Silencing the Competition: Inside the Fight Against the Hearing Aid Cartel

Thank you @d_Wooluf, I have always advocated the major hearing aid manufacturers operated a worldwide pricing cartel… This article appears to confirm those suspicions! Cheers Kev

I got my first hearing aids in 2011, and I did not have to get a prescription – although United Health Care insisted that I get an ENT’s report that my hearing problem could be helped by hearing aids.

Modern hearing aids are far more than a microphone in the ear: they are powerful signal-processing computers.

Nevertheless, I don’t doubt that there is a lot of anti-competitive malarkey going on between the various hearing-aid manufacturers to maintain their “regular” (i.e., excluding Costco and the like) high prices; do you think that either the manufacturers or Costco are losing money on on the aids they sell?

Personally, I believe all companies are entitled to make a reasonable profit… But, according to this article, the major hearing aid manufacturers appear to be running a cartel, and artificially inflating the price, way beyond any reasonable margins, using every trick in the book to disguise their manoeuvring… Ultimately, what sticks in my craw, is the pretentious moral high ground they portray to this hearing world, profiteering on the backs of HOH, these folks who have no choice, other than to buy… They have little or no moral compass, and it appears their only real interest is making lots of money out of folk who have a disability. My 2 cents worth…

@jeffrey said:

I haven’t yet read the article

You should,as it’s not about the audiologist clinic, it’s about the manufacturers and their respective political connections.

@jeffrey said:

Audiologists need to make a living.

Absolutely, as every legal business should.

@jeffrey said:

It’s not just the cost of production of a single aid that’s the whole story.

In this case, it is explained as exactly that.

@jeffrey said:

I need assistance from my audiologist for that, after purchase.

Of course, anyone can understand this, it’s what the majority of people do anyway.

Political interference/support for underhand business practices is totally wrong in any way, this is happening because of the massive amounts of money to be made (many billions per year) so
everyone wants a piece of the pie. OTC is the only way to help reduce the cartels way! It won’t stop it, because as the article points out, the manufacturers are busy buying up companies and investing in any one that comes close to offing any meaningful competition. Remember these guys still have total dominance of the severe/ profound market.

Wow. Recent experience–in Brampton Ontario Canada.

• my audiologist sold her business; she sold Phonak hearing aids…(and others I’m sure)
• bought by and renamed Connect Hearing
• Connect Hearing is owned by Sonova
• Sonova owns Phonak

So distribution is from Sonova to Phonak to Connect Hearing…

Somehow that doesn’t seem right to me.

Thanks for posting this. It concerns me.

@fred.l.kline20 said:

The OTC hearing aids are JUNK

Your confusing OTC with the PSAP type you see advertising, these are not the same thing, the BOSE soundcontrol that was released early in the year had favourable reviews, Apple air pods are also available with good reviews as are IQbuds MAX.

Remember you’ll always be able to still get your hearing aids for "free’ from Costco with your insurance, but paying just $1500 for top premium models (KS10) is a fantastic deal that you could easily do every 3 years yourself.

The OTC market will be fantastic for those that can’t afford that, the BOSE retail for $845, others will come in under that over time I’m sure, even Samsung is thinking of jumping in!

@jeffrey said:

I need assistance from my audiologist for that, after purchase.

It’s been said that buying the full-service package for hearing aids is about the third most expensive thing in life after buying a house and a car. So I think you have to ask yourself if you’d be happy if you bought either the house or the car and the only way to you could get those items would be to buy the full-service package deal? That your $300K house is actually going to cost you $2.5M because you’re buying a lifetime of any possible repairs that will only be done by the builder and his subcontractors who built said house or pay $200K for your $40K automobile because, same deal, you’re buying the full-service, lifetime maintenance on the car. Sellers tend to charge what the market will bear because everyone wants more money, more profit (the stockholders expect it ,too!). So if the market is very limited access, prices tend to go up, rather than down. The “I can make it better and cheaper” competition is a potential buyer’s best hope to acquire something at a reasonable price. On the other side of that, you can get a race to the bottom in quality because to sell something now at a too good to ignore price, a company often doesn’t worry about how well its product is going to last X years into the future.

So there is a Goldilocks balance to everything. My dad was a doctor. I vaguely remember in growing up some lesson in how the medical profession in cahoots with states restricted the number of medical schools that could be created because they didn’t want an overproduction of starving doctors who couldn’t get enough patients and might be induced to engage in shameless marketing practices to acquire patients, etc., debasing professional ethics, etc. So I think every profession tries to assure and maintain its mode of existence and HA OEMs and HCPs are unfortunately no different in wanting to maintain “the good life” for themselves, even if their clients end up paying more than they might otherwise in a highly competitive environment.

@fred.l.kline20 said:

My federal employee blue cross blue shield went from $2,500 every three years to every five years because of all this TV Ad sqxt!

There is no free lunch. What is the federal budget deficit these days? State employees are sort of living the same way. Both state and federal employees tend to get underpaid for what they might earn as private business employees and, in my experience, get compensated in part by generous benefit and retirement packages that private businesses to make bucks in the here and now don’t always provide, at least to the same extent. So let’s continue on with very expensive hearing aids just so federal and state employees can continue feeding at the benefits trough and let tax payers foot the bill (or have future generations of tax payers staving off federal and state budgets run wild).

When new stuff comes along, old ways may suffer and disappear in the process. Horses and blacksmiths have gone the way of the way of the dodo bird. In a free-market economy with regulatory oversight for medical necessity and against anti-competitive monopolistic practices (in general-not saying that’s what the HA industry is now), I don’t see why a number of different methods of providing hearing care shouldn’t co-exist and compete. And price barriers should not be propped up unless there is a true necessity for those for some concrete health and safety reason. Both the FDA and the medical establishment have said there is no substantial health or safety reason not to have OTC HA’s for mild to moderate hearing loss.

Thank you for the kind words Jim, I did wonder that @SpudGunner… The HCP’s silence is perhaps “Deafening”, if you’ll pardon the pun, it was intensional … But, surely a few would stand up, and defend their industry, it may be their business model is so corrupt, it is undefendable? Could be, this article just nailed it? Or perhaps there is silence, out of fear of retribution, they might get black listed by the major manufacturers, if they speak out? Who knows…

@kevels55: I dunno, Kev. I’m glad that you concur the question is worth asking, and the observation regarding HCP silence is not just niggling, on our part.

@kevels55 said:

But, surely a few would stand up, and defend their industry, it may be their business model is so corrupt, it is undefendable?

I was at my HAP office today. I’ve known some of the people there for over ten years. I’ve spent hours with my current audi. She’s not a corrupt ogre. She’s not rolling in money. Can’t you spot a charlatan, or a player, or a salesmen, just through experience? I certainly can. How many here have felt their audi was in on an indefensible scam and looking to fleece them with no regrets? Not me. My audis have been decent people looking to fit me according to my needs, and then follow on with service.

I agree that the hearing aid business is contrived and that aids are overpriced. As I said before, part of that pricing is to cover expertise and post buy service. My guess is that we’ll get a remedy for the HA market, one way or the other, fairly soon. The landscape will change. I may not get my easy years of walk in service when the shops all fold. The new model may well be better! cheaper aids for all!

Economics = Sellers make more money if by lowering the price they can sell more. So while the profit margin on an individual item may be lower, if sales volume increases significantly with the lower price, they make more profit. Costco sells based on volume and can negotiate lower prices with manufacturers and still make a lot of money. And Costco offers manufacturer a different distribution channel with no extra cost