Hearing Aid Practitioner employed at Costco…Ask Me Anything!

You folks are really over thinking the REM so I do the REM and the aids hit the targets perfectly but the client says these sound like crap. Imo, the REM is valuable if you are having problem.

Then when the audi charges ME $6200 I am getting gouged.

the AuD can ask whatever they want… it’s up to you to walk if you don’t like the price. Maybe it was their way of hoping you would go somewhere else without actually telling you to.

@froggy47 said:

So let’s say the real total cost to build an aid PAIR by any major HA company is 600. I can totally believe that to be the case, makes all kinds of sense, there are no “magic” parts inside. Mics, speakers, a chip and software.

All that means is when Oticon/Seimens/Phonak charges an audi $1500 to $3000 the audi is getting gouged. Then when the audi charges ME $6200 I am getting gouged. So as our new member so rightly points out, the industry is a sorry quagmire of overcharging, secrecy, shoddy programming and whatever other dirty tricks & snakeoil the industry can get away with. It’s at a turning point & Costco is leading the charge. Can’t wait for WalMart to jump in.

My next pair in a few years will be bought on Amazon for about $500 or less and I will self program them & do a video so others can see how easy it is.

There’s a lot of R&D and other overhead at the manufacturers end. A $600 cost of goods sold for a pair of digital aids doesn’t cover half their expense. The 300% mark-up at the retailer (say $1500/pair to $6k retail, a common mark-up for many consumer products) should include good service for the 5 year life of the aid (or some similar timeframe). That should include changing tubes, re-programming, follow-up hearing tests, and more - for years (this could be 20 office visits or more). If your dispenser wants an annual fee after paying $6,000 for a set of aids then there’s a problem.

To say your $6,000 pair of digital hearing aids only cost $600 (Cost of Goods Sold) to the manufacturer so everybody’s getting ripped-off is not really true. Room for improvement and better deals perhaps? You bet.

@Danny_D said:

So the HA’s are programed based on your test results and then the REM is done? My appointment is 2/24/15, so besides being anxious, I want to know what to expect. Thanks for your help.

REM is completed against targets that are setting based on your hearing levels that have been run through prescriptive formulas that have been researched and proven. There are different formulas that different professionals may use. REM is essentially the process of programming the Aids to your hearing levels, taking ear canal resonance into consideration as well.

@Doc_Jake said:

You folks are really over thinking the REM so I do the REM and the aids hit the targets perfectly but the client says these sound like crap. Imo, the REM is valuable if you are having problem.

Then when the audi charges ME $6200 I am getting gouged.

the AuD can ask whatever they want… it’s up to you to walk if you don’t like the price. Maybe it was their way of hoping you would go somewhere else without actually telling you to.

Lol, there ya go consumers…the classic car dealership style hearing aid fitting.

As for REM; you need to actually take time to counsel the patient on the effects of auditory deprivation and its reversal.

@fuhgettaboutit said:

Except all the above mentioned services are available at Costco for under half of $6200.

The manufacturers spend hundreds of thousands on lavish conferences at exotic locations in 5 star hotels for those who sell their products. Perhaps they can put that money toward bringing the costs down? 500% markup is normal for this price bracket? Um, enlighten me here.

I won’t try to enlighten you fella. Nearly every consumer product over $100 has a 500% mark-up from COGS to Full Market Retail but you have all the answers right?

I’ve got almost 3 decades experience as a manufacturing engineer as well an MBA in management. That and over 2 decades wearing various hearing technologies and am certified Hearing Assistive Technology trainer through HLAA.

Continue to post whatever you want about yourself and CostCo or whatever your business is. I’ll move on.

If consumers are willing to pay $5000.00+ to be the first to get their hands on the “latest and greatest” hearing aid technology, be honest with them at least. As long as the professional is being honest about it’s improvements, all is fair game. This vulnerable, usually senior aged market looking for help, can be easily swayed by the words “cutting edge, latest and greatest, revolutionary” etc, and professionals use this to get people in the door and to buy the latest, most expensive hearing aids. We have plateaued big time in regard to technology, and we all know it, nothing has really improved since 2010. The next big shift will be when a processor is released that can create a real-time, significant SNR boost, but as of right now… lets not act like each new “platform” that comes out is going to change your patient’s lives. That’s not responsible healthcare; that is deception. Hit your prescriptive targets between 500Hz-4000Hz, counsel the pt. heavily on auditory deprivation/adaptation to amplification, and then make your comfort tweaks at the follow up if necessary; its a simple model, and NOT worth a $4000 markup on a set of hearing aids. The current delivery model for hearing aids is flawed, and this is why so many clinics are scrambling to hang onto their hats, while certain ones are thriving and growing exponentially.

@audiogal said:

One point many are missing here is that hearing aids are only PART of the rehabilitation process.

I don’t sell gadgets, I sell better hearing. That includes my expertise selecting and programming the aids to best fit the patient (just read some of the horror stories on here about incompetent programming if you don’t think that’s a valuable skill), counseling, repairs, cleaning, hand-holding, and whatever else is needed. My patients can make same day appointments Mon-Fri, and I’m available evening and weekends if needed. I’ll make house calls if someone can’t get to me. I can sell hearing aids from any of the major manufacturers (not just whatever the head office tells me we have on contract at the moment) and I can get the latest technology as soon as it’s released (or even earlier with beta releases). Made for iPhone aids, CROS aids, or tinnitus aids, not a problem. I’ve had them since they came out.

Big Box stores like Costco or Walmart can sell their hearing aids for less than me because they have much less overhead for their hearing aid stores. They can make money off toilet paper or whatever, and they also can purchase their aids for MUCH less than I can. They don’t have me though! There will always be people who want to get their healthcare for the least amount possible, and that’s fine for them. I have plenty of patients who are happy with me and my services. I had one patient tell me he’d shopped around, and I wasn’t the cheapest, but he decided to go with me because I was the best.

Come on, do you really think the metal and rubber bands on your child’s braces cost thousands of dollars? Or are you paying for the orthodontist’s expertise? How about your surgeon? Do you ask him/her how much your knee implant costs, and then add $450 on top of that and think that should be “enough profit” for them? Same thing for your mechanic. Doesn’t matter if it only took him 30 seconds to diagnose and fix a problem, it’s something I can’t or don’t want to do so I’m going to pay him gladly. I see value in those services.

BTW, I do agree with Doc Jake (I know Jake, don’t fall off your chair!) with REM not being a panacea. It’s great to tell you where you’re starting at, but if it sounds sucky to the patient you’re still going to adjust things so that’s it’s acceptable to them and they’ll actually wear their aids. Doesn’t do them any good if they hit every target and they hate the sound so they stick them in the drawer. That’s where the experience, programming and counseling skills come into play.

So you’re saying that that your hearing testing and hearing aid fitting skills are as valuable as a surgeon’s or orthodontist’s? Come on… $450 mark-up per hearing aid is $900 made in 2 hours; thats pretty darn good if you ask me. Buy each premium HA for $1000, add an extra $450 per, thats $1450/aid and $2900.00 for a set. If you have set the hearing aids up correctly, using verification and proper counselling, 9/10 times your patient won’t need dozens of follow ups….Your patient will not feel so much pressure to get a “perfect” fitting seeing as they didn’t spend an obscene amount of money on the hearing aids; this will also help cut down on adjustments.

It’s funny you mention mechanics; another slimy profession full of client manipulation and ludicrous mark-ups. There are the odd mechanics that are running clean and responsible shops with a healthy profit and reasonable mark-ups. Thing is, this is not a market that preys on vulnerable senior citizens with an impairment seeking help……So while I do roll my eyes at the “mechanic” industry, it does not enrage me like this “hearing healthcare” industry does….

Your response to audiogal is enlightening seems your depression extends beyond hearing aids. Maybe it’s the long winters up there. Spend the money and get your meds refilled.

Seems some people always accuse other of their flaws and failures.

Cost, overhead, cost of goods sold and so on are only controls in a unending progression to a bottom line. What isn’t brought out is that a competitive market place is much different from a disruptive one.

The obvious disruption is the big box business plan. Its economy of scale places small business at a disadvantage. The obvious way to small business success is personal attention and I see that playing out in the threads I’ve read. Some will succeed and many won’t.

The other disruption is supply chain related. The major manufacturers have created a non-competitive market based on proprietary technology and gentleman’s agreement. This is the only computer technology that has shown increasing cost over the decade or so that digital product has been sold. Lets underline the only.

The only technology that is somewhat interesting in miniaturization. The processors are proprietary and not that powerful. Manipulating sound and controlling the amplification was done by people such as Les Paul in the 50’s. The technology existed and was miniaturized in shirt pocket unit of the day. That’s usually been a simple progression to the product of today. Only occasionally has something new entered the scene. The rest? Marketing hype.l

Respect what is going on. Local shops will need to differentiate and try to innovate. Be grateful that hearing loss is a small market that manages to give you providers a livelihood. You can survive the present market with limited location Costco discounting. They are the only one that has broken a single private label product that they can discount beyond the point where the locals can’t compete in some way. The others are just reflecting the top of the discount sheet. And that can be met by providers forming buying groups. It will keep you going until some third world entrepreneur cracks the gentleman’s agreement.

To sum it up: Hearing aids are an artificial market that has managed to restrain trade up to this point.

@fuhgettaboutit said:

Fact of the matter is, this thread has 7 pages, and 1500 views in under a week; it is a hot topic. Just imagine what the response will be should this information go viral. I would love to see these comments reviewed on broadcast television for the general public to debate over. Perhaps then, more than 1 in 5 hearing impaired individuals will decide to take action now that the the fucked up delivery model for hearing aids is going through a dramatic and realistic overhaul after years of price gouging.

With all due respect, the Costco vs Independent topic has been thoroughly discussed for some time here so your not bringing any revelations on the issue. Your preaching REM too as if it’s never discussed and it too has, but REM is really only good if the equipment is used correctly and those results are applied properly for the HA wearer. I’m grateful that Costco has stepped in to deliver quality HA’s at a reasonable price but as far as I’m concerned your opinions are just that and your not a representative for Costco as a whole.

@fuhgettaboutit said:

Fact of the matter is, this thread has 7 pages, and 1500 views in under a week; it is a hot topic. Just imagine what the response will be should this information go viral. I would love to see these comments reviewed on broadcast television for the general public to debate over. Perhaps then, more than 1 in 5 hearing impaired individuals will decide to take action now that the the fucked up delivery model for hearing aids is going through a dramatic and realistic overhaul after years of price gouging.

Hearing aid delivery models have been well-known for decades. A Google search will reveal hundreds of similar topics. Your attitude does Costco NO favors.

Prices will come down in the long run but not because of threads like this but because demand is going up and competition is growing.

@Um_bongo said:

So the 15% markup that Costco quote is a lie too? Given your big box figures they are making at least 100% and more like 200% overall. Is Costco lying about its level of mark-up ?

Costco’s self-imposed 15-percent limit on markups obviously doesn’t apply to hearing aids. One investment bank in Denmark, where ReSound is headquartered, estimates the selling price to Costco is about $350 per unit.

@Um_bongo said:

So the 15% markup that Costco quote is a lie too? Given your big box figures they are making at least 100% and more like 200% overall. Is Costco lying about its level of mark-up ?

Those “figures” are not based on Costco’s pricing, they are based on another member’s example of reasonable profit margin. I don’t know of the 15% markup applies to our speciality departments, or just off the shelf products, I don’t have access to that information.

@audiogal said:

Lol, I can tell you that things have definitely improved since 2010. Otherwise why don’t you just fit 5 year old technology vs. charging people for newer models?

For people who are having communication difficulties and are missing out on hearing things in their lives, yes I’m as important as straight teeth. That’s the difference, I’m not just slapping a hearing aid on someone’s ear and shoving them out the door, I’m spending time determining what they need to help them communicate with those around them and their world. It’s healthcare, not electronics.

We fit current technology because manufacturers insist on discontinuing older technology so that sales remain high. Please share some of these revolutionary advances with me.

Also, yes I realize that communication is important. I am profoundly HOH. However, it does not take the skill level of an orthodontist to complete a communication rehabilitation plan from case history, testing, fitting, REM, follow ups, etc…