The healthcare industry is failing to address a massive, treatable epidemic.
36 million Americans suffer from hearing loss, a number that is only increasing as the population ages. Hearing loss has been linked to chronic disease, depression and even reduced earnings, and the health benefits of treatment are clear, with studies showing that hearing aids profoundly improve quality of life, and can even prevent brain atrophy. Nonetheless, the hearing care industry seems content with a status quo characterized by inflated costs and low adoption, in effect turning a deaf ear toward untreated hearing loss.
America's hearing aid market is broken.
Given the benefits, a consumer might reasonably expect the free market to provide a selection of affordable hearing aid options. That consumer would be sorely disappointed. Today you can walk into an Apple store and take home an iPhone for $650, but if you want to buy hearing aids you'll have to shell out around $5,000. To put this number in perspective, Apple spent about 23 times as much on research and development last year as William Demant, the manufacturer of Oticon hearing aids. Hearing aid adoption has stagnated around 25% for years and increasingly high prices have surely played a role.
Taken together, restricted adoption and elevated prices are the hallmarks of monopoly. In the case of hearing aids, the monopoly was created by state-level regulations designed to protect consumers. Before an individual can purchase a hearing aid, a hearing test must be administered by a professional trained to recognize potentially serious health conditions. No one would object to the importance of this examination, but it's critical to realize that many audiologists are also hearing aid salespeople and that regulation has effectively handed them the deed to a cornered market.
The choices audiologists present to consumers are almost invariably stark: Break the bank for the sake of your health or live with an untreated disability. Neither option is particular attractive.
Since consumers can't choose to buy elsewhere, the industry gets away with making consumers pay through the nose while obfuscating the true price of hearing aids by "bundling" the devices in a "package" that includes unlimited follow-up care. From the industry's perspective, this is a very smart pricing strategy because it "captures" customers and makes them "sticky." Once the customer purchases a service package, he is effectively "locked in" and is unlikely to switch providers.
Professionals also benefit from asymmetric information in pricing the service package: They have a very good idea how much follow-up care the customer is likely to need, while a first-time hearing aid buyer probably doesn't.
From the perspective of the less-informed consumer, the medical purpose of the device may seem to justify a $5,000 price tag. What the customer may not realize is that he is really paying for a $2,000 device with a $3,000 service package attached. Trying to sell a service package at a cost of $300 per visit wouldn't be easy in a competitive marketplace, but as part of the "package" of care, that's often how the math works out.
In private conversations, some audiologists admit that "unbundling" is inevitable and that the value of audiologic care must eventually drive pricing. A recent article in Hearing Review even suggests "unbundling" as potential way to increase adoption. This will be a painful adjustment for the industry and Audiologists typically object to nontraditional sales channels, noting that expert professional service can mean the difference between successful hearing aid adoption and hearing aids ending up in a drawer.
Because their concern is not unreasonable, the question becomes: What if a consumer saves thousands of dollars by buying hearing aids online then negotiates after-market support from a local audiologist to maintain a high standard of care?
The answer is clear. The audiologist no longer pockets the retail mark-up and the consumer saves thousands of dollars. The audiologist may recoup some of his lost revenue by selling an after-market service package, but will lose out overall.
In the future, it seems likely that manufacturers will make hearing aid programming technology available directly to consumers, giving savvy technophiles the choice to bypass audiologic "re-programmings" altogether. But the first manufacturer to do so would likely face swift reprisals, and soon find its audiologist distributors pushing competitors' products. Since this seems unlikely, the short term focus needs to be on unbundling hearing care.
Audiologists may fear that 1-800 Contacts' effect on optometrists could be replicated in the cash cow hearing aid market, but this nightmare scenario would offer an affordable alternative to the 27 million Americans with untreated hearing loss. With an unsound market offering a deal this raw, it is only a matter of time until the status quo gets shattered. The coming change is long overdue. Better late than never.
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Sam Tanzer is the CEO of Embrace Hearing, an online hearing aid retailer that aims to improve the lives of the millions Americans with untreated hearing loss.
Follow Sam Tanzer on Twitter: www.twitter.com/@samtanzer
This is making Deaf people a guinea pig for their social agenda. Deaf people are not broken nor needing fixed. What needs to be fixed is that insurance companies need to give equal consideration to hearing aids as more than just "luxury" items and they are not antiquated!! technologies as they would make you think. Hearing aids are just as up-to-date as CI's are, they just have different ways of getting sound to the deaf individual. The other aspect is that I do understand that hearing aids are not for everyone either, some need more. But, people will go for Ci for cost reasons alone, and play right into the insurance company's hands and the medical folks who think they are "Helen Keller" to the deaf (Heard that quote on a TV show about Ci's), and that disgusts me. We can do better, and should give more options not railroad everyone into one-size-fits all through economic manipulation.
The issue is guaranteed money for CI for services and medical, and limitation of the people to being stuck with CI technology, since, once implanted, you cannot alter what type of accomodation you can use as a Deaf/HoH person once implanted. All residual hearing and function in the mechanical part of the ear is bypassed with the CI. With hearing aids, you have more options.
Audiology sells an outdated and ineffective placebo instead undergoing the necessary paradigm shift - to develop the listening-aid. See the Listeners' Manifesto.
It's more difficult for her to make the money she once did, but sleeps better knowing more people have access to her services at a price they can afford (helping people lead better lives is why she was drawn to audiology - not the money, which wasn't all that great when she graduated).
To illustrate how entrenched audiologists are, she's been roundly criticized for her business model and has been accused of accelerating the demise of the profession - to which my reply has been: "Let's hope, but I doubt she has that power".
Where is the government funding for hearing aids?!?!?
"A new study by researchers from the Perelman School of Medicine at the University of Pennsylvania shows that declines in hearing ability may accelerate gray mater atrophy in auditory areas of the brain and increase the listening effort necessary for older adults to successfully comprehend speech.
When a sense (taste, smell, sight, hearing, touch) is altered, the brain reorganizes and adjusts. In the case of poor hearers, researchers found that the gray matter density of the auditory areas was lower in people with decreased hearing ability, suggesting a link between hearing ability and brain volume.
"As hearing ability declines with age, interventions such as hearing aids should be considered not only to improve hearing but to preserve the brain," said lead author Jonathan Peelle, PhD, research associate in the Department of Neurology. "People hear differently, and those with even moderate hearing loss may have to work harder to understand complex sentences...."
I would also recommend this press release from the Better Hearing Institute -- a not-for-profit organization with the mission of educating the public and medical profession on hearing loss, its treatment and prevention:
http://www.marketwatch.com/story/link-between-hearing-loss-and-chronic-diseases-earnings-highlighted-by-bhi-during-national-employee-wellness-month-2012-06-01
There is a more fundamental issue. As currently configured, hearing aids simply aren't very useful in a wide variety of situations for which they are marketed. In short, hearing aids don't deliver good value at $2000, let alone $5000.
Don't get me wrong: hearing aids are necessary if you have a serious hearing loss. But they are not sufficient. They cover a significant fraction of hearing situations, but only a fraction.
To deliver good value, hearing aids will need to become more powerful and effective, which almost certainly means they need to be larger and visible. They also need to be re-conceived as the hub of a truly integrated assistive listening system based on open interconnectivity standards so that devices from one manufacturer can be used with another.
Firstly, the level of maintenance required to keep a hearing aid in good working condition is beyond the capability of most users and so the dispenser is tasked with upkeep. When that is the case, the incentive to sell cheaper HA's is diminished. It's a zero-sum game, for now.
Secondly, public perception is that hearing aids are extremely expensive, and so many people assume they are priced out of the market without doing any research. And when well-known nationwide chains like Beltone and Miracle Ear sell hearing aids for $10,000, this perception is difficult to alter.
Finally, the industry is so fearful of change that any attempt to circumvent accepted practices is met with negative publicity and the cry for more regulation. (see Best Buy and Radio Shack trying to add hearing aids to their product mix)
However, the hearing aid industry is going to change. In the next ten years someone will write an app or create a simple, cheap device that Best Buy can carry. When that happens, hearing aid manufacturers will wish they had changed their business strategy years ago.
Peter Niswander
Professional Hearing Care Services
Columbus, Ohio
The FDA must regulate HA to ensure accountability and transparency. FDA only regulates HA for safety and efficacy. Comparing cars is easier than HA. Proprietary rather than generic names should be used for features and be tested against international ANSI standards. As Sy Syms said, an educated consumer is our best customer.
HA should be covered under EHB s1302 under (G) Rehabilitative and habilitative services and devices. Pediatric services in section (J) should include hearing care. It was supposed to protect people with disabilities. Goldman Sachs HA 2011 report shows a direct correlation in Europe between usage and insurance coverage.
HA Assistance Tax Credit Act (S1019) does not go far enough. A $500 credit is paltry when compared with the overall cost. It will not impact affordability. Consumers may be forced to purchase low-quality rather than HA that will appropriately assist them.
People purchase new HA because their hearing worsened and breakage. A person should not be penalized for wanting to hear well. There should be no limits on the credit. It is not a new handbag.
Age is irrelevant and should be available to anyone.
People with lower incomes are least likely to benefit because it only helps those whose taxes exceed the amount of the credit.
Janice Schacter, chair Hearing Access Program