The Price Factor Revisited: What's being sold?Hearing Aids or Complete Hearing Loss Solutions?

Recently, Audiology Online featured an article by David H. Kirkwood, editor of The Hearing Journal titled, The Price Factor: How Important Is It? As a consumer who has worn two BTE hearing aids since 1984, and as a hearing health professional who works with hard of hearing clients on a daily basis, I would like to offer a few comments.

In my work with hard of hearing clients, one of the questions I hear a lot is - Why do the hearing aids cost so much?

I usually respond with; R & D takes a lot of investment, everyone has to make their profit, and you pay for the quantity and quality of service you receive. I also ask my clients to consider the value hearing aids have in helping them hear again and what difference they make in their quality of life. These factors help my clients get beyond the price tag by helping them better understand the benefits hearing products provide. But, I do agree with them - hearing aids are tremendously expensive and the decision to purchase (or not) is a difficult one.

Ultimately, many clients choose not to purchase hearing aids for various reasons such as; they are too expensive, they don't really need them, the hearing benefit derived is not worth the price paid, etc. These comments are cited in Kirkwood's article as the kind of responses he received from various dispensers and manufacturers.¹ Kirkwood, in the January 2001 cover story of the Hearing Journal, noted there were differences of opinion within the industry over the price issue.²

I believe there are a number of factors that cause consumers to not make a purchase. For many, I believe price is a significant issue, it certainly is for me! I have purchased three sets of hearing aids over 19 years and I have worked with hundreds of hard of hearing clients and their families. I wear two multi-programmable BTE aids that are now eight years old, and my audiologist recommended I change to digital.

But, let's be realistic! The price for two digital hearing aids in Canadian dollars is about $5,500. I did try them. They were absolutely marvelous. I can even admit that I would like to purchase them. However, my budget does not permit me to spend almost $ 6,000 on a set of hearing aids - despite the high quality, the electro-acoustic advantages and the desirability of owning such a useful and well engineered product.

So for the time being, I hope my current hearing aids continue to function; should they fail to do so, I will be in big trouble! They are, of course, priceless to me in terms of the quality of life that I enjoy. Without them, I know what my quality of life would be like! I went through quite a negative period when I had to leave the teaching profession in 1994, due to progressive hearing loss. It was a period in my life that I would not wish to repeat.

I wonder... If someone in my position, an experienced hearing health professional who intimately knows the value of hearing aids and knows the value of an improved quality of life, has trouble managing the price, is it any wonder that the typical consumer would have trouble too? And being totally straightforward....How many of you can really afford to spend $5500 for hearing aids, a set of glasses, dental implants, or other "non-essential," but highly desirable devices? Imagine if you actually needed to obtain digital hearing aids, a phenomenal set of glasses and have your teeth fixed! If you can truly internalize and personalize the scenario noted, I believe you'll understand my issue.

I know many people believe price is not the big issue, but I believe it is the primary issue for many people. It could finally be decided and defined if someone (university, manufacturer, clinic) were to conduct a research program to truly determine if lower priced hearing aids would lead to an increase in sales. Imagine if the same hearing aids could be purchased (and financed) for $5500 and also for $3500? Which pair would you buy? Would you be more tempted to acquire them at $3500? I would!

Kochkin stated there was too much emphasis on the sale of high end hearing aids. He said: "We have decided to all be Infiniti or Lexus dealers."³ As Kirkwood noted, the average price of hearing aids increased some 15% since the millennium year, 2000. This increase was mostly due to the higher number of high-end hearing aids being sold, and not really an increase in the price of specific categories. Yet overall, the hearing aid market has continued to decline.

What are the reasons for this? I know some dispensers and manufacturers argue that high prices, by themselves, do not prevent people from making purchases of hearing aids. They may be right, but price is the biggest consideration I am aware of!

In fact, the old "supply and demand" formula tells me that if the price were reduced, the demand for the product would increase. Of course there are many factors that apply to this situation and they are interdependent. Factors such as; supply, demand, price, quantity, value, desirability etc, are not perfectly predictable, but they seem to define a general trend such that lowering the price would very likely increase the number of units sold!

Certainly high prices by themselves do not address all the reasons why hearing aid sales are flat or in decline. I believe there are several other factors that negatively impact sales as well.

For example, in Canada, where I live, there are no long-term payment plans. I recently learned there are several companies in the U.S.A. that offer hearing-aid-specific financing programs (like "ESCO" for instance) and this appears to be very useful for the professionals and the consumers. If financing works with other consumer products (cars, appliances, furniture etc) I see no reason it wouldn't work for hearing aids. Importantly, the goal of financing is to help the consumer affordably acquire the product.

Another factor is the service delivery model. Simply, in many places, the diverse aural rehabilitation needs of consumers are not effectively met by the local professionals. The type and quality of services offered varies tremendously. Thus, some consumers receive a high level of service and others do not. Recently, there has been a trend by service providers to work together to offer more comprehensive programs. We have seen increased cooperation where audiologists and ENT's, or hearing instrument specialists and ENTs, or even audiologists and hearing instrument specialists and ENTs work together.⁴ Additionally, there has been a greater emphasis on aural rehabilitation programs that focus on complete hearing loss solutions.⁵

Another factor is long-term rehabilitation. In the October, 2001 edition of the Hearing Journal, Charlie Whelan outlined some key trends for the coming decade. He noted the need for a commitment to long-term rehabilitation is clear. He stated, "Fundamentally, dispensers and manufacturers are not in the business of selling hearing instruments; they are in the business of restoring human communication and social involvement." ⁶ It has often been argued that the industry focuses on selling hearing aids (product), rather than providing a complete hearing solution (process). Thus, my suggestion is that we focus on the process more, and the product less.

I believe the industry and the professions need to develop a model based on aural rehabilitation. However, for many hearing health professionals who work in the clinical setting, the argument has often been that the systems they work under do not permit this more in-depth approach. I disagree with this notion. I believe that if the will exists to make changes, then changes can be made to restructure current service delivery models to include a more effective, more efficient service delivery model.

Over the past few years, I have seen a number of references to the disturbingly low "20% market penetration" which we can't seem to get beyond. Only about 20 percent of our potential hearing aid users are actually wearing hearing aids! I was amazed to read an article recently in which several leading hearing aid manufacturers were at a loss to explain why hearing aid sales could not seem to get beyond the 20% ceiling that had existed for many years. They sought information from retailers as to why this might be the case. Although it is very difficult, I suggest it is vastly more important to reach the people who chose not to purchase hearing aids to find out why they made their decision. I think that information would be much more insightful and valuable in helping the industry and the professionals decide what it should be doing, versus what it is currently doing.

My main point is this - I believe that the hearing aid industry needs to reinvent itself. I believe we should focus on the process of better hearing through complete hearing loss solutions, not on the sale of hearing aids.

A recent study by M. Samantha Lewis, and Carl C. Crandell, et al in the Hearing Journal (February, 2003) cited the positive impact of the use of FM amplification with the use of hearing aids to improve the quality of life of persons with hearing loss.⁷ Servido(2000) also addressed this issue and said it's time to take advantage of ALDS, a valuable and underused technology.⁸

I believe the industry and the profession should introduce a standarized list of service items that should be offered to consumers when they make an initial visit, based on an aural rehabilitation model.

Toni Gitles wrote several interesting articles on this topic about re-inventing the profession.⁹ She called her model The Relationship Model of HearingCare Delivery. ¹⁰ Her model, or a variation of it, could be adopted by the industry. Barry Freeman¹¹ and Dennis Van Vliet¹² discussed the need for the hearing aid industry to become more professional and the need to change the hearing aid delivery system. I couldn't agree more. I believe the time has come for the industry to re-invent itself, to do things differently and to do them better.

Kirkwood (2000) cites Sergie Kochin who said, it is time for manufacturers and dispensers, "to come together to remake this entire industry and our image. We could never do this before. But now we have the data, we have the technology, and I personally believe that we have the will." ¹³

Does the will exist within the industry to re-invent itself? Only time will tell, but I won't be surprised if one of the headlines you see in 2013 reads: The Price Factor Revisited: Hearing Aid Industry Changed Little in Past Decade.

(Note: Some of the foregoing comments formed the basis of a presentation the author gave to the 2002 Annual Convention of the Canadian Academy of Audiology in Toronto, Ontario, Canada. The presentation was titled - Beyond the Hearing Aid Prescription: Extending Aural Rehabilitation in the Clinical Setting (Audiological and Other). The comments contained in this article are the opinions of the author only and do not necessarily reflect those of the Canadian Hard of Hearing Association of any of its Chapter or Branches.)

REFERENCES:

¹Kirkwood, J. David: With scant 3% annual gain in sales, hearing aid market remains in doldrums. The Hearing Journal 2001; 54; 1; 21-32.

²Kirkwood, J. David: AS recession begins, hearing aid market goes from flat to worse. The Hearing Journal 2002; 55; 1; 21-34.

³Ibid.

⁴Bloom, Sara: Some hearing professionals find it's better to unite than to fight with other disciplines. The Hearing Journal 2002; 55; 7; 25-32.

⁵Wayner, S. Donna & Abrahmson, E. Judy: The golden thread of hearing care: Audiologic Rehabilitation. The Hearing Journal 2002; 54; 9; 66-72.

⁶Whelan, Charlie: Key trends are predicted for the next decade in the U.S. hearing aid industry. The Hearing Journal 2002; 54; 10; 32-35.

⁷Lewis, Samantha M. & Crandell, C. Crandell et al. : Study measures impact of hearing aids plus FM on the quality of life in older adults. The Hearing Journal 2003; 56; 2; 30-33.

⁸Serevido, Dominick: ALDs: It's time to take full advantage of this valuable, but underused, technology. The Hearing Journal 2000; 53; 8; 38-39.

⁹Gitles, Tony: Re-inventing the profession: A new model of hearing care delivery. The Hearing Journal 1999; 52; 9; 32-34.

¹⁰Gitles, Tony: Re-inventing the profession: The relationship model of hearing care. The Hearing Journal 1999; 52; 9; 53-56.

¹¹Freeman, A. Barry: Viewpoint. The Hearing Journal 2002; 55; 4; 56-58.

¹²Vliet, Van. Dennis: Final Word: The hearing aid delivery system: Does it provide good value? The Hearing Journal 2003; 56; 2; 56.

¹³Kirkwood, J. David: After a flat 1999, industry leaders suggest strategies to get market growing again. The Hearing Journal 2000; 53; 1; 21-35.