As recently as 2000, it seemed as though behind-the-ear (BTE) hearing aids were disappearing. They accounted for less than 20% of hearing aid sales, they were large and visible, and hearing aid users often felt they occluded the ear canal.

Today, BTE’s have made a remarkable recovery and account for almost 50% of hearing aids sold. This reversal has been driven entirely by a new type of hearing aid: the mini-BTE. Mini-BTE’s alone account for more than 25% of hearing aids sold in the US.

But where did this trend come from? The answer is simple: mini-BTE hearing aids are better, and they’re better in almost every way.

Mini-BTE Hearing Aids Increase User Satisfaction

These are some of the conclusions in a Hearing Journal study of MarkeTrak VIII hearing aid data, exploring the advantages of Mini-BTE hearing aids vs. traditional BTE’s.

Overall, satisfaction with min-BTE hearing aids satisfaction is higher. When asked why mini-BTE’s are appealing, users typically mention lower occlusion of the ear canal, improved fit / comfort, better sound quality, less visibility, and better directionality. In fact, perceived sound quality with mini-BTE hearing aids is higher for every type of sound addressed in the survey.

When asked to explain the rise of mini-BTE hearing aids, hearing aid experts cite similar reasons. Mini-BTE's are almost invisible due to their use of super-thin tubes. They reduce occlusion of the canal – so there’s less of the strange sounds that can accompany chewing, swallowing, and the user’s own voice. Overall, they are more natural sounding, while reducing feedback, especially for RIC models  -- such as the Embrace X-Mini.

The great news is that improving technology is improving people’s quality of life. People are much more satisfied with mini-BTE hearing aids than their bulkier, older traditional BTE cousins. Even better, the improved design is encouraging more people to wear hearing aids. The Hearing Journal found that, especially among more active senior demographics, many people purchasing mini-BTE’s would not otherwise have bought hearing aids at all.

The one commonly mentioned downside to mini-BTE’s is cost – these hearing aids are typically much more expensive than older models. However, by buying hearing aids online, some customers are opting to spend less for the mini-BTE hearing aids with the latest RIC technology, then they might pay at an audiologist’s office for an older, bulkier, less effective model.

According to The Praeger Guide to Hearing and Hearing Loss, audiologists bundle follow-on care with hearing aid sales 87% of the time. But why is bundling so widespread?

Hearing Review’s point of view is that, “The bundling of audiologic professional services serves as a form of ‘insurance’ for [audiologic treatments/aural rehabilitation] service. This is because, when a hearing device is purchased, neither the patient nor audiologist knows just how much audiologic intervention will be required or utilized by a given patient.”

However, we suspect that most patients actually have a pretty good sense of their tendency to schedule unusually frequent checkups.

Since you're a good judge of your own likely behavior, you’re in a good position to decide whether you'll be among the only 20% of the population that makes 5 or more follow-up visits in the year after purchasing hearing aids from an audiologist.

If you believe you're likely to be part of this 20%, you may benefit from the "insurance" provided by bundled services. But if this doesn't sound like you, you're likely to be overpaying for hearing aid services you'll never use.

We believe there these are the real reasons for hearing aid bundling:

1)      It makes apples-to-apples hearing aid price comparisons difficult. For most people, buying hearing aids online is going to be cheaper in the long run, even if they pay full price for audiologist care. Audiologists have an incentive to obscure this information.

2)      It makes hearing aid customers sticky. Let’s imagine you’ve already paid up-front for all of your follow-up care. Even if a friend tells you there is a great new audiologist nearby, you’re not likely to make the switch! Audiologists love this, because a customer who pays in advance, is a customer who's going to stick around.

Buying hearing aids online is a way for customers to "unbundle" the sale and servicing of hearing aids, and reduce overall hearing aid cost.

One of the most important considerations when investing in hearing aids is cost. Some models cost $1000; some cost upwards of $7000 for a pair. But it’s not as straightforward as simply comparing numbers. There’s also the question of where you buy.

If you purchase hearing aids from an audiology practice, servicing and other follow-up care will typically be “bundled” into the price of the hearing aids.

If you choose to buy online, some servicing may be covered, but you may be “on your own” when it comes to in-person follow-up care. You may want and benefit from this care, and the cost is a big unknown. This makes it very difficult to compare the “all in” costs of buying hearing aids from an audiologist, vs. buying online.

But the fact is, even if you buy hearing aids online, you can still seek servicing and follow-up care with your local audiologist. And based on an excellent study recently released by Hearing Review, this approach will save you money in a large majority of cases.

The Hearing Review Study

Hearing Review collected data 503 patients for a year after their initial hearing aid fitting, to see how often they returned for follow-up care.

The findings: if you buy hearing aids from an audiologist, you’re likely to make an average of 3 follow-up visits in the year after purchasing your hearing aids. But this isn’t the whole story. There are a very small number of customers out there making 5, 10, or even 15 follow-up visits, and they inflate the overall average.

If you’re like most people, you’re much more likely to be at the lower end of the range. In fact, there is a 50% chance you will make 2 or fewer follow-up visits, and an 80% chance you will make 4 or fewer follow-up visits.

Let’s take this a step further. If we estimate the average cost of a follow-up visit at $100*, this means that if you buy online, there’s a 50% chance you’ll be adding at most $200 to your all-in first-year cost, and an 80% chance you’ll be adding at most $400.

If we compare with the thousands of dollars you’ll save by buying the hearing aid itself online, it becomes clear that if you’re like most people, you’ll save money overall by buying hearing aids online. However, it’s also true that buying online is not for everyone. If you have an unusually high number of follow-up visits, you’ll end up paying less overall for the “bundled package” of care provided from the audiologist.

*A report commissioned by the Virginia State Senate in 2009 found that the average cost of an audiologist was $46.

So... Should I Buy Hearing Aids Online?

Buying hearing aids online is not for everyone. But if you’re like most people, buying online is likely to save you money, while providing flexibility to seek follow up care with the audiologist or hearing aid dispenser of your choice.

Here at Embrace Hearing, we’re big fans of the Better Hearing Institute. Their paper from October 2009, "25-year Trends in the Hearing Health Market," has a lot of good info on hearing aid costs and helps to answer a question we hear pretty often:

[hesitant tone] "You're selling hearing aids... aren't there a lot of people who do that already?"

Based on the MarkTrake VIII database, the leading source of hearing aid data, and syndicated widely by trade publications, the paper raises some important points that help explain why we think this is exactly the right time to enter the hearing aid market.

First, hearing aids are expensive, and getting more expensive. The average retail price of a behind-the-ear (BTE) hearing aid in 1989 was $651. In 2008, the most recent data available, it was $2,326. This annual inflation of over 6% far exceeds the 3% inflation in the general economy, in an era where the cost of other electronic devices has fallen sharply.

However, the number of consumers paying full price for hearing aids is decreasing. In 1989, 24% of hearing aid purchasers involved a third party co-pay of some sort (including purchases covered in full by the Veterans Administration). In 2008, the number was 40%

This is an encouraging trend, as it makes hearing aids more affordable and accessible for the population. However, as a larger part of the population is covered by insurance, the industry can further increase prices because hearing aid costs are hidden to consumers -- instead, they appear in the form of higher insurance prices. Moreover, for the 60% of hearing aid users not covered by insurance, higher out-of-pocket costs are an unfortunate reality.

While prices and insurance coverage have increased, distribution in 2008 is largely unchanged. Audiologists' and Hearing Aid Specialists' offices remain by far the most common locations to purchase hearing aids. This means they have a major role in determining hearing aid prices. While these offices provide excellent and valuable care, it's important to realize that they have a financial incentive to keep hearing aid prices high. 

So why is this? First, a recent industry trend is that many clinics are now owned by manufacturers, whose core business is maximizing profit on hearing aid sales. But more importantly, Audiologist and Hearing Aid Specialist offices are also retailers run as profit-maximizing businesses, and their core product is hearing aids. Said another way, if it were in their financial interest to make hearing aids affordable, they would do so.

The result is that while hearing loss prevalence has increased significantly, hearing aid adoption has stagnated at 25%, and the number one reason is high price.

The current distribution system has created a two-tier market that leaves everyone with hearing loss worse off. Those who are comfortable paying $4000 for a pair of hearing aids get the medical care they need and gain improved quality of life -- but they are dramatically overpaying. Those who cannot afford to pay such high prices are shut out of the market entirely. In short, the winners in the current system are manufacturers, audiologists, and hearing aid dispensers -- and the losers are people with hearing loss.

So that's why we decided to launch Embrace Hearing. We are sure that alternative distribution will eventually emerge to reduce costs and better serve people with hearing loss. We're excited to be doing our part to reduce hearing aid cost -- and we hope you're just as excited as we are.

We’re always happy to hear your thoughts so please, any comments, suggestions, feedback would be appreciated in the comment field below.

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For more questions on our blog and Embrace in general, contact us! Call us at 917 830-4327/917 830-(HEAR) or send us an e-mail at info@embracehearing.com

Embrace Hearing's direct-to-consumer hearing aid model was recently profiled by Hearing Health Matters, a highly respected blog "for people who share the belief that Hearing Health & Technology Matters!" We're excited that our mission to make hearing aids affordable and accessible is continuing to attract attention from those who follow industry trends.

Embrace Hearing is pleased to announce that co-founders Sam Tanzer and Ross Porter were included in the Philadelphia Business Journal's list of "30 under 30" entrepreneurs to watch in 2012. We're extremely pleased to see hearing aids in the news. We believe the topic is headed for more and more news coverage as the prevalence of hearing loss continues to rise, and hearing aids become increasingly unaffordable.

Thanks again to the Philadelphia Business Journal for this great recognition.

Embrace Hearing is pleased to announce its acceptance into the University of Pennsylvania's Wharton Venture Initiation Program. Only a select group of ventures are accepted into this program, and Embrace Hearing will use this honor to help grow into the premier online retailer of hearing aids.

For more information about the VIP program or to see the other ventures accepted, visit The Wharton Venture Initiation Program on the web.

-The Embrace Team