Bundle Bundle Toil and Trouble

Holly Hosford-Dunn
January 21, 2014

The last few posts in the Pricing series measured the spans separating wholesale and retail pricing of hearing aids.  The purpose was not to give away trade secrets; rather to reduce trade secrecy in order to pursue rational explanations of hearing aid pricing.   For that, we need real data rather than shrouded speculation, which means “transparent” pricing, or what is popularly known as unbundling price.

Last post ended with a promise to enter the unbundling realm — a dark place full of witches–a place I wish I’d never promised to go because I really don’t like numbers THAT much.  But, a promise is a promise, so here’s the post.


Today’s Transparency Report:  Cloudy with Limited Visibility


Transparency is not a strength of our profession at present, as noted previously.   Getting individual practitioners to share actual dollar costs of product has not proved a viable option at Hearing Economics and past publications don’t seem to have done much better.  It is easier to buy an eye of newt or a toe of frog than it is to get good numbers for costs of doing business in our profession.

This is strange because what data there are tell us that most Audiologists and dispensers are using legitimate pricing that would bear up well under scrutiny, were we to embrace transparency and unbundle ourselves publicly.  The majority of us are fitting with margins that cover our costs, allow us to stay in business, and encourage us to fit appropriate technology on a patient-by-patient basis.

Tomorrow’s Forecast:  Expect Fear and Loathing


Really, it’s not as though we’re a bunch of hedge fund managers  cackling over boiling, charmed caldrons of money.  We’re the good guys, so why not unbundle?  Here are three reasons that make me fear and loathe the idea. I’m sure you can think of more:

  1. No one wants to go first because our competitors might use our efforts at transparency against us.
  2. It confuses consumers to look at a bunch of line items instead of one simple number.
  3. Counting and accounting are time consuming, confusing and boring activities that many business owners, including Audiologists, skip or skimp on.

And, of course, technological disruptions are always spelling doom and gloom to Audiologists-as-we-know-them.  I like this comment from a reader of a previous Hearing Economics post, though I don’t agree with it wholeheartedly:

The major innovations of late appear to be focused on service and delivery – that is, the distribution of hearing aids as well as initial and follow-up audiologic evaluation and programming is going to increasingly happen over the web. It’s not perfect yet (new innovation rarely is), but over time technology will fill in the gaps. Despite the fact that the brick and mortar audiology industry will continue to fight this tooth and nail, the hearing aid market is on the verge of a major disruption which will render any economic models based on the current market structure obsolete.

Reports of Our Demise and Our Mark-ups Have Been Greatly Exaggerated


Seriously, why unbundle if it’s hard to do and the structure is being dismantled anyway? Here are four reasons that make me want to do what I don’t want to do.  I hope you can think of some more.

  1. It’s been done and we didn’t disappear.  Hearing aid price transparency got a big boost–some would call it a shock–back in 2004 when Mead Killion and Gail Gudmundsen faced-off with the FDA and the Audiology on hearing aid costs and dispensing regulations.  A decade later, what used to be heresy is taken for granted  and our industry and profession are productive and profitable.
  2. It’s good business.  It’s difficult to set prices, bundled or otherwise, if you don’t know your unbundled costs of selling and servicing hearing aids.  Doing the analyses will help you whether you decide to unbundle or not.
  3. It can be good marketing. Not all practitioners believe that price is a secret. Some Audiologists invite open discussions of Price, price components (testing and fitting), and price abuse to buttress their marketing positions. Once consumers are informed and still tuned in, it’s just a skip and a jump to unbundle Price components.
  4. Better us than them.  Why leave scrutiny of our business practices to others who are happy to spread the false word that we’re fitting low technology products at high-end prices, using 5x markup. Why not do it ourselves and set the record straight?

My Costs or Your Costs?


Astute readers have detected the schizophrenia of today’s post:  am I talking about unbundling our Costs of running a business or about services and products that are part and parcel of the Price consumers pay for hearing aids?  Both need unbundling, the first to explain that noxious term “mark-up,” the second to educate consumers on the necessary components that comprise a successful hearing aid fitting.

Hold those thoughts. Next week’s post will start by addressing mark-up.

(editor’s note:  this is Part 10 in the multi-year Hearing Aid Pricing series.  Click here for Part 9 or Part 11).

Leave a Reply