Is there a hearing aid price bubble?

Posted on May 26, 2011 by Patrick Freuler | 33 Comments

hearing-aids-prices-audicusIf you have been through the process of getting a hearing aid, you probably must have scratched your head when looking at the bill. Hearing aid prices typically range from $1,500 to $3,500 per unit. Double that if you need one for each ear!  To the average American household, this is equivalent of up to 2 months of income!

Escalation of Hearing Aid Prices

While the price itself seems exorbitant, what is even worse is its continuous pace of growth: in the last decade the price of an average Behind the Ear (BTE) hearing aid has more than doubled. Even today, price points are not receding.

hearing-aid-prices-audicus

Most hearing aids today are made up of digital signal processors. What is surprising is that digital technology was expected to reduce the production cost of a hearing aid. After all, digital technology has also made consumer electronics far less costly: think of how the cost of an average DVD player has plunged over the last decade.

The components of a hearing aid are indeed commoditized: they cost at most $50 to $150 per device but can go as low as a few dollars. If on top of this, most major manufacturers have shifted their production to low-cost China (e.g. Phonak), why do consumers still see rising price levels?

For a while, increasing amounts of R&D spend shifted towards developing sophisticated signal processing software that tackled anything from complex speech recognition situations to effective noise cancellation. However, that has become standard too.

Manageable Hearing Aid Prices: Where are the Low Cost Hearing Aids?

More importantly, manufacturers have spent substantial R&D resources making the devices smaller, more powerful and packed with myriads of new features: Bluetooth, wireless integration, remote controls, 20+ channels. However, the improvements in alleviating hearing loss are becoming increasingly marginal: for most people there is no notable perceived benefit beyond 4-5 channels. Many argue that devices nowadays are over-engineered for the average user with mild or moderate hearing loss - however it gives manufacturers an excuse to charge higher prices by introducing “newer and better” models. Think about it this way: if you need to get from A to B, a Rolls Royce would definitely make the ride more enjoyable than a Honda. But the Honda will get you from A to B just as well, in a safe and comfortable manner. It seems that when it comes to hearing aids you don’t have the choice to opt for the Honda: you are forced to buy the Rolls Royce.

However, by far the most important factor for the current hearing aid price levels has to do with the underlying industry structure; the relationship between manufacturers, audiologists and end-patients. Have you ever pondered at how on earth a few components costing at most $100, assembled in China, suddenly turn into a $2,500 hearing aid? While many recent events suggest that low price hearing aids might be right around the corner (Audicus is one example) this pricing bubble is material for many posts to come.

Read more about the rising hearing aid prices versus other consumer electronics.

Sources: Audicus Hearing AidsMarke Trak VIII, Audiology Online

Posted in Audicus, Hearing Aid, Hearing Aid Cost, Hearing Aid Prices, Hearing Aids, Hearing Industry, Prices of Hearing Aids


25 Responses

Ben
Ben

November 24, 2013

What has been overlooked here is the fact that there are a multitude of hearing aids that range from $19.99 to $50.00 that perform with E-X-A-C-T-L-Y the same quality with E-X-A-C-T-L-Y the same parts even manufactured by the E-X-A-C-T-L-Y the SAME companies as those found for $100.00 dollars or more on up to the $3,000.00 mark. It is much like when I take a silk shirt to the cleaners and they charge me $7.00 to clean it and my wife takes her silk blouse to the cleaners (the same shirt just in a smaller size) and they charge her $20.00. All they are doing is sitting back and watching the suckers line up to pay between $100.00 to $3,000.00 for a $50.00 item. It is nothing more than theft partnered up quite profitably with stupidity.

peter
peter

November 09, 2013

I am looking for an behind the air hearing aid that has a remote control with an ON/OFF switch. Is there any out there?
thanks

wayne
wayne

September 25, 2013

I am researching low cost hearing aids from China where most hearing aids are now produced. I am tired of the extremely high price for hearing aids. Having worn aids for the last 30 years I want to source low cost aids. But how can they be tuned to suit our wide ranging hearing loss patterns?? My last $9,500 pair only lasted 2yrs before needing replacement.

Bernie Wiebe
Bernie Wiebe

March 20, 2013

I have a hearing problem that seems to be other than just a hearing loss. I have intermittent times when my eardrum seems to “pop.” Then a hum starts in that ear [it is my right ear] and with that
my hearing seems to decrease. It is also quite uncomfortable.
I have seen two ear specialists. Both tell me that there is no known cure for my problem and that I may have to use “trial and error” to see if anything al all will help. I have tried drops, steroids, ear popper, wax removal, massage, etc. To date, nothing has really helped.
Do you believe there is a chance that a hearing aid might help me?

Rev. Dr. Bernie Wiebe, berniewiebe@shaw.ca

RLakin
RLakin

March 08, 2013

DSP (Digital Signal Processing) is the technology used now days to process audio signals. DSP uses analog audible data converting it to digital, processing the digital data, eg; filtering, compressing, sensing and converting digital to analog data. Output to desired amplification matching the desired response curve. Serial interface to a computer program would allow the patient to program their own hearing comfort zone. Almost all hardware models would be the same. One piece of hardware using software programing. A single chip would do the job. Program the hardware rather than tweaking the hardware. Should make the aid less expensive and I could buy used ones and do my own programming.

Oleg
Oleg

December 02, 2012

Hello !!!

My name is Oleg , I live in Ukraine ! I and my friends have a problem hearing … We need hearing aids I ask for help … gift of hearing instruments … Waiting for reply .. Blessings to you from Jesus! Oleg
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October 28, 2011

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Jon
Jon

September 12, 2011

Idea: Make an iPhone and Android hearing aid app. Avoid the stigma of wearing hearing aids and save money at the same time.

Matt Haakinson
Matt Haakinson

September 15, 2011

Useful post with some very helpful points! I’m Sure this will support my finances and maybe many others.

Dr. Kenneth Noisewater
Dr. Kenneth Noisewater

September 11, 2011

Are hearing aids covered by medical insurance? If so, that’s probably your answer.. If folks had to pay out of pocket the entire price, then I doubt many would be able to justify those prices, and a market for the lower-cost lower-spec but fully functional variants would emerge. Imagine (to use your analogy) that the government or your employer would subsidize the cost of a Rolls-Royce so that you only had to pay the price of a used Yugo to receive one. Where would that leave Honda?

Sanders
Sanders

September 11, 2011

Not just that they are more and more expensive, with the jump to digital most of them are full of bugs which in many cases are never fixed.

Yes, the hearing aid industry runs on a price bubble.

Paul
Paul

September 10, 2011

Post 2, possible solution: If the answer to the second part of my first post is yes, (sub $1000 hearing aids are competitive in a non-insurance covered market), then let’s launch a business to do just that. Using the components you indicate are available to produce the Honda hearing aid, we make a low cost hearing aid, and make it available with a small margin to cover expenses.

Gavin Bollard
Gavin Bollard

September 10, 2011

As someone who has worn hearing aids (on and off) since for the last 35 years, I’m stunned that the price keeps on rising when the devices themselves are not showing any improvement. I went back to hearing aids after a nearly 20 year hiatus to find that they still had all the old problems (non-selective amplification, discomfort and whistling to name just a few). These problems weren’t only still present, they’re actually worse in the newer models.

Surely hearing aids should be like glasses. Low cost and continually improving. The fact that they’re not suggests that people with impairments are simply being “ripped off” by greedy companies willing to take advantage of people with a handicap.

JP Armstrong
JP Armstrong

September 10, 2011

GEEZ! After reading this I feel lucky to have purchased my hearing aids for a measly 2K each! Thanks for making my day. JP

Paul
Paul

September 10, 2011

Post 1, non-technical: My knee-jerk reaction is that the reason for the high cost is two-fold; an industry that has a high overhead method of sales, an industry that is reliant on insurance coverage thus requiring the devices be medically approved and limiting the availability. Regarding this last reason, if you had a hearing aid that cost $500 but was not covered by insurance, would you gain enough market share to compete with a $3000 hearing aid that was covered by insurance?

Sorry?
Sorry?

September 10, 2011

Question. Are there no “angry kids” trying to break open this market with (cost of device + shipping + marketing) + small margin?
if not, why not? If so, what would be their web site address?

Luka
Luka

September 10, 2011

That’s cause americans hate socialism and love capitalism. It’s all about the money and profit, nothing to do with helping others. The cost of manufacture of hearing aids of high quality is at best 100 dollars. Everything else ist just profiting off hear impared people. Socialism rocks, Capitalism sucks.

Aud1
Aud1

September 10, 2011

I am an audiologist and I can tell you I often prescribe $395/unit brand name hearing aids in Ontario, Canada. Health Insurance as well as many community groups help fund hearing aids. Hearing aids can still be very expensive but in Ontario the minimum cost to the end user is much lower than $1500/unit.

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