors regarding what you think the cost of a hearing aid is to the professional.

    I failed to address a few other issues you raised:

    You suggested that charging several thousand dollars for a hearing aid for a mild to moderate loss is a non-starter. Well that's simply not true on many levels. In fact it is sometimes harder to fit a patient like this, especially with good low frequency results, because of the occlusion issue, and the difficulty of reproducing excellent high frequency response without feedback.

    This is another reason why patients with this kind of loss may require MORE adjustments than someone with a severe to profound loss.

    Also a person with a mild to moderate loss is often getting aids for the first time, and is therefore going to require more help to get used to them. These baby boomers you keep talking about often have more active lifestyles than our older patients, and so are far more demanding about getting results in a wider variety of situations.

    Additionally, when you are talking about baby boomers, you claim they are all computer savvy and can adjust their own hearing aids. That's simply not true. Not all baby boomers are tech savvy. I'd seriously doubt that 20% of them would do a good job at adjusting their own aids. Heck there are plenty of hearing professionals out there that don't do a good job of making adjustments, and they have been trained an licensed to do so.

    I don't have an issue with people having an opinion. But I resent posts that are so scathing of hearing professionals, and simply make up 'facts' to portray the industry as some kind of evil that needs to be stamped out.

    The hearing aids enjoyed by millions of hard of hearing individuals around the world wouldn't even exist if hearing aid companies hadn't invented them. So how about we cut them just a little slack?

    I've met with a bunch of hearing aid industry people from various major companies over the years. They always seem to have genuine enthusiasm for helping people to hear.

    I have been involved in other industries that appear to be profit focused, but all the people I've met from the major hearing aid companies seem to be very genuine people.

    I will concede however, that there are some hearing professionals who are less than professional, and will push over priced product onto patients to make money. But then I've met dentists like that too. There are useless professionals in all professions.

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    Default

    Getting back on topic, what is the audiologist's markup?

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