Do "tech level" prices reflect real cost? Or are just "market segmentation"

Tis more of a market ripoff TBVH @portage, basically all the components are the same in every hearing aid made, via the top manufacturers, tech levels are dumbed down, switched off, to reflect the price, via the software in each tech tier level… Manufacturers know, we all want to hear the best we can, but to hear with all the bells and whistles switched on, comes at a premium price point, they have us over the proverbial barrel, basically exploiting our disability for monetary gain! To my way of thinking, it’s actually criminal, perhaps like selling a disabled person a motorised wheelchair, without the motor, or maybe minus a wheel… Cheers Kev

I think that’s a bit harsh. Granted, it sounds idiotic to sell a variety of models with the same hardware, whereby the more advanced features are disabled for the cheaper models.

HAs remain devices where the bulk of the costs go into R&D. A bit like pharmaceuticals- many of these are very simple, easy-to-make chemicals. What you pay for is the knowledge that those pills are effective for disease X- knowledge that can take billions to secure, and must be earned back.

I have nothing against this, moreover the HA market seems fairly competitive to me.

@thecaz said:

It’s disgraceful, considering the hardware is pretty much identical irrespective of tech level

Perhaps it helps to view HAs as costly software devices that come attached to run-of-the-mill hardware.
Software packages -think SAP- can be extremely expensive even when they come on cheap memory sticks.

I have been pretty consistent over the years @Michael_Phonak I praise Phonak or any other hearing aid manufacturer where appropriate, and condemn them when I feel the need, and let us get this straight, I never mentioned Phonak in my post, I was just generally stating the obvious… But, since you are here Michael, you speak of R&D costs, let’s take that a bit further, your highly effective Roger devices, were initially designed and developed for the US military, the R&D was paid for by them, you could have sold Roger at about a fifth of the price or more, and still been in handsome profit, you didn’t and just bumped up the price… Cheers Kev

@RobHooft said:

I think that’s a bit harsh. Granted, it sounds idiotic to sell a variety of models with the same hardware, whereby the more advanced features are disabled for the cheaper models.

At one time @RobHooft perhaps 20 years ago now, I managed to gain access to the NHS Phonak Portal, at that particular time, the NHS were probably the largest dispensary of hearing aids worldwide? I was interested in the prices paid by the NHS for hearing aids, many of these aids we’re available on the “Private High Street Dispensaries” I saw the NHS catalogue prices, around 1/20th of the High Street price, I assume these aids weren’t sold at a loss, the NHS bought in bulk, initially this gave me a fair idea of manufacturing costs, which is a tiny fraction of the actual High Street price… And yes, in some instances, I am harsh towards hearing aid manufacturers, and IMO rightly so, I make no apologies for that, like everything nowadays R&D will be high, I am all for a reasonable profit, but when you purposely dumb down hearing aids for profit, it sticks in the craw a bit!!! The whole aim should be to help improve the HOH of this world, make the aids more accessible to those that need them, but probably can’t afford them!!! These people could easily be helped, if hearing aids we’re more affordable to the masses, yet they the manufacturers think it is okay, to make their products purposefully inferior in order to gouge out more money to exploit my disability…They have no shame!!! Cheers Kev

@kevels55 said:

NHS catalogue prices, around 1/20th of the High Street price

I am not surprised that Phonak can sell their HAs for 1/20 of the high street price and still make a healthy profit, given that the hardware costs of a HA are only a fraction of the price. As I wrote earlier, this is a bit like for patented small-molecule medicines. And, indeed, all companies will sell their stuff at “what the market will bear”. As I always argue, the world would be a better place if healthcare were public all the way from R&D to sales, with drug (and medical device) discovery in a shared, global effort. Not going to happen, certainly not in today’s “every-nation-for-itself” world.

A less ambitious question is if companies could drastically lower HA prices and still make a profit, thanks to vastly larger sales volumes. One might predict this to happen for an elastic, underserved market. The latter condition clearly holds; the proportion of the hearing impaired that does not use HAs is just huge in many countries. But someone here pointed out to me that a study, I believe in Danemark, showed that the uptake of HAs would not much increase if prices went down- the market is inelastic in economic terminology. The main reason for this might be the social stigma felt for wearing HAs. A bit the opposite of vanity spending, if you like…

Thank you for your reply @Michael_Phonak I have no gripe against you or indeed Phonak, it’s just the system… I absolutely love Phonak aids, but the system is deeply flawed, more skewed towards bigger profits than helping the HOH of this world… Now, I can just about afford new Phonak hearing aids every 2 or 3 years, I just save, but many folks in this world are much less fortunate, they could do with a leg up! We have a disability, so we cannot avoid paying premium prices, with premium features, we require them to communicate effectively or effectively as possible, by switching off these features, if you cannot afford top tier, companies are effectively making some of the HOH of this world disabilities worse than they actually should be, and yes, please make a reasonable profit after R&D costs, but don’t milk us dry!!! Cheers Kev

Yeah @RobHooft the simple truth is many people worldwide are priced out of the equation, they have no choice but to suck it up, or do without, for many millions of hearing impaired, hearing aids are priced way beyond their means, the price is kept artificially high to maximise profits, tis sad but unfortunately true!!! Cheers Kev

@RobHooft Thank you for posting the link to that article by Amyn Amlani, Dr.Aud. It is rich and dense and worthy of the attention of those on this forum.

I think that Dr. Amlani’s analysis is spot on. The basic thesis is correct. But as this was written almost twenty years ago, the hearing aid market has changed considerably. In fact, in ways he might well have predicted.

The market has been disrupted from below,: Apple, Sony, Elehear. And from above: Fortell.

In addition, thanks to Hearing Tracker, Soundly.com6, and others, the consumer has much better information to help in hearing aid evaluation.

I guess my point is that if these are truly meant to be medical devices, then there should only be one tech level available and that is the best.

What you pay for supply, fitting and ongoing care is of course another story.

Curious, since I’ve not considered it before - in a line of hearing aids that has 50, 70, and 90 levels of the same aid, is the ability of the aid to help a person’s hearing inferior in the lower levels? Or is it that the lower levels don’t have the extra features like letting the wearer customize a bit, working with your phone for calls, and tinnitus blocking? Heck, mine even supposedly have some features that have to do with general health (which I’ve never investigated).

@RobHooft said:

A less ambitious question is if companies could drastically lower HA prices and still make a profit, thanks to vastly larger sales volumes.

People will take a dim view of the practice. “They sell second rate stuff.” This is what people say or feel about Costco in spite of the evidence showing that they sell top shelf with only a few exceptions. They won’t go for either. “It costs too much” over here and “it isn’t really any good” over there.

WH