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

@WhiteHat said:

People will take a dim view of the practice. “They sell second rate stuff.”

Interesting argument. This reminds me a bit of the marketing of Birkin handbags, which cost in the order of $10,000 to $2 million (plus a waiting list to get one). Since I don’t hold a degree in pathological psychiatry (specialty: self-harm) this type of customer behavior is beyond my understanding, and I cannot comment.

The main thing one loses in getting a 50 model instead of a 90 model is the ability to deal with speech in noise. For speech in quiet there won’t be any difference. You’ll still be able to stream, use them with your phone, etc.

I think Costco has proven the market for HAs has some elasticity.

OTC and Apple have expanded the market as some have multiple devices between prescription, OTC, and/or AAP2/3.

Costco has a lower price point allowing customers to deploy funds to upgrade sooner.

Many are being diagnosed at and buying hearing aids a younger age.

More states are requiring hearing aid health plan benefits for the roughly age 18-65 group.

Rechargeable aids have effectively a shorter service life.

The market may not be the most elastic but it is some. The elasticity is not uniformly distributed between sources and type of device.

Fully agree
My aunt too (I30s) — she rarely leaves the house and loves them – and her neighbor is happy because they don’t hear her TV anymore.

I also have I30s, which are perfect for working from home, but they’re useless at my neighborhood bar. For that, I use my SmartRIC440s, which work great. The difference between the 440 and the I30 is huge (and I use Oticon OpenBass with both). If it weren’t for my struggles in noisy places, I wouldn’t have gotten hearing aids.

Not really. If the major brands aren’t colluding directly, they are certainly all following each other’s price point. Price fixing!

A large percentage of senior citizens are on a fixed income. In many cases the childen of these senior citizens don’t know or don’t care that poor hearing has such a large impact on the well being of an individual. The heirs are not interested in spending $6000+ on a set of hearing aids. My father-in-law passed away last year. Two sisters “placed” him in a nursing home memory unit when he became inconvenient. His hearing was very poor and untreated. When I pointed this out they wouldn’t even consider investing money in HAs. It would cut into their inheritance.

It’s a total Monopoly run by a cartel and has been since they managed to convince governments that they are “medical devices”…boom.. the world is our oyster!

Don’t practitioners, not the manufacturers, set the prices?

Well no, both do it, obviously the retail price is the clinic, but this is based on what the manufacturers offer to them, so if you look at prices through private clinic, Costco and the VA you’ll see the manufacturers control over this.

I object to the use of the term “medical device" and then offering it at differing tech levels.

Doesn’t medical science strive for the best?

Does a cardiologist offer a tech level 1 pacemaker that might keep your heart pumping for another 5 years but then say "but have a look at this one….tech level 9. You’ll get 20 years out of this one”!

Hearing aids, in their current form, are not medical devices. They are disposable consumer electronics.

And sadly, a majority (not all I should stress) of the people who sell them should not be so keen to adopt the salutation “Dr’".

We could compare it failing eyesight - obviously thge R&D costs are not the same, but they don’t ask you how well you want to see and then charge accordingly.

Actually, they do - at least here in the US. Being an old guy, I’ve experienced different design levels of blended multifocal lenses being offered at different price points to provide better vision. the same applies to implanted lenses after cataract removal. It costs more if you want to correct astigmatism or presbyopia than if you simply have a simple single focal length implanted lens. I wish it were the model to provide the best possible care, but that isn’t the way the durable medical device industry works.

I follow what you’re saying Kev, but it doesn’t actually answer the question:

If a pair of aids ‘cost’ £2.5k wholesale, what would be (in the collective mind on this page) the appropriate mark up given the typical obligation/expectation listed above to see someone with about 3 decades of industry experience?

I’m not looking to blindside anyone on this page, though it is slightly annoying to see people failing to understand the difference between wholesale cost and the cost of fitting/utility to the client. Plus there’s an informed self-selecting motivated user group on here that’s atypical of the average client base.

The premise for me asking is that I run my business in one of the poorer areas of Western Europe, that’s facing further cuts due to the stupidity of Brexit. I’ve cut back clinics and staff (practically halved) over the last 3 years. So, without it seeming like a moan about the business, if there’s no ‘fat’ to cut out of the equation, do all you guys going to Costco understand that by doing that you destroy a rural mom + pop business that provides a mix of product to allow the poorest in town to ‘rent’ hearing aids that they genuinely couldn’t otherwise afford.

Don’t get me wrong - big business provides lots of savings to your average Joe. The problem is, that if you keep giving all your money to Walgreens (Boots), Bezos, Costco or whoever, it’s you that loses out when you can’t drive the 50+miles to the clinic any more.