The Hidden Costs of Hearing Aids - Part 2: The Technology

Time to Read: 12 minutes

This second part to the a special feature called "Hidden Costs of Hearing Aids". This takes a look at the costs of hearing aids from the manufacturer's perspective. Emma discusses the research and development that goes into developing hearing aid technology, the costs behind manufacturing the hardware, the costs of maintaining warranty, marketing, training, and more.

Read and view part 1 here.

View part 2 or read the transcript below.

Hi there, welcome back to Value Hearing’s YouTube channel.

I'm Emma. I'm a clinical audiologist.

Today I'm going to talk to you about a topic that is brought up a lot in our industry by our consumers which is, ‘why do hearing aids cost so much?’

You may have seen a video that we released recently talking about the cost of audiology, the cost of running a clinic and paying an audiologist to do their job - and a really important part of getting hearing aids is seeing an audiologist and having them properly fitted.

I mentioned in this video that our industry has probably made a bit of a mistake in the past in that we were bundling the cost of hearing aids as a piece of technology in with the cost of our business - in terms of paying our audiologist, or ourselves, paying our rent, paying for our own personal marketing in our own businesses, and we didn't make it clear to our own customers, our clients, our patients, whatever you want to call them, the consumers in our industry exactly what they were paying for in terms of how much was for audiology and how much was for the cost of the devices.

Why do the hearing devices cost what they do?

Something I didn't cover in that video that does still come up a lot, and creates a lot of questions in our industry is, ‘why do the actual devices cost so much? Why are hearing aids so expensive?’.

The video I made a few weeks ago made it clear that what you think is the cost of the hearing aid is often the cost of the audiologist. But a significant part of it - a really significant part of the cost to you - is the cost of the device itself.

The question often comes up, ‘why are they so much more expensive than other electronics such as mobile phones for example?’.

There's a few reasons for this, some of them you will hopefully enjoy hearing, others might annoy you a little.

Research and Development

Side view of busy group of researchers working on experiments in the laboratoryIt's a fact of life that we are paying some of this cost for hearing aids for things that maybe we don't feel is necessary but hearing aid companies certainly feel it is, so when you ask the hearing aid manufacturers, ‘why do these hearing aids cost so much?’, one of the main reasons  is research and development.

And to be fair to them, all of the big hearing aid manufacturers spend billions per year researching hearing aid technology and hearing loss in general and so they're not kidding when they say that there's so much that goes into it and we really do reap the benefits.

We're seeing every year, massive leaps in the technology, and the understanding of hearing loss and its impact on our health and our economy.

So, to be fair to them, there is a lot going on. When you do purchase a hearing aid - the reason that it can be so life-changing, and it does make such a difference to your overall day-to-day living - is not because of, (well not just because) the microphones and the amplifier and the hopefully fantastic audiologist that's fitted it, but the huge amount of research and development that has gone into that technology. That is a huge part of the cost.

The components

They say approximately 10 percent  of the cost is most likely to be covering the hardware for the hearing aid manufacturers, so things like just building the hearing aids themselves - the microphones, the amplifiers, the chipsets - a lot of what's made in our industry is actually made by the manufacturers themselves, designed by themselves.

It's not something they can purchase from other industries so this can cost quite a lot.

Young woman drawing a ribbon on whiteboard isolated on whiteWarranty and parts

Something that I think is forgotten a lot as well, especially here in Australia with consumer rights being so good, is when you purchase a hearing aid, you need to have a minimum of a three year factory warranty and in some cases the hearing aid manufacturers offer four years.

Even after that warranty has expired, they will also generally offer parts and repairs at a fairly reasonable cost for many years after.

That is very expensive for them in terms of the cost of the hardware and the manpower to offer this.

I had a client only yesterday who was very surprised. He had a pair of hearing aids that were six and a half years old go off for repair while he has his new ones on the go. These are going to be his backups. He nearly fell off his chair when he realised that when they came back from the manufacturer they were essentially brand new.

The whole thing was new, except for the serial number (and obviously the technology was old) but it was completely new hardware, new electronics, a new casing and a new ear hook - everything was new and he couldn't quite believe it.

I did remind him that he paid over four thousand dollars for these hearing aids six and a half years ago and that was part of the cost.

So the warranty is a big, big part of it.

So, you've got: 

  • Research and development 
  • The hardware 
  • The warranty on the hardware 

Marketing and shareholders

You've obviously also got things like marketing.

These big hearing aid companies have to market themselves to you which they've started doing in the last decade or so but also to us as audiologists to convince us to use their products over their competitors. Marketing is a really really huge cost for them as well.

Obviously they also have to pay their shareholders. All but one of the big hearing aid companies now are publicly listed, so they've got shareholders that they need to keep happy.

Even Cochlear is publicly listed. I frequently have my clients coming in here in Australia saying, ‘oh I'm very proud I'm a shareholder in Cochlear’, but that means that obviously, some of that money has to go back to them as well because they've invested in that company, so it's, you know, a little bit of capitalism there as well.

Trainers and technicians

Businesswoman doing conference presentation in meeting roomSo look, you are mostly paying for the research and development but obviously you are paying people's salaries. There's a lot of people involved, so a big part of the cost of running a hearing aid manufacturer locally, for example, is actually training audiologists on how to fit their products.

That is actually quite a time-consuming task. It was actually my job. In a previous life, I worked for one of the big hearing aid companies and my entire role was supporting audiologists throughout New South Wales and South Australia, here in Australia.

The point of my whole purpose was to train all the audiologists that were fitting the product, on the best way to fit it, and all the different types of products that were offered, which was a huge number, but also to support them with more complex cases and complex patients.

It was a huge role and I was extremely busy and it's costly.

And that has to happen all over the world.

Fitting one hearing aid can be very different from another. As an audiologist we have to be trained pretty specially to be able to fit the products to the standards that we need to. It's also done by people who run online academies and do training for us remotely, but that is a huge amount of support.

Then we also have audiologists and engineers in the head offices of these manufacturers that we can contact and we regularly do call them for support and advice.

Those guys have to be really highly trained and so that all those little technical things that you may not think of as someone who wears hearing aids, can add to the costs as well but it really adds to the outcomes.

That means that the audiologists are much better at fitting the hearing aids and in turn, you're going to get a much much better outcome.

It makes sense the hearing aid manufacturers would spend money on this. There's no point doing all this research and development, releasing the product and not training audiologists on how to fit them to the best standard.

Economy of scale

Now, when you compare it to mobile phones or other electronics, which we often hear, so we get complaints of, ‘I could buy a small car for that cost’, or ‘I could buy a new mobile phone 10 times over for that cost’.

Well, when you think about it as an economy of scale, you have to understand that the number of people buying hearing aids is a lot lower than the number of people buying mobile phones and it really is as simple as that.

The more people that wear hearing aids, the more hearing aids that are sold per year, the more the price will come down. That should start to happen in the future, but at this point the number of people buying hearing aids is much, much, much smaller than the number of people buying mobile phones, or cars for that matter, or many other electronics, so I'm afraid that that's just how it is.

Get the technology you need, not just the technology you pay for

Student doing a hearing test at the universityI hope this helps clarify a little bit more about the cost of hearing aids. It doesn't take the sting out of the cost. It is still huge, no matter what level of technology, it is a massive amount of money.

But make sure when you are purchasing hearing aids, that you do go to see an audiologist who can make sure that they're actually offering you and fitting you up with hearing aids that you need, not just what they're trying to sell you.

Not everyone needs the premium technology at all.

Here at Value Hearing, we actually do a lot of testing to make sure that we match the technology to your actual hearing loss and your ability to understand speech-in-noise, or your signal to noise ratio loss. We do look at your lifestyle to a certain extent as well, but we're pretty scientific about it.

There are real reasons why you may need the premium technology but not everyone does. So, please make sure with these expensive devices that you are getting the best for you - the best model, and the best level.

Amortising the cost

The other thing I do want to mention is that when you're buying these electronics, do remember that these hearing aids should last you at least three years, more likely five years and maybe even seven or eight years. 

So when you spread out the cost of the hearing aids day-to-day it's actually pretty good considering what they're going to do for you, considering how much they could potentially change your quality of life.