Hearing aids are characterized by steady progress in technological advancement, even while the lack of progress in lowering hearing aid prices and improving distribution continues to frustrate hearing aids users. We’ve frequently written about issues with hearing aid costs and hearing aid distribution; this entry will focus on technological progress, as represented by the increasing popularity of receiver-in-canal technology.

Within the behind-the-ear hearing aid category, hearing aids can be further subdivided into Receiver-in-the-Aid (“RITA” or “traditional”) and Receiver-in-the-Canal (“RIC” or “external”). The receiver – or speaker – amplifies sound, which must pass through a tube to the ear canal (in an RITA) or is simply projected directly into the canal (in an “RIC”).

If it seems obvious that placing the speaker in the canal will yield better, relative to forcing sound to travel an extra distance through an external tube… well, that’s about right.

A 2010 paper for the Journal of American Audiology that compared RITA to RIC hearing aids found that RIC models were equal or superior in all measured respects. Specifically:

·         RIC hearing aids reduced feedback. They were able to produce higher gain (louder amplification), without feedback.

·         76% of study participants preferred RIC hearing aids to RITA

·         This preference held both for new hearing aid users (74%) and experienced hearing aid users (80%)

In short, the study strongly suggested the superiority of RIC hearing aids for mild to moderate hearing aids (and is one of the reasons Embrace Hearing sells RIC devices). So if the study was released in 2010, why is it newsworthy today?

Because hearing aids are only replaced once every several years, it takes time to observe whether the implications of academic studies are actually being observed in clinics across the country and translating into differences in recommendations and ultimately hearing aid fittings.

By comparing 2012 statistical data from the Hearing Industries Association to 2010 data, we can see that far more people in 2012 are wearing RIC hearing aids than in 2010.

This is great news, because it shows that the hearing aid distribution system worked. In just two years, a combination of technical advancements, empirical academic studies, and coordination between manufacturers and audiologists and hearing aid dispensers let to a major improvement in the types of hearing aids distributed. The real winners here are hearing aid users, who are likely to experience improved satisfaction with their hearing aids and ultimately improved quality of life.

Recently, we posted a blog entry explaining why some commonly cited reasons not to buy hearing aids online, despite much lower hearing aid prices, do not apply to Embrace Hearing.

This is the second of a two-part post focusing specifically on the last reason proposed by Neil J DiSarno in his recent March 6 Q&A piece in The New York Times.

Mr. DiSarno states that: “Audiologists are professionals who can provide adjustment and programming of the devices, counseling, hearing training and support when you obtain hearing aids from them. Hearing aids bought online do not include these services.”

We completely agree with this statement, but we also believe that the model of “bundling” hearing aids and follow-on services serves to obfuscate the true costs of hearing aids and hearing aid services, and allows audiologists to charge more for the services than they would be able to charge on an easier-to-understand visit-by-visit basis.

To demonstrate this point, we’ve calculated the effective price of hearing aid follow-on services.

Above and here is our analysis of the effective cost per visit of the “training and support” referenced by Mr. DiSarno, when purchased as part of a bundled package. This analysis assumes that an audiologist pays $1,000 for a set of hearing aids from a manufacturer, sells it to a consumer for $5,000, and that the “fair price” for that sale is really much lower. It then asks the question – how much is the customer really paying per follow-up visit, depending on 1) how often he returns for follow-up visits, and 2) what hearing aid price he considers “fair” in the first place?

At the risk of stating the obvious, we submit to you that these are very high numbers!

In our view it is unlikely that hearing aid wearers would be willing to pay per-visit prices at these levels, if given a transparent choice. Hearing aid “bundling” is so common because it allows audiologists to include these exorbitant hidden costs in the up-front $5,000+ hearing aid price. First-time hearing aid buyers may not know whether $5,000 is too much to pay for a medical device – but they would suspect that $1,000 is too much to pay for a follow-on visit.

While it is impossible to know Mr DiSarno’s true motivations, we note that he has “spent the last 35 years as a practicing audiologist” and therefore has likely benefited financially from profits created by the practice of hiding high per-visit costs in an opaque “bundle.” We leave it for our readers to decide whether this conflict of interest might influence the thinking of audiologists who advise consumers not to buy hearing aids online because doing so deprives consumers of the ability to obtain “adjustment and programming of the devices, counseling, hearing training and support” from audiologists.

To this argument, we say – if you really want to ensure that all consumers have access to these services, then why not charge for them on a per-visit basis, no matter where consumers originally purchased their devices?

In a more transparent system, the free-market price for these services would decline to the level that consumers feel is fair. In an environment with lower prices, it is highly likely that many of the 27 million Americans with untreated hearing loss would purchase hearing aids and achieve an improved quality of life. And shouldn't that be the goal of everyone involved in the hearing care industry?

On March 6, 2013 The New York Times ran the second in a series of Q&A pieces with Neil J DiSarno, chief staff officer at the American Speech-Language-Hearing Association. The series of articles addresses topics of interest from hearing aid prices to new hearing aid technologies. In this article Mr. DiSarno recommended that consumers avoid buying hearing aids online.

We have assessed Mr. DiSarno’s reasons for warning against online hearing aid purchasing, and we agree with each of them – which is why we designed Embrace Hearing to sidestep each potential issue with online purchasing.

While Mr. Disarno acknowledges that purchasing online can reduce hearing aid costs and provide consumers with convenient options, he warns that:

“A hearing aid is a complex medical device, not a simple sound amplifier”

We agree – that’s why we sell state-of the art hearing aids directly comparable to hearing aids sold by audiologists

Hearing aids have digital technology that can be set by an audiologist to meet your personal hearing needs”

We agree – that’s why our 100% Board Certified specialists program each set of hearing aids to our customers’ individual hearing loss profiles, based on a combination of their hearing test results, and any specific customer requests

“Hearing aid bought online without a complete hearing test and other necessary hearing therapy/treatment services may not meet your needs”

We agree – that’s why we require that each customer undergo a professionally administered hearing test, prior to ordering hearing aids online

“Setting hearing aids for your needs requires specific computer software that audiologists may not have access to if the devices were bought online. For some online businesses, getting the hearing aid settings changed may only be possible by shipping the hearing aid back to the manufacturer, which means you will have to go without your hearing aid for a while.”

We agree – that’s why we will supply the necessary software to any audiologist who doesn’t already have access. We do offer by-mail reprogramming – for free – because some customers prefer the flexibility of not paying for adjustments, and not having to make an in-person appointment. We also support customers who seek in-person adjustments, and will even work to facilitate these in-person visits (though we don’t receive any fee for doing so).

Online hearing screens cannot tell you the cause of hearing loss — the cause may be something as minor as too much earwax or as serious as a brain tumor.

We agree – that’s why we require every customer to undergo a professionally administered hearing test, prior to buying hearing aids online

The F.D.A. strongly recommends that you see a physician to rule out medical causes of hearing loss before buying hearing aids. If your doctor determines your hearing loss is not medically treatable, ask to be referred to a licensed audiologist to see if you are a candidate for hearing aids.

We agree – We require each customer who buys hearing aids online to submit a waiver that acknowledges understanding of the F.DA.’s recommendation.

Audiologists are professionals who can provide adjustment and programming of the devices, counseling, hearing training and support when you obtain hearing aids from them. Hearing aids bought online do not include these services

We agree – however we believe that the model of “bundling” hearing aids and follow-on services serves no purpose except to obfuscate the true costs of the product and the service, and allow audiologists to charge more for the services than they would be able to, if they charged on an easier-to-understand visit-by-visit basis. We'll go into more detail on the price of hearing aid follow-on services in a future entry.

Mr. DiSarno has assembled a number of convincing reasons to avoid many online hearing aid vendors. However, we believe strongly that none of these reasons applies to Embrace Hearing.

We do not believe all consumers should buy hearing aids online. But we do believe strongly in consumer choice, and we  believe that customers can evaluate for themselves the wisdom of paying $5,000+ for hearing aids in person or $1,000 - $2,000 online, for near-identical devices.

Finally, we believe that since 27 million Americans are living with untreated hearing loss, the legacy distribution system of brick & mortar audiologist practices is failing many of the people it is theoretically supposed to help -- largely because the inefficiencies of running individual practices with high fixed costs forces audiologists to charge through the nose, pricing millions of consumers out of the market.

You’re in need of an affordable hearing aid.  The search for this – with newspaper ads, phone calls, referrals, and Internet surfing – has been an arduous one.  Or has it?  

Probably not, thanks to e-commerce creating a new industrial order.

Today, it is difficult to detach “commerce”, the act of buying and selling, from its prefixed “e” with 2012 online sales totaling $820 billion  (up 15% from the year before). Ten years ago, the process of purchasing something might involve a pile of print ads and, unbelievably, actually going to a store.  But what if your ideal product didn’t advertise?  What if the store was out of stock?  What if no one else in your life could give you a tip or a deal or a review?

This is the issue e-commerce aims to solve; it is a consumer-centric industry aimed at helping people find exactly what they want to buy.  The Internet is a single hub for searching, finding, comparing, advertising, and, most importantly, purchasing. The result? It comes right to your door.

Though once a brick-and-mortar industry controlled exclusively by audiologists, the hearing aid market is now also going online. There is no longer a need for retail markups. Advertising costs are reduced with the facility of search. Overall, online industry brings down consumer hearing aid prices and increases customer potential from select to global, allowing e-commerce sites like Embrace Hearing to enter and change the market.  

With hearing aid prices starting at $399, wouldn’t you agree?

2012 was a landmark year for the hearing aid industry. At Embrace, we think it will be remembered as the year the continued spread of affordable hearing aid prices became inevitable.

As awareness of the true dynamics of hearing aid prices grows in the mainstream community, and as online hearing aid sales gain increasing, if grudging, acceptance among professionals, Embrace Hearing has three predictions about 2013.

1. The shift to online hearing aid sales will accelerate. Consumer awareness is growing, quality is high and prices are low… and for many professionals, “online” is no longer a dirty word – just an inconvenient fact of life. Hearing aids, in short, are going to be sold more like glasses, with several distribution options.
2. For the first time in recent memory, hearing aid prices will fall. Prices charged by audiologists may actually increase as professionals sell to an affluent but shrinking group of customers who are wary of buying online, and can afford the luxury of premium audiologist pricing. But overall average hearing aid costs will decline as more customers shift to online hearing aid sales, which remain far more affordable.
3. The shift toward “unbundling” will continue. As more consumers buy hearing aids online, audiologist perceptions of these consumers will shift. No longer will they be a “lost hearing aid sale” – increasingly, they will represent a “servicing revenue opportunity.” Ultimately, we’ll see more transparent & fair audiologist pricing, with the result that hearing aid prices will fall, while the price of great in-person service increases to a level commensurate with its true value.

Why do we think this?

First, 2012 marked the year hearing aid pricing began to get mainstream press. Features were run in both The Wall Street Journal and The New York Times – which chronicled the frustration of searching for an affordable hearing aid in an opaque pricing environment (and which featured Embrace Hearing!). Our view is that greater awareness of alternative options will lead to customers seeking greater value for their money through online hearing aid sales.

Second, HiHealthInnovations, the online hearing aid venture backed by United Health, attempted to fully cut independent audiologists out of the hearing aid purchase cycle by putting a hearing test online. This represented the healthcare industry turning on itself, as current inefficiencies had simply become too great an opportunity too great to ignore for insurers -- which traditionally have little involvement in hearing aids.

This move drew immediate protests from the American Association of Audiology (AAA), as well as the Academy of Doctors of Audiology. But notably, the consumer group Hearing Loss Association of America (HLAA) disagreed:

“Our stance is to give innovative [online hearing aid] programs such as this one a chance… Hearing loss is a leading public health concern with 17 percent of American adults (36 million) reporting being affected…. Yet, fewer than 20 percent of people with hearing loss seek treatment and obtain hearing aids. While there are a number of reasons for lack of attention to this condition, the primary barrier is the cost of hearing health care services and especially hearing aids.

The HLAA agrees that face-to-face interaction with a health care professional to obtain personalized fitting of hearing aids as well as follow up services is the ideal situation. However, this approach operates as burden for a vast majority of adults with hearing loss who simply do not seek treatment….

The HLAA Board of Trustees met and… concluded that alternative delivery models and options are needed for some people who would otherwise not seek the services of a hearing professional.”

While the FDA ultimately weighed in and shut down the online hearing test, hiHealthInnovations and other innovative new companies such as Embrace Hearing continue to successfully sell online, now with the support of the HLAA.

(We are proud to say we believe that Embrace Hearing offers a better combination of quality and price than hiHealthInnovations, owned by United Health, the largest health insurance company in the country. Our customer satisfaction is demonstrated by our low ~10% return rate – we challenge hiHealthInnvations to release a comparable statistic)

Finally, something even more surprising happened. In August, the AAA, the ADA, and the American Speech-Language-Hearing Association (ASHA) issued a joint statement to hearing care professionals focusing on consumer needs in the delivery models of hearing health care.

The unusual joint statement was a call for reflection and action regarding the current business of hearing care and how the insurance industry, technology, and hearing aid price concerns now require hearing practices to adapt to new ways of delivering hearing health care. Among other questions, it invited audiologists to ask themselves:

• “What role does the sale of hearing aids play in your practice model? Do you have options in place to accommodate consumers who arrive at your practice with a hearing aid purchased elsewhere?"

• “Are the costs associated with the care you provide transparent to the patient? If appropriate, do you itemize the cost of your services? When discussing amplification and other treatment, do you offer patients options? Do you engage family and others to support the patient with hearing loss?"

The statement’s message was clear – the world is changing, and patient needs – not audiologist needs –will determine how hearing aids are distributed in the future. Hearing healthcare professionals are encouraged to adapt, or be left by the wayside by online hearing aid sales.

Given all the industry turmoil and innovation in 2012, and all the exciting ideas we have in store for next year, we’ll offer one last parting thought – we’re looking forward to an even more disruptive 2013!

We've written before about high hearing aid prices, and the cost benefits to buying online.

In the past, we've cited academic studies and industry-leading research. For this week's entry, we wanted to approach it in a slightly different way. We read recently that hearing aids cost more than their weight in gold, and decided to do some myth-busting.

Hearing aids cost more than gold? That can't be true... right?

In fact, our research revealed that hearing aids are much, much more expensive, on a per-gram basis.

A modern, RIC BTE hearing aid weighs in at about 2 grams. It may wholesale for $500, and resale for $2,500. On a per-ounce basis, that's a staggering $7,200 at wholesale, and $36,000 at resale. For comparison, gold is currently trading around $1,600 an ounce.

In all fairness, this approach penalizes manufacturers for making technological strides to reduce the weight of hearing aids, and increase comfort and satisfaction.

Nevertheless, the conclusion holds: on a per-ounce basis, hearing aids cost twenty times their weight in gold.

In fact, our internet research turned up a long list of luxury items with a lower price-to-weight ration than hearing aids. On this list are caviar, saffron, uranium nuclear fuel, a top-of-the-line artificial heart, and the Space Shuttle Endeavor.

It actually took us a while to identify any substance, manmade or otherwise, with a higher price-to-weight ratio than modern hearing aids. We think contact lenses come close, but they were too light to register on our scale. But we did identify two clear winners. Plutonium is one. The other is a diamond.

Readers, can you help us out with some others?

Clearly, this analysis is overly simplistic. But it's pretty striking nonetheless.

Gold is more expensive than virtually any other good...

...But hearing aids are so much more expensive, we had to put them on a different chart

Recently, the Better Hearing Institute announced a campaign encouraging employers to emphasize hearing health in their workplace wellness programs.

The vast majority of people with hearing loss can benefit from hearing aids. In fact, three out of four hearing aid users report improvements in their quality of life due to wearing hearing aids. And studies show that when people with even mild hearing loss use hearing aids, they improve their job performance, increase their earning potential, enhance their communication skills, improve their professional and interpersonal relationships, and stave off depression.

The Institute noted research linking hearing loss to such chronic conditions as Alzheimer's, kidney disease, diabetes, and even heart disease. Additionally, hearing loss is linked to a greatly increased risk of injury-causing falls among people aged 40-69.

Further, untreated hearing loss is linked to reduced earnings, increased workplace absenteeism, and lower workplace productivity, as well as depression, anxiety, and cognitive decline.

BHI is promoting an online hearing test (http://www.hearingcheck.org/) that allows people to assess their own hearing. While the online test is not a substitute for a comprehensive audiologist-administered exam, it can serve as a "wake-up call" that encourages people to seek professional care.

"Hearing loss is far more serious than people realize," says Sergei Kochkin, PhD, BHI's executive director. "When left unaddressed, [it] negatively affects virtually every aspect of an individual's life. And in the workplace, especially, untreated hearing loss can take a significant financial toll."

In fact, a study published in the International Journal of Audiology found that employees with hearing loss are as much as five times more likely than their co-workers with normal hearing to experience stress so severe that they must take more sick-days. One reason may be that only four in ten people with moderate-to-severe hearing loss use hearing aids. Even fewer people with mild hearing loss use them--just one in ten.

In a large national study, BHI found that people with untreated hearing loss lose as much as $30,000 in income annually, depending on their degree of hearing loss; that the aggregate yearly loss in income due to underemployment for people with untreated hearing loss is an estimated $176 billion; and that the fiscal cost to society in unrealized federal taxes is an estimated $26 billion. Use of hearing aids was shown to reduce the risk of income loss by 90 to 100 percent for those with milder hearing loss, and from 65 to 77 percent for those with severe to moderate hearing loss.

"I cannot emphasize strongly enough the importance of both protecting the hearing of America's workforce and addressing workers' hearing problems," says Kochkin. "When hearing is lost, it cannot be regained. But when hearing loss is appropriately acknowledged and addressed, it does not have to interfere with job performance, earnings, or quality of life. I urge all employers to make hearing health a routine part of their wellness programs."

This content originally appeared in MarketWatch coverage at http://goo.gl/oAXaw