In Defense of Costco

Am I suggesting that everyone go work for Costco? No, but I think those who do probably deserve more respect than they get.  David Kirkwood

The hearing impaired should be offered the widest possible selection of instrumentation and dispensing models.  One size does not fit everyone.   K. Ray Katz 

Costco has rapidly emerged as the second largest US retailer of hearing aids, building a reputation of low Price and pleasant, efficient commercial service.  Hearing Economics

 

By now, Hearing Economics readers have worked out that Economics encourages efficient markets and casts a gimlet eye on firms and special interest groups’ efforts to control markets.  Hearing healthcare providers qualify as a special interest group because they tend to group together, formally or informally, to plot ways of controlling the markets for hearing healthcare and product delivery.  The Economic View and the Hearing View have never seen eye to eye but disagreement has escalated. Now it’s eye for an eye with the advent of Big Box competitors such as Costco’s hearing aid dispensing program. Try entering “Costco” into the Search Box on our home page and see how many entries pop up — they could form their own blog site.  It’s a war out there.

As an Audiologist and almost-Economist, I argue with myself everyday and never win.  As a private practice Audiologist, I want to protect my livelihood by ensuring that low-cost, high-volume options like Costco go away.  As an Economist,  I know that Costco is not going away because the market wants what Costco is selling.  My Economic Self thinks my Audiology Self is naive and selfish.  My Audiology Self thinks my Economic Self is cold and heartless.  It’s a war in there.  

 

The Book of Revelations:  How One Audiologist Solved Her Costco Dilemma

 

Today’s post is a personal journey.  No graphs, no statistics, no equations.  Just my own thoughts as I grappled with the Costco in my own backyard and came to see the Light.

1st Revelation.  The first Costco Audiologist I ever met was a guy who attended our annual Audiology Conferences faithfully.  He was pleasant, self-effacing, and interested in learning.  I would have hired him in a minute. From what I’m told, he is still working at Costco almost 20 years later.  This got me thinking that working for Costco can’t be all bad.  

2nd Revelation.  I was first betrayed while shopping at  Costco.  Pushing the cart, I glanced into the test booth window and there he was, pushing the dispenser’s button.  He was one of the worst patients in our practice — never interested in improving his hearing, always interested in improving his bottom line for our services.  I felt like a bookkeeper after every appointment and a receptionist after every phone call he made to go over everything once more…. but I never felt like an Audiologist when I was “serving” him.  This got me thinking of a few other patients I might nudge toward temptation.

3rd Revelation.  I was next betrayed by an unknown Audiologist in California who I recommended–based on credentials and AAA membership–as the best provider for a friend of a patient.  My patient later reported that the Audiologist had poor people skills but excellent financial skills, to the point that the friend fled to Costco. There, he received satisfactory service and product and lived happily ever after.  This got me thinking that credentials and training only take you so far and maybe Costco’s HR people already had that figured out.

4th Revelation. Loyal patients began bringing in stories of friends and neighbors who were fitted at Costco and “loved” the experience and the providers.  This got me thinking that Costco might single-handedly destroy the old “used car salesman” image of hearing aid dispensing that I’d been futilely sparring with for so many years.  

5th Revelation.  Confined to bed with a terrible cold, I was bored but too sick to work.  AudiologyOnline had an ad for employment at Costco.  I clicked.  What followed was hands-down the most amazingly thorough, thoughtful, uplifting interview process I’ve ever experienced — and all online, at my own pace, with choices of job locations all over the country, full-time or part-time.  This got me thinking that maybe I should ask Costco to do my hiring next time I had a position open.

6th  Revelation.  Another loyal patient came in with custom ear-molds from Costco for his high-end RICs.  This was after we’d made two unsuccessful attempts to get acceptable custom molds from the hearing aid manufacturer. Costco’s price was lower than our cost from the hearing aid manufacturer.  This got me thinking that I should send my patients to Costco for ear-molds   I was already recommending Costco for batteries. Why not molds, too?  Neither one is a revenue generator.  Nothing lost on my side, money saved on my patients’ side.  Could my Audiology Self and my Economics Self finally find common ground?

7th Revelation.  I moved from thinking to action. On the next Costco shopping trip, I introduced myself to the dispensing staff, and successfully pursued the ear-mold question.  They were visibly thrilled to meet me and asked for our cards so they could refer people for cerumen management; also for high-end hearing aids and specialty aids that Costco doesn’t sell.{{1}}[[1]]At the time of writing, Costco only offered Bernafon Chronos (7&9), Rexton (Bridge+12, Insite+1, Cobalt+16), and Resound Forza RIC.[[1]]  This got me thinking two things:  I should have introduced myself a long time ago, and these Costco hearing professionals placed a higher value on Audiology skills than consumers in general.  

8th Revelation.  I was happy for the referrals but confused about their joyous greeting–it’s not like our locale is short of Audiologists.  Their answer surprised, shocked, and embarrassed me.  “We would love to refer to Audiologists, but they say such awful things about us that we can’t find one to work with.”  Really, I am not making that up.  This got me thinking about Principal 7 of AAA’s Code of Ethics:  “Members shall honor their responsibilities to the public and to professional colleagues.”  

9th Revelation.  Costco referred a patient and sent over his audiogram.  The rule in our office is retest to ensure validity; also to fill in gaps and obtain a complete diagnostic battery.  The Costco workup was one of the more comprehensive work-ups we’ve seen in some time.  They may not bill insurance, but they do diagnostic evaluation. This got me thinking that I need to go see their equipment and find out what constitutes a standard test protocol at Costco.

10th Revelation.  Practice revenues rose last month, thanks to Costco.  Use of time improved, too, thanks to Costco:  Fewer ear-molds and batteries, more Bluetooth pairing.  This got me thinking that from the Economic View, it’s Good to be an Audiologist.  

 

Full disclosure:  Not all Costcos are alike. Other practicing Audiologists may have opposing Revelations.  This post is tainted by the Editor’s admitted bias, contained in her confession:  “I love Costco.  I shop there twice a week. My dogs, cats, and I would starve if it weren’t for Costco. I have bought a piano at Costco.  I have purchased a car from Costco.   I purchase my latte machines from Costco, which is the highest compliment I can give.”



About Holly Hosford-Dunn

Holly Hosford-Dunn, PhD, graduated with a BA and MA in Communication Disorders from New Mexico State, completed a PhD in Hearing Sciences at Stanford, and did post-docs at Max Planck Institute (Germany) and Eaton-Peabody Auditory Physiology Lab (Boston). Post-education, she directed the Stanford University Audiology Clinic; developed multi-office private practices in Arizona; authored/edited numerous text books, chapters, journals, and articles; and taught Marketing, Practice Management, Hearing Science, Auditory Electrophysiology, and Amplification in a variety of academic settings.

8 Comments

  1. This was excellent! I also enjoyed the comments people posted. I have been using a hearing aid I got through an audiologist in mid 2008 (I only hear in one ear). I paid about $2,850 at the time. It served me well when it worked but I had a lot of initial problems with it failing and having to be sent in for repairs for the first 1.5 years. Finally got a stable version and was fine. On July 31, 2012 I had a sudden hearing loss and went totally 100% deaf for about 3 weeks. Worked with ENT Doctor and Ear Neurologists to do all the recommended treatments including direct ear injections. I recovered limited hearing and use a Pocket Talker for many situations (works very well for me in a business meeting with different microphones). I revisited my audiologist and he reprogramed the hearing aid for my new situation and I paid for a new in ear speaker setup to help boost sound and reduce background noise. It was very limited and good only for one on one talking. A couple weeks ago the hearing aid started to act up. It shuts down for random periods after about 15 minutes. Some days it comes back after a few hours and is good the rest of the day, other days, 15 minutes is about it.

    I went to the Audiologist but the office was closed that day (not sure why) so I set an appointment with Costco. I was VERY impressed with the depth and quality of the hearing exam. They used computerized voices (my biggest challenge) and I totally failed the initial word test, as I expected. After she was done with the exam, she programed all the sub tests into the hearing simulator and I did the word test again…ony this time I got 100%. I’m hoping the hearing aid actually replicates the simulator!

    I ordered the hearing aid and pick it up on Friday. My cost, $999.99 and it is the 4th generation version made by the same parent company as my exisitng one, which is the 1st generation. My new one comes with far more capability, lots more features and functions and a speaker 100% stronger than the one I’m currently using.

    I’m trying very hard to see why there would be a down side to working with Costco so long as they have models that work for the specific hearing issues. I have a way better hearing aid, fraction of the cost and had a better exam. I was also way more knowledgeable than their ususal customer (their words) because I have been working with MD’s for the last several months with my hearing issues and reading everything I can get my hands on through groups and articles like this one.

    I appreciate all information shared and am happy to be on the journey…after hearing nothing, I appreciate greatly what I now have.

    Best regards,

    Bob

    1. greetings’ I would love to go to work again in the hearing aid field. I have fourteen years in the field,however i have been out the bussiness for three years.I do stay imformed of latest products and would like the oppurtunity to prove that i still know what it takes.Would like to hear from you.Thanks.

  2. Very interesting article. As a Canadian consumer of hearing aids for 40 years I have only recently been tempted to shop at Costco for hearing aids. It likely has something to do with the $3250 each (I need two) price tag I was recently quoted for new aids. Costco may not be the provider I require due to bluetooth and high end requirements, but hey, shopping around never hurts just to keep everybody on their toes!

    Thanks for the insight!

  3. Your experiences with Costco hearing aid dispensers do sound encouraging. However, one concern that I have is whether the consumer understands the difference between the devices and services that private audiology clinics and Costco provide. We have heard price-shopping patients say “I can get the same thing for $2000 less at Costco, when in fact, as far as I can tell, their “premium product” is similar in features to our “basic technology.” These comparisons are difficult to make, even for the professional because it is not simply “apples to apples.” Ideally, all patients would recognize the value of our training and expertise as hearing health care professionals, and would want our advice in order to achieve the best possible communication outcomes. However, if the patient chooses to go ‘discount,’ I would hope that no one is sitting there telling them, it’s the same thing, just cheaper.

  4. I’d concur with the authors revelations and would like to add even more kudos. When CostCo opened their first dispensery in our town about 15 years ago, we had great fears at first. In the ensuing years, our fears have gone away to a degree. The patients that seek CostCo’s help tend to be the most difficult for us to work with, the ones who are solely price-focused and don’t consider us as an option (even though we have low cost options that can compete). Typically these price-oriented patients can become somewhat abrasive, and though I can compete, the red flags I see suggest I shouldn’t waste my time–let them go to CostCo.

    What I would like to credit CostCo for, however, is their training program. Here in Oregon we recently increased training standards for dispensers. Prior to 2012, the requirements were pretty weak: 98 hours of practicum and 62 hours of “theory” (i.e. reading books) gets the trainee their temporary license, which supposedly in less than a month equips them to work independently of their supervisor seeing patients. Being on the licensing board (at the time), I pushed for an increase in standards to reflect the higher level of knowledge now needed to ensure patient results: a 2-year associates degree program, similar to what is now required in Washington State.

    Of course, there was backlash. Representatives from various hearing-related business voiced their opinions, some for and some against, these new standards. CostCo was present, and advocated against. Ultimately, it was negotiated to require 520 hours of practicum and “theory” through IHS’s online training program, which is 30 modules and requires passing a quiz before moving on to the next module. It went into effect August, 2012.

    How does this relate to CostCo? In the process of developing new standard, we learned about their own standard of training. First, most dispenser candidates have to have been good CostCo employees for a time prior to even being eligible to shift into a dispenser position. This allows management a level of screening for ethics and customer care: can’t go to the position if you can’t be trusted to represent the company appropriately.

    Second, their own training program is for an entire year, which exceeds and pre-dates what our new state standards now are; they were holding their employees to a higher level for quite some time before we were even able to implement it.

    Finally, I have become good friends with a few of their dispensers, and one is currently the president of the local IHS chapter. I have been involved with the Oregon Hearing Society for over a decade, and Cheryl has done an excellent job over the past few years representing hearing healthcare practitioners in own state. Jayann, one of her fellow employees, also has a very good repuation, and occasionally refers a patient to me when it involves a product she does not have access to (i.e. wireless CROS, etc.).

    All in all, I have very little to complain about our local CostCo. From what I have seen, they are good practitioners and better representatives for hearing healthcare than some other dispensers in the area. When patients ask me about the reputations of other offices (which I find a topic I must approach cautiously), I tell them that all of the audiology groups (ours and two others) in Salem are very good, two dispenser offices, and CostCo does well. Beyond these six offices, I wouldn’t take my chances with any of the others.

    CostCo has a vested interest in doing a good job, and it is exemplified in their thorough training program and by what I have seen in their local employees.

  5. This article conveys the best practical, honest comments re: Costco I have ever read from any other audiologist. I too, have heard nothing but good stories re: Costco hearing aid clinics from pts. They’re doing something right!

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