Why do Americans pay eight times more for hearing aids than the British? Hearing aids are big business, and a cartel controls the industry through mergers, patents, and control of audiologists.
I'm a retired speech pathologist (but many of my friends and former colleagues are audiologists), old enough to remember when audiologists would not sell hearing aids - they were simply diagnosticians who, in those more innocent times, did not want to dirty their hands dealing with the more commercial side of things. That was early in my academic career and I remember the battle that went on when some audiologists wanted a piece of the hearing aid pie. Obviously, they ultimately were able to do so and, like a lot of other things that seemed like a good idea at the time, we sit here 40+ years later looking at another example of money being the root of all evil. Many audiologists I know truly are interested in helping people overcome their hearing loss and live better lives. Others, unfortunately, would probably be just as well off selling used cars instead of hearing instruments. (Matt, you might want to do a column about the parties that the hearing instrument dealers throw at conventions for the audiologists. I think consumers would be surprised to see how a lot of their money was being spent on extravagant food and drink.)
Captured? I rather believe they think I am a pain in their arse. To clarify, THEY, don't pay me anything. In answer to your question and a clarification, the UK government isn't the only game in town. Yes, there is universal healthcare in the UK through the NHS. They provide hearing aid services free at point of acquisition. That doesn't mean they are free, every person in the UK pays for them.through social contributions and taxation. However, there is also a burgeoning private sector in hearing aid provision and there always has been. Cost of goods anywhere, whether the UK or US is based on volume purchased. It is as simple as that. The NHS purchase a ridiculous amount of hearing aids in a clear planned purchase method. NHS staff do not get junkets, pretty parties, business dinners and NHS departments are not given help with their marketing budget by manufacturers. NHS cost of goods are low for both that reason and the fact that the technology used is more often than not a generation behind and the most simply manufactured devices. It is a similar situation with the VA in the US. NHS cost of goods delivered is completely another story. Audiological departments are not run on rainbows and pink fluffy unicorns. The staff get paid commensurate to their grade level to deliver those services and believe me, most staff would say the people are getting a damn bargain. When you consider Costco in the US, while they are a private company, their purchasing power would be similar in nature to the NHS, however, they purchase top of the range latest generation devices. They use the KS hearing aids as a loss leader, but overall, their pricing is cheaper than the wider marketplace. The key for Costco is that their profit is based on membership fees not necessarily the sale of goods. The private sector in the UK is a different animal as is the US marketplace. So down to brass tacks as it where. A pair of top of the range hearing aids from the manufacturers in the UK are available to private Independent dispensers at pricing from around £1400 to £2000 after Vat based on unit discount. Those devices are sold for anything between £3200 to £4000 depending on retailer. The markup seems high, but if the aftercare and service is delivered, the customer gets what they have paid for. Unfortunately all retailers bundle their prices, something that we have been lobbying against for years. Unbundling makes the transaction more transparent. The retail cost has been reduced in the UK in the last ten years because of the price pressure brought to the market by businesses like Specsavers. Those businesses, like Costco get pretty fantastic cost of goods prices, perhaps as low as 800 a pair on premium range based on the units purchased and they purchase a lot of units. Again, those businesses don't get fancy junkets, nice trips to Vegas etc etc. You assertion that Costco is paying a quarter of the price is off, I have no inside view but from what I have heard, Costco pays around $400 a unit based on volume. I would imagine, most larger independents in the US are paying around $1100 per unit, again for premium level. The retail price over there tends to be a little different from the UK. The only place where manufacturers are gouging the system, appears to be Australia, if my Australian colleagues are to be believed and I don't doubt them. As I said, manufacturers don't set retail prices. If retailers unbundled their services or just even itemized their invoices, the costs would be more transparent. As I said, we have been advocating for unbundling for years, but people have been wedded to a business model that suits them not the consumer.
Matt.... so much good information it is difficult to pick what to comment on. Might you consider spreading this out over a few cycles to give readers a chance to dig in on one "meaty" issue ONE at a time?
How about focusing on the pattern with health care purchases, exemplified with hearing aides, that the BUYER should not be the public but instead a single buyer who is as informed or more than the seller? No?
I think a few people are missing the point. Independent audiologists rely on the cartel of hearing manufacturers who set high prices to purchase from them due to a lack of competition between the incumbents. Naturally they have to pass the cost onto the consumer. Hearing aid prices can be cheaper for them to make the same profit.
Sure there will always be a need to see an audiologist for some people, but new competitors can flex its distribution channels to access regions that do not have a local audiology clinic.
When my Australian mother needed a hearing aid, the government sent her a glossy brochure describing five models (two German, one Australian, and two American) to choose from. Two weeks later, her free hearing aid arrived with an invitation to a free consultation. (Australian taxes are in line with ours).
Thanks for your extremely revealing analysis of how yet another an industry moved from a "value based business model" to a far more lucrative "fraud, waste & abuse" approach. This is the playbook throughout US healthcare. There's good reason why Warren Buffet describes our healthcare system as the "tapeworm of the US economy".
Matt- thanks for great work. Please note that the statements of Biden on ports are plain bullshit (as usual). The LA and Long Beach ports are not running 24/7; there is merely one little pilot project to do that in just only one of the terminals at LA Port. The current administration will almost certainly screw up everyones Christmas.
You know, Vint Cerf is a really big name in the accessibility movement for the internet. It'd be interesting to see if any of the things in this issue impacted him.
As an aside, the beef email raises a really interesting issue in research. The more important thing I saw in that email than funding was the offer for access. If you can get an industry partner to agree to let you look at their data (or run your own tests), putting together sufficient material for publications becomes super simple. Of course, if they decide they're not thrilled with what you find, they can always retract the rights to the data and the paper can't be published.
It saddens me to see such a negative portrayal of hearing loss and the industry that makes improved hearing possible. Can you please tell me 1. How much education is required to become and audiologist and why most states allow uneducated, unqualified individuals to sell hearing aids? 2. What is involved in the process of fitting hearing aids and how much follow up is needed? I am under the impression that people go to their audiologist for at least 2-3 appointments per year to ensure that the hearing aids are working properly and adjusted for any changes in hearing or health status. So people are paying for service, not just the gadgets.
Opinions like this, from someone who has no background in the hearing industry are harmful and unnecessary. Maybe we can talk about these issues instead. Hearing loss is associated with cognitive decline. Despite that, physicians don't routinely screen adults for hearing loss. People don't address hearing loss for an average of 7 years, even though it can lead to significant communication challenges for their family members who have to keep repeating themselves.
I hope someday when you are a family member have hearing loss, they go buy one of these "glorified microphones" off the shelf and Costco and see how well they work. And if they don't, make sure you never call a local audiologist who runs a small local business with the intention of helping people. This article is nothing more than your opinion and I hope you will educate yourself in the future before you demonize a whole industry.
My first thought on why ships aren't returning empty containers is that the shippers are expecting fewer exports to the US and other countries due to inflation and a poor economy and are therefore saving money in fuel and storage space by not returning them home.
Reading the comments below, you know that buying hearing aids is complicated. (You might start with youtube which might also thoroughly confuse you because when you start to actually find a provider, they may not have what people on you tube think you should have, rightly or wrongly.) My daughter offered to help out financially and I found an online supplier that discounted the purchase price combined with a local audiologist/hearing aid specialist who would fit the hearing aid you chose--from major brand names. My daughter thought I should get the best which to her meant the most expensive of the brand chosen. The hearing aids chosen arrived in two days, and we installed and adjusted them. After a day or two I was not happy because the hearing aids did not do what I had been told they would, namely recognizing my voice and reducing the sound level accordingly. (We are talking about top of the line name brand which sold for $4000.) I had had a bad feeling from the first meeting with the H.A.S. So I went back and returned the hearing aids to him as warranted. The money was back in my daughter's account in less than 24 hours.I called the discounter and he gave me another audiologist to try. I did and the result was terrific. I got the right aid for me and after some adjustment, the hearing aids worked perfectly, connected to my phone or chromebook via bluetooth which is fantastic. He recommended the model one down from the top ($3000 for both), though I thought the 2nd one down ($2000) would have been fine. His reasoning was that with 12 channels rather than 8 would give him more control. I have not seen evidence of this since the app you download has treble, mid-range-and bass, rather than 12 channels.
The company has wonderful consumer reps that I have talked to trying to understand the hearing aid. The app allows you to make your own custom programs. I asked why I could not modify their programs and had to go to an audiologist. The answer was that they did not want to be liable for your blowing out your ear drums. (I think an additional reason might be that they don't want to alienate their audiologists. But if you are paying more than $4000, I think you will find that the audiologist is getting the extra because he/she can. At least one of you suggested Costco. Between the one H.A.S. and audiologist, I went to Costco. It was considerably less expensive, though not for the units they sell made by Phonak under their private label. (Phonak is what I have.) Costco is very popular and reportedly does a good to great job. I decided to stick with my online source because a Costco appointment would not be available for 2 months and I would have had to drive 60 miles. I had a new appointment locally from the online supplier in maybe 3 days, and hearing aids 2 days later. There is more than all this to getting the right fit, and I am skeptical that the FDA's regulations will help in the great variety of cases. But I do think that direct access to the hearing aid manufacturers seems like a good idea. It will also produce a bunch of scams. When I started looking two years ago, there were already some online.
Note that for what we paid I got an excellent hearing aid, 6 visits in the first year to my audiologist, and 3 years warranty.
I’m not sure where to begin. As a hearing instrument specialist, I see so many flagrant errors in this article that I can only assume the writer is simply looking for attention with inflammatory accusations. Of course, I’m now giving him attention by commenting.
Costco does not buy their hearing aids at 3-4x cheaper, they accept slim margins on the devices because they make their real money on memberships. The model works for some people, for others they are interested in a different model of healthcare.
Hearing aids are not “an adjustable microphone”. You can order one of those on Amazon, and it ain’t the same thing.
I am all for the cost of hearing aids being driven down by natural economic forces like competition, efficiencies in the business, and innovations. I am all for increased insurance coverage for real hearing aids. I am all for some over the counter devices with caveats and warnings explaining exactly who they are for and what to do if you don’t fit that category.
Over-the-counter devices will work for some people but not for all. Shadow me for a day and see why my physical hands, my intellectual knowledge, and my counseling help my patients successfully wear their hearing aids. I’m physically and mentally working all day every day doing tasks that cannot be replaced through the internet.
And lastly, take a look at the NHS which provides hearing aids for free and yet only 50% of the people who need them have gotten them and many of those do not wear them ( but hey they were free). Cost is not the single factor that is keeping people from getting hearing aids, but is just one of many reasons. It is part of why I spend so much time with patients building trust, explaining diagnostics, reviewing possible outcomes and walking them towards the solution that’s going to work for them.
Hi, my name is Geoff Cooling and I write for the consumer site Hearing Aid Know. I would like to point out a couple of things in the article that just aren't true. Firstly, hearing aids are by no means adjustable microphones, which is a ridiculous simplification of what hearing aids do. Secondly, the retail price of hearing aids is set by the retailers who sell them. The idea that Independents pay four times the price over that offered to Costco is a lie. Whoever told you that, was lying to you. You should ask them what their unit cost is after the discount, then ask them what they retail them at. I would be especially interested in their answer to that question about entry-level or lower medium-level technology. In relation to ruralbob's comment about lavish parties. Why didn't the Audiologists approach the manufacturer involved with the suggestion that if they did not attend any of those fancy trips to Vegas or wherever, could their discount not be bigger considering there would be lower marketing budget cost?
The empty containers issue is simple. Because the port is running so slow, as soon as they finish unloading one ship, the management is trying to get another unloaded as fast as they can. As you can imagine, this doesnt leave the ports with any time to put empty containers back on the boats headed for china. as such, the empties just pile up
I'm a retired speech pathologist (but many of my friends and former colleagues are audiologists), old enough to remember when audiologists would not sell hearing aids - they were simply diagnosticians who, in those more innocent times, did not want to dirty their hands dealing with the more commercial side of things. That was early in my academic career and I remember the battle that went on when some audiologists wanted a piece of the hearing aid pie. Obviously, they ultimately were able to do so and, like a lot of other things that seemed like a good idea at the time, we sit here 40+ years later looking at another example of money being the root of all evil. Many audiologists I know truly are interested in helping people overcome their hearing loss and live better lives. Others, unfortunately, would probably be just as well off selling used cars instead of hearing instruments. (Matt, you might want to do a column about the parties that the hearing instrument dealers throw at conventions for the audiologists. I think consumers would be surprised to see how a lot of their money was being spent on extravagant food and drink.)
Captured? I rather believe they think I am a pain in their arse. To clarify, THEY, don't pay me anything. In answer to your question and a clarification, the UK government isn't the only game in town. Yes, there is universal healthcare in the UK through the NHS. They provide hearing aid services free at point of acquisition. That doesn't mean they are free, every person in the UK pays for them.through social contributions and taxation. However, there is also a burgeoning private sector in hearing aid provision and there always has been. Cost of goods anywhere, whether the UK or US is based on volume purchased. It is as simple as that. The NHS purchase a ridiculous amount of hearing aids in a clear planned purchase method. NHS staff do not get junkets, pretty parties, business dinners and NHS departments are not given help with their marketing budget by manufacturers. NHS cost of goods are low for both that reason and the fact that the technology used is more often than not a generation behind and the most simply manufactured devices. It is a similar situation with the VA in the US. NHS cost of goods delivered is completely another story. Audiological departments are not run on rainbows and pink fluffy unicorns. The staff get paid commensurate to their grade level to deliver those services and believe me, most staff would say the people are getting a damn bargain. When you consider Costco in the US, while they are a private company, their purchasing power would be similar in nature to the NHS, however, they purchase top of the range latest generation devices. They use the KS hearing aids as a loss leader, but overall, their pricing is cheaper than the wider marketplace. The key for Costco is that their profit is based on membership fees not necessarily the sale of goods. The private sector in the UK is a different animal as is the US marketplace. So down to brass tacks as it where. A pair of top of the range hearing aids from the manufacturers in the UK are available to private Independent dispensers at pricing from around £1400 to £2000 after Vat based on unit discount. Those devices are sold for anything between £3200 to £4000 depending on retailer. The markup seems high, but if the aftercare and service is delivered, the customer gets what they have paid for. Unfortunately all retailers bundle their prices, something that we have been lobbying against for years. Unbundling makes the transaction more transparent. The retail cost has been reduced in the UK in the last ten years because of the price pressure brought to the market by businesses like Specsavers. Those businesses, like Costco get pretty fantastic cost of goods prices, perhaps as low as 800 a pair on premium range based on the units purchased and they purchase a lot of units. Again, those businesses don't get fancy junkets, nice trips to Vegas etc etc. You assertion that Costco is paying a quarter of the price is off, I have no inside view but from what I have heard, Costco pays around $400 a unit based on volume. I would imagine, most larger independents in the US are paying around $1100 per unit, again for premium level. The retail price over there tends to be a little different from the UK. The only place where manufacturers are gouging the system, appears to be Australia, if my Australian colleagues are to be believed and I don't doubt them. As I said, manufacturers don't set retail prices. If retailers unbundled their services or just even itemized their invoices, the costs would be more transparent. As I said, we have been advocating for unbundling for years, but people have been wedded to a business model that suits them not the consumer.
Matt.... so much good information it is difficult to pick what to comment on. Might you consider spreading this out over a few cycles to give readers a chance to dig in on one "meaty" issue ONE at a time?
How about focusing on the pattern with health care purchases, exemplified with hearing aides, that the BUYER should not be the public but instead a single buyer who is as informed or more than the seller? No?
I think a few people are missing the point. Independent audiologists rely on the cartel of hearing manufacturers who set high prices to purchase from them due to a lack of competition between the incumbents. Naturally they have to pass the cost onto the consumer. Hearing aid prices can be cheaper for them to make the same profit.
Sure there will always be a need to see an audiologist for some people, but new competitors can flex its distribution channels to access regions that do not have a local audiology clinic.
When my Australian mother needed a hearing aid, the government sent her a glossy brochure describing five models (two German, one Australian, and two American) to choose from. Two weeks later, her free hearing aid arrived with an invitation to a free consultation. (Australian taxes are in line with ours).
Thanks for your extremely revealing analysis of how yet another an industry moved from a "value based business model" to a far more lucrative "fraud, waste & abuse" approach. This is the playbook throughout US healthcare. There's good reason why Warren Buffet describes our healthcare system as the "tapeworm of the US economy".
Matt- thanks for great work. Please note that the statements of Biden on ports are plain bullshit (as usual). The LA and Long Beach ports are not running 24/7; there is merely one little pilot project to do that in just only one of the terminals at LA Port. The current administration will almost certainly screw up everyones Christmas.
You know, Vint Cerf is a really big name in the accessibility movement for the internet. It'd be interesting to see if any of the things in this issue impacted him.
As an aside, the beef email raises a really interesting issue in research. The more important thing I saw in that email than funding was the offer for access. If you can get an industry partner to agree to let you look at their data (or run your own tests), putting together sufficient material for publications becomes super simple. Of course, if they decide they're not thrilled with what you find, they can always retract the rights to the data and the paper can't be published.
Great work as always
It saddens me to see such a negative portrayal of hearing loss and the industry that makes improved hearing possible. Can you please tell me 1. How much education is required to become and audiologist and why most states allow uneducated, unqualified individuals to sell hearing aids? 2. What is involved in the process of fitting hearing aids and how much follow up is needed? I am under the impression that people go to their audiologist for at least 2-3 appointments per year to ensure that the hearing aids are working properly and adjusted for any changes in hearing or health status. So people are paying for service, not just the gadgets.
Opinions like this, from someone who has no background in the hearing industry are harmful and unnecessary. Maybe we can talk about these issues instead. Hearing loss is associated with cognitive decline. Despite that, physicians don't routinely screen adults for hearing loss. People don't address hearing loss for an average of 7 years, even though it can lead to significant communication challenges for their family members who have to keep repeating themselves.
I hope someday when you are a family member have hearing loss, they go buy one of these "glorified microphones" off the shelf and Costco and see how well they work. And if they don't, make sure you never call a local audiologist who runs a small local business with the intention of helping people. This article is nothing more than your opinion and I hope you will educate yourself in the future before you demonize a whole industry.
My first thought on why ships aren't returning empty containers is that the shippers are expecting fewer exports to the US and other countries due to inflation and a poor economy and are therefore saving money in fuel and storage space by not returning them home.
Re: Public Data-- the idea that Section 230 somehow provides immunity from FCRA is just bonkers. What?
Matt, what about the EU? Often they step in where the US is unwilling to do.
Reading the comments below, you know that buying hearing aids is complicated. (You might start with youtube which might also thoroughly confuse you because when you start to actually find a provider, they may not have what people on you tube think you should have, rightly or wrongly.) My daughter offered to help out financially and I found an online supplier that discounted the purchase price combined with a local audiologist/hearing aid specialist who would fit the hearing aid you chose--from major brand names. My daughter thought I should get the best which to her meant the most expensive of the brand chosen. The hearing aids chosen arrived in two days, and we installed and adjusted them. After a day or two I was not happy because the hearing aids did not do what I had been told they would, namely recognizing my voice and reducing the sound level accordingly. (We are talking about top of the line name brand which sold for $4000.) I had had a bad feeling from the first meeting with the H.A.S. So I went back and returned the hearing aids to him as warranted. The money was back in my daughter's account in less than 24 hours.I called the discounter and he gave me another audiologist to try. I did and the result was terrific. I got the right aid for me and after some adjustment, the hearing aids worked perfectly, connected to my phone or chromebook via bluetooth which is fantastic. He recommended the model one down from the top ($3000 for both), though I thought the 2nd one down ($2000) would have been fine. His reasoning was that with 12 channels rather than 8 would give him more control. I have not seen evidence of this since the app you download has treble, mid-range-and bass, rather than 12 channels.
The company has wonderful consumer reps that I have talked to trying to understand the hearing aid. The app allows you to make your own custom programs. I asked why I could not modify their programs and had to go to an audiologist. The answer was that they did not want to be liable for your blowing out your ear drums. (I think an additional reason might be that they don't want to alienate their audiologists. But if you are paying more than $4000, I think you will find that the audiologist is getting the extra because he/she can. At least one of you suggested Costco. Between the one H.A.S. and audiologist, I went to Costco. It was considerably less expensive, though not for the units they sell made by Phonak under their private label. (Phonak is what I have.) Costco is very popular and reportedly does a good to great job. I decided to stick with my online source because a Costco appointment would not be available for 2 months and I would have had to drive 60 miles. I had a new appointment locally from the online supplier in maybe 3 days, and hearing aids 2 days later. There is more than all this to getting the right fit, and I am skeptical that the FDA's regulations will help in the great variety of cases. But I do think that direct access to the hearing aid manufacturers seems like a good idea. It will also produce a bunch of scams. When I started looking two years ago, there were already some online.
Note that for what we paid I got an excellent hearing aid, 6 visits in the first year to my audiologist, and 3 years warranty.
I’m not sure where to begin. As a hearing instrument specialist, I see so many flagrant errors in this article that I can only assume the writer is simply looking for attention with inflammatory accusations. Of course, I’m now giving him attention by commenting.
Costco does not buy their hearing aids at 3-4x cheaper, they accept slim margins on the devices because they make their real money on memberships. The model works for some people, for others they are interested in a different model of healthcare.
Hearing aids are not “an adjustable microphone”. You can order one of those on Amazon, and it ain’t the same thing.
I am all for the cost of hearing aids being driven down by natural economic forces like competition, efficiencies in the business, and innovations. I am all for increased insurance coverage for real hearing aids. I am all for some over the counter devices with caveats and warnings explaining exactly who they are for and what to do if you don’t fit that category.
Over-the-counter devices will work for some people but not for all. Shadow me for a day and see why my physical hands, my intellectual knowledge, and my counseling help my patients successfully wear their hearing aids. I’m physically and mentally working all day every day doing tasks that cannot be replaced through the internet.
And lastly, take a look at the NHS which provides hearing aids for free and yet only 50% of the people who need them have gotten them and many of those do not wear them ( but hey they were free). Cost is not the single factor that is keeping people from getting hearing aids, but is just one of many reasons. It is part of why I spend so much time with patients building trust, explaining diagnostics, reviewing possible outcomes and walking them towards the solution that’s going to work for them.
There are just a few of my thoughts..
Hi, my name is Geoff Cooling and I write for the consumer site Hearing Aid Know. I would like to point out a couple of things in the article that just aren't true. Firstly, hearing aids are by no means adjustable microphones, which is a ridiculous simplification of what hearing aids do. Secondly, the retail price of hearing aids is set by the retailers who sell them. The idea that Independents pay four times the price over that offered to Costco is a lie. Whoever told you that, was lying to you. You should ask them what their unit cost is after the discount, then ask them what they retail them at. I would be especially interested in their answer to that question about entry-level or lower medium-level technology. In relation to ruralbob's comment about lavish parties. Why didn't the Audiologists approach the manufacturer involved with the suggestion that if they did not attend any of those fancy trips to Vegas or wherever, could their discount not be bigger considering there would be lower marketing budget cost?
The empty containers issue is simple. Because the port is running so slow, as soon as they finish unloading one ship, the management is trying to get another unloaded as fast as they can. As you can imagine, this doesnt leave the ports with any time to put empty containers back on the boats headed for china. as such, the empties just pile up