Back to the Future, part VII: How Big is HUGE?

Holly Hosford-Dunn
May 8, 2012

Editor’s note:  This series follows predictions by Lars Kolind[1] in the 1990s.  

Predictions to date have addressed Audiologists as Retailers,Vanishing Practitioner AutonomyInternet DispensingConsumer ExpectationsVertical DistributionTechnological DominanceDispensers and Audiologists as Bedfellows, Ruthless Demand Curves, and Verification and Validation by regulation. Today’s post considers factors affecting market expansion.

Lars Kolind’s Prediction #VII. There will be huge market growth.

Hearing aid market penetration has been stuck in the region of 17.5-30%{{1}}[[1]]I’m not going to reference this because there are tons of numbers out there–differing depending on criteria for hearing loss and threshold for hearing aid fitting decision– but this seems to be the general range

[[1]] forever and forecasters aren’t projecting near-future annual hearing aid sales to grow more than “the standard 3 to 5%“.  Why should we expect a huge growth in Demand? One reason, of course, is the growing senior population, which is always first and foremost among the usual suspects when we talk about growth in the hearing aid market.   Perhaps an aging population is sufficient to explain market growth, but I doubt it accounts for what Dr. Kolind meant by “huge.”

Technological advances that appeal to a broader range of consumers will increase demand.   A good audiological example  is open-ear fits made possible by RIC technology, enabling more successful fits to people with milder hearing losses. That contributes to market growth, but MarkeTrak data tell us that most hearing aids and hearing services are still consumed by people with moderate to severe hearing loss.  RICs may not be the deciding factor for that market segment.   I doubt that audiologic technological advances alone could account for Dr. Kolind’s concept of “huge.”

Price may be the driving force that expands Demand.  To the extent that MarkeTrak VIII surveys of what people say are reflective of what they actually do{{2}}[[2]]My economics professors teach us that people don’t always behave as they say they will.[[2]], then  Table 3a in that report is highly instructive:  respondents with hearing loss–whether mild or moderately severe–say they are 49-66% more likely to consider hearing aid purchase if it is 100% covered by insurance, and  20-31% more likely to purchase if insurance kicks in $500.  Perhaps more significantly, those same respondents are 33-47% more likely to buy the hearing aids out of pocket if hearing aid Price drops to $500/aid. Amlani & De Silva‘s economic modeling shows that hearing aid Demand is inelastic, but widespread changes in Price due to dramatic changes in channel distribution may alter the data, the Demand curves, and their elasticity, independent of efforts to unbundle.

Accessibility is another means of expanding Demand, manifest by United HealthCare’s  (UHC)  Internet hearing aid dispensing model.  As the largest US health insurer by some measures, UHC offers hearing aids directly to its huge client base through one of its own companies, which contracts directly with a manufacturer.  Ordering hearing aids can’t get much easier than that for consumers{{3}}[[3]]Easier does not imply better, necessarily. If it is easy to get but undesirable to own, the market will not expand [[3]], plus the system is specifically designed to reduce costs and dramatically reduce Price.  Now, we’re beginning to get in the vicinity of what Dr. Kolind may have meant by “huge.”

But if you really want to think about “huge,” just consider what would happen if you switched out “hearing aid” for “hearing app“.  That is happening fast, as demonstrated by an article in Sunday’s New York Times Business Section with a snippet preview that begins: “Audio Devices Give New Options to Those Hard of Hearing.” The article impresses in many ways, chief among them:

  1.  it appears in the business section instead of a lifestyle section
  2. it talks about “audio devices”
  3. Etymotic Research gets a high five
  4. The 1st sentence says hearing aids do “wonders”
  5. the first 7 paragraphs say that other, much cheaper, “audio devices” work better in noise than hearing aids
“when he is meeting friends at a busy coffee shop … he removes [the hearing aid]. He has a better solution. He pops on a pair of in-ear earphones and snaps a directional mike on his iPhone, which has an app to amplify and process sound. I put the iPhone on the table. I point it at whoever’s talking, and I can have conversations with them. Soon we forget the iPhone is sitting there.”

The Cool Factor may be an important key to growing the market to huge.  The get-up described above is not all that different from set-ups we tried 30 years ago…. except for the all-important difference that the mike plugs into an iPhone and everybody has or wants an iPhone.  Truly, we are back to the future and it’s cooler now than it was then.

And there you have it… Dr. Kolind’s vision for huge market growth.

HUGE = Technological Advancement + Accessibility + Price + Coolness factor


HUGE  => Audio Device => Hearing App => Cool Connectivity


photo courtesy of lucky pony

  1. I think the “cool” factor is HUGE. Until hearing aid stigma can be finally put to rest, people will be, as they have always been, less willing to spend the time and money necessary to “really” treat their hearing loss. PSAPs and the online “almost one size fits all” Open Fit devices may get a few more people into the market initially, but in my professional opinion, they will do nothing to polish the image of hearing aids. Again, it is my opinion, that they will set us back since they can’t “really” solve the problems people have. Face to face, professionally guided hearing aid fittings and follow up are required to rehabilitate the sophisticated yet damaged sensory system of hearing. Now, how to make it quick, convenient, affordable and most of all, cool…….

  2. Great post, Holly.
    On price sensitivity vs. hearing aid adoption, it might help to consider the penetration rates of hearing technology in countries where hearing aids are fully reimbursed by the state/insurers… and draw a correlation from there (noted, there are other elements as well, like channel dynamics, etc.).
    We tried laying this out in the following analysis:

    Hope it’s helpful.
    Thanks and keep up this great blog.


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