Price shopping/Costco thread
smartdomai...@gmail.com
>From what has been said about the cost of hearing aids and the profits
made by audiologist, I think it would be rather difficult for the
audiologist to justify the 250% to 300% they are marking up their
products. $1500 for 6 to 8 hours work comes out to about $400,000 a
year ($200 an hour x 40 hours a week x 50 weeks a year). And I doubt
very seriously if any of them are worth that kind of money. I wonder
what audiologists that work for physicians are paid?
I think it also might be a bit of a stretch to put audiologists and
physicians (MDs and DOs) in the same category. That is most likely
wishful thinking on somebody's part.
I find the idea of Costco selling hearing aids very interesting. The
hearing aid business has a rather poor (should I say rip-off)
reputation, while Costco is and extremely ethical company. Does
anyone know if the hearing aid department at Costco is run by Costco or
is it a lease department?
As for the skill level of audiologists: My neighbor's wife was bugging
him about getting a hearing aid. So he went to an audiologist, not a
hearing aid store, and got two digital hearing aids for a total of
$7,500. He went back several time to get them adjusted or
re-programmed and finially gave up. He said that the hearing aids were
almost useless because they amplified the background noise along with
the voices, so you really couldn't use them in a room with any noise or
where there were other people talking. To make a long stroy short,
after about 6 month he put those $7,500 hearing aids in a drawer and
hasn't use them since. The audiologist made a killing on that deal, at
the expense of my neighbor. I don't know about you, but I have a
problem with that.
While I am on my soap box, there are a couple more things that bother
me. First, If I buy a Brand Name hearing aid from "Joe audiologist",
if I have a problem while it is under warranty I have to take it back
to "Joe". If I am on vacation of working out of town and I take it to
a dealer that sells the same brand of hearing aid, that place is going
to charge me to service or re-program it or whatever. If I have a car
or tires for my car or a cell phone and I have trouble while I am out
of town, all I have to do is go to a dealer for that product and all of
the service is covered under warranty. Why is that?
The other thing that bothers me is: I have a couple friends (man and
wife) that are audiologists at a univeristy in France. These people
are at the top of their profession. They speak, and hold clinics all
over the world. Late last year I mentioned in an email that I was
thinking about getting a hearing aid and ask if they had any advise for
me. Their answer was that if I wanted a hearing aid to wait until I
was in Europe to buy one. She said that what I will save by buying it
in Europe will pay for my airfare over there and back. How can hearing
aids be sold in Europe for that much less then they are being sold for
in the US. I don't know, maybe the oil companies run the hearing aid
business in the US.
I have been in electronics all my life. I have noticed that as
technology advances the quallity of any given product improves and the
price drops dramatically. Your PC is a good example of that. However,
that economic principle appearently does not apply to hearing aids.
The price doesn't drop.
I would hope that the hearing aid business becomes more like the PC
business where you buy your computer one place, get the software
another place and get your Internet service at a third place. That way
you can shop for price for each item.
2Phat
it is a one time cost, with many more hours going to help the person without
getting paid or rather included in the 1x fee.
The basis of all hearing aid is amplification. The technology you put on
top of it controls the other stuff AND a wearing schedule to break a person
into hearing again. Background noise doesn't go away and new HA wears are
under the impression it's supposed to not exist. IMPOSSIBLE. That is my
biggest issue with some dispensers. They do not properly inform or have the
client adhere to a wearing schedule. And on the flip side, new HA wearers
think they can just put the HA on and life is perfect, hearing is normal and
they do not adhere to a wearing schedule.
Have your friend go back, have the fitter call the audiologist department of
the manufacture and have him help him. OR go to another establishment.
<smartdomai...@gmail.com> wrote in message
news:1149401187.8...@i39g2000cwa.googlegroups.com...
2Phat
> me. First, If I buy a Brand Name hearing aid from "Joe audiologist",
> if I have a problem while it is under warranty I have to take it back
> to "Joe". If I am on vacation of working out of town and I take it to
> a dealer that sells the same brand of hearing aid, that place is going
> to charge me to service or re-program it or whatever. If I have a car
> or tires for my car or a cell phone and I have trouble while I am out
> of town, all I have to do is go to a dealer for that product and all of
> the service is covered under warranty. Why is that?
All the cost is a 1x cost which is included in the $7,500. Now you are
going to anther person, they have to spend time with you, a person who spent
$7,500 with Joe and not them, hence you are really paying for the time of
the person not a fitting fee.
> The other thing that bothers me is: I have a couple friends (man and
> wife) that are audiologists at a univeristy in France. These people
> are at the top of their profession. They speak, and hold clinics all
> over the world. Late last year I mentioned in an email that I was
> thinking about getting a hearing aid and ask if they had any advise for
> me. Their answer was that if I wanted a hearing aid to wait until I
> was in Europe to buy one. She said that what I will save by buying it
> in Europe will pay for my airfare over there and back. How can hearing
> aids be sold in Europe for that much less then they are being sold for
> in the US. I don't know, maybe the oil companies run the hearing aid
> business in the US.
I have no clue, but I'd check with the exchange rate to make sure it was
that much cheaper. IF you were buying a Siemens, they are a german company,
that maybe a good reason.
> I have been in electronics all my life. I have noticed that as
> technology advances the quallity of any given product improves and the
> price drops dramatically. Your PC is a good example of that. However,
> that economic principle appearently does not apply to hearing aids.
> The price doesn't drop.
PC's are mass produced off an assemply line. HA are not, they take a bit
more skill and each one is customized (mold wise) and eltronics are put in
at that point so it is labor intense.
However, it is still what the market will bear.
> I would hope that the hearing aid business becomes more like the PC
> business where you buy your computer one place, get the software
> another place and get your Internet service at a third place. That way
> you can shop for price for each item.
So you would want 1 person to do your test, 1 person to sell you the HA and
1 person to fit and program the HA? That is not very professional and HA
are a class 3 medical device regulated by the Feds and State. I think I'd
want someone competent fitting me vs. a Best Buy/Circuit City/Wal-Mart
mentality.
occam
> I have been in electronics all my life. I have noticed that as
> technology advances the quallity of any given product improves and the
> price drops dramatically. Your PC is a good example of that. However,
> that economic principle appearently does not apply to hearing aids.
> The price doesn't drop.
An excellent post, snipped only for brevity.
There are very few medically related fields in which prices go down. The law
of supply and demand applies. There are fewer than a million hearing aids
sold each year. Each hearing impaired person, two ears, five year life of
the aid (or, commonly, a further decrease in hearing) and you have a market
which expands slowly, yet the prices the dispenser pays for gas, housing,
etc. continue to rise.
How should a dispenser feed his family if prices for his product dropped to
a fraction of the cost today? Individual attention is the true cost of the
aid. The dispenser takes on a person for life, usually giving free followups
for years. How else would you pay for someone's services? If one charges per
visit, people don't come in and are not current with their fit.
It is a puzzle. Fortunately for me, few people question my prices, as I,
like most dispensers, consider them my friends and would go in to see them
at the office at night or on a Saturday morning or visit them at home or in
a nursing home, should they become disabled, with no additional charge.
Find a physician who does that, or an engineer.
Michael Ridenhour
Peter Weis
> There are very few medically related fields in which prices go down. The law
> of supply and demand applies. There are fewer than a million hearing aids
> sold each year.
Just a small correction.
World market for hearing aids is 6 - 8 million units a year. Roughly 40%
in north america, 40% in Europe and 20% in the rest of the world.
best regards
Peter
2Phat
"Peter Weis" <p.w...@email.dk.slet> wrote in message
news:4482fc61$0$60780$157c...@dreader1.cybercity.dk...
jwc...@gmail.com
> But, how many need an aid but do not get it?
FYI - article in current issue of Hearing Review
Raising the Bar on Quality and Professionalism
A perspective on systematically generating customer satisfaction with
hearing aids by: 1) Mandatory evidence-based processes, and 2)
Personal Interaction between the patient and the professional.
By Brian Taylor, MA
Why we need evidence-based practices and why all managers should
adopt best-practices guidelines
http://hearingreview.com/Articles.ASP?articleid=H0604F04
==========================================================
Additional:
1. They mention that only 50% of HOH shopping for hearing aids (whether
first time or replacement) actually buy any.
2. Of the ones that do buy, 15 to 18% of them don't wear them.
3. Only a small percentage ('few") of practitioners follow established
best practices.
Sounds to me like there might be a little work to do.
Ike
Sure.
I'll not only say it once more, I'll reiterate, risking still another
accusation of being repetitively redundant:
When we buy an aid, hardware is less important to our satisfaction than
service/professionalism. The aid itself is only a part - and the smaller
part - of the process of meeting the HOH requirement. I believe that ANY
well-designed aid can be adjusted to satisfy ANY satisfiable patient
whose loss is within the fitting parameters of that aid. Satisfaction
depends upon skill of the fitting professional with the fitting
software, and time spent getting the job done.
There is a continual reduction in the real (inflation-adjusted,
functionality-adjusted) cost of ALL technology. We get more for less.
There is a continual increase in the cost per hour of ALL professional
services, but the advent of productivity tools means that in some fields
(engineering, for example) real output per hour increases and cost per
unit output is sometimes fairly constant despite rising labor rates.
In medical services involving real-time with patients, however, that
line goes in only one direction: UP. In fitting hearing aids,
satisfaction correlates directly with the time spent by the fitting
professional in getting it right. That's expensive, and rightfully so.
I wouldn't have it any other way.
My audiologist will be the supplier of my aid technology for the rest of
my life - if I outlive her. On a pennies-per-day basis, it's cheap. In
the last decade we've had lunch many times. I get a new audiogram
perhaps two or three times a year. I've tried many new technologies and
products, and kept some, and am completely comfortable returning an item
even after a long (30, 60 day) trial. I can get an earmold re-done
whenever I like, and have never paid for one. If a BTE tube gets
brittle, I have spares in my desk - from her. Earwax is checked and
removed regularly. I've taken fitting hardware and software home to work
out various settings myself (admittedly not for the faint of heart).
That audiologist is happy whenever my dog and I drop by...
If you buy an aid online or on eBay or from the estate of some deceased,
then pay a few hundred dollars to someone to fit it - perhaps you saved
some money, but that local "fitting professional" wants to see only one
thing: your back.
Ike
jim
Ike wrote:
> If you buy an aid online or on eBay or from the estate of some deceased,
> then pay a few hundred dollars to someone to fit it - perhaps you saved
> some money, but that local "fitting professional" wants to see only one
> thing: your back.
>
> Ike
I think that's true. True, even if you move to another city with aids
you paid $6000 for.
One of the many reasons bundling services with hardware is not a good
idea is just such a situation. The professional should be paid amply
for his services no matter where the hardware came from. And the user
should be able to replace a non-performing professional without
forfeiting thousands of dollars paid up-front for services.
Peter Weis
> But, how many need an aid but do not get it?
The ones in need has been estimated to between 5% - 10% of the
population. These numbers are lower in development countries where the
average life expectation is shorter.
However, these numbers are probably a little too optimistic, boosted a
bit in order to promote the value of hearing aid companies shares. Even
today, with much less persons being fitted, many hearing aids end up in
drawers.
In my opinion, there is still a gap between the sound quality
deterioration through hearing aids and the adverse effects of mild
hearing losses.
best regards
Peter
occam
"jim" <jwc...@gmail.com> wrote in message
news:1149441196.0...@g10g2000cwb.googlegroups.com...
Bundling is a word which does not apply to my services. It sounds like
another way to diss people, to me.
I see people every month who have retired and moved to my area for their
retirement. If they come with new aids and are referred by the manufacturer
or another audiologist, I see them as if they had purchased the aids from
me. My patients who have moved elsewhere have received the same treatment. I
do not, however, offer these services to people who march into my office and
demand my services for free, simply because they have new aids.
I respect people and expect the same treatment from them.
Michael
justmy...@whatever.com
>I would hope that the hearing aid business becomes more like the PC
>business where you buy your computer one place, get the software
The PC business is competitive and based on constant technological
advances. The hearing aid business is based on laws, regulations, and
politics. Hard-of-hearing people are theoretically first-class
members of society, but in reality they aren't. People feel free to
discriminate against hard-of-hearing people because the general public
associates being hard of hearing with being old and/or senile.
As just one example of how hard-of-hearing people are discriminated
against, the Social Security Disability qualification for deafness to
be considered a disability is so strict that more than 99% of all
hard-of-hearing people don't qualify, even if they don't qualify for a
good job either, because they can't answer the phone.
Hard-of-hearing people have never had good representation in politics.
ASL deaf people have a lot more political power than hard-of-hearing
people do.
You can expect services for partial deafness to continue to be
substandard for the indefinite future, as long as those services
continue to be based on laws, regulations, politics, and oppression of
a disrespected minority associated with age and/or senility.
Ed
only 16% of that number using aids. In Europe its 37% and Australia
41%.....in these countries the government health services pay part or
most of the aid costs. Cost is too high for the majority of USA hoh.
As long as the FDA continues to class hearing aids as medical devices
the States will restrict distribution to those they deem qualified to
dispense them.
40% of the aids today are fabricated in China. Within a few years
most aids will be built in China or Asia.
Chinese manufacturers charge much less than $150 for 2nd tier aids.
Remember this does not include the provision for returns, repairs,
services of any kind, import duties if any, etc.
If a miniture audio amplifier with compression and EQ is marketed as
Hunter's Ears or as a Blue-Tooth cell phone in-the-ear device the cost
retail with a 100% satisfaction guarantee is $129 to $600
(sophisticated DSP multi-channel). Mark the same electronics "Hearing
Aid" and the price becomes $2000 to $6000+ a pair with bundled
professional fitting services.
Probably the worst feature of the present State and Federal
regulations is that it has shut down all innovation in producing low
cost aids with simple self programming.
To those who think that low dost aids must be fitted by professionals,
I would ask them to think "outside the box" to what could be innovated
if a mass OTC market were possible. Think:::like pocket size remote
controls with 8 or more loss curves at the push of a button. Low cost
aids with half a dozen snap on molds made in China for pennies. On
and on. Ed
jim
No offense to anyone.
Guidance is one thing. Regulated restriction of ordinary choice is
quite another. Its not up to anyone to decree what I should want or not
want. We are all different.
Forcing solutions an me by means of unusual regulations is an intrusion
on ordinary rights and is not acceptable. If I want to buy a HA bundled
with services I will do it. If I don't I won't. I don't need anyone
making these decisions for me by limiting my options and distorting the
market to achieve a result favored by an inspired few.
a@b.c
>So you would want 1 person to do your test, 1 person to sell you the HA and
>1 person to fit and program the HA? That is not very professional and HA
Professional = monopoly = very high prices.
>are a class 3 medical device regulated by the Feds and State. I think I'd
>want someone competent fitting me vs. a Best Buy/Circuit City/Wal-Mart
>mentality.
What if you had diabetes or high blood pressure, and you had to go to
a professional to get your blood sugar reading or your blood pressure
reading? Those are cheap now, because they're mass-produced gadgets
you can use at home without having any "professional" do any "fitting"
work on them.
If hearing aid technology were as modern and advanced as PC
technology, you could buy a gadget at Best Buy to automatically fit
your hearing aid, for optimum results, and without relying on the
variable competence of a "professional." The gadget would monitor
your auditory nerve while making automatic adjustments to the hearing
aid for optimum compatibility with your hearing loss. You might rent
such a gadget for the fitting, or each time you needed an adjustment,
if you could afford the $100 rental fee, which probably wouldn't be
covered by medical insurance, because of the discrimination against
hearing loss.
2Phat
see what satisfaction you will get from it.
2Phat
Legs, arms, hips. A aid is a prostheses. IF the cost was covered by
insurance, no one would complain about the cost but since it is not, there
is debate about how much a professional should charge for time, energy,
effort and device.
"jim" <jwc...@gmail.com> wrote in message
news:1149441196.0...@g10g2000cwb.googlegroups.com...
>
2Phat
mean to you? Yes the lay person understands but does he understand the
total physiological response?
Monitor the auditory nerve?
Okay, I give up. IF hearing aids were covered by insurance no one would be
worried about a price or the professional.
<a@b.c> wrote in message news:rp8682hidf3jdp6og...@4ax.com...
Peter Weis
> If a miniture audio amplifier with compression and EQ is marketed as
> Hunter's Ears or as a Blue-Tooth cell phone in-the-ear device the cost
> retail with a 100% satisfaction guarantee is $129 to $600
> (sophisticated DSP multi-channel). Mark the same electronics "Hearing
> Aid" and the price becomes $2000 to $6000+ a pair with bundled
> professional fitting services.
I have worked in both the hearing aid industry and the bluetooth
cell-phone device industry, and I can assure you that there is no
comparison between the quality and the production costs of the devices.
As an example, there is no way the cheap speakers in bluetooth devices
could deliver the sound pressure levels of hearing aids within the same
size constraints.
The microphones of bluetooth headsets are more noisy than those of
hearing aids.
best regards
Peter
jim
2Phat wrote:
> Do you not need a professional to interpret those levels and what they may
> mean to you? Yes the lay person understands but does he understand the
> total physiological response?
>
> Monitor the auditory nerve?
>
> Okay, I give up. IF hearing aids were covered by insurance no one would be
> worried about a price or the professional.
Then why only $4500? Why not $45,000? "If a little is good more is
better?" How can you put a price on your hearing?
That logic might work until you realize that 4 out of 5 people (20
million in the US) who need hearing aids will never get them because
they can't afford them and because they refuse to demand that their
neighbors chip in $1000 per household every three years to buy HAs for
them. Insurance is us. It just handles our money, keeps some, and
passes it on -there is no free lunch.
Given the situation, there's a lot to be said for bringing much more
efficient means to bear on this issue.
Ed
are almost one of kind. Yes there are other caring audiologists out
there. But as I see it the cards are stacked against you nice guys.
Most of the audiologists that I ran into in my 35 years of being hoh,
were competant and some were caring. But they were all pressed for
time. Most of my appointments were for half an hour. I think that
was not enough time to truly try out the adjustments and the tweaking
that they did. The reality is that professional time equates to
income.
My other gripe is that not one of these professionals seemed aware
that testing their fittings in the office had little to do with what
the results would be out in the real world of complex sounds. Not one
was equipped with any way to simulate real world conditions for use in
fitting. "Now, how does that sound?" is not a results based test.
Another problem is that I am convinced that simply testing a hoh
person's response to pure tones, determing UCL's has little to do with
speech comprehension in real world environments. Where are the
scientific papers proving an absolute correlation between the typical
pure tone audiogram and a patient's comprehension in various acoustic
ambiences? They may be out there but I didn't find any that were
conclusive. Ed
Peter Weis
> Then why only $4500? Why not $45,000? "If a little is good more is
> better?" How can you put a price on your hearing?
Because hearing aid fittings do not cost $45.000. As a matter of fact,
hearing aids are more expensive in free markets than in government
regulated markets. Try comparing Canada to the US.
>
> That logic might work until you realize that 4 out of 5 people (20
> million in the US) who need hearing aids will never get them because
> they can't afford them and because they refuse to demand that their
> neighbors chip in $1000 per household every three years to buy HAs for
> them. Insurance is us. It just handles our money, keeps some, and
> passes it on -there is no free lunch.
Well, if run by by a tax-funded system it could mean some Robin
Hood-like re-distribution of wealth.
best regards
Peter
jim
I see what you mean. "Steal from the rich and give to the
retailologist." With the resulting 5x market growth that would soon
become "Steal from the rich and give to the rich." With current pricing
the poor would realize about 15% of the flow in real value.
Somehow I favor a much more efficient free market approach (as opposed
to the compromised HA mess that exists is the US now).
I may sound too bitter. I do not question the need for good
professional fees being charged as incurred and received. Insurance
coverage for this may be appropriate.
occam
> Most of the audiologists that I ran into in my 35 years of being hoh,
> were competant and some were caring. But they were all pressed for
> time. Most of my appointments were for half an hour. I think that
> was not enough time to truly try out the adjustments and the tweaking
> that they did. The reality is that professional time equates to
> income.
>
It is one of my gripes, the bottom line thinking of professionals today.
What happened? It wasn't this way lo these many years ago when I went thru
college. Old Doc Adams has been replaced by a technologist with dozens of
expensive tests. I asked a neurologist what he thought was the problem with
my suddenly weak left leg. He said we would have to wait until all the tests
came back. I asked if he would act like a real doctor and surmise by case
history and initial exam what the likelihood was of such and so. He said he
had been advised by his attorney not to give such advice anymore due to
liability concerns.
Oh well.
Not one poster has mentioned that I have to carry malpractice insurance
also, even though only an audiologist. It adds to the "bundling" some are so
afraid of.
> My other gripe is that not one of these professionals seemed aware
> that testing their fittings in the office had little to do with what
> the results would be out in the real world of complex sounds. Not one
> was equipped with any way to simulate real world conditions for use in
> fitting. "Now, how does that sound?" is not a results based test.
>
I agree wholeheartedly. Many top-of-the-line manufacturers include such
software with their programs. The theory is that by replicating sounds
similar to those heard in the real world, a person could have demonstrated
to him how he would perform in such real life situations prior to leaving a
large amount of money behind as he left with his new aids, with satisfaction
guaranteed, hopefully inside the 30 day trial. The problem is that the brain
takes longer in some people than in others learning how to use the new
input. Some people may take as long as 6 months to a year. I have never
found a way to overcome this problem. There is no true results based test
for hearing aid use, other than the individual's testimony coupled with a
professional's experience.
> Another problem is that I am convinced that simply testing a hoh
> person's response to pure tones, determing UCL's has little to do with
> speech comprehension in real world environments. Where are the
> scientific papers proving an absolute correlation between the typical
> pure tone audiogram and a patient's comprehension in various acoustic
> ambiences? They may be out there but I didn't find any that were
> conclusive. Ed
That's because such a thing does not exist. Think of it this way, an
audiogram is not a test of hearing, it is a test of behavior. The assumption
is made that there is a one to one correlation between presentation of a
tone and the patient's response. A number of factors intervene in the
process, some easily understood, some not. For example, if a wife has been
treated like a fool by her husband in the hours preceding her appointment,
does that relate to how well she will perform on a test consisting of
concentration on barely perceptible pure tones? Yes.
Another problem I see often from patients and even from other audiologists
and dispensers is that most of them believe that the squiggly lines on the
computer monitor actually represent what the hearing aid is really doing. It
does not. It is a program-generated approximation of what a given circuit
could do in a test environment under ideal situations and with a perfect 2
cc coupler in place. The use of real ear and other techniques is equally
philosophically invalid, imho. The only reliable source of information about
what a hearing aid is doing is the testimony of the individual who has worn
it hour after hour and day after day.
I believe what my patients tell me, no matter how screwy it sounds. I have
learned a tremendous amount by trying to figure out what Aunt Fanny meant by
saying that the aid sounds "late" (microphone dislodged) or Uncle Henry
saying his aid doesn't want to stay on (cerumen in the receiver port which
swelled up after an hour or so due to body heat and shut off the aid. By the
next morning, the cerumen shrank and the aid functioned normally.)
There is the true data. Only an officious idiot would scoff at such attempts
by people to explain what they are experiencing.
Returning soapbox to the group.
Michael
Bruce Coryell
One audie I had actually asked me how my aids worked in real life
settings, and in noisy restaurants, etc.
Medman
discussion here. I have added to it.
What is going to happen in the next few years is the unbundling of the
hearing aids themselves with any service that goes with them. Customers
will pay for what they feel is necessary. The hearing aid industry will
become like the vision industry is today with a few twists.
Hearing impaired may or may not go to an audiologist for a hearing
test. Whether they get the hearring test or not, if they are price
sensitive, they will go online or to a mail order house and order the
hearing aid. If they want the handholding and the face-to-face
assistance, they will buy from the audiologist. Even if they order
online, a customer may want addiitonal service afterward, and if the
audiologist is smart, they will provide that service, at a price.
Bottom line is, despite the various State laws to the contrary, people
want choices. They will go to an audiologist to get a hearing test, and
if they don't like the prices for the audiologist's hearing aids, they
will go online (or to a mail order catalog) and order a hearing aid if
they want a low price, or stay with an audiologist and get the
handholding and face-to-face services.
With new hearing aid technology coming out that does not require a mold
for the IE and ITC models, and also the new "open ear" technology for
the BTE models, a consumer doesn't need to see a professional if they
don't want to (except for a hearing test).
The Internet and the mailorder houses from out-of-state are making the
State laws superfluous, or at least unenforceable. States Attorney's
General have much bigger fish to fry with serious crimes than going
after consenting adults ordering products online. Also recent Supreme
Court rulings have come out on the side of the consumer when States
have attempted to limit citizen's choices when purchasing items from
out of state. Recently (2003) the Court has narrowly intrepreted the
Commerce Clause (Article I, Section 8, Clause 3) in a case against
North Carolina (Beskind v. Easley, 2003) and have stated that a State
cannot restrict someones decision to purchase wine from out of state,
and cannot set up monopolies within a State that force a customer to
purchase from the monopoly. Hearing aids are a far cry from wine, but
the free flow of Interstate commerce is the same principal...freedom of
choice by consumers to purchase items from out of state.
As long as Internet sites and mail order houses get buyers to sign or
click on the FDA waiver, these sites comply with FDA regulations. Most
Internet and mail order houses offer at least a 30 day "no questions
asked" return policy with a small restocking fee, so an online
purchaser is not buying a pig in a poke. I know of no reputable
Internet site or mail order house who has been sued for not honoring
their return policy.
With the cost of manufacture of digital hearing aids with all the
latest gizmos costing between $100 and $250, how can anyone justify
marking these items up 400 - 500%? Supplier in a competitive industry
would allow this to happens; they would be falling all over each other
to come out with lower prices. If competition was given free reign,
prices would drop to a norm of about 30% - 40% gross profit for any
distributor. By the very existence of a thriving Internet and mailorder
hearing aid sector, these channels can make a reasonable profit selling
top-of-the-line hearing aids for between $300 and $800 with the same
electronics and features of hearing aids that the audiologists are
selling between $1,500 and $3,000.
The customer is KING!
Phil Wyatt
www.hearingcentral.com
2Phat
first CT scan I had done cost $1,500 the second, 4 years later $2,500.
Surly the equipment is paid for by now, so what am I paying for?
"jim" <jwc...@gmail.com> wrote in message
news:1149457494.3...@i39g2000cwa.googlegroups.com...
jim
expensive, go somewhere else. Pay as received.
You aren't being forced into buying 6 years of CT and MRI services
(number of scans undefined) in advance because someone who operated on
you remembers someone who needed that many and who would gain if you
did so.
Ike
Peter -
According to data taken from my copy of the Registry (admittedly a
couple of years old), typical hearing aid microphones and speakers
(called "receivers" in this business) cost the aidmaker $2-3 each.
I agree with your statement regarding quality and production costs, as I
understand them, regarding one-at-a-time hearing aids and high volume BT
devices.
Considering the difference in coupling due to distance between the
"receiver" and the eardrum, vs. the relatively open-air situation of the
Bluetooth device, I am surprised by that part of your statement.
Ike
Ike
> Then lets just give away CT scans, MRI's, all health care services. The
> first CT scan I had done cost $1,500 the second, 4 years later $2,500.
> Surly the equipment is paid for by now, so what am I paying for?
It's not an automobile.
The equipment was purchased with a lifetime operating budget, based upon
the expectation that it would operate over a certain number of years,
with some planned cost of maintenance, upgrades, and other costs, before
being replaced. Each time you made use of it you paid your pro rata
share of that total cost. The price you pay the day after it was
installed should be the same as it would be the day before it was replaced.
Ike
Ken
<From what has been said about the cost of hearing aids and the profits
made by audiologist, I think it would be rather difficult for the
audiologist to justify $1500 for 6 to 8 hours work.>
This must be one of the most stupid posts I have ever seen. $1500 for 8
hours work is less than $200 per hour. We are talking about
university-trained, experienced professionals who, if you will let
them, can convert your life from withdrawn, lonely, unemployable
silence (we can't do anything about the stupidity) to one of
substantial participation in your family, the economy and the world.
I suggest you compare how much you pay per hour to have your dishwasher
or your car repaired, let alone what you are happy to pay lawyers,
doctors, surgeons, and then compare what they give you in return with
what a good audiologist can do for you.
I forget who it was who talked about people who know the cost of
everything and the value of nothing (Wilde? Shaw?).
occam
"Ken" <kker...@ozemail.com.au> wrote in message
news:1149477428.5...@f6g2000cwb.googlegroups.com...
Oscar Wilde.
Michael
Peter Weis
> I see what you mean. "Steal from the rich and give to the
> retailologist." With the resulting 5x market growth that would soon
> become "Steal from the rich and give to the rich." With current pricing
> the poor would realize about 15% of the flow in real value.
Apparently you don't. At least the effects that you predict are not the
ones observed in the real world.
best regards
Peter
Peter Weis
> Peter -
> According to data taken from my copy of the Registry (admittedly a
> couple of years old), typical hearing aid microphones and speakers
> (called "receivers" in this business) cost the aidmaker $2-3 each.
Typical transducers in cell phone headsets cos below 30 cents a piece.
> Considering the difference in coupling due to distance between the
> "receiver" and the eardrum, vs. the relatively open-air situation of the
> Bluetooth device, I am surprised by that part of your statement.
Receivers in cell phone headsets are much bigger (11 to 15 mm diameter)
than receivers in hearing aids, and they require larger cavities around
them in order to control the frequency response. So they are too big to
be put into hearing aids. In BTE-like headsets, the whole receiver combo
takes as much space as an entire ITE.
best regards
Peter
2Phat
number of times a person can come back is unlimited. You do not pay for the
testing, the fittings, the readjustments, the cleanings, etc. It's part of
the professional service. Everything costs. I once said, the most
expensive thing you can buy is something that does not work and the cheapest
is something that does. You never think of the cost of your appliances if
they work right, but you do if they go out 2 days after getting it. HA is
the same way. We all know someone who purchased the most expensive they had
and it didn't work, and we know someone who purchased the most expensive
they had and they did work.
"jim" <jwc...@gmail.com> wrote in message
news:1149466426....@u72g2000cwu.googlegroups.com...
2Phat
just a darn HA cost.
"Mike Burke" <mbu...@pcug.org.au> wrote in message
news:b2b782dhr9mbavsr1...@4ax.com...
> All other things being equal, eg salaries, rent, insurance costs, etc,
> etc, all of which would have risen significantly in the ensuing four
> years.
>
> Mike
ardway
"2Phat" <n...@noway.com> wrote in message
news:l6Tgg.13999$Qg.1...@tornado.southeast.rr.com...
jim
microphones:
http://dkc3.digikey.com/PDF/T062/1591.pdf (Microphones)
Vary from about $10 to $20 in quantities of 100
http://dkc3.digikey.com/PDF/T062/1592.pdf (Speakers)
Vary from about $10 to $20 in quantities of 100
In quantities of 50,000 or so they should be significantly lower in
cost.
DSPs in quantity will will be in a similar cost range.
jim
Here are some figures:
For reference (see
http://www.demant.com/eprise/main/Demant/com/SEC_Investor/2004_04_InvestorPresentation.pdf):
Est WW Market size: 6.6 million units annually
Est WW wholesale Value: 1.8 to 2.1 Billion (USD)
(Average factory proceeds per unit was about $303 world wide)
The average price paid for a hearing aid in the US in 2003 was about
$1600. The US retail hearing aid market was about $2 Billion in 2003
for about 1,250,000 units sold
R&D averages about 5% of factory sales even for very Research oriented
companies. R&D would be about $100 Million or so for the whole industry
at 5% R&D reinvestment. Even at 15% R&D, industry R&D total is no more
than $300 Million.
If we assume the wholesale price of these US units was about $800 Then
US sales at the wholesale level was about 1/2 of worldwide sales (or $1
billion). This would mean that the R&D allocated to these sales would
be $150 million at the very most.
This means that the R&D expenditure you can assign to a $1600 hearing
aid is about $120 (and that's really stretching it at a 15% factory R&D
rate.)
A $2400 hearing aid probably carries a 5% R&D cost component to the
consumer. Not anywhere near what it would have to be to explain the
cost increases. R&D is not a driving factor.
Peter Weis
> Some more cost figures:
>
> Here are some figures:
>
> For reference (see
> http://www.demant.com/eprise/main/Demant/com/SEC_Investor/2004_04_InvestorPresentation.pdf):
> Est WW Market size: 6.6 million units annually
> Est WW wholesale Value: 1.8 to 2.1 Billion (USD)
> (Average factory proceeds per unit was about $303 world wide)
> The average price paid for a hearing aid in the US in 2003 was about
> $1600. The US retail hearing aid market was about $2 Billion in 2003
> for about 1,250,000 units sold
Hearing aids are more expensive in the free market of the US than in
more regulated markets like Canada, England or the Scandinavian countries.
But roughly, the price is doubled in every stage of the distribution, as
your figures suggest - whole sale/importers are charging twice the
factory price, dispensers are charging roughly twice the whole sale
price. But also value is added in ach of these stages.
> R&D averages about 5% of factory sales even for very Research oriented
> companies. R&D would be about $100 Million or so for the whole industry
> at 5% R&D reinvestment. Even at 15% R&D, industry R&D total is no more
> than $300 Million.
>
> If we assume the wholesale price of these US units was about $800 Then
> US sales at the wholesale level was about 1/2 of worldwide sales (or $1
> billion). This would mean that the R&D allocated to these sales would
> be $150 million at the very most.
>
> This means that the R&D expenditure you can assign to a $1600 hearing
> aid is about $120 (and that's really stretching it at a 15% factory R&D
> rate.)
>
> A $2400 hearing aid probably carries a 5% R&D cost component to the
> consumer. Not anywhere near what it would have to be to explain the
> cost increases. R&D is not a driving factor.
The big bluff here is to think that the hearing aid industry is any
worse than other industries within the elcetronics sector.
They all have similar mark ups between manufacturing costs and sales price.
best regards
Peter
jim
Peter Weis wrote:
> > A $2400 hearing aid probably carries a 5% R&D cost component to the
> > consumer. Not anywhere near what it would have to be to explain the
> > cost increases. R&D is not a driving factor.
>
> The big bluff here is to think that the hearing aid industry is any
> worse than other industries within the elcetronics sector.
>
> They all have similar mark ups between manufacturing costs and sales price.
>
> best regards
> Peter
The margins at factory door may be similar but there the similarity
ends. Consumer electronics has very efficient pipelines (very low
distribution/retailer margins even compared to other consumer goods.)
I'll grant you this: If you disregard the present retail hearing aid
prices but assume that 2/3 of the present price is for bundled services
and only 1/3 is for hardware then you might be a little closer to
consumer electronics margins.
Unbundling (even when the same entity supplies both hardware and
services) would help things get sorted out.
1. The user would buy only what services he needed or could afford.
2. The fitter would be motivated to maintain a good reputation to keep
business flowing.
3. Insurance companies and social services are much more inclined to
cover well-documented professional services than hardware so help might
be available that's not available now.
Peter Weis
> The margins at factory door may be similar but there the similarity
> ends. Consumer electronics has very efficient pipelines (very low
> distribution/retailer margins even compared to other consumer goods.)
>
> I'll grant you this: If you disregard the present retail hearing aid
> prices but assume that 2/3 of the present price is for bundled services
> and only 1/3 is for hardware then you might be a little closer to
> consumer electronics margins.
I know about retail prices and production prices for some (not all)
fancy electronics consumer goods. The relationship is not as far from
the hearing aid situation as you might think.
> Unbundling (even when the same entity supplies both hardware and
> services) would help things get sorted out.
It makes me think of the proverb, that the grass is always greener on
the other side.
People paying for each individual piece of service, often get the
impression that they are going to pay only the hardware price, and they
feel disappointed by the seemingly endless number of bills.
People pating for bundled services constantly think that they are paying
for services they don't get.
I think this is part of human nature.
best regards
Peter
Ike
> It makes me think of the proverb, that the grass is always greener on
> the other side.
> People paying for each individual piece of service, often get the
> impression that they are going to pay only the hardware price, and they
> feel disappointed by the seemingly endless number of bills.
> People pating for bundled services constantly think that they are paying
> for services they don't get.
> I think this is part of human nature.
>
> best regards
> Peter
This is an important observation - nearly profound - and makes it easy
to understand consumer frustrations in certain markets, regardless of
whether the product and services are bundled or not.
Ike
Ed
Discussions about of the proper income per hour for professionals is
an issue. That's true but if I am going to have brain surgery I want
the top surgeon who will price his services commenserate with his
skill and what the market will bear. But, I think this type of
discussion misses the point.
What really gripes the knowledgeable hard of hearing person, is the
lack of choice of where, what, and how the purchase of a hearing aid
(HA) is to be made. Once the FDA classified hearing aids as Medical
Devices, that effectively limited distribution to those professionals
licensed by the States. This eliminated over-the-counter (OTC) sales
and severely limited mail order/Internet sales. (and it completely
stifled development of low cost aids with simple self programming).
Hoh persons would like the choice of buying the aid itself from one
source and if desired, buying fitting services from a professional of
their choice.
The present distribution system has priced out of the market a large
portion of the estimated 80% to 84% of the persons in the USA
classified as hard of hearing that do not wear aids. This is an
unintended consequence of the Federal action.
I think we should all remember that a device marketed as a hearing aid
consists of a small audio amplifier and some spectrum and response
modification circuity. Classified as a hearing aid it costs much more
than the almost identical device if classified as Hunter's Ears or an
in-the-ear accessory to a cell phone.......as much as 10 times more
when coupled with bundled services.
I have no objection to a two tiered distribution system, that is: over
the counter (OTC) sales for those that just want some measure of
relief from the isolation of being hoh. And those that can afford the
services of a professional and obtain perhaps, perhaps, perhaps a more
accurate fitting and better speech comprehension.
We do that with eye glasses. Drug Stores sell eye glasses that allow
low income people to read for just a few dollars and those that want
and can afford the best....the most accurate fitting go to a eye
professional.
Please don't post the tired old completely unsubstantiated horror
story that OTC sales of aids would cause millions to blow out their
remaining hearing or that millions of hoh will die tomorrow of
undetected serious treatable ear diseases. If you insist on posting
please include the scientifically valid study that substantiates these
claims complete with hard data on the prevalence and incidence of such
diseases and proof of the mind-set and intentions of these diseased
persons that will preclude their seeking professional help and instead
run to the drug store to completely mess up their lives.
I say ban aspirin from the drug stores. It may mask serious
underlying treatable disease and ban antibiotics too as some are a
proven ototoxic substance. (just kidding about the ban) Ed
2Phat
the cost of other health items, PC's or TV's. Does anyone think it cost
$5,000 to make a flat screen TV?
"ardway" <ard...@elbow.edu> wrote in message
news:NqWgg.3569$f76.443@dukeread06...
jim
also. I don't think there is much question that most of the present
prices paid are for service.
Here is an rough estimate biased to the high side:
Manufacturing cost consists of material, labor, and factory overhead
and excludes things like general and administrative costs, R&D, profit
(loss) and selling costs. (Note: Both Phonak and WDH have R&D costs
equal to about 7.5% of sales).
In the case of hearing aids (Qty. many 1000's) a typical Bill Of
Material (BOM) might look something like this:
Item Qty Unit Cost Cost
Microphones 2 5.00 10.00
Receiver 1 5.00 5.00
DSP 1 12.00 12.00
Housing 1 set 5.00 5.00
Controls 1 set 8.00 8.00
Ear Hook Assy 1 6.00 6.00
Battery Hardware 1 set 6.00 6.00
Connectors 1 set 7.00 7.00
Misc electr. comp 1 set 5.00 5.00
Misc Hardware 1 set 5.00 5.00
Collateral Mat. 1 set 7.50 7.50
BOM Cost $76.50
For conventional electronics assemblies the direct labor + overhead
equals 1/2 material cost.
For miniature, fussy assemblies it can go to double that. Assume the
latter.
Direct labor - assembly:........... 33.25
Direct Labor - Test.....................10.00
Total DL:......................................43.25
Factory overhead at 100%:.......43.25
Total Factory
Cost:........................................................................$163.00
For most R&D heavy companies a gross margin of 60% (over factory cost)
is a very good result.
Factory door price: (163/.4) = $407.50
(This turns out to be about $100 more than WDH's industry report
indicated.)
To get the retail gross margins for consumer electronics see:
http://www.census.gov/svsd/retlann/view/table7.txt
Year.......Gross Margins
1993...........28.8
1994...........28.4
1995...........26.2
1996...........24.6
1997...........24.9
1998...........25.5
1999...........26.4
2000...........27.7
2001...........26.6
2002...........28.2
2003...........29.1
2004...........29.7
If we use 30% Retail price would be:
Retail = 407.50/.7 = $582.14 (for the instrument alone without any
service)
Rest our pretty heads? Pre-paying for undelivered services is an
incompetent user's illusion? Maybe.
But I have little doubt that the coming Boomers' intolerance for vendor
response of that kind will drive real change in this industry.
Ike
Good job. I think some of the line items in your BOM much too high, and
you left out that expensive outer package. Forgetting amortization of
R&D and assuming an internally-developed IC, I'd put the figure closer
to $60 than $76.50. I also think that assembly cost is lower than your
number. However, overall it's probably in the ball park.
But all MY numbers are very old and considerably lower ($2 for a mic and
receiver, etc.).
A well thought out estimate, I'd say.
Ike
zaf...@yahoo.com
jim wrote:
> As an electronics product manufacturer I've spent a few years at it
> also. I don't think there is much question that most of the present
> prices paid are for service.
>
Probably true, and I am in agreement that the cost of mfg of the
instrument is low, although I think you are on the low side. When I
someone says 'typical' or 'ball park', I hear it as 'this is my guess',
of corse that could be part of my hearing loss, LOL.
The only right way to do this is actually do it to a thourough job by
complete disassebly and quoting of each part. All these custom plasic
parts have tooling costs, amortized over a small volume; what are they?
And this just gets you the costed BOM.
Between you and IKE, have you ever gotten a honest to goodness paper
quote on just the DSP? Not trying to throw turds here, just asking!
> For conventional electronics assemblies the direct labor + overhead
> equals 1/2 material cost.
> For miniature, fussy assemblies it can go to double that. Assume the
> latter.
Folks around here use a generalization like this all the time. While I
hate this generalization, the number bantied around here only 20% of
material cost for asm & test. It is a fallacy that you can link BOM
cost to cost of assembly. You can solder a $500 Intel Xeon on to a
server motherboard, and it costs the same as a $0.0002 SMT resistor for
assembly once your process is down.
I am not familiar with the processes for fabing a product so small, but
here are questions I'd want to know before estimating labor. What is
the board material (I'd guess not FR4)? How are the boards cut apart?.
Can you autoplace a board so small?? What is the yield?? Connectors,
in a product so small??? I would have though the mics and recievers
are direct soldered (by hand). It would not surprise me to find there
is nothing automated in the whole process to assemble an instrument and
the most of it is done under a microscope.
The only way to get the accurate asm costs is to see the process. I
think you will find the process differs considerably from a standard
consumer product. I have not a clue where most HAs are mfg, there were
some allegations they are mostly made in China. This is unlikely as
the skill is not there on the mainland, we only make our lowest tech
stuff their (perhaps this could be done in Taiwan).
On a different topic, what happens to the 30 day return instruments?
If these are required to be scrapped, don't forget to include these in
the warrantee expense.
Peter Weis
- snipping a lot of reasonable numbers
> If we use 30% Retail price would be:
>
> Retail = 407.50/.7 = $582.14 (for the instrument alone without any
> service)
First of all there is a whole sale link in the chain.
Secondly, also the dispensing systems have amortization of equipment.
And thirdly, there is a lot of professionals involved with M.Sc or
Aud.D. degrees in the distribution, and these are more expensive than
the immigrant selling over the counter electronics in the supermarket.
> Rest our pretty heads? Pre-paying for undelivered services is an
> incompetent user's illusion? Maybe.
>
> But I have little doubt that the coming Boomers' intolerance for vendor
> response of that kind will drive real change in this industry.
As long as hearing aids aren't sexy, but something you accept only
because you need it, no big changes will happen to the industry and the
distribution, I fear.
best regards
Peter
jim
> "First of all there is a whole sale link in the chain"
2-step distribution is becoming rare in consumer electronics. Costco,
Walmart, Circiut City, Best Buy, etc. are all one step. BTW the big
guys are closer to 23% margin.
> Secondly, also the dispensing systems have amortization of equipment.
> And thirdly, there is a lot of professionals involved with M.Sc or
> Aud.D. degrees in the distribution, and these are more expensive than
> the immigrant selling over the counter electronics in the supermarket.
Exactly. That all should be part of the cost of unbundled services, not
lumped into hardware cost. Because of this distortion, insurance
coverage for it is not common in the US.
> As long as hearing aids aren't sexy, but something you accept only
> because you need it, no big changes will happen to the industry and the
> distribution, I fear.
Stay tuned
jay1000
exceptions.
1. Children...for obvious reasons.
2. High power aids designed for a profound hearing loss. With a profound
loss of 90 dB, all hearing is compressed into the power levels between 90 to
125 dB. That is a region where a very small error in power level will
result in accelerated hearing loss. Even when set correctly there will be
some ongoing noise induced hearing loss. But that's the price that has to
be paid for the ability to hear with a profound loss.
If you look at the specification sheets for some power aids, you will see a
caution for audiologists that these aids have the capability of causing
hearing damage.
"Ed" <ed...@mindspring.com> wrote in message
news:h14982le73em7kgoa...@4ax.com...
Medman
Jim:
Where did you come up with the 23% profit margin? Any references? The
interest is professional.
Thanks
jim
http://www.reference.com/browse/wiki/Wal-Mart
"Wal-Mart's supporters point out that gross margin has been consistent
over time, fluctuating between 20.8% and 22.9% over the last ten years.
"
http://www.bankrate.com/brm/news/cheap/20040623a1.asp
Deals in electronics -
"Consumer electronics are not typically high-margin items," says Andy
Pargh, co-author of "The Gadget Guru's Guide to the Best." Pargh says a
good margin for retailers is about 25 percent.
Peter Weis
> 2-step distribution is becoming rare in consumer electronics. Costco,
> Walmart, Circiut City, Best Buy, etc. are all one step. BTW the big
> guys are closer to 23% margin.
Within hearing aids, similar chains (Miracle Ear etc.) are offered
rebranded products of "last years models" from the the larger
manufacturers. They get these at much better prices than the smaller
stores. They also carry a larger part of the cost for training, printed
material etc. themselves, so the whole sale companies (in the US they
will typically be the importers) has lower distribution costs.
Bear in mind that I am not particularly aware of the american maket
structure. My knowledge comes from across the world.
> Stay tuned [talking about sexy hearing aids]
I do, I might need them within some years. However, I have seen many
unsuccesfull attempts to make hearing aids smart and sexy over the last
25 years.
best regards
Peter
Medman
In reply to sexy hearing aid post...the best way to make them sexy is
to make them disappear i.e. where no one can see them. (This statement
does not apply to applicable body parts :))
Ike
> Within hearing aids, similar chains (Miracle Ear etc.) are offered
> rebranded products of "last years models" from the the larger
> manufacturers.
> best regards
> Peter
Is there any published evidence of this claim? If not, where does it
come from?
If an aid has $75 in parts, and labor rates are the same whether the
item is "this year's" or "last year's", and rebranding costs something,
does this make sense? If old merchandise is bought by ME for $60 (below
cost!), rebranded for $10 in labor (name polished off and restamped),
and is then sold to the audiologist for $1,000 -- where's the profit?
I think that's a myth.
Ike
Peter Weis
> Is there any published evidence of this claim? If not, where does it
> come from?
I observed it while working in the business.
> If an aid has $75 in parts, and labor rates are the same whether the
> item is "this year's" or "last year's", and rebranding costs something,
> does this make sense? If old merchandise is bought by ME for $60 (below
> cost!), rebranded for $10 in labor (name polished off and restamped),
> and is then sold to the audiologist for $1,000 -- where's the profit?
I should perhaps have said branded in stead of rebranded. At least I was
thinking of continued production of older series with new stripes and a
different name.
By doing so, you create a sensation of competition while you are
effectively competing against yourself.
If a company looses market shares to one of its other brands, it doesn't
hurt as much as if they loose it to another manufacturer.
Branding hearing aids for distribution chains has the same effect. Only
by using "last years models", you can keep innovative image for your
main brand.
> I think that's a myth.
I don't.
best regards
Peter
Ike
I agree that many companies make aids for other companies, and do not
offer their "best and latest" aids to such competitors. Perhaps that's
what you meant.
Ike
2Phat
"Ike" <binary...@gmail.com> wrote in message
news:nRAig.55385$K46....@newsfe13.lga...
Peter Weis
> I agree that many companies make aids for other companies, and do not
> offer their "best and latest" aids to such competitors. Perhaps that's
> what you meant.
Yup. Any Costco or Walmart hearing aids (if they exist) would probably
belong to this category.
best regards
Peter
2Phat
Wal-Mart and National sells 1st run Unitron products. Indigo is a brand new
HA from Unitron and National Hearing Center, soon to be called Amplifone,
sells it along with all the Unitron products.
"Peter Weis" <p.w...@email.dk.slet> wrote in message
news:448b1a8c$0$60779$157c...@dreader1.cybercity.dk...
erra...@yahoo.com
Costco sells Benafon's line.
Symbio
SwissEar
etc.
Ike
I'm not sure all Costcos sell the same HAs. They sell space to local
concessions, right? If the local concession chooses to sell Bernafon, or
Miracle Ear, or Siemens...
Or does Costco actually have some control over what sells - via a
national contract with a national concessionaire?
2Phat
they are just leasing space to a specialist or audiologist then it is
anyone's ball game. Best way is to call COSTCO an find out.
"Ike" <binary...@gmail.com> wrote in message
news:7rMig.62610$K46....@newsfe13.lga...
Ike
> IF COSTCO wanted to get the best price, they would sell the same brand. IF
> they are just leasing space to a specialist or audiologist then it is
> anyone's ball game. Best way is to call COSTCO an find out.
Neither of the two Costcos near my home sell HAs. That's what makes me
suspect that they sell only space, and to the highest bidder - and that
bidder can sell whatever.
Ike
Ed
But I am puzzled by the end result. I think Jim had grand total costs
to produce a typical aid at $163. Then there is a mfg profit or gross
margin calculation. If the mfg wants to make a gross profit of 40% he
sells the $163 cost aid for $271.66............not for the higher
amount stated.
jay1000: Do you know of any studies that support the argument that
profound loss patients could have accelerated loss from power aids
cranked up too high..And what about UCL and the threshold of pain?
.just asking....your statement sounds logical. And are there any
papers discussing the problem of professionals dealing with profound
losses in terms of the trade off between giving any useful hearing to
a profound vs causing further accelerated loss.
About young children, I agree. You find this type of warning on most
drugs and many other products. Ed
2Phat
them and asking that question would be good idea. It maybe they only have
places in markets that would support the hearing aid population?
"Ike" <binary...@gmail.com> wrote in message
news:Q8Wig.75635$K46....@newsfe13.lga...
Ike
> Way back up the page Jim developed a very cogent model cost for aids.
> But I am puzzled by the end result. I think Jim had grand total costs
> to produce a typical aid at $163. Then there is a mfg profit or gross
> margin calculation. If the mfg wants to make a gross profit of 40% he
> sells the $163 cost aid for $271.66............not for the higher
> amount stated.
Jim's electronics-industry approach was perfectly valid, but I don't
think he had the best HA-industry info, and my numbers are dated (old
copy of the Registry, an industry catalog with price lists). Here are
two data points.
1. A few years ago, a BTE digital aid could be built for about $80
including outer packaging (case, brush, literature). That did not
include amortization of R&D or tooling, overheads, etc. I think cost of
mics, switches, 'receivers' (speakers', have remained about the same,
but the production cost of chips should have dropped (it's a function of
the size of the chip on the wafer, yield, bonding, etc.). R&D and
tooling are not trivial numbers, however. If a company uses someone
else's chipset, parts cost goes up. If the company develops its own,
amortization can be a monster.
2. Lots of aids are returned. It was once about 20% - I don't know what
it is today. I also don't know what the industry does with them... are
they trashed?
So I think a key issue would be tooling, which includes cost of
developing that chipset - it must be paid for. Will someone on the
inside generate some numbers?
Ike
Peter Weis
> Jim's electronics-industry approach was perfectly valid, but I don't
> think he had the best HA-industry info, and my numbers are dated (old
> copy of the Registry, an industry catalog with price lists). Here are
> two data points.
The margin of the industry is pretty easy to assess. Check their
accounts ... a least Oticon/Bernafon, GNReSound/Beltone and
Phonak/Unitron are public companies and their annual reports are
available on their websites.
If I am not mistaken, their profit margins are around 20%.
best regards
Peter
2Phat
purchases the product and sells for what they want.
"Peter Weis" <p.w...@email.dk.slet> wrote in message
news:448c731e$0$67260$157c...@dreader2.cybercity.dk...
Peter Weis
> Yeah, theirs might be but Beltone is a franchise and the franchisor
> purchases the product and sells for what they want.
I suppose they sell it for what they can get ... isn't that the idea of
a free market?
best regards
Peter
Ike
> The margin of the industry is pretty easy to assess. Check their
> accounts ... a least Oticon/Bernafon, GNReSound/Beltone and
> Phonak/Unitron are public companies and their annual reports are
> available on their websites.
>
> If I am not mistaken, their profit margins are around 20%.
>
> best regards
> Peter
Right! But that's corporate performance, and the original question
seemed to focus upon production cost vs. consumer cost - with the steps
in between. I'm still comfortable with <$100 production cost, $1000 to
the audiologist, $2,500 to the consumer.
There's no inherent conflict between "<$100 production cost, $1000 to
the audiologist" and "profit margins are around 20%", as long as you're
talking about pretax profit and not gross profit. Actually, few U.S.
accountants use 'profit margin' any longer, as "margin" and "profit" are
two different things.
Ike
Ken
pie in the sky - just beginning to be talked about. At the time I did
not expect them to get very far in my lifetime.
Well they have virtually taken over and have gone on to even greater
subtlety and the end of this development proces in nowhere near in
signt. And the cochlear technology, bringing hearing aids to people who
have lost, or never had, the physical ability to hear, are part of the
digital revolution.
People who go on about the hight cost of aids want to stop and think.
As someone pointed out, anyone selling anything is entitled to charge
whatever they can get. If the hope of making big monery leads to
innovation then we all benefit.
And, for those who cannot afford market prices, a compassionate society
subsidises the cost of hearing aids. They are free for pensioners and
veterans in Australia and many other countries.
And the practice of bundling the cost of diagnosis, fitting and
follow-up in with the cost of the aids means that noone has any idea of
how much of what they pay is for hardware and how much is for the
services of the audiologist. That is the only thing I would like to see
changed - for audiologists to charge for their services the same as any
other medical specialist and sell the aids at cost plus 20% or
whatever.
People are free to winge about things being expensive but informed
winging needs to take account of market relities, the cost of R & D
and how much of what they pay is actually for the hardware rather than
professional services.
Ike
You (Ken) didn't expect digital aids to get very far in your lifetime?
Having just seen a $1500 digital fishing reel, nothing will surprise me!!
Ike
Ike
hardware. All that equipment and skill comes not from trial and error...
Ike
Ed
Selling Price and costs. Usually expressed as a percentage of the
selling price. That is Gross Margin percentage times selling price
equals Gross Profit.
Net Profit is what's left after most or all expenses have been
deducted from the the total of the Gross Margin dollars for the period
stated.
Net Profit is often expressed as Earnings Before Internest,
Depreciation, Taxes and Amortization. (EBIDTA).
Because I had a friendly relation with a Costco District hearing aid
Manager, I know for a fact that COSTCO Hearing Centers are wholly
owned and operated by Costco. They hire a licensed dispenser and
supply the aids. Costco generally carries top mfg's aids such as
Bernafon, Siemans, and couple others. I note they do not sell every
model from these mfgs. Just the newer popular ones. My Manager friend
claims that Costco is the second largest seller of hearing aids in the
USA. (The VA is the largest.) Ed
erra...@yahoo.com
>
> I'm not sure all Costcos sell the same HAs. They sell space to local
> concessions, right? If the local concession chooses to sell Bernafon, or
> Miracle Ear, or Siemens...
>
> Or does Costco actually have some control over what sells - via a
> national contract with a national concessionaire?
Here are quotes from a post from someone who looked into this and (I
think) bought aids from Costco. The post is a bout 1.5 years old now:
"I know that costco warehouses nationally have hearing centers in
selected outlets, staffed with certified fitters who are paid a salary.
They are NOT on commission, so the fitters/salesmen are not pressing
customers to purchase the most expensive models, with all the bells and
whistles
I know that costco sells Siemens (Rexton), Bernafon and Interton
products; they may also sell products by other manufacturers. They have
only two prices: premium aids cost $1599 each; mid-level aids cost $899
each. I"m familiar with the Bernafon products sold by costco¦
The company promotes only the newest Bernafon aid designs: the year-old
premium Symbio line, the new premium Swiss Ear design, and the newly
revamped Neo mid-level models. The basic Symbio model with no external
controls, the Symbio model with an external volume control, and the
Symbio model with two directional mikes all sell at the same premium
price. All are fitted and adjusted “in situ†- with the aids
in the customer’s ears, using a comprehensive software package
called Oasis, version 5. With a minimum of instruction, any computer
literate individual can perfectly program these aids using this
software is almost idiot-proof. And costco fitters have more experience
with these aids and this software package than do most dispensing
audiologists…
costco offers a 60 day trial period; if the customer returns the aids,
he gets all his money back. And costco offers free adjustments, no time
or number limits. If you hang around the warehouse for an hour or so,
you’ll probably walk out with a cart full of items¦
- - - - - - -
Walmart has its National Hearing Aid shops in its major centers. They
offer four levels of hearing aids. The receptionist at my local Walmart
center told me that many of the National hearing aids are made by
Siemens or a subsidiary; she didn’t know if all of them were
made by Siemens¦
- - - - - - -
Genesis Labs, in Colorado, offers BTE models from Siemens and Rexton,
and also from many other manufacturers, at prices even lower than
costco. They also offer a 60 day trial period.
- - - - - - -
The fact is, there are fitters at costco, Walmart, and Genesis Labs
that are far more experienced at programming and adjusting Siemens and
Rexton aids, using the comprehensive Siemens software package, than are
most dispensing audiologists.
So, if you're going to purchase these newest model aids from the
mentioned manufacturers, the aids will be programmed using the new
comprehensive software programs........."
Ike
business model than I'd imagined - but I'll certainly accept it. I
wonder why different locations apparently offer different brands.
In any case, I probably won't visit a Costco for help since I have a
good long-term relationship with an audiologist I trust (and the price
is by now about the same!).
Ike
jay1000
> Way back up the page Jim developed a very cogent model cost for aids.
> But I am puzzled by the end result. I think Jim had grand total costs
> to produce a typical aid at $163. Then there is a mfg profit or gross
> margin calculation. If the mfg wants to make a gross profit of 40% he
> sells the $163 cost aid for $271.66............not for the higher
> amount stated.
>
> jay1000: Do you know of any studies that support the argument that
> profound loss patients could have accelerated loss from power aids
> cranked up too high..And what about UCL and the threshold of pain?
> .just asking....your statement sounds logical. And are there any
> papers discussing the problem of professionals dealing with profound
> losses in terms of the trade off between giving any useful hearing to
> a profound vs causing further accelerated loss.
>
> About young children, I agree. You find this type of warning on most
> drugs and many other products. Ed
>
on "ear damage by hearing aid"
Jay
jim
Ed wrote:
> Way back up the page Jim developed a very cogent model cost for aids.
> But I am puzzled by the end result. I think Jim had grand total costs
> to produce a typical aid at $163. Then there is a mfg profit or gross
> margin calculation. If the mfg wants to make a gross profit of 40% he
> sells the $163 cost aid for $271.66............not for the higher
The gross margin (gross profit) I had assumed was 60% not 40%. The 60%
figure has been currently typical of companies that run significant R&D
risk (7 - 8%). Examples are Phonak and William Demant Holdings that
report gross profits of 66.4% and 66.2%.
So to get factory door price at 60% GM:
Price = 100*(burdened factory cost)/(1-.6)
Of course companies not in that catagory could well have lower GM's.
jim
jim wrote:
> Price = 100*(burdened factory cost)/(1-.6)
Whoops. Should be:
Price = (burdened factory cost)/(1-.6)
Ed
Thought it said 40% GM. Sorry.
Ed
Paul Revere
the prices are nowhere near what is being thrown around
here. I got a pair of Interon DSP for $3500. I am very
satisfied with the service from the Dunwoody GA store.
"Peter Weis" <p.w...@email.dk.slet> wrote in message
news:448b1a8c$0$60779$157c...@dreader1.cybercity.dk...
Paul Revere
: erra...@yahoo.com wrote:
:
: I'm not sure all Costcos sell the same HAs. They sell
space to local
: concessions, right?
The HA center in the Dunwoody GA Costco is owned by
Costco and is run by Costco employees. The products
they sell come with the Costco guarantee.
Paul Revere
In Atlanta all Costco's do not have tire stores or
liquor stores. Only one Costco in the Metro Atlanta I
know of has a HA store. I bet it has something to do
with the volume of business.
2Phat
"Paul Revere" <Paul@impeach_the_effin_chimp.gov> wrote in message
news:QNQlg.8381$lf4....@newsread1.news.pas.earthlink.net...
Rich256
They had only one in the Denver area for a long time. Just happened
that I had bought from the audiologist twice before when she was working
for a commission. She told me that with Costco she got a straight
salary so what I bought was not really all that important to her.
I bought the next ones from her more because she was there than it being
Costco prices.
Now they have opened HA centers in other stores in the area and she
moved to a different store.