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Hearing aid prices in Australia varies greatly due to a number of factors, which I will discuss in this article.
Shopping around is generally a good idea.
Unfortunately shopping around is not as simple as comparing the price of a specific hearing aid between one retailer and another. Doing this, without understanding the nuances in the hearing aid pricing, could mean you end up with affordable hearing aids based on the price alone but with terrible value.
By studying this article, you will have all the tools on hand to make an informed comparison.
Hearing aid costs in Australia is not regulated
Australian consumers enjoy great legal protection though the ACCC (Australian Competition and Consumer Commission) and other government bodies. This means that pricing of most goods, including quality hearing aids, aren't regulated to allow for free competition. Competition can and has driven hearing aid pricing down and that benefits you.
Due to this, however, you will likely find a large discrepancy in pricing between one retailer and another.
Hearing aids tend to be more expensive in Australia than overseas
The perception that hearing aids seem to be more expensive in Australia is not just your imagination. There are very good reasons for this and much of it has to do with protection of you as a consumer as well as other reasons I'll discuss below:
1. Hearing aids are classed as medical devices
Modern hearing aids are classed as medical devices by the Therapeutic Goods Administration.
As such, they need to be locally registered with a local sponsor who needs to comply with all the legal requirements, which include various things such as providing local support, repair facilities, etc. This means that there is quite a bit of cost involved in supplying medical goods in Australia and this gets passed on to you.
BEWARE: Some less than honest retailers have started importing hearing aids directly from overseas for local resale at lower pricing. This might seem attractive, but you miss out on local protection and are exposed many other potential risks if you purchase from these retailers.
Typically these retailers sell online only and despite being based in Australia, there pricing seems significantly lower than those offered elsewhere.
2. Manufacturers sell hearing aids at different prices to local suppliers in different countries
Most good quality hearing aids are produced in Europe with at least one smaller brand being made in the US. There are 6 major hearing aid suppliers globally that serves around 90% of the market.
Do to varying legal requirements in all the different countries they sell hearing aids in, they tend to set up a local group company that purchases hearing aids from the global manufacturer. The price at which the hearing aids are sold to the local distributor seems to vary depending on volume, the county's tax system, cost of transport, import duties and many other factors.
So if you compare Australia with 25 million people of which 10% would have hearing loss (2.5 million), and 25% would use hearing aids giving us a total hearing aid market of 625,000 people split between 6 suppliers with each user only replacing their hearing aids every 5 years or so.
That would leave around 125,000 people needing hearing aids per year in Australia. Divided between 6 main suppliers, this leaves about 20,833 customers per supplier per year (presuming they were all equal).
Compare this to a country like the US with approx. 331 million people, which then leaves 1.65 million people needing hearing aids per year, giving each big supplier, if divided equally, 275,833 people buying their brand per year.
Although these calculations don't take every factor into account, one can see that the US market is around 13 times larger than the Australian market!
Since local pricing is also influenced by volume discounts, the US enjoys much larger volume discount on hearing aids than the local Australian distributors receive.
This alone has a large influence on the price you pay for hearing aids locally.
3. Government funding towards hearing aids differ in each country
Australia enjoys one of the best government funded hearing aid systems globally in the shape of the Hearing Services Program.
This program mandates that each supplier has a range of hearing aids available at fully subsidised pricing. It can't be just any old hearing aid either because the standard the hearing aid needs to meet is higher than most manufacturer's bottom of the barrel models.
This not only means that the local distributor is unable to supply their lowest cost offerings in Australia, but also the price of the most basic hearing aids in Australia is set by government. This price is often lower than they sell these in other countries, so the losses need to be made up on their other higher end models.
This is the one exception to the general rule that hearing aids are more expensive in Australia. Entry level hearing aids are often cheaper here than overseas. These fully subsidised hearing aids make up the majority of annual sales. So the losses made on these aids need to be recovered on other products, adding to their cost, and making hearing aids more expensive.
4. The local cost of doing business differs greatly between countries
Australia employment law has been designed to protect the employee in ways not available to workers in other countries. Australian employees rightfully enjoy some of the best minimum wage rates and leave allowances in the developed world.
This is fantastic for all Australians, but it also means that we tend to pay more for products and services where human labour in involved. These regulations not only makes it more expensive for suppliers to operate in Australia, but it also makes services attached to the hearing aids more expensive locally compare to overseas.
5. Warranty conditions and local support vary between countries
As mentioned before, Australian consumers enjoy a range of wonderful protections. This also relates to hearing aid warranties.
All hearing aids sold in Australia come with comprehensive 3 year warranties that need to be supported with local repair facilities by the supplier. On top of this, all suppliers also offer a one year loss and damage cover to their hearing aids which all adds to the cost.
In some countries, hearing aid warranties appear to be limited to one year, which makes it cheaper to supply them in those countries than locally.
These factors are by no means extensive, but they do cover what, in my understanding, causes much of the difference between local and overseas pricing.
NOTE: If you choose to buy a hearing aid overseas, you are unlikely to enjoy more than a 1 year local (Australian) warranty from the date of purchase. Repairs can cost up to $500 per aid that is out of warranty, so this could be a costly mistake.
Factors that affect pricing between one retailer another - what to look out for when comparing hearing aid pricing between one retailer and another
There are many ways to make one hearing aid price appear better than the same hearing aid elsewhere.
The issue is that the lower price option may not always represent the same value or offer the same hearing benefit, despite using the exact same hearing aid. These factors are discussed in detail below:
Are the hearing aids sold bundled or unbundled?
Unbundling refers to hearing aids being invoiced separately from any other services, where bundling is a total price including services and or consumables for a set period of time.
Unbundled hearing aids
Hearing aids sold online tend to be completely unbundled, meaning you pay just for the hearing aids but they don't come with the services that ensure they are set up optimally, nor is there any ongoing fine tuning and support to adjust the hearing aids as your hearing changes over time.
Unbundled hearing aids means that the sticker price appears much more affordable than the bundled offering, despite the value being less.
When you purchase unbundled hearing aids, you will need to pay for clinical time and consumables as you need them. Some essential services to even get the hearing aids set up in the first place might not be included, meaning even your initial price might be higher than first impressions suggest.
Pros of unbundled pricing:
- Unbundling means your initial purchase price might be lower
- You are empowered to just pay for services you need, controlling costs
- Ongoing services are paid for when needed allowing you to spread the cost a bit
- It is very easy to compare pricing between one unbundled hearing aid and another
- You could theoretical purchase the hearing aid from one retailer and get the services done elsewhere. (Note: if you purchase a hearing aid online, you may have trouble getting it serviced as most clinicians are not willing to carry the liability for a hearing aid not supplied via professional channels)
- If you have a health insurance plan that pays separately for visits and hearing aids, this may be a good option.
- Services with unbundled pricing can easily list the product pricing online, giving you more insight without having to contact the provider.
Cons of Unbundled hearing aid pricing:
- You have no idea what the total price of the extras might be over a set period of time
- You might think twice before requesting assistance due to the cost, which negatively affects your long term benefit. (This could be a BIG issue as our own research showed)
- It makes it very hard to compare the value of the unbundled offering with the value of a bundled hearing aid pricing.
- Exchanging the hearing aid for another incurs additional services fees for the exchange
- You may not be offered full refunds in the event of a return as the service has been rendered and charged for separately.
- Pricing for services and consumables could easily go up as time goes by, meaning your hearing solution could cost more than expected.
Bundled hearing aid pricing
Most hearing aids sold in Australia, outside of the government (Hearing Service Program, which is really an unbundled model) are sold as bundled pricing. This is the way hearing aids have been traditionally sold.
Bundling inclusions can vary depending on the number, type or frequency of services included, as well as the time period involved in the included services. Some bundled pricing includes consumables like batteries, wax filters, moulds, domes etc, while others don't.
Most bundled services rely on you to contact the clinic when you want services, while others, like our own, send out active recalls encouraging you to come in for services.
Considering the cost of service is a significant part of the bundled pricing, the latter definitely offers much greater value. Providers who wait for you to call them are basically playing the odds that you won't go to the effort of contacting them unless things are really going poorly. Unfortunately, this means you might have had less than optimal hearing for months before getting it looked at.
Pros of Bundled pricing:
- You have one price to worry about and won't be charged again until the included services have been expended.
- You are much more likely to return for help when needed as you don't have to worry about additional unknown costs. This is likely to lead to greater long term hearing aid satisfaction.
- You should expect that a reputable company will set up the hearing aids optimally without additional charge within bundled pricing
- Returns are more likely to be refunded 100%, even if services have been rendered up to that point
- Exchanges to other hearing aids generally incur no additional service costs, apart from paying or being refunded the difference in price.
- You can build up a more solid relationship with your provider as you are more likely to access their services more frequently than in the unbundled model.
- The cost of your hearing aid over the bundled aftercare period could be lower than the equivalent unbundled offer if you make use of the included services.
Cons of bundled hearing aid pricing:
- It makes it more difficult to compare various service/product offerings as you need to figure out what is included with each and what the value of each is to you.
- The exact same inclusion could have a different value depending on how it is delivered. E.g. active recalls every 6 months over 3 years have much greater value than unlimited visits over 3 years without active recalls. This is because you are much more likely to use clinical time in the first option than with the second.
- You might need to spend more money on services if you relocate to an area where your provider does not operate. (However, it is much easier to find someone to assist than with unbundled internet-bought hearing aids)
- You might pay more than you need to if you are truly someone who is experienced with hearing aids, needing very infrequent clinical assistance.
- The initial purchase price is likely to be higher than the unbundled offer, this can be as much as 50% more expensive than the unbundled offering. Yet, the value of the bundled offering may be much more than the 50% difference.
Which is best for you?
The choice of which is best comes down to:
- Your needs
- The complexity of your loss
- Your hearing aid experience, and
- How clearly the bundled inclusions are stipulated.
With either option, make sure you take into account the cost of required, and likely ongoing services, then add these up when comparing your options.
Take into account whether either option includes active recalls, which act as reminders, and help achieve the best ongoing usage and benefit with your hearing aids or not.
Take into account the cost of inclusions such as batteries/charger cases and other consumables.
Are you likely to move away from the provider? Can they offer remote services instead of in clinic services when needed?
Take the time to understand the inclusions before making a final decision.
Our experiences with bundling and unbundling
Value Hearing started with a bundled service and were one of the first in Australia to experiment with unbundling.
What we found was eye opening and challenged our vision which is to empower those with hearing loss to engage and thrive through optimised hearing.
We started off bundling all our services and batteries for three years. This mean that all our testing, fitting appointments, follow-up services and ongoing care appointments were all initially included in our price. We did this for six years until we started being challenged by aggressive online companies.
We then changed to a hybrid unbundled model called Fit and Go.
Here we offered lower initial hearing aid pricing by only offering essential services such as the assessment, fitting and initial follow-up services during the initial 60 days as our standard offering. This offer was popular with clients and our clinicians alike, but unbeknownst to us, things were going wrong over the long term.
Despite still practicing active 6 monthly recalls, fewer people were acting on these due to the fact that services would be charged for. This would happen even though they clearly had issues that needed addressing. The result of this experiment was that we had fewer satisfied clients and and some actually gave up using their hearing aids as they did not work as well as when they first got them. We learnt that better client and clinician education is key to providing you with an empowering experience. Choice is important, but guidance is required to make the choice that is best for you.
We now offer a choice of bundled and ubundled pricing, with active recalls every 6 months, and our usage and satisfaction rates are now some of the best in the industry - better than 95% reported regular hearing aid use.
This experiment is proof in my eyes, that a hearing aid without a carefully planned service journey could easily end up as a VERY expensive paperweight.
Some clinics have more buying power affecting hearing aid pricing in interesting ways
Volume pricing is not only a factor between the manufacturer and their local distributor as discussed earlier. It also plays a massive role in the price a local retailer pays for their hearing aids from the local distributor.
The more units a retailer buys, the better the discounts they receive. A retailer can also sign a contract stating they will mainly sell the distributors brand which then gives them a bigger discount. This however limits your choice of hearing aid with that retailer and there is NO guarantee the discount is passed onto you.
Some manufacturers also own retailers. Ironically their pricing tends to be quite high, until you shop around and show them a cheaper quote.
Then they are more than willing to match after the fact. As they only sell the brand owned by the manufacturer, one would expect them to be a lot cheaper at the outset, but this currently does not seem to be the case.
Some independent clinics, like Value Hearing focusses on providing the client with the best solution available from all the major brands. This means you end up with the best option for your hearing loss. On the flip side, it also means the discounts available to us aren't generally as good as those limited to one or a couple of brands.
Some very large international retailers bypass the Australian supplier by negotiating directly with the manufacturer's overseas head office to buy in bulk. This allows for pricing that is hard to match for the service and choice-oriented local independent clinic.
It is important to remember that the level of service is as critical, if not more important, than the hearing aid itself. So keep this in mind when making a pricing decision.
Some clinics use 'own brand' hearing aids which could affect cost
Some very large international retailers use their global purchasing and negotiation power to procure 'own brand' hearing aids from the global hearing aid manufacturers. These are often older or defeatured models, where the manufacturer has already recouped their research and development costs. These are then sold to these retailers under the retailers own brand at pricing not available to any non-global clinic.
The advantage for you is very cheap hearing aids, but is comes at a cost. You might be paying for severely out of date technology, which may not give you as a great a benefit as the modern option available to everyone else locally. You may also have issues getting it set up by anyone except the original retailer.
This rebranding can make it impossible to price shop as that brand is only available at a single retailer. Some use this to make the rebranded models more expensive than the real brand model, leaving them with massive profit margins and a captive customer unable to shop around for the best price.
Conclusion
Hearing aid pricing can vary greatly between clinics and countries.
Make sure you understand what you need and what you are actually offered.
A hearing aid without service is pretty much worthless.
Don't get lead astray by a low $ number without understanding the value it truly represents.
