Slashdot Mirror
Ask Slashdot: Why Are Hearing Aids So Expensive?
solune writes "You can get a tablet these days for a few hundred dollars, and laptops for a few hundred more. Gaming consoles, TVs, and smartphones are all available for under a thousand bucks. Yet, a decent hearing aid for my mom will go upwards of $3000! With ever-shrinking electronic components, better capabilities, and technological advancements, not to mention the rapidly increasing potential user base, I would think quality hearing aids should be coming in a lot cheaper than what we can find. Adding fuel to my fire is that a hearing aid will greatly improve my mom's life — not to mention the lives of millions of others out there. Currently, she suffers from frustration and isolation with having to ask people to 'speak up', and nodding her head to things her kids and grandkids say. We've tried the cheapies, and they're fraught with problems. So, can someone tell me why a hearing aid should be so expensive?"
Here's an article that attempts to justify the cost:
http://www.aarp.org/health/conditions-treatments/info-05-2011/hearing-aids-cost.html
Overall cost — $3,600
Costs for the manufacturer:
Materials — $360
Research — $1,080
Other retailer costs:
Rent/overhead — $450
Testing/diagnostic machines — $288
Licenses/insurance — $108
Salaries — $540
Marketing — $270
Continuing education/training — $180
Potential profit for the retailer (pretax) — $324
Approximate product cost for retailer — $1,440
I don't know how accurate it is, but I can believe that the actual parts cost of a hearing aid is around $350.?
Tablets, computers, etc., all can be machine-assembled, or assembled by half-way trained manual laborers in a factories that can achieve high throughput by economies of scale, division of labor, etc. And although they are densely packed, personal electronics are still, for the most part, macroscopic. The components in a hearing aid, by contract, have many miniscule components that are assembled very carefully, by hand, by skilled laborers using loupes and microscopes - more akin to watchmaking than assembly-lines. As such, the assembly labor has resisted outsourcing. Plus, the number of units being assembled by any one company (there are many players in the market) aren't large enough to support well-oiled assembly lines running 24-7. Finally, most hearing aids have some amount of customization to each patient (ear-insert moldings for some models, equalization tuning for others), which further increases cost.
Others have mentioned the addition cost associated with it being a medical device, which is not insignificant. Lastly, because many hearing aids are paid for by insurance, rather than out-of-pocket, there is less consumer-driven pressure to reduce costs.
embrace sells em for $700/ea at the high end. Don't think $2k/ea is reasonable. It's a gigantic crock of BS.
www.embracehearing.com
signed,
hard of hearing anon.
If an uninsured dude yet collectible / aka non-judgement proof walks in, they'll probably get the full $350 booked as accounts receivable, then it goes to collections for 25 cents on the dollar for a net income of $87.50 to the Dr which is competitive with the insured pay rate.
Another way to play it is put uninsured dude in accounts receivable as $350, then book a tax deductible $350 loss as a forgiven debt if no collections agency is dumb enough to buy the debt. The real loss is whatever providing the service actually cost, which is probably about half of $95 in your example unless they're operating a charity. So they "really" lost $45 or so of actual medical supplies and labor, not $350. But the $350 loss offsets $350 of income when it comes to tax time so they save perhaps 25% of $350 or whatever that could be as much as $100 tax reduction in exchange for actually losing $50 or so of labor and band aids. The IRS wants their revenue so uninsured dude gets 1099ed as a forgiven debt and gets to pay income tax on the implied income of $350, which for a retail clerk girlfriend with an uninsured broken arm was approximately zero because she made practically no money that year. As I recall it did prevent her from filing the 1040-EZ form and she had to use the 1040 or 1040A something about you can't have 1099 income while filing a EZ form, or at least that was the case in the early 90s. This was some time (decades) ago and the story is related thru a "woman doing taxes" filter so it may or may not be correct. Also her broken arm was an imaginary amount something like $20K not $350. The story originally came from a discussion of "I have to fill out extra paperwork for taxes because of my broken arm before I met you, so I won't get any tax return this year unlike you" type of discussion, leading to the above discoveries.
The above explains why docs and hospitals tend to not really care "if you can pay or not" because either collections or semi-shady tax work lets them get about the same net income even if you never pay them a penny. There will be anecdotal situations where this doesn't work.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
1) And the reason that hearing aids can't use 3V lithium battery technology is? Seem like there might be some benefit there, especially in view of the impressively low-power things that can be done with small-geometry silicon when speed isn't the main issue.
:-) ), it's structural monopoly pricing. As long as that's in the picture, there's no hope for a transition to cost-based pricing.
2) This is a meaningful cost. A library of semi-custom versions might be a plausible intermediate step. As might laser scanning and 3-D printing.
3) Why can't analysis of the loss can be completely automated? "Press + if this sound is louder than the last one"
4) Flex PCBs (even when each one is fully custom) and 0105 components seem like a plausible solution. Automated assembly has come a long way since the invention of 32 gauge wire. Open your iPhone and count the grains of sand (resistors and capacitors) soldered to the PCB. Sure, they've always done it by hand with microscopes, but while that was a sensible approach 30 years ago, there are better approaches now.
5) This is a meaningful cost, too. But again, there's a lot of "tuning" that could be done by interaction with an automated system.
6) This is a meaningful cost. No obvious way to mitigate it, given the elderly user communicate it.
7) This isn't a cost, it's just a complaint that modern electronics isn't in the picture.
What I hear is "this is the way we've always done it, and we can't imagine a non-evolutionary approach to improvement". Is it really possible that a 3V supply (which would allow use of a $5 2mm^2 32nm-process DSP) would be the kind of disruptive change that would make hearing aids cheap enough for everyone?
Probably not, because the economic argument is unimpeachable: as long as insurance pays for it, and thus eliminates price pressure, there's no motivation to charge much less (10% off for cash, yeah, what a deal). This isn't even value-based pricing (think Mac Pro
Rubbish. I'd be willing to bet that they're using small variations on garden variety filtering algorithms that have been available in the open literature for many years. It's difficult to believe that they've come up with super-duper-proprietary stuff that's more complex than what you would see in video/audio processing, communications signal processing, etc. Patented does not mean better.
Just like college tuition. The easier it is to fund an education the more expensive it gets.
I was going to go there, but the last time I did on Slashdot I was immediately pounced on and pummeled by people who work for universities and colleges. Apparently I had gored some sacred ox.
Finding any historical cost per credit hour data was fairly hard, schools don't really want you to see this.
I finally found some for the University of Nebraska, Kearney, a state funded school, where a 2011-12 credit hour costs $168. Back in 1964-5 this cost was 9 bucks per credit hour.
Using the Dollar Times calculator $9.00 in 1964 had the same buying power as $65.73 in 2012. So, instead of charging $65.73/ch, UNK is now charging$168, or 2.5 time the inflation equivalent per credit hour.
Kearney isn't alone in this, Central Michigan is actually worse.
They charged $85.50/ch in 1993, which had the same buying power as $135.98 in 2012, but they are charging $358/ch or 2.6 times inflation.
Admittedly, state funding levels may have changed, and more money may now be raised by tuition and fees with less tax dollar input.
Its hard to know, without digging thru the University budgets over the years.
But in any event, I suspect that you are correct, that the cost of college expands to absorb the available funds.
Sig Battery depleted. Reverting to safe mode.
In the old days, they'd make 'em with cheap components with 5% or more resistance / capacitance variation, then test them when they came off the line and sort them into bins for "prescription" filter characteristics.