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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?"
on this silly site
About 2 to 4 of every 1,000 people in the United States are "functionally deaf," though more than half became deaf relatively late in life; fewer than 1 out of every 1,000 people in the United States became deaf before 18 years of age.
However, if people with a severe hearing impairment are included with those who are deaf, then the number is 4 to 10 times higher. That is, anywhere from 9 to 22 out of every 1,000 people have a severe hearing impairment or are deaf. Again, at least half of these people reported their hearing loss after 64 years of age.
Finally, if everyone who has any kind of "trouble" with their hearing is included then anywhere from 37 to 140 out of every 1,000 people in the United States have some kind of hearing loss, with a large share being at least 65 years old.
So even at 140, even ignoring those that cannot be helped by hearing aids and those that cannot afford hearing aids, the truth is that far more than 140 out of 1,000 people buy the products you mentioned. If you move a higher volume, you can price them lower and approach their true cost as your design and overhead costs diminish with numbers. What's more is that "a laptop" will more or less work for me the same as it will work for you. We don't need to mold the laptop to put it in our ears or have it tuned to our needs.
You also seem to overlook two factors: as electronics get smaller they get more expensive. The second part is that as electronics need to power themselves and get smaller they get even more expensive. And on top of that, my cell phone puts out a lot of heat. The kind of heat I would not want in my ear. So you have to consider that the battery must be small and must not dissipate tons of heat and so therefore the electronics must have a very low power draw. There's not much of a conspiracy to find here, it's an unfortunate reality that prevents someone from storming the market with the new better cheaper hearing aid (pending tech advancements).
In my family, we look at chipping in to buy our elders hearing aids for presents, I know the nice ones are crazy expensive.
My work here is dung.
They need to be able to have FDA testing, certification, independent verification of testing, quality assurance and all the paperwork hell -that- involves. The certification needs certifiers to certify that the certification has certificates on the certifiers to do certifications and so on... There is a MASSIVE paperwork rats-nest involved in making ANYTHING that used in healthcare.
It's why healthcare spending is rapidly outstripping the US economy, to be completely honest.
Many insurance plans don't pay for them. Medicare doesn't pay for hearing aids unless the hearing loss is the aftereffect of an accident. They generally don't cover hearing tests either. Medicare and hearing aids.
I think you miss the point. When Joe Sixpack doesn't have to pay for Product X, he doesn't care whether Product X costs $10 or $10,000,000.
Health insurers pass the cost on to employers, who have to keep paying the increased premiums to keep their employees happy. If Joe Sixpack had to pay for their own health insurance, then he would object when they doubled the premiums to cover those $10,000,000 products that could have been bought in a free market for $10.
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.?
Except, insurance (generally) doesn't cover them. Mine surely didn't.
"I'm a Genius!"*
*Not an actual Genius
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.
http://www.embracehearing.com/
Just add {In Space!} to anything.
For pretty much the same reason that a small piece of soft foam as a filter for my CPAP -- not magic foam made from unicorn testicles, just bog-standard foam, about 2" square -- is billed to my insurance company at 25.00.(Seriously, due to a paperwork snafu, at one point, I got the itemized bill instead of my insurance company getting it, and it's ridiculous what they charge.) Because they can. (My insurance company, I'm sure, just laughs and pays them a buck, at most, but having the item be "worth" 25.00 is probably a lot of use to accountants at every stage in the transaction.)
Why did a simple ultrasound of my heart, performed by a technician who was not a doctor, not a nurse, just someone who'd completed "Be an ultrasound technician!" at night school, and which took about 15 minutes, cost over $1000.00? No reason. It's a random number. They bill the insurance company, or the government, depending on if you have private health insurance or medicare/medicaid, and then the people they bill pay whatever amount THEY decide to pay for an ultrasound. This doesn't work, of course, if the hospital has to bill YOU -- you have to pay what they ask. Sucks to be you. Or me, when I didn't have insurance.
It's because there's no market control; there's no shopping around; there's no way anyone can (legally) just start making hearing aids and having them sold at Wal-Mart. If eyeglasses followed the same rules, you couldn't buy even a pair of reading glasses without going to a licensed optometrist and paying 250.00, minimum. As it is, I can go to the aforementioned Wal-Mart and try on a few quickly, then pick whatever I like best and walk out having paid less than I'd pay to go to the movies.
My hearing aids were covered by my father's insurance (he works for the state, so great insurance) until I turned 21. Now I'm trying to figure out how to pay for my next pair because none of my employers since then have even had partial coverage for hearing aids. It's one of the frustrating gaps in most employer-offered insurances. My current pair were $4000, which includes cleaning every six months (not sure for how many years).
I will say that hearing aid technology has improved at an impressive rate over the past 19 years that I've been wearing them, and costs of a low to mid-end hearing aid is about the same as it was in 1994 when I got my first pair, but inflation has gone up quite a bit since then - not to mention they're more comfortable and durable than ever.
Yep. No market pressures to lower the price. Sucks if you don't have or can't get insurance.
Am I the only one that read this as two completely contradicting statements? Surely, you must see the logic that if there are people forced into paying out of pocket to hear, that there is some market pressure to make lower priced hearing aids!
Not as long as they're a minority. And even then - think about it this way - if you have a 100 patients needing one and only half have insurance... would you still rather sell 50 hearing aids at $3,000 each or 100 at $500 each? Plus it's not like some startup can easily flood the market with cheap alternatives either - hearing aids are Class I regulated medical devices... I can only imagine the amount of bureaucracy that must be involved to obtaining that classification.
Bow before me, for I am root.
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.
MOST insurance policies do NOT cover hearing aides. As a person who's been wearing hearing aides for the last 30+ years, I can guarantee you this. Only if you work for a much larger corporation with a VERY nice benefits package, will you find an insurance policy that will cover your hearing aides - or even a portion of it.
My last pair cost me just shy of $4000. I paid out of pocket since my insurance at the time didn't cover this expense. This is, to date, the second biggest expense I've ever paid, after my car. They were top of the range 11 years ago. I can buy an equivalent model now with the same features from Costco's hearing center now for about $500 each.
Maybe your mum doesn't need the top of the range aides? Try looking for some with fewer features - say only six channels and two or three programs each (one program for normal environment, one for noisy environment, and one for telephone use if she should so desire). You'll save a ton of money.
The other reason why hearing aides are usually so expensive is that not everybody has the same ear shape. All in-the-ear aides are made from a custom mold, which does increase the cost. My dad recently got a behind-the-ear pair that didn't include a custom mold. The tips fit into the canal, similar to a pair of newer earbud headphones. (They still cost him $1200 for the pair though.)
Your mileage may vary. I highly suggest you shop around. Just remember though - you get what you pay for, and always buy the insurance plan on the li'l buggers.
Ok, so if I just pull some random numbers out of my ass... We have 100 people. 50 have insurance and 50 don't. If they sell the hearing aid for $3000, they sell 50 of them. If they sell it for $500 they sell 100. Which makes them more money?
Exactly. In fact, remember those supply-and-demand lines from high-school economics. Basically, your revenue at any given price will be given by finding that price on the demand curve, finding the quantity that it gives you, and you multiply them. The visual way to show this is to make a square with the lower-left corner at (0,0) and the upper-right corner at some point on the demand curve. The area in that square is your revenue. But that is far from your maximum possible revenue. It turns out that, in theory, you could make revenue equal to all of the area under the demand curve. That whole triangle! Usually, that ends up being about 100% increase in revenue.
The way you pull this off is you have to be able to charge $100 from the people who are willing to pay $100 but not $101. And you have to charge $250 from the people who are willing to pay $250 but not $251, etc. In other words, you charge everybody the most that they'll pay. The economics term for this is "price discrimination". Problem is, it's tough to charge different prices from different people. First off, you have the problem of being able to secretly offering different prices to different people. Second, you have the problem of figuring out who's willing to pay more. The internet has made the first problem a non-issue... until people caught Amazon doing it. Remember about 6-7 years ago when someone noticed that, if you went to buy a product on Amazon, and if you were using the same account that you previous used to buy 4 pairs of top-of-the-line Air Jordans, Amazon would quote you a higher price than if your account was used to but Sketchers? Turned out that Amazon was figuring out how "upscale" or how "trailer-park" you tended toward in your purchases, and they could figure out how much more they could squeeze out of you.
An example which is a little closer to the hearing-aid insurance one is that of airline tickets. Ever noticed how it costs so much more to buy a round-trip ticket which does not stay over a weekend? Who would want to not stay over a weekend? Business people. Who's money are they spending? The company's. Are they going to aggressively price-shop or be willing to stay over the weekend for a better price? Nope. So, they can soak the business travelers for more money.
With insurance, it's kinda the same deal. Doctors do have "cash" prices, which they offer to patients who lack insurance, but they can't get too crazy with the price disparity or it'll start looking like insurance fraud.
Don't be a retard. There's nothing Randian about pointing out the effect that big insurance companies have on the market for medical devices. If people had to buy these things out of pocket exclusively, the economics would be totally different, and that's true regardless of your political outlook. As someone else here pointed out with airline tickets bought by business travelers, when people aren't spending their own money (and instead, spending their employer's or health insurance company's), they don't bother to count pennies like they do when they're spending out of their own bank account, even though the cumulative effect does affect them later on (through higher insurance premiums, lower salaries, etc.).
Or housing. Flood the market with cheap financing and a governement directive to put everyone into a mortaged home and prices went on a moonshot. Right up until they didn't.
Just like the other reply already mentioned, college tuition and low interest government loans are again creating a moonshot effect.
And you are almost certainly correct on the same effect causing hearing aids coverable by insurance/medicare/etc. to be priced like nobody actually has to pay... because if you are asking the price you are paying for it yourself and realize that if you have to ask, you can't afford it.
Happens every time but we fall for the same trick over and over. Intelligence seems to be in short supply.
Democrat delenda est
Definitely there's more paperwork involved with a Class 1 medical device than say a DVD player, but if both manufacturers follow good management and development practices, it's not really that much more paperwork.
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.
> You can't blame the government for these scandals when it is the banks...
Yes I can. Because I know who drove those policies. Freddie and Fannie along with Congress and Presidents from Carter to Bush II. The insane push for 'affordable housing' and the idea that renting == bad, mortgage == good. They looked at stats that showed homeowners to have several socially desirable qualities and confused cause and effect in an epic fail for the ages.
The banks were in a no-win scenario so they cheated.
The government was demanding they make an ever growing percentage of their loans to politically preferred customers regardless of ability to repay. But it was ok because if you just made sure they could probably pay for the first year you could push the paper off on Freddie or Fannie and it was all going to be good. Because otherwise the banks wouldn't have done something that stupid regardless of how much political and regulatory pressure was applied to them. But then Freddie and Fannie had to do something with all that dodgy paper and so did the banking industry. Hmm, what to do, what to do. Mortgage backed securities! Except most people started figuring out the game of hot potatoe (nod to Quayle..) going on and started hedging those with derivatives thinking they were so clever. But when it ALL goes boom at once there ain't nobody can collect on those contracts because everybody gets boned at the same time. Short version, things that can't go on forever don't.
Democrat delenda est
2. Frequency adjust hearing aids- these are actually tiny computers that slightly shift the frequency of the waveform for people who have frequency-specific hearing disorders. The cost for them is about $500 base, plus a couple of weeks of software engineering to tune them to the INDIVIDUAL User. It is the second type that the original author's mother needs, and yes, in a way it is a supply and demand problem as *each unit* (even in a pair) has to be tuned to the disability of the individual ear.
Bogus argument
We have these cool things called "algorithms" and "parameters" which we implement in these things called "computers". A generic hearing aid could easily be made and the customer could sit in an automated booth at wallmart, listen to some automated test sounds, give feedback to the booth computer and the booth computer could tweak the parameters for an individual hearing aid, flash the parameters, and provide the "custom" hearing aids for the user to checkout. If you REALLY wanted to get exotic and custom, you could have the booth tell the user to put-in the new aid, re-test, and tweak the values and re-flash the parameters before sending him/her to the checkout. This is the sort of innovation that would have appeared years ago if hearing aids had never been classed as "medical devices". This is like the guys who supply a bunch of uber-expensive "medical equipment" to docs and hospitals trying to explain why they charge so much for a slow two-trace oscilliscope with a different label on the face and some slightly different firmware...
Now, I doubt that the problem with affordable education is simply a shifting of funding from the state to the individual
I'm not so sure.
Just looking at round bald numbers from the ten year interval of 1999 to 2009 you can see that Student Tuition at Central Michigan has grown 2.6 times, while the total budget has only grown 1.7 times. And state funding has held steady over those years.
Bottom line Figures for 1999 show Tuition totaling $79,762,133.
Bottom Line Figures for 2009 show Tuition totaling $214,308,670
Tuition grew to 2.6 times the 1999 values.
State Funding was $79,796,415 in 1999 and $80,064,200 in 2009, a virtual wash.
Total revenue was $227,472,170 in 1999 and $397,036,721 in 2009 or 1.7 times.
This is without regard to the total number of students, but the fact that Tuition increase of 2.6 times matches so closely the Cost Per Credit hour growth of 2.6
would suggest that the enrollment was not dramatically higher, and this is born out Here where 2002 undergrad enrollment was 17k, and 2011 enrollment was 19k.
(Total compensation (wages) increased by 1.6 times over that interval. It seems the revenue isn't all flowing into faculty pockets)
So Without becoming a CPA, and chasing every penny, its clear that the student out of pocket expenses have grown at a rate vastly higher than the University budget as a whole. The vast majority of the expansion in the budget is from tuition.
The cost of the of a college education has expanded to absorb the available student loan money.
Sig Battery depleted. Reverting to safe mode.