Obscene Hearing Aid Profits!

@ZCT said:

Kev,
In the course of the discussion no one ever actually proved that high end hearing aids cost $200 to make.

Oh, that has been already shown quite well. Say ZCT, you weren’t a juror in the murder trail of OJ Simpson were you? The evidence was equally flimsy there.

P.S. The number is probably more like $100.

@zafdor said:

Oh, that has been already shown quite well. Say ZCT, you weren’t a juror in the murder trail of OJ Simpson were you? The evidence was equally flimsy there.

P.S. The number is probably more like $100.

You know you can keep saying it over and over again, it:

A) Doesn’t make it true.
B) Doesn’t alter the dictionary definition of the words ‘profit’ and ‘margin.’

Frankly, it’s all getting a bit silly. It’s like the conspiracy theorists are now trying to outbid each other in who can make up the lowest number they think a hearing aid costs to make, and then spout it out on the Internet without any evidence or facts. Even if a hearing aid costs $1 to make, it still doesn’t equate to obscene profits, nor does it consider the obvious reality that there is a cost attached to designing a hearing aid and its software; a considerable hefty cost that you conveniently leave out of your made up numbers. Or are you suggesting that hearing aids are built for $100 and that includes the cost of developing the technology?

Finally, if you would please respond only if you have some facts and evidence to support your opinion. That would save us all a lot of time.

Regarding the cost to develop and manufacture high grade hearing aids.

I bought a couple years ago directly from Newsound of Xiemen, China a fairly sophisticated model for USA $135. This was when Newsound was only selling in the far East.

That price was for a fairly good aid. Feature-wise not much different from what was being sold retail in the USA for $2,000 to $2,500 each from top name brands.

From what I was told Newsound was legally paying the parts and chip manufactures the normal parts and license costs and fees.

I repeat: $135 US. That’s a fact. (and my bank charged me $50 transaction cost>)

I understand that Newsound’s chief was formerly employed in Europe as chief engineer at one of the big manufacturers.

To me you can slice it anyway you want, but $3,000 each retail for a bucket parts that a Chinese company can profitally sell wholesale for $135 means there is something wrong with the industry business model. IMO Ed

@ed121 said:

I bought a couple years ago directly from Newsound of Xiemen, China a fairly sophisticated model for USA $135. This was when Newsound was only selling in the far East.

To be fair we just have your word for this, and you’ve been pretty vocal about conspiracy theories on here. Also you conveniently ignore the elephant in the room which is that this hearing aid did not magic into existence, someone had to invent it, and all the technology that allows them to make it and allegedly sell it for $135.

Interestingly though, I went to their website (last updated in 2009), and the very first page I clicked on was this one:

http://xmnewsound.en.ec21.com/offer_detail/Sell_Open_Fit_hearing_aid--2891685.html?gubun=S#

Right on that page they claim that the hearing aid provides ‘Tinnitus Treatment’ which is grossly misleading and medically inaccurate. Such a statement would be illegal here in the US, because the ‘flawed system’ you so deeply despise, tries to protect consumers from this kind of quackery.

The second page I visited was this one:

http://xmnewsound.en.ec21.com/offer_detail/Sell_Mcic_hearing_aid_Standard--1899329.html?gubun=S

On that page the consumer is told that this aid features ‘new’ Class-D technology. I’m sure I don’t need to explain to you as an electronics expert how misleading this is. I just did a brief search of patents and found Class D technology being patented in the 80s. Calling it new is a lie.

One of their other ‘new’ products is a ‘push-pull’ or class B analog amplifier! Again over thirty year old technology.

On another page they state that their two channel BTE “provides you every specific hearing need.” I’m sure they are glad they don’t have to back any of these claims up with science. If I ran an ad claiming that in the newspaper, they’d have my license revoked by the end of the month!

http://xmnewsound.en.ec21.com/offer_detail/Sell_digital_hearing_aid_2--3823931.html?gubun=S

Sorry Ed, but this looks to me like one of those factories that make the fake watches and knockoff handbags. Their claims are dangerously misleading, most of their technology is 20+ years out of date. When you claim that for $135 you can pick up a hearing aid that even closely matches the technology available in the US for $2000, you are simply lying, or at the very least just making stuff up.

@ed121 said:

Regarding the cost to develop and manufacture high grade hearing aids.

I bought a couple years ago directly from Newsound of Xiemen, China a fairly sophisticated model for USA $135. This was when Newsound was only selling in the far East.

That price was for a fairly good aid. Feature-wise not much different from what was being sold retail in the USA for $2,000 to $2,500 each from top name brands.

From what I was told Newsound was legally paying the parts and chip manufactures the normal parts and license costs and fees.

I repeat: $135 US. That’s a fact. (and my bank charged me $50 transaction cost>)

I understand that Newsound’s chief was formerly employed in Europe as chief engineer at one of the big manufacturers.

To me you can slice it anyway you want, but $3,000 each retail for a bucket parts that a Chinese company can profitally sell wholesale for $135 means there is something wrong with the industry business model. IMO Ed

As a hearing healthcare professional I am tired of these kinds of posts. ED continues to focus on the price of the aid itself like it’s a toaster that you would buy off the shelf at a hardware store ! When a hearing aid is purchased from my clinic there is an entire range of services that are included with the devices for an extended period of time. Initial testing procedures, impressions and earmolds (if required),initial fitting session, usually a minimum of two follow up visits (many times three or more with difficult fittings), verification testing using REM / speech mapping, in office servicing for a period of five years, extra receivers for RIC hearing aids which I absorb for a period of five years and I could go on and on.

If the aid has a cost of $450 to $950 and all of these services are then added what should the aid sell for ? Please keep in mind you need to have infrastructure in place to support your clients. Even if the so called high end aid could be acquired for $200 and you are providing this level of service what should the hearing aid sell for ? These critics can never answer this question because they don’t know…

As far as the pipe dream of people self fitting and making adjustments themselves ?!? 95% of my clients cannot and would not want to do this. So…what do they do ?

There, now I feel much better. These negative posters seem to forget that there is some of us that truly want to help the HOH. I should also add that I make a very modest income but according to ED121 no one should be allowed to make any type of an income selling anything.

Hip Matt,
For Ed’s sake ditch the office and work out of a van or maybe a cart like the hotdog venders use. I think that’s what they must do in China or Vietnam when they sell and fit HA.

It’s about time the FTC investigated the hearing aid cartel that has conspired for years to keep prices artificially inflated. All the major players-Oticon, Phonak, Resound, and Siemens-are now manufacturing many, if not all of their components in China using coolie labor. Yet these aids sell for thousands of dollars in the US even though they aren’t made here. Of course, most audiologists never disclose this dirty little secret to their patients. What an absolute disgrace. Audiologists should be required by law to disclose to their patients where their hearing aids are manufactured. Why should a patient spend $3000 for an aid that was made in some third-world sweatshop by laborers who earn $2 a day? Gerald

@HIP_Matt said:

I checked out these links and have to agree with ZCT. If buyinge this junk makes people happy and they feel they are saving money all the power to them !

Designing more than one business model/modes of operation would benefit most all. What I mean to say is having a variety of services/plans to offer your clients.
Something like these:

1. Plan A. We test the client, give recommendations. One price.

2. Plan B. We purchase the HA, and sell to the client, fitting, programming, follow up adjustments, maintenance for a year, warranty service, 45 day trial. A different price.

3. Plan C. Client buys their hardware at their best price, Audi fits, programs, does one follow up. Client may or may not have to handle warranty on their own.

4. Assorted services, maintenance, expendable parts, check ups, evaluations, at an agreed upon hourly rate. A La carte services, if you will.

What I am trying to say, is have all of your services available to the public, at prices that you can feel comfortable with. Being locked into one stringent mode of sales is likely to lose sales.
Just sharing my thoughts.Peace.

Very interesting posts all around, tis very us and them, as it should be!

I’ll give some ground here ZCT and state; I should not have perhaps used the words, Obscene Hearing Aids Profits! Instead I perhaps should have used the Headline/Title, Obscene Hearing Aids Markup! now that makes me feel much better, although as you are well aware, this will have no actual effect on the price to the end user:(

Now as previously stated, my argument in this is not for me, its for others whom unlike me, they cant afford these “Markups”!

You know guys and girls, when you think about it, we are all part of a massive “HOH Worldwide Fraternity”, 1 in 7 of the population has some form of hearing loss and 1 in 5 in some parts of the UK! Now, collectively if you could harness that voting power…

ed121, I agree with most of your sentiments (Cartel, apart:D) and perhaps also, I have a severe/profound loss and my aids are set just exactly how I want them, I programmed them personally and I’m no HIS or Audi! I can say with a certain amount of confidence, that IMHO, no Audi or HIS could set them up better, because I know invariably instantly what works and what does not, it is not rocket science:D

Cheers Kev.

PS, ZCT, I thank you for the kind words about my dog, tis much appreciated! I had to get him put to sleep today (Chronic Kidney Failure) he was in too much pain! My friend who died, had Lung Cancer and we were friends for some 40 years, some people don’t get dealt any aces in life, he had 80% burns all over his body including his face from the age of 8 years old, but a smile or a laugh was never far from his lips and I was proud to call him friend…RIP PEN.

@me75006 said:

Designing more than one business model/modes of operation would benefit most all. What I mean to say is having a variety of services/plans to offer your clients.
Something like these:

1. Plan A. We test the client, give recommendations. One price.

2. Plan B. We purchase the HA, and sell to the client, fitting, programming, follow up adjustments, maintenance for a year, warranty service, 45 day trial. A different price.

3. Plan C. Client buys their hardware at their best price, Audi fits, programs, does one follow up. Client may or may not have to handle warranty on their own.

4. Assorted services, maintenance, expendable parts, check ups, evaluations, at an agreed upon hourly rate. A La carte services, if you will.

What I am trying to say, is have all of your services available to the public, at prices that you can feel comfortable with. Being locked into one stringent mode of sales is likely to lose sales.
Just sharing my thoughts.Peace.

Many clinics do this…it’s called unbundling. I will tell you I have lost count of my colleagues that have tried this and had it fail miserably. It will work for a small population of those interested in hearing aids…for the other 95% they don’t want to mess with it. Maybe that will change as the population purchasing hearing aids changes…but right now…for this population…it just doesn’t work.

Regarding the earlier post about charging “little old ladies $6000 for a pair of hearing aids” being okay…I absolutely don’t think it’s okay…unless that little old lady either wants something that is prime tech or is more active than I am…and I do have a couple of those but realistically a elderly woman doesn’t need a hearing aid that costs $6000/pair. The people that tell everyone that walks in their door that they need the most expensive tech are trying to do one thing and that is make money. They have no interest in finding the right solution for their patients…they are only interested in lining their pockets.

I understand that people are angry about the cost of hearing aids. I’ll tell ya what…I wish I didn’t have to pay what I pay for them…If they cost $600 or $700 less I’d love it. I could sell the products at a much more digestible level for my patients. It does get old to be accused, in a round-about way, by some individuals on this board that the field of audiology is out to rip off our patients and are charlatans whose goal it is to take advantage of our patients. It’s not many that do post those accusatory statements…but it makes me wonder sometimes why I’m on here at all.

Doc Audio,
Unfortunately, what you describe as “the people that tell everyone that walks in their door that they need the most expensive tech,” is perhaps what most people posting here are upset about. I now a couple of Audiologist in the San Jose area that practice just this method of doing business or sell them the lower end HA at or above the premium level price. I suppose they can charge what ever they want but when they take advantage of people who don’t know any better it upsets you. It all boils down to buyer beware and do your homework before making a $6, 7 , 8 or even $9,000 purchase of HA.

@nancyb said:

First of all, ZCT, I agree with you thoughts about our medical system, and your forthrightness-which is to say I’m on your side.

But I’m going to reiterate. I saw the wholesale price of my Deltas five years ago. They were about $1700 an aid (maybe as low as $1250). I was told by someone in the know (when we spoke out of the office) that the mark-up on HAs is 200% ( don’t know whether she meant from factory to consumer or simply from audiologist to consumer.) No matter, I don’t believe that number was just pulled out of a hat.

Putting aside your overhead, time, and the fact that you have to earn a decent living (all of which of course you deserve), have any of you told us what your mark-up is on most aids? Or did I miss that post?

The markup on most hearing aids is between 1-2 thousand dollars. In other words, an aid that costs me $1100 will retail for about $2900. Thats in my office.

Is that what you wanted to know?

@nancyb said:

First of all, ZCT, I agree with you thoughts about our medical system, and your forthrightness-which is to say I’m on your side.

But I’m going to reiterate. I saw the wholesale price of my Deltas five years ago. They were about $1700 an aid (maybe as low as $1250). I was told by someone in the know (when we spoke out of the office) that the mark-up on HAs is 200% ( don’t know whether she meant from factory to consumer or simply from audiologist to consumer.) No matter, I don’t believe that number was just pulled out of a hat.

Putting aside your overhead, time, and the fact that you have to earn a decent living (all of which of course you deserve), have any of you told us what your mark-up is on most aids? Or did I miss that post?

Nancy,

Thank you for your kind words.

Unfortunately, I am not privy to the wholesale prices of my company. They tell me what they want them sold for and I do as I am told.

I am privy to the bottom line of the large company I work for, and I can tell you that if I were allowed to share it with the forum not a single person would call it obscene.

Whichever way you cut it, fitting people with hearing aids is an expensive proposition. Perhaps if health insurance companies did their job and actually helped people with this medical problem, we’d be able to lower our prices and make up for it with more patients.

DianaS,
With your’e post regarding your vision and glasses, you would be in the profound range if you correlated your vision to hearing aids, so you would not be able to by HA over the counter. On the serious side, I don’t know how old you are but have you had your retinas checked lately by an opthamologist? A friend of mine who is 58, is going though his second detached retina and he is at about -9 diopters and he was told he’s at a higher risk because of his severe myopia and if he had come in sooner they could of done a pre emptive treatment to tack it down before it tore. I don’t mean to scare the crap out of you but as a physician you know the old saying an ounce of prevention.