Story from Florida Today Audiologists Struggling to Survive
Posted by CENTURY HEARING
http://www.floridatoday.com/story/money/business/2015/02/20/brevard-hearing-aid-specialists-struggling-compete/23702259/
Ilana Kowarski, FLORIDA TODAY
The business of selling hearing aids has been transformed in the past five years, with big-box retailers, health insurers, and hearing aid buying groups taking an increasing share of the market for a medical device that was — until recently — primarily sold by independent, licensed hearing aid specialists and board-certified audiologists. Hearing aid sales at discount retailers are growing three to five times faster than those at independent medical offices.
So, despite the fact that national hearing aid sales reached a record high in 2014, business owners in Brevard County's hearing health sector say they are struggling.
Economies of scale allow national companies to acquire hearing aids at steep discounts and to pass those savings along to cost-conscious consumers, many of whom are unwilling to pay the $1,000 or more they could be charged if they bought a hearing aid from a traditional health care provider. Because of these affordability issues and the growth of America's senior population, the hearing industry is an arena with enormous profit potential for businesses that can compete on price.
Most health insurance provides little to no coverage for hearing aids, and there's currently a Congressional proposal to give a $500 tax credit for hearing aids, because the devices are so expensive. Hearing aid costs range from $500 to $4,000 per ear, and the devices have a four-to-six-year life span, which means that a hearing impaired person can expect to spend thousands of dollars on hearing aids over the course of their lives.
Proponents of the wider availability of budget price hearing aids say they offer hearing help to those who might not otherwise be able to afford hearing aids.
However, the entry of discount retailers into this health sector is a trend which is lamented by those in Brevard whose livelihoods depend on providing medical care to the hearing impaired.
Brevard's independent hearing specialists and audiologists say that their expertise allows them to serve patients better than their national competitors, and they want consumers to remember that when they purchase hearing aids at their medical offices, they are buying more than just a device - they're also getting a diagnostic exam, a professional fitting, and follow-up care.
Most ear health care providers say that getting a hearing aid on-demand without a medical consultation is unwise, and they warn that an ill-fitting hearing aid can cause physical harm. These health practitioners also urge consumers to think twice about getting personal amplification devices, which are not vetted by the Food and Drug Administration to ensure quality and consistency, since they are not classified as medical products.
Dan Taylor, the owner of A Advanced Hearing Care in downtown Melbourne, said that his industry is in a state of crisis.
"If you strip out the professional component of what we do, then we all become hardware merchants," Taylor said of the hearing aid business. "It's such an uneven playing field at this point that I wouldn't recommend anybody going into this industry."
He said that licensing fees and other costs of compliance with state regulations were a financial burden which he could ill-afford, and that his business was generating between 25 and 30 percent less revenue now than it did in 2008.
"I may go the way of lamp-lighters and buggy drivers. I'm not bitter about that. This industry has been good to me. I've got to evolve or die just like any organism," he said. "I recognize that, but I'm not being allowed to evolve."
Taylor argued that state-mandated hearing test protocols for licensed specialists like him are so extensive that they add hundreds of dollars to the cost of the test, which cripples his ability to compete on price.
Daniel Talarico, the owner of Riverwalk Hearing Center in Indian Harbour Beach, said that he is also concerned about the health of his business.
"We're getting less and less return on our investment, but our overhead is still as high as it has ever been," Talarico said. "I have not raised my prices in 15 years even though my costs have gone up, so my profit margin has steadily gone down."
Talarico also said he was concerned that Brevard's hearing impaired could unknowingly get inappropriate or inadequate care for their medical condition, if they did not have an in-person diagnostic exam from a trained professional, and did not receive follow-up care to ensure that their hearing aid was working properly.
Though consumer advocates in the hearing-impaired community generally share Talarico's concern about quality ear care, they tend to view the increase in the number of inexpensive treatment options as a positive development.
"In the past, entry-level hearing aids were more expensive, less powerful, and offered less sophisticated sound processing than what's available today," wrote David Copithorne, a cochlear implant recipient who blogs about hearing technology on his website HearingMojo.com.
He continued, "While a pair of premium hearing aids with all the bells and whistles still can cost more than $6,000, now it's also possible to get excellent amplification with digital sound processing, feedback cancellation, directional microphones and other features in a pair of hearing aids for $2,000 or less."
Lee Krause of Melbourne, who regained his hearing after cochlear implant surgery, shares Copithorne's optimism about the transformation of the hearing industry.
"There's a special place in the world for audiologists. I would never say otherwise. They've really helped me. On the other hand, I think with the way things are going, there'll be an emerging market for those who have age-related hearing loss and want personal amplification devices," said Krause, the founder of Audigence Inc., a hearing technology company.
He added, "I strongly think people should seek professional help when they need it. Someone with truly profound hearing loss should not go to Best Buy and expect their problem to be solved, but if you have low to moderate hearing loss, unbundling the services and using low-cost devices might make sense... For me, the bottom line is if it's providing value to the individual, then it's a good thing."
Sandra Wagner, a hearing aid specialist who owns the Personal Hearing Solutions clinic in Viera, said that the general public needs to understand the expertise involved in her profession.
"Hearing aids take the most complex sound in the world — live speech — and transform it into something that the brain can understand," she said.
Wagner said that she was willing to adapt to the changing marketplace by offering and servicing low-price hearing aids, but she said that physical examinations were a nonnegotiable for proper treatment of the hearing impaired.
The American Speech-Language-Hearing Association, a coalition of hearing health care providers, expressed similar sentiments. Pam Mason, the association's director of audiology professional practices, put it this way.
"It's not all about the device. Hearing aids are not one-size-fits-all," said Mason, an audiologist. "It's just like anything else. If you have a medical concern, you ought to see a medical professional. I would say that ideally someone should seek out the professional services of an audiologist, who has a graduate degree, as opposed to a hearing aid dispenser with a GED. The audiologist can identify the diagnostic red flags."
Barbara Kelley, the deputy executive director of the Hearing Loss Association of America, said that although she wishes every hearing-impaired person was able and willing to pay for "the gold standard of care," it was unrealistic to expect that of everyone. "We know as a consumer advocacy organization that people can be turned off by the price of hearing aids," she said. "Hearing loss is not life-threatening even though it is life-altering, and there's a stigma associated with treatment, so not everyone gets the help they need when they should. We know price is a factor.. . I think consumers should have a choice."
Contact Kowarski at 321-242-3640 or ikowarski@floridatoday.com. Follow her on Twitter @IlanaKowarski
About hearing aids
Hearing aids range in price from $500 per ear to $4,000 per ear, and the cost of the hearing aid depends on the technology involved. External, behind-the-ear hearing aids are generally less costly than hearing aid devices which are hidden inside the ear. Pricing also varies depending on a hearing aid's sound quality and customizability, and the intensity of the deafness it is designed to treat.
There are cheap alternatives to hearing aids, which are commonly called personal amplification devices, but unlike hearing aids, these devices are not screened by the Food and Drug Administration, and they often lack the acoustic technology necessary to simultaneously increase the volume and the intelligibility of sound.
Ilana Kowarski, FLORIDA TODAY
The business of selling hearing aids has been transformed in the past five years, with big-box retailers, health insurers, and hearing aid buying groups taking an increasing share of the market for a medical device that was — until recently — primarily sold by independent, licensed hearing aid specialists and board-certified audiologists. Hearing aid sales at discount retailers are growing three to five times faster than those at independent medical offices.
So, despite the fact that national hearing aid sales reached a record high in 2014, business owners in Brevard County's hearing health sector say they are struggling.
Economies of scale allow national companies to acquire hearing aids at steep discounts and to pass those savings along to cost-conscious consumers, many of whom are unwilling to pay the $1,000 or more they could be charged if they bought a hearing aid from a traditional health care provider. Because of these affordability issues and the growth of America's senior population, the hearing industry is an arena with enormous profit potential for businesses that can compete on price.
Most health insurance provides little to no coverage for hearing aids, and there's currently a Congressional proposal to give a $500 tax credit for hearing aids, because the devices are so expensive. Hearing aid costs range from $500 to $4,000 per ear, and the devices have a four-to-six-year life span, which means that a hearing impaired person can expect to spend thousands of dollars on hearing aids over the course of their lives.
Proponents of the wider availability of budget price hearing aids say they offer hearing help to those who might not otherwise be able to afford hearing aids.
However, the entry of discount retailers into this health sector is a trend which is lamented by those in Brevard whose livelihoods depend on providing medical care to the hearing impaired.
Brevard's independent hearing specialists and audiologists say that their expertise allows them to serve patients better than their national competitors, and they want consumers to remember that when they purchase hearing aids at their medical offices, they are buying more than just a device - they're also getting a diagnostic exam, a professional fitting, and follow-up care.
Most ear health care providers say that getting a hearing aid on-demand without a medical consultation is unwise, and they warn that an ill-fitting hearing aid can cause physical harm. These health practitioners also urge consumers to think twice about getting personal amplification devices, which are not vetted by the Food and Drug Administration to ensure quality and consistency, since they are not classified as medical products.
Dan Taylor, the owner of A Advanced Hearing Care in downtown Melbourne, said that his industry is in a state of crisis.
"If you strip out the professional component of what we do, then we all become hardware merchants," Taylor said of the hearing aid business. "It's such an uneven playing field at this point that I wouldn't recommend anybody going into this industry."
He said that licensing fees and other costs of compliance with state regulations were a financial burden which he could ill-afford, and that his business was generating between 25 and 30 percent less revenue now than it did in 2008.
"I may go the way of lamp-lighters and buggy drivers. I'm not bitter about that. This industry has been good to me. I've got to evolve or die just like any organism," he said. "I recognize that, but I'm not being allowed to evolve."
Taylor argued that state-mandated hearing test protocols for licensed specialists like him are so extensive that they add hundreds of dollars to the cost of the test, which cripples his ability to compete on price.
Daniel Talarico, the owner of Riverwalk Hearing Center in Indian Harbour Beach, said that he is also concerned about the health of his business.
"We're getting less and less return on our investment, but our overhead is still as high as it has ever been," Talarico said. "I have not raised my prices in 15 years even though my costs have gone up, so my profit margin has steadily gone down."
Talarico also said he was concerned that Brevard's hearing impaired could unknowingly get inappropriate or inadequate care for their medical condition, if they did not have an in-person diagnostic exam from a trained professional, and did not receive follow-up care to ensure that their hearing aid was working properly.
Though consumer advocates in the hearing-impaired community generally share Talarico's concern about quality ear care, they tend to view the increase in the number of inexpensive treatment options as a positive development.
"In the past, entry-level hearing aids were more expensive, less powerful, and offered less sophisticated sound processing than what's available today," wrote David Copithorne, a cochlear implant recipient who blogs about hearing technology on his website HearingMojo.com.
He continued, "While a pair of premium hearing aids with all the bells and whistles still can cost more than $6,000, now it's also possible to get excellent amplification with digital sound processing, feedback cancellation, directional microphones and other features in a pair of hearing aids for $2,000 or less."
Lee Krause of Melbourne, who regained his hearing after cochlear implant surgery, shares Copithorne's optimism about the transformation of the hearing industry.
"There's a special place in the world for audiologists. I would never say otherwise. They've really helped me. On the other hand, I think with the way things are going, there'll be an emerging market for those who have age-related hearing loss and want personal amplification devices," said Krause, the founder of Audigence Inc., a hearing technology company.
He added, "I strongly think people should seek professional help when they need it. Someone with truly profound hearing loss should not go to Best Buy and expect their problem to be solved, but if you have low to moderate hearing loss, unbundling the services and using low-cost devices might make sense... For me, the bottom line is if it's providing value to the individual, then it's a good thing."
Sandra Wagner, a hearing aid specialist who owns the Personal Hearing Solutions clinic in Viera, said that the general public needs to understand the expertise involved in her profession.
"Hearing aids take the most complex sound in the world — live speech — and transform it into something that the brain can understand," she said.
Wagner said that she was willing to adapt to the changing marketplace by offering and servicing low-price hearing aids, but she said that physical examinations were a nonnegotiable for proper treatment of the hearing impaired.
The American Speech-Language-Hearing Association, a coalition of hearing health care providers, expressed similar sentiments. Pam Mason, the association's director of audiology professional practices, put it this way.
"It's not all about the device. Hearing aids are not one-size-fits-all," said Mason, an audiologist. "It's just like anything else. If you have a medical concern, you ought to see a medical professional. I would say that ideally someone should seek out the professional services of an audiologist, who has a graduate degree, as opposed to a hearing aid dispenser with a GED. The audiologist can identify the diagnostic red flags."
Barbara Kelley, the deputy executive director of the Hearing Loss Association of America, said that although she wishes every hearing-impaired person was able and willing to pay for "the gold standard of care," it was unrealistic to expect that of everyone. "We know as a consumer advocacy organization that people can be turned off by the price of hearing aids," she said. "Hearing loss is not life-threatening even though it is life-altering, and there's a stigma associated with treatment, so not everyone gets the help they need when they should. We know price is a factor.. . I think consumers should have a choice."
Contact Kowarski at 321-242-3640 or ikowarski@floridatoday.com. Follow her on Twitter @IlanaKowarski
About hearing aids
Hearing aids range in price from $500 per ear to $4,000 per ear, and the cost of the hearing aid depends on the technology involved. External, behind-the-ear hearing aids are generally less costly than hearing aid devices which are hidden inside the ear. Pricing also varies depending on a hearing aid's sound quality and customizability, and the intensity of the deafness it is designed to treat.
There are cheap alternatives to hearing aids, which are commonly called personal amplification devices, but unlike hearing aids, these devices are not screened by the Food and Drug Administration, and they often lack the acoustic technology necessary to simultaneously increase the volume and the intelligibility of sound.
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