US Hearing Aid Pricing: Part 1 – Nominal Wholesale-Side Trends

Editor’s Note: The last time Hearing Economics discussed hearing aid pricing was 2016, when then Section Editor, Holly Hosford-Dunn, provided readers with a comprehensive assessment of the market in a seven-part series.

Starting with today’s blog on wholesale pricing (in a nominal sense), the aim is to build on Holly’s earlier work and share current trends in a multi-part series over the next few months.

–Amyn M. Amlani, PhD

Calibration

 

Before diving into the chasm of figures and numbers, I take this opportunity to calibrate the reader to several aspects related to the wholesale data. The caveats written in 2013 and 2016, paraphrased below, remain true today:

  • The categorical lines that separate hearing aid tiers—Economy to Mid-Level to Premium—are somewhat blurred given variations across product lines, manufacturer interpretation of technology tiers, and price points adopted by the market.
  • The dataset is truly a sample, provided by a small faction to whom I am beholden. (There is no pricing data—not one morsel—provided by or adopted from Audigy for obvious employment reasons.) 
    • Prices reported are for a single-unit purchase with no additional discounts.
  • There is no data available prior to 2004. 
  • Transparency is king.
Figure 1. Nominal wholesale hearing aid prices, in US dollars, for average (blue filled circles), premium-tiered (red filled circles), and economy-tiered (green filled circles) product lines.

 

Premium-Tier Wholesale Pricing

 

  • Premium products are depicted as red filled circles in Figure 1.
  • Comparisons are derived using nominal comparisons (i.e., not adjusted for inflation).
  • In 2004, providers paid an average of $1259 for a premium-tiered product. In 2019, a markedly more advanced, premium-tiered product was available for the average wholesale price of $1356.
    • The nominal difference in wholesale price between 2019 and 2004 is $97. Over a 16-year span, this difference equates to just over a $6 per year increase.
  • Over time, the wholesale pricing for premium-tiered hearing aids is nonlinear, reaching a peak of $1453 in 2010, and a low of $1150 in 2015. 
  • Wholesale prices began rising in 2016 when a single unit could be acquired for $1221. In 2019, a single unit averages $1356. 
    • In 2019, the nominal wholesale price has increased by $206 per unit compared to the average price in 2015.
    • This increase in pricing is not surprising, given technological advances in Bluetooth connectivity, rechargeability, artificial intelligence, and the transformation of hearing aids to track the user’s health and wellness.
      • In Part 2 of this series, we will assess whether providers are accounting for this increase in cost of goods (COGS) in their retail pricing.

 

Economy-Tier Wholesale Pricing

 

  • Economy products are depicted as green filled circles in Figure 1.
  • Comparisons are derived using nominal comparisons (i.e., not adjusted for inflation).
  • The wholesale pricing for economy hearing aids is also nonlinear, reaching a peak of $471 in 2016, and a low of $253 in 2006.
    • The astute reader will note that economy-tiered pricing patterns are inverse to premium-tiered pricing patterns. That is:
      • As economy-tiered pricing increases, premium-tiered pricing decreases, and as economy-tiered pricing decreases, premium-tiered pricing increases. 
      • These pricing patterns are essentially synchronized in time.
  • Economy-tiered products in 2019 cost a nominal average of $46 more per unit than in 2004.
  • Since 2016, when a single-unit product cost $471, single-unit prices have dropped nominally by $145 in 2019.
    • In Part 2 of this series, this decrease in COGS is expected to yield increased revenue for the practice.
    • It is assumed that wholesale costs for this tier were reduced—and are expected to be reduced in the future—in order for the provider to compete with direct-to-consumer products.

 

Average Hearing Aid Wholesale Pricing

 

  • The average wholesale price for a hearing aid is depicted by blue filled circles in Figure 1.
  • Comparisons are derived using nominal comparisons (i.e., not adjusted for inflation).
  • The average wholesale price includes all product tiers (e.g., Economy, Economy-Premium, Mid-Level, Advanced, Premium).
  • Since 2004, the average wholesale price of hearing aids increases in a rather linear manner.
  • Premium-tiered vs. Average Wholesale Cost
    • In 2004, the nominal difference in wholesale cost between a premium-tiered product and the average hearing aid yielded $802. 
    • In 2019, the nominal difference in wholesale cost between a premium-tiered product and the average hearing aid is narrowed to $582. 
    • The narrowing of price differences between premium-tiered and the average hearing aid over time suggests that the wholesale cost of mid-tiered devices has increased markedly.
      • This was an unexpected finding and data to substantiate this outcome has been requested.
  • Average Wholesale Cost vs. Economy-Tiered
    • In 2004, the nominal difference in wholesale cost between the average hearing aid and an economy-tiered product was $177. 
    • In 2019, the nominal difference in wholesale cost between the average hearing aid and an economy-tiered product ballooned to $448.
    • This nominal difference of $271 supports the earlier claim that COGS for mid-level products are driving up the average wholesale price of hearing aids. 
      • Again, an unexpected finding that I hope to assess in an upcoming blog.

 

Summary

 

In Part 1, the reader was provided a glimpse of nominal hearing aid wholesale pricing trends for premium- and economy-tiered products, as well as for the average hearing aid. Findings indicate an inverse pricing relationship between premium- and economy-tiered products, as well as a linear increase in the average wholesale cost of hearing aids. The latter finding is conjectured to be driven by wholesale pricing increases in the mid-tiered products.

In Part 2 of this series, wholesale prices will be compared yet again, this time adjusted for inflation.


About Amyn Amlani

Amyn M. Amlani, PhD, is Director of New Practice Development at Audigy, a data-driven, management group for audiology and hearing care, ENT group, and allergy practices. Prior to this position, Dr. Amlani was an academician for 18 years, where he educated future Doctor of Audiology professionals and directed a research laboratory funded primarily from extramural grants and corporate sponsors.

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