Your script sounds exactly like the one a good friend of mine who works for Pharma recites…“Without these high prices we cannot fund research”. So we looked up the numbers from his company, for every $ spend on R&D, 4 were spent on SG&A. He works in sales and did’nt like the answer either… Are hearing aids any different? Unlikely, R&D are likely <10& of gross sales. Probably much less based on the following info…
So the single google in did on SG&A on hearing aid companies turns up the followin stats from resound that show a 60% gross profit margin, 3x you number!
Funny, I looked at your document, and you clearly need an accounting lesson. Take a look at slide 31. The gross margin you refer to is BEFORE expenses such as R&D and SG&A. So the bottom line was 10.4% for 2010 financial year. Oh what obscene profits!
But hey, don’t let facts or numbers get in your way. Why not send me some more data you don’t understand and claim it proves your point? Or better still just make stuff up.
Now folks, I’m fully aware I keep banging on the same drum of the hearing industry, sorry if I’m like a dog with a bone! They (HA manufacturers) have a captive client base, they must think it is their god given right to exploit said client base (via subterfuge/deception/profit margin) and screw every last cent out of us, knowing full well, we will pay the piper whom calls the tune… if we want better hearing, then we are forced to stump up! Now I am all for commerce and I do understand there is a need for research costs, advertising, production costs etc. But, here is the rub; most of the top brand HA’s are manufactured in Asia to exploit the cheap labour force and you would imagine some of those savings would be passed on to the end user? No, they are screwing everyone at both ends and increase the producers profit margin… A top end HA will cost at the very most $200 to produce each and around 1500% mark-up by the time they reach your ears, that for my money is unadulterated greed, sheer exploitation of the disabled and disadvantaged HOH end user! No matter how you paint it, it’s a sham/smokescreen to obscene hearing aid profits that would not be tolerated in the real world, if it were an essential commodity for many people, for instance a car! We HOH can do without a car, but we can’t do without a hearing aid, it enables us to compete in the hearing world!
This worldwide cartel has little or no interest in the end user…ONLY PROFIT IS THEIR GOAL!!!
Cheers Kev
Hi Kev,
hmmm not sure it is the said manufacturer who is exploiting you…you actually buy them from a Hearing aid dispenser…enough said??
Because they try to get whatever they can out of you. I worked in a hearing aid office and I seen a set go for $9000 that cost my boss $1500. Other’s would pay about $5000 a set. I now work at HearSource and love the quality and the price, $1990 for a set (for EVERYONE!) AND it includes a programmer so your not making a 100 trips to get them adjusted. Tech calls and service are for the life of the hearing aid. I can truly say I can go home at night thankful that I helped someone hear & didn’t break them to do it!!
to force out into the open the actual costs of Hearing Aids, the prices paid by the Audi’s and HIS of this world and highlight this to the HOH public! And thereby, give the HA’s Manufacturers some scope to actually increase their business, not that I think it will move them one iota at present, but it could change their pricing/markup policy in these austere times, it may perhaps make them sit up and listen a little as I am sure they read this forum to gauge the market!
I doubt that the hearing aid manufacturers change anything based on the economy. I will tell you that I am easily more busy this year as I was last year…oddly enough the downturn in the economy has not affected hearing aid sales very much. It is one industry that has remained fairly stable.
we are disabled people whom are being exploited for profit, we have no choice in the matter if we have a severe/profound loss, we have to buy from a market that has went way over the top with regards to pricing policies, many of the HOH needy in the severe threshold are out of this market to the severe detriment of their quality of life and job prospects!
Everyone is exploited for profit. It’s called capitalism. It’s not limited to disabled individuals. Again, the referral to “way over the top”. Am I correct in assuming that your ideal would be for the hearing aid manufacturer to decrease their sale price to us/the professionals and therefore result in a lower sale price to the public?
Individuals who are not working/need financial assistance have a bevy of programs to select from so that they are not cut off from the world or employment like you state. It is illegal to not hire someone because of a disability in the US and there are numerous ways a person can go about getting hearing aids if they need them. This applies especially to children. People who are on government assistance, in a number of states, can also get hearing aids through their medical card.
Now perhaps this is a “Pipe-dream”, but some food for thought, so here is the rub; tis time for some of you to become proactive, especially in the larger population areas, there is a niche in the market for starting up your own not for profit organization or charity, perhaps call it, “American Low Cost Hearing Aid Dispensers Society” (ALCHADS:D) employ your own Audi’s and other staff, employ yourself as an admin or better still, get the training and become a HIS as the finest HIS/Audi’s I have come across are those with an actual hearing loss, they understand implicitly your problems! Now, I’m well aware this will put a few noses out of joint on this forum, but I say enough is enough, if the hearing industry cant or will not regulate itself then over time collectively YOU could do it for them! Rome was not built in a day folks and this would take a fair bit of time to set up something like, “ALCHADS”… But, ultimately it could be done! Think of the buying power your individual “ALCHADS” centre would have, when they hooked up with everyone else, if the there were a chain of these in every large city in the States, prices would tumble, that $1200 HA manufacturers price as quoted by a HIS on this thread would at least half? For the more competent end user, you could have training days on self programming on those whom want it, I’m sure the manufacturers would gladly develop some software for the likes of something like “ALCHADS”, if you were giving them a lot of business! On the manufacturers profits, think about it, you would be the only show in town if you could bring these prices down to more affordable levels, say $1500 or $1200 per high end aid or less to the end user, then you are going to be busy as it comes into many more peoples price range and ultimately the demand would be higher, thereby production for the manufacturers would increase, a far smaller price, could actually increase their profits?
First, there are a number of programs already out there that are designed to get hearing aids to those who need them. Hear Now, Lion’s Club, HIKE, Voc Rehab, State assistance just to name a few…so why do we need to add another one? Secondly, when have any of you ever heard of prices decreasing? I worked for an office that tried to do just that…sell hearing ads less as to be more accessible and you want to know what happened? It closed in less than a year because the owner couldn’t afford to pay his bills - he was losing too much money.
You could start a scheme for your members and have a steady cash-flow, say $100 a month, every month, guarantees you a new set of high end hearing aids every 3 years, the used HA’s could go to the 3rd world? Run a free drop in centre/hub for small repairs, adjustments, tubing, perhaps advice and maybe PC’s set up for self adjustments, training, sell far cheaper accessories, cheaper batteries, environmental aids, etc, etc, etc?
I’m a bit confused here. Are you saying that the patient could pay $100/month and then in 3 years get a new pair of hearing aids without paying because they had essentially pre-paid for them? The book-keeping on that would be a nightmare. If you’re implying that the person could save $100/month and buy the aids in 3 years…well…we’ve all seen how good people are at saving money or being sensible about their expenses here in the US…lol. Fat chance at that ever occurring on any large scale for the general public. There are 2 manufacturers that I know of right at this second that take their hearing aids (new and reconditioned) and already dispense them to areas that are needy/don’t have regular services all over the world. I’m sure there are more that do the same thing. Third, all these “free” services…lol…that’s what makes the hearing aids so expensive in the first place because they aren’t really free…all those supplies, the support, the space, the tech associated with the things you mention cost money…and a lot of it. Now how are we supposed to have those things for the patients and stay open? Oh yeah, raise prices.
Lastly, think of how much joy you would bring to your fellow HOH sufferer, their quality of life and their families, their job prospects would increase and perhaps their outlook in life…
Now, where would this leave you Pro’s if it ever came to fruition, between a rock and a hard place at a rough estimation? You would sink or swim via lowering your prices or change your job? But, I’m sure many of you might join something like this scheme, if your aim in life as hearing aid Pro is to help us HOH, might mean a wage cut though?
While we’re at it…why don’t we ask the Doctors I work with to lower their surgical prices too? Or better yet, why don’t we ask everyone who works in any goods-distribution category (clothes, cars, groceries) to take a pay cut so that everything we buy is cheaper? It all goes back to that business model that was posted probably 10 pages ago stating that you just can’t have a successful business that has superior service, premium level tech and low prices. Even in systems with completely socialized medicine it just doesn’t exist. Somewhere something has to give.
The thing is that there are programs out there to help just about anyone get hearing aids if they need them. It’s just a matter of finding them.
Really, when it boils down to it…the distributor will end up charging what they need to charge to cover their costs plus a reasonable profit. Each “hand” it passes through will increase the cost until it finally reaches the end-user. It doesn’t matter what the product is…that is going to be the basic plan they follow. So unless you can convince everyone involved to charge less and therefore accept less…well it just won’t go anywhere. It doesn’t matter if an audiologist or decides to do exactly what you suggested…it won’t work. The manu won’t lower their prices because the distributor they buy their parts from won’t lower their prices, all the way up to the people who provide the professional their ancillary services (utilities, rent, equipment, employees) aren’t going to accept less than what is at a minimum, standard reimbursement. In the end, after everyone has taken their piece of the pie…it adds up to about what is being charged in most markets. Fluctuations in those prices will reflect the difference in operating expenses/economy accordingly. Outliers (those people charging $9000 for hearing aids that aren’t worth half that) are anomalies and indicate people who are in it to make as much as they can off every person they see. So here we are at the end of the chain and we are right where we are now.
Some of the posters here earn their living from the existing business model. Can’t blame them for defending the status quo.
At present aids are designed, manufactured, to be retailed and require fitting ONLY by licensed professionals. This is frozen by government regulation starting in 1977 when the industry lobby successfully convinced the to regulate what was a free and open industry. Yes, there were abusive practices in 1977. Most older in those days were little old ladies (just kidding)…
Actually the typical HOH in 1977 was educated before World War I. Zero knowledge of electronics and computers. They really couldnot defend themselves against the rip-off.
Now, here we are in 2011, with electronics and computers everywhere. And with active consumer protection laws working in every state.
Now 2011 we have hearing aids designed to be fitted by the only legal retail system…,the licensed dispenser/audiologist.
This is frozen.
But the technology now exists to provide sucessful self fitting at low cost. No computer necessary. Just intelligent software and a $10 programming remote control.
Of course, severe losses, the small minority, might require professional fitting.
Yes, folks, self fitting by anyone who can work a TV remote, is feasable.
I know the present aids are designed to be professionally fitted…by law who else buys aids wholesale but by law, of course, just the professionals. The big factories won’t even sell direct to a HOH. That’s frozen, by law. So aids are designed and built for their only market,the professional practice. Not designed to be easily self fitted. Of course there are only a few HOH interested in self fitting at present. But, if properly advertised and presented that number would increase year by year to the majority. Ed
Because they try to get whatever they can out of you. I worked in a hearing aid office and I seen a set go for $9000 that cost my boss $1500. Other’s would pay about $5000 a set. I now work at HearSource and love the quality and the price, $1990 for a set (for EVERYONE!) AND it includes a programmer so your not making a 100 trips to get them adjusted. Tech calls and service are for the life of the hearing aid. I can truly say I can go home at night thankful that I helped someone hear & didn’t break them to do it!!
Unfortunately,
Your aids do not have the latest technology features and can only use one microphone at a time.
Your QA is sloppy. I received one aid that had feedback supression turned on and one with it off. Neither aid was progranmmed the way I had discussed on the phone. I also received tulip domes for aids with my FreeStyle () aids. I ended up getting one stuck in my ear!
You charge a fee for trials. Most providers do not charge for trials.
Due to the lack of advanced features, I could not get the sound quality I need without feedback. I also had to pay for return shipping in addition to the fee for trial.
Because they try to get whatever they can out of you. I worked in a hearing aid office and I seen a set go for $9000 that cost my boss $1500. Other’s would pay about $5000 a set. I now work at HearSource and love the quality and the price, $1990 for a set (for EVERYONE!) AND it includes a programmer so your not making a 100 trips to get them adjusted. Tech calls and service are for the life of the hearing aid. I can truly say I can go home at night thankful that I helped someone hear & didn’t break them to do it!!
I knew this guy who paid $12,000 for his Rolex. A $50 Casio tells better time.
Some people are willing to pay $9,000 for a set of hearing aids, they have the money and the desire to deal with that. They don’t want to go online or self program.
Once again, you are one of those people who are trying to cause shock by such an alleged outrageous mark up, which sure, on the face of it sounds pretty messed up. But you don’t know how much it cost to keep that clinic open, pay all the staff, etc. etc. In any business the price is what the market will bear.
Some hearing aid retailers will sell fewer products at a higher price, like a Rolex dealer. Some will sell at a much lower price, and go for volume. This is simple business 101. You have to decide, as the consumer, do you want to shop at Khols or Dillards? No one made that patient spend $9,000. And one has to assume if they spent that much, they had it to spend. People who are struggling to make ends meet, do not shell out $9,000 for hearing aids. They believed that the technology and professional services were worth that price. They had the option to shop around, call for quotes, get a second or third opinion, visit a forum like this and figure out what would be a good deal. They chose not to. Who are you to blame them for their decision? Who are you to judge the ethics of your former bosses’ business model? He is the guy with his house on the line if he doesn’t make enough money to keep the doors open. Not you.
Everything we buy is marked up to include enough gross profit to pay for the ongoing costs of staying in business. That’s capitalism. I don’t personally agree that capitalism is a good model for health care, but people in this country seem to largely disagree with me on that.
The question though, going back to the original premise of this thread is: was your boss making an obscene amount of money? Was he driving a Porsche, wearing a Patek Philippe, dressing in Prada and Armani, living in a mansion? Or was he just a small businessman making a reasonable living for his skill, qualifications, experience and service? And really does one sale, from one guy, in one profession really give us a fair snapshot or useful set of statistical data for the entire industry anyway?
It’s funny how people have attacked the industry, hearing professionals, hearing aid companies. No one has even mentioned that the government at state level frequently charges close to 10% sales tax on hearing aids. What a scandal, yet we’re focusing on attacking the very companies that are designing amazing hearing aids that help people today in a way that wasn’t even possible five years ago.
I know the present aids are designed to be professionally fitted…by law who else buys aids wholesale but by law, of course, just the professionals. The big factories won’t even sell direct to a HOH. That’s frozen, by law. So aids are designed and built for their only market,the professional practice. Not designed to be easily self fitted. Of course there are only a few HOH interested in self fitting at present. But, if properly advertised and presented that number would increase year by year to the majority. Ed
You always ignore this question Ed, but I’ll ask it again:
Given how easy you claim it is to make hearing aids, invent self-programming technology, what’s holding them back?
You claim the law, but there is no law against selling personal amplifiers. I saw one in Walgreens today, claims to let you hear from 90 feet away, all for just $19.99.
If what you believe to be possible is indeed financially viable, why hasn’t Nokia, Motorola, Apple, Samsung, LG etc released a $200 personal amplifier you can buy in Walmart? If what you say is true they could sell them by the million, and the community would soon wise up to these affordable hearing aids at rock bottom prices. Do you really believe that simply not using the term ‘hearing aid’ would prevent people from buying them? I see people all the time who bought cheap amplifiers off TV or from a magazine, of course such items are junk, which is why they end up coming to see me. But again, if companies would make them good, why are they not bothering to do so? You claim the market exists, you have told us over and over how easy and cheap it is to throw these things together for $135. Who wouldn’t want to buy something that is normally sold for $2,000 (as you claimed) for $135?
I put it to you that you are missing some pieces of the puzzle, which is why none of these electronic giants have even bothered with this market.
I put it to you that you are missing some pieces of the puzzle, which is why none of these electronic giants have even bothered with this market.
No, Ed has it pretty much nailed. It’s about distribution. Nokia does not have a sales force that calls on audiologists. They would have to hire gobs of people to do this and fight uphill against the established players with the audies/fitters. The distribution model for hearing aids is certainly not capitalism at work, and that is Eds point.
I do not know how the direct marketers (AH, hearsource) avoid government scrutiny, maybe because they’re so small. And yes, I think if best buy were able to call their line of “Personal Amplifiers” “Hearing Aids” instead and market them as such, they would sell a lot more of them.
No, Ed has it pretty much nailed. It’s about distribution. Nokia does not have a sales force that calls on audiologists. They would have to hire gobs of people to do this and fight uphill against the established players with the audies/fitters. The distribution model for hearing aids is certainly not capitalism at work, and that is Eds point.
I’m not talking about the current method of distribution. Ed has always argued that it would be simple for a company that makes, for example, Bluetooth headsets, to make a hearing aid and call it a personal listening device (or similar). They could sell it at Best Buy, Walmart, wherever else they already sell their products. No audiologists, no distribution chain, all the same infrastructure they already use.
I do not know how the direct marketers (AH, hearsource) avoid government scrutiny, maybe because they’re so small. And yes, I think if best buy were able to call their line of “Personal Amplifiers” “Hearing Aids” instead and market them as such, they would sell a lot more of them.
Given your assertion that any of these companies that already have deals with Best Buy et al to sell their products, why have none of them ever bothered to make a listening device? We keep being told in this thread how cheap and easy it is. Chinese components that cost mere pennies. The evils of the current system that makes hearing aids so expensive.
So how is it that the brilliant minds at Apple, Motorola, Bose, Sennheiser, Bang & Olufsen etc have not tried to cash in on the 1 in 7 people who need help?
Here’s the thing, I am actually saying that making a modern and state of the art hearing aid is a lot more difficult that some people on this board seem to think. And I think that is the real reason why personal amplifiers you can buy off the TV, Skymall or in Walgreens are just crappy amplifiers of sound.
If it was easy and profitable, the big electronics players would already be doing it. They’d be on the shelf of Walmart today. And the fact they are not has nothing at all to do with government regulation. There are no relevant restrictions on personal amplifiers, you just can’t claim they are hearing aids or that they are intended to treat a medical condition.
Your aids do not have the latest technology features and can only use one microphone at a time.
Your QA is sloppy. I received one aid that had feedback supression turned on and one with it off. Neither aid was progranmmed the way I had discussed on the phone. I also received tulip domes for RIC aids with my FreeStyle (open fit) aids. I ended up getting one stuck in my ear!
You charge a fee for trials. Most providers do not charge for trials.
Due to the lack of advanced features, I could not get the sound quality I need without feedback. I also had to pay for return shipping in addition to the fee for trial.
In other words, buyer beware.
Our hearing aids have all the features that are important. We do have directional microphone as an added feature. I think what matters is being able to hear, not all the “bells & whistles” that specialist try to use for marketing purposes. K.I.S.S. has always been my rule of thumb!
I apologize, there are a couple glitches with the software which is why we have a new version coming out very soon. The tips, if not put on correctly, can fall off. Discussing “how you want aids programmed over the phone” is not going to to be right on target
(although sometimes they are) which is why we have the self-programmer. Our hearing aids with the programmer I agree, are not for everyone. There are clients that need and should go to a local professional.
We do not charge a fee for trial, we charge a restocking fee. Hearing aids cannot just be thrown back on the shelf.
We have less than a 1% return on our hearing aids, has to say something!
I knew this guy who paid $12,000 for his Rolex. A $50 Casio tells better time.
Some people are willing to pay $9,000 for a set of hearing aids, they have the money and the desire to deal with that. They don’t want to go online or self program.
Once again, you are one of those people who are trying to cause shock by such an alleged outrageous mark up, which sure, on the face of it sounds pretty messed up. But you don’t know how much it cost to keep that clinic open, pay all the staff, etc. etc. In any business the price is what the market will bear.
Some hearing aid retailers will sell fewer products at a higher price, like a Rolex dealer. Some will sell at a much lower price, and go for volume. This is simple business 101. You have to decide, as the consumer, do you want to shop at Khols or Dillards? No one made that patient spend $9,000. And one has to assume if they spent that much, they had it to spend. People who are struggling to make ends meet, do not shell out $9,000 for hearing aids. They believed that the technology and professional services were worth that price. They had the option to shop around, call for quotes, get a second or third opinion, visit a forum like this and figure out what would be a good deal. They chose not to. Who are you to blame them for their decision? Who are you to judge the ethics of your former bosses’ business model? He is the guy with his house on the line if he doesn’t make enough money to keep the doors open. Not you.
Everything we buy is marked up to include enough gross profit to pay for the ongoing costs of staying in business. That’s capitalism. I don’t personally agree that capitalism is a good model for health care, but people in this country seem to largely disagree with me on that.
The question though, going back to the original premise of this thread is: was your boss making an obscene amount of money? Was he driving a Porsche, wearing a Patek Philippe, dressing in Prada and Armani, living in a mansion? Or was he just a small businessman making a reasonable living for his skill, qualifications, experience and service? And really does one sale, from one guy, in one profession really give us a fair snapshot or useful set of statistical data for the entire industry anyway?
It’s funny how people have attacked the industry, hearing professionals, hearing aid companies. No one has even mentioned that the government at state level frequently charges close to 10% sales tax on hearing aids. What a scandal, yet we’re focusing on attacking the very companies that are designing amazing hearing aids that help people today in a way that wasn’t even possible five years ago.
Here we go again…
I see you like to “assume” without having all the facts! I did run my own hearing aid business & did VERY WELL thank you! The ONLY reason I closed it was because I moved back home to be close to family. I didn’t have to charge $9000 to “live meager” for which you are implying! It is my duty as a hearing professional (is your foot in your mouth yet as it should!) to help people hear at an affordable price!!! Not to rip them off!
Our hearing aids have all the features that are important. We do have directional microphone as an added feature. I think what matters is being able to hear, not all the “bells & whistles” that specialist try to use for marketing purposes. K.I.S.S. has always been my rule of thumb!
We have less than a 1% return on our hearing aids, has to say something!
Well the problem with that statement is that because YOU feel it to be important does not mean that the wearer does also. All those “extras” you state specialists use to market hearing aids and are essentially unnecessary benefit a significant number of my patients on a daily basis.
Just being able to hear isn’t enough. Being able to hear well (or at least as well as can be expected given auditory information and limitations) in multiple and difficult environments is what is important. Hearing aids can and are simple even with a lot of “extras”…
And just because less than 1% return hearing aids doesn’t mean they are happy with them. I’m not saying they aren’t happy…but unless you call and ask everyone who doesn’t return a hearing aid purchased through you if they are still wearing it and how happy they are with it there’s no way for you to know what the reason behind them keeping it is.
Quite frankly, I’ve grown tired of the bickering on this thread between everyone posted. It’s obvious that no one is going to change their position regardless what proof or data is presented and definitely when someone is passionately expressing their opinion. The people who believe that hearing aids are overpriced are going to continue to believe that and the professionals who fit hearing aids are always going to feel justified in charging what they need to charge. There are A LOT of options out there for people with hearing loss to obtain help and between all of it, most people are able to obtain something that will help them.
Our hearing aids have all the features that are important. We do have directional microphone as an added feature. I think what matters is being able to hear, not all the “bells & whistles” that specialist try to use for marketing purposes. K.I.S.S. has always been my rule of thumb!
I apologize, there are a couple glitches with the software which is why we have a new version coming out very soon. The tips, if not put on correctly, can fall off. Discussing “how you want aids programmed over the phone” is not going to to be right on target
(although sometimes they are) which is why we have the self-programmer. Our hearing aids with the programmer I agree, are not for everyone. There are clients that need and should go to a local professional.
We do not charge a fee for trial, we charge a restocking fee. Hearing aids cannot just be thrown back on the shelf.
We have less than a 1% return on our hearing aids, has to say something!
Modern hearing aids use multiple microphones to determine direction, not just one. Even my 8 year old Widex aids had two microphones! (Yes, I had the directional option, assuming both microphones could be used simultaneously.)
I was not talking about software glitches, although they were there too. I was referring to the programming not what whats discussed or even what made sense. Why turn off feedback supression on one aid?? Theese are people / “pride in performing a good job” issues.
I ordered my aids from my home here in Virginia. This state does not allow “restocking fees”, only fees gor hearing aid evaluation services. See here for more details.
I have a lot of pride in what I do and am grateful to help people at a great price. Again, I emphasize our hearing aids are not for everyone.
Again, we have directional microphones (2 microphones) which are used simultaneously.
I again, apologize, the click of a button that turns on the was not done in error. We are humans and mistakes are made by all. Are we really fussing over a click of a box?
I am not talking about our retirement centers which is a different division than HearSource. We do have a low return rate and I am proud of that!
I see you have had Several trial periods on different hearing aids. I hope you have finally found something you like. Hearing is what it is all about!
One major point that has been overlooked is the fact that Audiologists/Dispenser SELL merchandise…the physical piece of plastic/wires/transisters. They sell a product and services.
Money changes hands for goods/merchandise and services. Not just their professional services.
Did you know that back before 1977, audiologists did not sell hardware. It was considered unprofessional to SELL hardware.
Its as if Doctors sold you the drugs they prescribe. You can only guess how this would influence the Doctors decisions…Doctors being human. Ed
Wales, UK
Central Virginia