Last year, more than 3 million hearing aids were sold in the US alone. This is an industry that has a rock solid 2% to 4% annual growth rate. If that’s true, why are most hearing aids so expensive? After all, a hearing aid is just a tiny computer married to a tiny hi-fi. The prices of both computers and hi-fi systems have dropped precipitously even as their quality has gone up.
Thirty million to 50 million Americans could be aided by some sort of hearing device—the market is big. What’s holding up progress? It’s the current business model, which basically requires anyone who wants to get an FDA-approved hearing aid to go through an expensive acquisition process. Many of the better hearing aids are sold only through audiologists, who developed relationships with the manufacturers long before the arrival of the Internet, Big-box stores like Costco, and digital technology. Audiologists have done their best to protect this model. They have lobbied states (Florida for example) to ban Internet sales of hearing aids. They have lobbied the FDA for strict product definitions so as to prevent newcomers from calling their products hearing aids. They have lashed out at companies (Phonak) that have decided to cut prices to the VA. And in many places, they have upgraded their degrees to enhance their professional standing by calling themselves “doctors.”
But all this is about to change. The gap between the traditional buying model and the actual cost of hearing devices is driving entrepreneurs to enter the field and offer significantly lower pricing combined with new technologies, to create compelling new products at significantly lower prices. Some of these developments, particularly the techie-oriented ones, are indeed a welcome change in what used to be a sleepy field. Certainly, few can argue with a policy that offers our veterans lower pricing for hearing aids, as the VA does now. But the proliferation of big-box store sales and Internet providers can be a double-edged sword. On the one hand, the long-overdue pressure to cut prices benefits the public. On the other, there is a significant “buyer beware” issue with online sales of hearing aids. Both the products and the system for delivering them are all over the lot in terms of quality, and it is a simple fact that fitting hearing aids is definitely not like fitting eye wear.
The audiology industry now stands at a crossroads. Until recently, audiologists had the space all to themselves. Now, Big-box stores, the Internet, and new technologies are encroaching on their domain. They will need to find a way of adjusting to these pressures. As Bob Dylan wrote long ago, “a change is gonna come,” as it does for all of us—and now for the hearing aid industry.