Why do hearing aids cost $2000 to $4000 each?

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GopherT

Joined Nov 23, 2012
8,012
New legislation in the US will create an "over the counter" (non-prescription) hearing aid for people with moderate to mild hearing loss.

Current hearing aids cost $2000 to $4000 each (most people need a pair). A hearing aid has much less technology in it than an iPhone and they cost way more - weird. Someone must be making a big profit off the hearing impaired (and that profit is government mandated). That said, Guess who is fighting the bill with major lobbying efforts?

http://www.cnn.com/2017/08/03/opinions/otc-hearing-aids-opinion-kelley/index.html

It already passed congress, I wonder if it will go through the senate.
 

Aleph(0)

Joined Mar 14, 2015
597
Current hearing aids cost $2000 to $4000 each (most people need a pair). A hearing aid has much less technology in it than an iPhone and they cost way more - weird.
Not really gophert cuz it's just supply and demand! So there's a lot more demand for smartphones than hearing aids so it's almost like _specialty item_! Now I know it's it's just tiny AF amp in special package but all the FDA rules and regs drive price up too!

GopherT as example of what I mean by supply and demand forces I paid $700 for a $15 8' linear florescent lamp just cuz of requesting no phosphor coating (so I mean just 110W HO w/o UVC lucent envelope glass so it's just regular lighting tube w/o phosphor) so limited demand usually means paying more for less:cool:!
 
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#12

Joined Nov 30, 2010
18,218
I'm going with regulation costs. Now that you can get eyeglasses without a thorough medical exam they are 2 for $78.
The last Ophthalmologist I went to wants nearly $400 for two pairs of glasses and he can't get glass lenses.
I think he just lost most of his business.

I had an experience a long time ago where I paid for the exam and received my spectacles, but they were ground wrong. I went to another eye doctor who put me through the whole process and costs again because, "I am responsible for the total care of your eyes". I told him to call me when he needs his air conditioner filters changed because I would love to be responsible for the total care of his entire heating and cooling system.

He didn't phone me.:(
:D
 

Aleph(0)

Joined Mar 14, 2015
597
"I am responsible for the total care of your eyes"
#12 I totally agree with what ur saying! That line from ANY health professional is total BS just to upsell patient and intimidate them abt possibility of serious condition! Which I say is totally extortion! So health scaremongers outsmarted themselves cuz now a lot of ppl refuse screening on basis that modern medicine is way better at diagnosis than treatment and cure! So if patient is on like bad health equivalent of _death row_ maybe he/she doesn't want to know abt it and I totally sympathize with that attitude cuz we're all going to die soon enough anyway so I say why mark it on calendar:rolleyes:?! And saying something like _screening can catch serious condition in time to treat it_ doesn't cut it cuz a lot of serious illness is untreatable or has treatment worse than death! So I agree health providers need to just perform requested services and not look for other problems patient doesn't want explored:mad:!
 

Thread Starter

GopherT

Joined Nov 23, 2012
8,012
Not really gophert cuz it's just supply and demand! So there's a lot more demand for smartphones than hearing aids so it's almost like _specialty item_! Now I know it's it's just tiny AF amp in special package but all the FDA rules and regs drive price up too!
You're sticking with that story? Are these assumptions or did you really look? Could you please describe what "FDA regs" are driving up the price? I'm guessing more hearing aids are sold than "laser combs to cure baldness and all of these devices claim some degree of FDA approval - I'm guessing the same level of non-invasive device as hearing aids.

http://hairlosscureguide.com/13-of-the-best-laser-hair-growth-combs-and-helmets-to-treat-baldness/

Interestingly, more and bigger injection molded parts, and still under $500.

Let me know you you determined production volume and FDA approval costs drive hearing aid costs to $4000 each. I'm guessing it is lack of competition and "value pricing", not free markets and "cost plus" pricing that keep the price of hearing adds high. In fact, I doubt a hearing aid costs more than $50 in parts and assembly.


GopherT as example of what I mean by supply and demand forces I paid $700 for a $15 8' linear florescent lamp just cuz of requesting no phosphor coating (so I mean just 110W HO w/o UVC lucent envelope glass so it's just regular lighting tube w/o phosphor) so limited demand usually means paying more for less:cool:!
So a fluorescent bulb can be correlated to a $4000 hearing aid? Please share the details you've found! I can't wait to hear about it!
 

Thread Starter

GopherT

Joined Nov 23, 2012
8,012
You're sticking with that story? Are these assumptions or did you really look? Could you please describe what "FDA regs" are driving up the price? I'm guessing more hearing aids are sold than "laser combs to cure baldness and all of these devices claim some degree of FDA approval - I'm guessing the same level of non-invasive device as hearing aids.

http://hairlosscureguide.com/13-of-the-best-laser-hair-growth-combs-and-helmets-to-treat-baldness/

Interestingly, more and bigger injection molded parts, and still under $500.

Let me know you you determined production volume and FDA approval costs drive hearing aid costs to $4000 each. I'm guessing it is lack of competition and "value pricing", not free markets and "cost plus" pricing that keep the price of hearing adds high. In fact, I doubt a hearing aid costs more than $50 in parts and assembly.




So a fluorescent bulb can be correlated to a $4000 hearing aid? Please share the details you've found! I can't wait to hear about it!

Note: according to the NIH,
  • About 28.8 million U.S. adults could benefit from using hearing aids.
Assuming a 5-year lifetime, 58M are needed every 5 years or 12M per year.

How much do fixed production cost get diluted by higher volume once you are making 28M units per year vs about 4M units per year? Currently, 1 in 6 who need hearing aids are buying them. I'm looking forward to @Aleph(0) 's economic calculation.
 

Hypatia's Protege

Joined Mar 1, 2015
3,226
Re: Posts #7 and #8 -- Hey @GopherT?!:confused: Did somebody arise from 'the wrong side' of bed this morning?:p

So a fluorescent bulb can be correlated to a $4000 hearing aid?
It seems to me she has a point? -- To wit: less demand = higher manufacturing and marketing cost:profit ratio = higher end user price... Granting that impromptu 'one off' production of a phosphor-less florescent tube represents an entirely different 'dynamic', I feel the 'central theme' holds true?:cool:

In fact, I doubt a hearing aid costs more than $50 in parts and assembly.
Agreed...

all the FDA rules and regs drive price up too!
I'm guessing it is lack of competition and "value pricing"
@Aleph(0) & @GopherT
While I feel that both of you have identified significant 'contributing factors' -- My 'theory' (ahem... wild guess:oops:) is that the 'root cause' of the 'higher than expected' price may be summed up with a single word -- To wit: Tort:rolleyes:

'Tho, for all that, I'm bound to say $4k --fair or not-- seems a small enough price for maintenance of a vital sense! --- Perhaps the real mystery is to be appreciated in the observation that hearing aids are more costly than eyeglasses?

Best regards
HP:)
 

Hypatia's Protege

Joined Mar 1, 2015
3,226
So I agree health providers need to just perform requested services and not look for other problems patient doesn't want explored:mad:!
100% agreed but with the qualification that full implementation of such a scheme will require some measure of 'tort reform'! -- The trouble (from the providers' POV) is far less greed than fear of litigation!

With genuine respect
HP:)
 

Thread Starter

GopherT

Joined Nov 23, 2012
8,012
Re: Posts #7 and #8 -- Hey @GopherT?!:confused: Did somebody arise from 'the wrong side' of bed this morning?:p


It seems to me she has a point? -- To wit: less demand = higher manufacturing and marketing cost:profit ratio = higher end user price... Granting that impromptu 'one off' production of a phosphor-less florescent tube represents an entirely different 'dynamic', I feel the 'central theme' holds true?:cool:


Agreed...




@Aleph(0) & @GopherT
While I feel that both of you have identified significant 'contributing factors' -- My 'theory' (ahem... wild guess:oops:) is that the 'root cause' of the 'higher than expected' price may be summed up with a single word -- To wit: Tort:rolleyes:

'Tho, for all that, I'm bound to say $4k --fair or not-- seems a small enough price for maintenance of a vital sense! --- Perhaps the real mystery is to be appreciated in the observation that hearing aids are more costly than eyeglasses?

Best regards
HP:)
Not covered by health insurance or Medicare. How does one making $16k/year in minimum wage afford a pair of hearing aids?
Should they set aside a quarter of their income just to hear when there are less than $50 of parts in the device?

Do you really think incumbent vendors should maintain their status or should a OTC version be available?
 
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Thread Starter

GopherT

Joined Nov 23, 2012
8,012
Re: Posts #7 and #8 -- Hey @GopherT?!:confused: Did somebody arise from 'the wrong side' of bed this morning?:p


It seems to me she has a point? -- To wit: less demand = higher manufacturing and marketing cost:profit ratio = higher end user price... Granting that impromptu 'one off' production of a phosphor-less florescent tube represents an entirely different 'dynamic', I feel the 'central theme' holds true?:cool:


Agreed...




@Aleph(0) & @GopherT
While I feel that both of you have identified significant 'contributing factors' -- My 'theory' (ahem... wild guess:oops:) is that the 'root cause' of the 'higher than expected' price may be summed up with a single word -- To wit: Tort:rolleyes:

'Tho, for all that, I'm bound to say $4k --fair or not-- seems a small enough price for maintenance of a vital sense! --- Perhaps the real mystery is to be appreciated in the observation that hearing aids are more costly than eyeglasses?

Best regards
HP:)
If Tort was the only reason for the price of hearing aids, the current manufacturers would not be lobbying.
 

Hypatia's Protege

Joined Mar 1, 2015
3,226
Do you really think incumbent vendors should maintain their status or should a OTC version be available?
---Emphasis added---

Absolutely! -- Granting enforcement (i.e. maintenance) of the selfsame health and safety standards!:)

If Tort was the only reason for the price of hearing aids, the current manufacturers would not be lobbying.
Hey @GopherT -- Please be advised that I do not -for an instant-- ignore the influence of 'greedy players' nor their effect upon the cost of healthcare in general! -- In that I am in full agreement with @Aleph(0) 's description of said practice - namely extortion!:mad: -- That said, I feel tort is likewise a significant part of the 'picture'...

Very best regards
HP
 

DickCappels

Joined Aug 21, 2008
7,424
Several years back the government of Thailand said that AIDS medication from American companies were too expensive and they were to important to do without, so the government said (and I paraphrase poorly), "No, thanks, we'll make our own. Sorry about your patent rights" and they were able to make them freely available to all Thais.

The "Adjustable Digital Hearing Aid Kit Behind the Ear" hearing aid below is listed today on eBay from a Hong Kong source for about $4.50 including international shipping. Hey, in 1983 this one would have been state of the art!
upload_2017-8-6_19-6-13.png

Friends of mine set up a hearing aid company in mainland China a couple of years ago. No red tape, no bureaucracy to deal with. Might not have been totally legal but nobody stopped them.
 

Hypatia's Protege

Joined Mar 1, 2015
3,226
Hello,

Just like the most hated man in america did with the aids medicine:
https://www.nytimes.com/2017/06/26/business/dealbook/martin-shkreli-trial-jury-selection.html

He bought the company that produces the pills.
He raised the price of the medicine from $13.50 to $750 a pill.

Bertus
...And the fact that such extortion, mayhem and murder is possible under US law says all that needs be said about the so called 'free market' system and pay-per-play governmental oversight -- both of which being among the many faces of fascism!...
 
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wayneh

Joined Sep 9, 2010
17,152
A hearing aid has much less technology in it than an iPhone and they cost way more - weird. Someone must be making a big profit off the hearing impaired (and that profit is government mandated). That said, Guess who is fighting the bill with major lobbying efforts?
I've often wondered why they're so expensive. It obviously (to my eyes) limits the market for such devices.

There are quite a few facts about the market and the distribution channels here:
https://www.quora.com/Why-are-hearing-aids-so-expensive
(If you cannot access this without logging in, let me know and I can copy over some of the relevant facts.)

But after reading that and more, I still don't have the answer. There are implications that the six big manufacturers run a sort of cartel, and have been able to influence state laws to reinforce their dominance over the market. The latter is clearly true (and applies to all of medicine) but I have a hard time buying into the cartel theory. With such a huge incentive to cheat, cartels always fail. The weakest player will start cheating out of desperation and the thing collapses. With six players in the mix, failure of a cartel is a given.

And even if the entire market were run by a single monopolist, I believe that monopolist would make more money by dropping the prices and selling more units. I admit I haven't done the math and I'm not privy to the demand curve and the price elasticity in this market. Optimum monopoly pricing is actually a very difficult topic and can lead to odd situations. Theater popcorn pricing is one example. Everyone in the theater wants the popcorn and would buy it if it were cheap. But the theater wants the highest revenue possible, and they get it because they know a few people seeing the film will pay a much higher price for that pleasure. Selling the popcorn at a lower price would give up the revenue from that fattest segment. I suspect that's what is happening here - the suppliers know they could sell to a mass market at a lower price, but then they'd lose the revenue from the smaller "whales" segment. But they're not a single monopoly and I don't understand why they don't compete.

I just know that money is the main hurdle keeping buyers out of the market. I also know from a friend's experiences that the cost of the hardware is not a big part of it. When she had problems with her devices, they swapped them out without flinching.

Another thing that doesn't make sense to me is that a smart monopolist would prepare for new entrants and head them off. Develop new technologies, drop prices, change distribution channels and so on. I don't see those things happening. They don't seem to be changing one bit except to step up their lobbying. Maybe they know that's their only reliable weapon.

I thus predict that the big guys are going to fall, and fall very hard within the next year or so, to be replaced by more nimble entrants. Hearing aids will be $200 a pair, available from dozens of suppliers, and we'll all look back with amazement that people ever paid more. The big guys of today must know this, and yet they keep holding on to the old business model. Maybe they don't know what to do except milk the cow until it's dead. Sometimes that's the right strategy, but in my experience it's rare.
 
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Thread Starter

GopherT

Joined Nov 23, 2012
8,012
I've often wondered why they're so expensive. It obviously (to my eyes) limits the market for such devices.

There are quite a few facts about the market and the distribution channels here:
https://www.quora.com/Why-are-hearing-aids-so-expensive
(If you cannot access this without logging in, let me know and I can copy over some of the relevant facts.)

But after reading that and more, I still don't have the answer. There are implications that the six big manufacturers run a sort of cartel, and have been able to influence state laws to reinforce their dominance over the market. The latter is clearly true (and applies to all of medicine) but I have a hard time buying into the cartel theory. With such a huge incentive to cheat, cartels always fail. The weakest player will start cheating out of desperation and the thing collapses. With six players in the mix, failure of a cartel is a given.

And even if the entire market were run by a single monopolist, I believe that monopolist would make more money by dropping the prices and selling more units. I admit I haven't done the math and I'm not privy to the demand curve and the price elasticity in this market. Optimum monopoly pricing is actually a very difficult topic and can lead to odd situations. Theater popcorn pricing is one example. Everyone in the theater wants the popcorn and would buy it if it were cheap. But the theater wants the highest revenue possible, and they get it because they know a few people seeing the film will pay a much higher price for that pleasure. Selling the popcorn at a lower price would give up the revenue from that fattest segment. I suspect that's what is happening here - the suppliers know they could sell to a mass market at a lower price, but then they'd lose the revenue from the smaller "whales" segment. But they're not a single monopoly and I don't understand why they don't compete.

I just know that money is the main hurdle keeping buyers out of the market. I also know from a friend's experiences that the cost of the hardware is not a big part of it. When she had problems with her devices, they swapped them out without flinching.

Another thing that doesn't make sense to me is that a smart monopolist would prepare for new entrants and head them off. Develop new technologies, drop prices, change distribution channels and so on. I don't see those things happening. They don't seem to be changing one bit except to step up their lobbying. Maybe they know that's their only reliable weapon.

I thus predict that the big guys are going to fall, and fall very hard within the next year or so, to be replaced by more nimble entrants. Hearing aids will be $200 a pair, available from dozens of suppliers, and we'll all look back with amazement that people ever paid more. The big guys of today must know this, and yet they keep holding on to the old business model. Maybe they don't know what to do except milk the cow until it's dead. Sometimes that's the right strategy, but in my experience it's rare.

I also think that many people only need them occasionally. So far, the prescription concept means the Apple was pulling any apps that appeared to be a medical device. An OTC "app" would mean people could do hearing tests with an app, set the microphone and output frequency profile and instantly, your phone is an "as needed" hearing aid. The new apple ohones don't have a switching headphone plug so microphone and speaker (headphones) should be programmable to be on at the same time. Lots of opportunities.

As for things that people. Think are volume based, many, many, many electronic devices are run in volumes under 100,000 units and the price is nowhere near 4000 each.

PS, I appreciate your opinion, WayneH.

I was going to call Energizer and Duracell product managers on Monday to see if they will pay their lobbies to push for the OTC option. How could they say "no" to growing their hearing aid battery market by 6x?
 

MaxHeadRoom

Joined Jul 18, 2013
23,090
If any consolation, they are priced the same in Canada.
Very similar to Luxottica the Italian eyewear company of Milan. , Italy, it is the world's largest eyewear company.
Luxottica designs, manufactures, distributes and retails its eyewear brands, including LensCrafters, Sunglass Hut, Apex by Sunglass Hut, Pearle Vision, Sears Optical, Target Optical, Eyemed vision care plan, and Glasses.com. Its best known brands are Ray-Ban, Persol, and Oakley.
Luxottica also makes sunglasses and prescription frames for designer brands such as Chanel, Prada, Giorgio Armani, Burberry, Versace, Dolce and Gabbana, Miu Miu, DKNY, and Tory Burch.
In January 2017 it announced a merger with Essilor to be completed by mid-2017, resulting in combined market capitalization of approximately €46 billion.!!
Just about the whole market sewn up!:rolleyes:
Max.
 
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RichardO

Joined May 4, 2013
2,271
There are devices that are like hearing aids but they do not call them that. They sell for about $300 for a pair. I don't have time to find a link right now...
 
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