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Getting caught in the crossfire of the hearing aid wars

Edward C. Halperin, MD
Policy
June 24, 2024
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My hearing precipitously declined four years ago. As a patient and practicing physician, I became dependent upon hearing aids. Thus, I was introduced to the off-putting business of hearing aids in America.

The American hearing aid market is estimated to generate between $3 to 4 billion per year annually. It is expected to grow six to eight percent annually as our population ages. Assistive listening devices can be a vast mystery for patients. The industry became even more treacherous because of battles between hearing aid manufacturers and insurance companies. The people caught in the crossfire are the ones who can’t hear the bullets whizzing past.

Let’s focus on people with severe enough hearing loss who need prescription hearing aids, not over-the-counter sound amplifiers. First, who are the big dogs in this marketplace? Phonak, a Swiss company, is one of the brands marketed by the parent company Sonova, which accounts for 31 percent of the worldwide hearing aid market. Oticon, based in Denmark, is a subsidiary of Demant and accounts for 30 percent of the market share. ReSound is a Danish company, falling under the umbrella of GN Group, and makes up 15 percent. Signia is a subsidiary of the German company Sivantos, which was formerly known as Siemens. In 2019, they merged with Widex under the WS Audiology group, accounting for 19 percent of the global market. Starkey, the only American company in the race, makes up 4 percent of the global market. The largest single place Americans buy their hearing aids is likely Costco, with about 11 percent of national sales. Costco offers only some of the brands listed above, including a house brand, Kirkland, manufactured by Sonova.

How do people pay for these devices, which often can run $1,500 to $8,000 for a pair, with an average of about $4,600? Medicare? Nope. Medicare doesn’t pay for hearing aids. Medicare Advantage plans? Well, some of them offer partial coverage. Commercial insurance through your employer if you’re still working? Maybe, but increasingly if you have any form of insurance, the company is going to tell you that you’re in a “managed care hearing aid plan” where they will push you to buy certain brands where they have negotiated a good price for the insurance company to maximize their profits – and where the available hearing aids your insurance company steers you to may not be the best for you.

Then, in February, Oticon disrupted the market when it announced it would no longer do business with managed care hearing aid plans. They have calculated that they can make more profits by sticking to a cash business where well-off customers pay full freight for their products at the high end of the price spectrum.

And it’s not as if you can be sure that you can “trust your hearing professional” to advise you what hearing aids you need. First, the definition of a “hearing professional” is up-for-grabs and includes ear, nose, and throat doctors, master’s and doctoral level trained audiologists, “hearing aid fitters” trained by companies, and hearing aid salespeople. Some of these professionals will steer you to one brand versus another because that’s how they get paid.

Hearing aids are part of the larger problem of the not-so-free market for medical devices. How does a consumer “know” which is a good CT scan machine or MRI machine to have their brain imaged? Who manufactures good artificial hips and shoulders? Do you discuss with your surgeon what brand of sutures will be purchased to sew you up during your upcoming operation? The answer to all the questions is either “No” or “I don’t know.” When it comes to hearing aids, the consumer’s ignorance could cost them dearly both in quality of life from less-than-optimal correction of hearing loss and in the pocketbook.

Do people in other countries face the hearing aid problem to the same degree as Americans? It’s not going to surprise you that in most of Western Europe, hearing aids are either fully covered by the national health insurance plan or partially covered with the option to “top up” and use the national health insurance payment to supplement your own payment and get the hearing aids you want.

American politicians who are addicted to “consumer choice” and “the free market” miss the point that being unable to hear is socially isolating and often dangerous. The average person is lost at sea in the marketing of hearing aids. There are multiple deceptive marketing practices. Insurance companies and hearing aid manufacturers are seeking to maximize their profits. Politicians, can you hear me? When you opened the market to over-the-counter hearing aids, it was a good first step; but the system for prescription hearing aids cries out for further reform.

Edward C. Halperin is a professor of radiation oncology, pediatrics, and history.

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