Hearing Aids vs Personal Sound Amplifiers

Why do Hearing Aids Cost So Much?

by Mark Ross, Ph.D.
This article first appeared in Hearing Loss
It's undeniable that the price of hearing aids is often a source of contention between consumers and their hearing aid providers. Nobody likes to be told that they're going to have to lay out six or more thousand dollars for anything. But there are also some points that I think we can all agree on. Perhaps, it would be useful to review these before going on to discuss those areas in which unanimity is less likely.
The first point is that for many people hearing aids are not just helpful devices, but absolutely essential. There are individuals who simply can't function without them. Their choices are not whether they should use a hearing aid, but which one (or two), where and how will they be acquired, and how much would they have to pay. In brief, for many people hearing aids are not a luxury but a necessity. What they would like to do is to purchase hearing aids that work as well as possible for the lowest possible price.

The second point, and one major theme of this exchange, is that we can agree that they are expensive. We may or may not believe that the cost can be justified, but whatever we feel, the dollar figure is still there, still high, and still looms very large for many prospective hearing aid purchasers. A pair of high-end digital aids costs as much as six or eight thousand dollars, with such accessories as a personal FM system adding thousands of dollars more. It is no wonder, therefore, that price becomes very a relevant consideration when people contemplate purchasing hearing aids.

Third, it is apparent that the high cost does discourage prospective new hearing aid users from acquiring their first set of hearing aids, while dissuading some experienced users from upgrading to newer models. While this reality is often countered by stating that the cost is worth the benefit (which, ideally, should be true in every instance), the fact remains that the high cost of hearing aids does deter some people from purchasing hearing aids, either initially or as replacements. This would be particularly true for those who feel that they can "get along" without hearing aids.

The fourth point is that to properly select hearing aids takes time. It takes even more time to provide the necessary follow-ups to ensure that the hearing aids are properly fit, both acoustically and physically, and that the user understands how to care and employ them appropriately. There are those who feel that the selection and adjustment process can be shortened, a step that could reduce the cost of hearing aids. For some people, perhaps experienced users or those with minimal hearing losses, maybe it can. For the rest, however, a truncated hearing aid selection process jeopardizes their chances of not only realizing the full benefit of hearing aids but of obtaining other kinds of help in learning how to minimize the effect of a hearing loss. And, yes, this does take time, and time is money. This is a reality that does have to be acknowledged and confronted.

Hearing aid users have very little information about how manufacturers arrive at the price they charge individual dispensers for their hearing aids. We don't know what financial resources manufacturers devote to such areas as research and development, cost of components, the manufacturing process, as well as marketing and merchandising, etc. Much of this, such as costly marketing, is unavoidable because of the nature the business and our economic system. And we don't know their profit margins and we are not likely to find this out. This entire area is a black box insofar as consumers (and hearing aid dispensers) are concerned.

Fortunately, given the intense competitive character of the hearing aid industry, it can be assumed that manufacturer's prices are to some extent subject to market forces. For example, dispensers are often able to reduce their unit cost by joining a cooperative buying group who, by purchasing hearing aids in large quantities, are able to negotiate a lower price for the aids they purchase. This results in cost savings that can, theoretically, be passed on to a dispenser's clients. A major force in the industry is the Veterans Administration which purchased nearly 290,000 hearing aids in 2003 (or 14.5% of the total hearing aid market). Undoubtedly, they paid much less per unit than a private hearing aid dispenser would. So bulk purchasing does work and is one way the price of hearing aids can be reduced for consumers.

The economies of scale are also a factor according to several of the contributors to this exchange. In 2003, the entire hearing aid industry sold just a bit less than two million hearing aids. That sounds like quite a lot, but when divided among 20 or so manufacturers is no longer such an impressive figure. If hearing aids were as popular as cell phones, I don't doubt that economies of scale could be applied. But since, to put it mildly, this is not likely to happen, not with just 2% of our population using hearing aids, it is unlikely that the economies of scale will ever apply to the same extent it does to other electronic products.

Fortunately individual consumers are not completely powerless in negotiating the price of hearing aids with a hearing aid dispenser. Consumers can shop around, look for sales, and use alternative channels like mail order and the internet in return for lower prices. Most importantly, by knowing the cost ranges of various kinds of hearing aids, plus their performance implications, consumers can make a more intelligent cost/benefit choice in respect to specific hearing aids.

So what is the average cost of a hearing aid (in 2003, the last full year for which this data is available)? One can answer $1794.00, which is the figure used in the 2004 Hearing Review dispenser survey. But this figure lumps all types of aids and technology together; it is accurate, but not applicable for specific individuals. Instead, we should look at the breakdown of costs, the author of The Hearing Review survey (Karl Strom) provides.

According to this survey, the price of the different types of hearing aids, i.e. behind-the-ear (BTE), in-the-ear (ITE), in-the-canal, (ITC) and completely-in-the-canal (CIC) differed considerably. Generally, the smaller the hearing aid, the more it cost (CIC aids were the most expensive while BTE and ITE were the least). What I find most interesting was the breakdown given in the survey between the price of economy, mid-level, and premium digital hearing aids. Economy digital aids were just a little more than half the price of the premium aids. For example, economy BTE digital aids averaged $1390 while the cost of the premium BTE digital aids averaged $2559. Overall, the price range between the highest and lowest digital hearing aid was over $1700. This suggests that effective hearing help is currently available at less than premium prices. And even less expensive than the economy digital hearing aids were the digitally programmable analog hearing aids, with linear analog hearing aids costing the least. We should emphasize that these, too, can provide significant auditory assistance to many hearing-impaired people.

The question we have to ask ourselves is whether there is a performance difference between the highest and lowest price hearing aids? That is, do people who buy more expensive hearing aids actually hear better? And if there is such a difference, is it worth the extra cost to the people who wear the most expensive hearing aids? Maybe it's not necessary to purchase a "premium" hearing aid in order to receive, if not "premium" hearing help, at least perfectly acceptable help!

Fortunately, we have some information on this question in a report by Sergei Kochkin in a 2003 article in The Hearing Review. In it, he points out that in numerous studies he found only a slight positive relationship between the cost of a hearing aid and the actual hearing benefit received by a consumer. So paying more does not guarantee that someone will hear noticeably better. But benefit (an objective measure) is still not the whole story. In terms of how people perceive the value of the benefit they receive whether they feel the benefit is worth the cost - the situation gets a bit more complicated. It turns out that the more people pay for a hearing aid, the higher their expectations (not at all surprising!) and the less they are likely to be satisfied with the value of the hearing aid. In other words, higher price hearing aids do not automatically translate into greater benefit or satisfaction with the hearing aid performance.

As a society, however, we are somehow conditioned to believe "that you get what you pay for", i.e. that superior performance can be purchased with higher prices. This is an oversimplification. True, for some features (like directional microphone hearing aids), this may well apply. And yes, such features do add to the cost of a hearing aid. But simple directional microphones are now routinely included in the many of the lower price digital hearing aids. I stress the word "simple", since this feature has spawned a host of expensive variations, such as adaptive directional microphones, for which the degree of added benefit and value is still an open question. Other specific hearing aid features may be important to some particular individual, and these too would add to the cost, but the burden of proof has to be on the dispenser to demonstrate that the higher price tag associated with a specific feature does confer desirable (and proven) benefits.

It is apparent that high-end modern digital hearing aids are chock full of expensive features and other refined electroacoustic variations. The digital revolution has opened up the kind of speech processing strategies we could hardly conceive of a generation ago. But because something can be accomplished technical