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What goes into the cost of hearing aids?

Contributed by | Monday, February 22nd, 2016

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If you are like most people who decide to look into the purchase of a hearing aid, you might have experienced a feeling of sticker shock.

Several hearing aids of all types and colors
These tiny medical devices take years to
develop and professional expertise to fit. 

According to a recent Hearing Review survey, the average price of hearing aids in the U.S. is around $4000 a pair. And that price is for mid-range hearing aids, not the cutting edge, top of the line hearing aids some consumers are looking for.

A common argument heard among those who object to the price of hearing aids is, “I can get an iPhone or an iPad for much less, so why aren’t hearing aids priced similarly? After all, they are both technological devices, essentially tiny computers, so what is the difference?” The difference in hearing aid pricing from other high tech electronic devices comes down to three critical elements: manufacturing, distribution and economics. Hearing aids diverge sharply in these areas, and we will explore why.

From R & D to manufacturing

The manufacturing process is a small but vital element of the cost of a hearing aid. The materials that make up a hearing aid aren’t that expensive; even with specialized equipment such as microprocessors and microphones materials only make up about 10 percent of the cost. But like any high tech device, hearing aids require extensive research and development which is then folded into the cost. In the end, research into the making of the device can be as much as three times the cost of the materials themselves.

"It is a substantial part of the price: All the major companies have phenomenal research," said Patricia Kricos, an audiology professor at the University of Florida and president of the American Academy of Audiology.

Each manufacturer of hearing aids also utilizes an extensive team of professionals to design and create new equipment and platforms; these professionals range from electrical engineers and audiologists to computer programmers and even musicologists. Due to the desire to make the best possible product, developing a new high tech hearing aid can involve 200 to 300 people over a period of three to four years. Beyond that, any new features require labor intensive user testing, which can take another one to two years.

Only 8 to 10 percent of the total cost of hearing aids is the production (raw materials, labor and equipment). The remaining wholesale costs include R&D, marketing, testing and overhead for the manufacturer. 

Getting the hearing aids into your hands

The retail price of the hearing aids includes dispensing fees and administrative salaries, which occur after the hearing aids leave the manufacturer. Unlike other devices such as iPhones, hearing aids are medical devices. What that means is that unlike walking into an Apple store, spending an hour with a sales person, making your purchase and walking out, getting hearing aids is a rather involved process that involves many hours of fitting, adjusting and maintenance, all of which factor into the cost. This all means that while you are paying for the devices themselves, you are also paying for the services of highly trained professionals for the life of the devices.

Here are just some of the services that are incorporated into the retail cost of hearing aids:

  • Cost of hearing examination (patient history and complete audiometric evaluation)
  • Consultation
  • Programming
  • Fitting
  • Follow-up appointments
  • Cleanings
  • Regular maintenance
  • Device warranty
  • Year’s supply of hearing aid batteries
  • Counseling
  • Education

Because hearing aids are medical devices, these services are performed by a trained and educated professional. Not only is all of that initial training and education expensive, but a qualified hearing care professional regularly attends seminars and training to make sure that they are up to date on the latest medical information as well as to stay licensed. And the equipment necessary to fit your hearing aids and keep them in tip top shape is specialized, including computers and other dedicated high tech tools.

Other expenses are included in the cost of hearing aids as well. That clean and comfortable office you visit for appointments requires rent and overhead such as electricity, for example. Insurance, salaries of staff and marketing are just some of the expenses that hearing care professionals incur, and that are folded into the cost of hearing device. At certain junctures, hearing care professionals are able to perhaps cut a few corners in order to slightly lower the cost of hearing aids to benefit the patient. But unfortunately there are certain factors over which hearing care professionals have no control, such as the economy.

The economy of scale

And make no mistake; economics certainly comes into play when it comes to the price of hearing aids. First of all, there is competition between the hearing aid manufacturers, which drives marketing costs. Beyond that, the economic principle called economy of scale is of tremendous significance when it comes to pricing hearing aids. Basically, when a product (in this case hearing aids) is produced on a larger scale, a company can spread certain costs involved with production (such as design and research and development) more thinly, and the company has an opportunity to reduce its costs and pass those savings on to the consumer. However, since only about 2 million hearing aids a year are sold (as opposed to 32.4 million iPhones in the U.S. in 2011), cost reductions based on economy of scale are unlikely in the near future.

The fact that the economic factors driving the cost of hearing aids are not likely to change course any time soon stems from a somewhat mystifying attitude among those who have hearing loss: In a Marketrak survey done by The Better Hearing Institute in 2012, people with hearing loss who were not currently hearing aid users this one question: If you could have hearing aids for free that were invisible and that would solve your hearing problems, would you wear them? Despite the hypothetical scenario solving the three most common complaints about hearing aids, a staggering 45 percent still said no.

Hearing aids are expensive; that fact is indisputable and not likely to change any time soon. But they are also available in a wide range of costs, and with due diligence it is possible to find a lower cost option that fits your needs. It is often said that knowledge is power, and our hope is that having more information about what goes into the cost of hearing aids will allow you to not only understand the cost, but will allow you to make the most informed decision possible when it comes to purchasing your own hearing aids.

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