Almost a year after the passage of the Over-the-Counter Hearing Aid Act of 2017, I was curious to know if the bill and the attendant publicity had affected the hearing aid marketplace. So I asked an expert: Abram Bailey of Hearing Tracker.
OTC hearing aids won’t be on the market for months, if not years. But the one-year anniversary seemed like a good time to try to establish some kind of benchmark in terms of sales, prices, location where purchased, brands, cost and other issues that may begin to shift after OTC hearing aids become available.
The bipartisan OTC bill, sponsored in the Senate by Republican Chuck Grassley and Democrat Elizabeth Warren, was signed into law by President Trump in August 2017. The FDA, which regulates hearing aids, has three years from the time the bill was signed for comments and questions. The final regulations will reflect the views not only of consumer advocates but also of audiologists and other medical professionals as well as hearing aid companies and dispensers. Until that comment period is over, there will be no OTC hearing aids.
Abram Bailey constructed a survey that was filled out by over 2000 consumers. (Here is a link to the survey) The respondents were a self-selected group, already aware of their hearing loss and many already wearing hearing aids. The survey was sent to Hearing Tracker followers, HLAA members, and people who follow my blog.
Part 1 of the survey was published last week. Parts 2 and 3, focusing on hearing-aid preference and recommendations, insurance coverage, and purchase of accessories (assistive listening devices, for instance), will be published in the coming weeks.
The survey first established the demographics of the respondents: 54.7 were female and 44.2 male. More than three-quarters were over the age of 55, with pretax income that reflects that of the population at large. More than half were retired. Their self-reported levels of hearing loss ranged from mild to profound, with 18.2 percent reporting that their hearing loss was profound, and 31.4 percent reporting severe hearing loss. As would be expected from the respondents surveyed, many were experienced hearing aid users, over half with 10-plus years of use. This is a very different sample from those who are just now becoming aware of their loss and buying hearing aids, but the trends are interesting.
Almost all (84 percent) bought a pair of hearing aids, as opposed to a single aid. More than half bought what they understood to be top-end hearing aids and more than a third bought mid-range hearing aids. The average price paid was $2560 for a single aid, or $2,336 per aid when purchased as a pair. This is more or less in line with the reports from the President’s Commission on Hearing and Technology (October 2015), which recommended a “basic” hearing aid, and the National Academies of Sciences, Engineering and Medicine (June 2016), which found an average cost of approximately $4700 for a pair of hearing aids.
The top brand purchased by survey respondents was Phonak, with Oticon and ReSound second and third. Eleven other brands were purchased by at least 10 respondents. Not surprisingly, the share of the US market reflected sales figures, with Sonova (Phonak) accounting for 30 percent. William Demant (Oticon) and GN Resound third. All three also own other brands. (The market share statistics date from 2015, and may have changed.)
Did cost affect market share? Starkey (# 4 in market share at 16 percent) had the highest average price paid ($2,674), with Widex (with 3 percent of market share) being the second most expensive ($2,672). The least expensive were Kirkland Signature (Costco’s house brand) at $963.
I was interested to see that the vast majority were fitted by and bought through audiologists (75.18 percent) or hearing-instrument specialists (20.46 percent) Audiology training is far more rigorous than that of hearing instrument specialists. Hearing aids sold by audiologists (1056 responses) cost on average $2,499 per device, those sold by hearing instrument specialists (337 responses) $1944 averaged per device.
The data also revealed, however, that hearing instrument specialists and audiologists seemed to charge the same amount when in similar settings (a local office, for instance). The disparity may reflect the fact that at Costco hearing professionals are mostly hearing-instrument specialists (40 percent) with only 4 percent audiologists. Those who bought at Costco, the survey found, were more than twice as likely to have been fitted by a hearing aid specialist as by an audiologist. Costco’s current estimated market share is 11 percent of all US hearing aid sales.
Costco sells, in addition to its own brand, Phonak and Resound, at vastly reduced prices. How is this? Abram Bailey speculated that it may be due in part to the fact that the aids sold are not the brand’s latest model (usually one generation behind flagship stores) Costco also can purchase in volume, and has very little overhead for its hearing aid sales.
Most surprising to me was the response to a question about the length of time it took for respondents to buy hearing aids once they had learned about their hearing loss. It is commonly said that most people wait 7 to 10 years before buying hearing aids. Over half the survey respondents reported buying their first hearing aids within two years of learning they had a loss. As Bailey noted, this discrepancy may be the result of sampling bias (the respondents were all already hearing-aid users) or erroneous self-reporting (a respondent might like to think she had bought hearing aids within two years when in fact it had taken her 4-5 to make that decision.)
As the survey says, Stay tuned for more.