Inside the Research | July 2017 Hearing Review
The argument that a new FDA class of over-the-counter (OTC) hearing aids will dramatically expand the hearing healthcare market by making hearing aids more affordable is an interesting one. However, research into what economists call “price elasticity”—or how much growth occurs in terms of market penetration when the cost of a product is reduced/increased—tend to suggest otherwise when it comes to hearing aids. It’s not an easy subject to understand, so this month we thought it would be a good idea to interview one of the foremost experts on price elasticity and hearing aids, Amyn M. Amlani, PhD. Dr Amlani is professor and chair in the Department of Audiology and Speech Pathology in the consortium program between the University of Arkansas for Medical Sciences and the University of Arkansas at Little Rock.
Beck: Good afternoon, Amyn. It’s always wonderful to speak with you. I’ve always enjoyed your work on price elasticity and related models.1-3
Amlani: Hi Doug. Thanks. Always a joy to speak with you, too.
Beck: I’d like to jump right in and ask about your new article, co-authored with Michael Valente, titled “Cost as a Barrier for Hearing Aid Adoption” in the May 18 edition of JAMA Otolaryngology-Head and Neck Surgery.4 It was brief and to the point. Essentially you said cost is an issue, but cost is not the major reason people don’t seek hearing aids.
Amlani: Exactly. In fact, when we remove cost from the equation, the changes in economic modeling of adoption rate are rather small.
Beck: Tell me more about that, please? In your article you report that in countries where hearing aids are free, nearly free, or heavily subsidized by the government, the uptake is about 40% for eligible people with hearing loss. Is that right?
Amlani: Yes. In Norway, hearing aids are fully subsidized—actually free—for the citizenry, and the uptake is about 42.5%; in the UK, hearing aids are free, too, and the uptake is about 41%; in Switzerland, another country where hearing aids are free or heavily subsidized, the uptake is 38.8%. So let’s round these out to about 40% uptake when hearing aids are free—which indicates that about 60% of people with hearing loss have no interest or intention to acquire hearing aids.
Beck: And so, for comparison, that begs the question…For people with hearing loss in the United States, even though they generally have to pay for hearing aids, what is the uptake?
Amlani: Grundfast & Lui5 state the hearing aid adoption rate in the United States, based on MarkeTrak 9, is approximately 33%, and they say this results in a “poor” adoption rate because hearing aids are priced at $2,000 each. We believe cost is a factor, but clearly the data indicates there’s much more to it.
Beck: One of the things this brings to mind is the idea of “full employment.” Economist William Dickens estimates that for the United States, although full-employment varies, it hovers around 5.5% for the civilian labor force. That is, there are certain things which prevent every willing and able person from having a job, and we’ll not likely see 100% employment.
Likewise, with the numbers you just presented—similar to the statistics related to “full employment”—“full hearing aid access” is an artificial line somewhere around 40% in places where hearing aids are free. Of note, in the United States, where hearing aids are mostly paid for by the consumer, we have a 33% adoption rate. So it seems most people who would like to acquire hearing aids already have access?
Amlani: Yes, well, in general, that appears to be a true statement. However, one must also consider that hearing aids can be acquired through quite a large number of channels for one-half, and arguably one-quarter, of the cost [eg, $500-$1,000]. I think if we examined this in more detail, we would find the US adoption rate is actually surprisingly high. Further, if the US government decided to fully subsidize hearing aids, the adoption rate would increase by only 5-7%—essentially the same uptake as that found in the UK and Switzerland.
Beck: Further, the data indicates that, for people with mild hearing loss in the United States, 90% do not acquire hearing aids. However, to me, it’s not as much about cost as it is about stigma and the “pain versus gain” trade off. That is, people tend not to seek relief from hearing loss until it causes substantial “pain” with regard to work, recreation, or social issues. If one can get by without hearing aids, they tend to do so…and, of course as hearing loss increases, it becomes increasingly harder to get by without hearing aids!
Amlani: Absolutely. In that same new article, we also presented data from a recent VA study by Yueh and colleagues6 that looked at about 650 veterans with hearing loss. The data indicated that only 28%—that is 5% fewer than the 33% noted above—heeded the advice to seek hearing aids, and fewer than half the vets who sought hearing aids ended up with them, even though there was no personal monetary cost. So again, it doesn’t seem like the financial barrier is as significant as one might think intuitively.
Beck: And you found the same or similar results in Australia?
Amlani: Yes, the situation there is about the same. Globally, price is clearly a secondary factor in uptake, but uptake is dependent on many factors. There are internal factors that are patient- driven, such as emotion, denial, attitude, expectations, and self-efficacy, which the practitioner can assess and provide counseling and guidance.
External factors include variables such as social acceptance, product aesthetics, and sound clarity/sound quality. The primary factor for uptake is the patient’s perceived value, which stems from the services provided by the practitioner and includes counseling, rehabilitation, real-ear measurements, and the inclusion of the family and significant other as part of the treatment process.
Beck: And so it seems to me you’re not a fan of over-the-counter acquisition of hearing aids?
Amlani: Not true! I have been an advocate of OTC devices for many years. An increase in product selection and channels are economic foundations for increasing our “full-employment” goal in hearing aid uptake.
However, the product alone is not the silver bullet for economic growth and patient satisfaction. Recently, you, Fabry, Powers, Abrams, and Edwards8 co-authored a “manifesto” that provides a reasonable approach and reflects a defensible protocol. This protocol called for people with mild hearing loss to explore their options, at their own behest, at a reduced price, and without initial professional involvement.
This form of economics is based on the premise of self-efficacy—in other words, one’s belief to be successful on a task—which will reduce internal factors that negatively impact traditional hearing aid uptake. The protocol further recommended that the OTC line be drawn at moderate hearing loss, to assure that people with this degree of hearing difficulty seek professional guidance prior to acquiring hearing aids, to maximize their opportunity for success with hearing aid amplification combined with professional diagnostics and management.
Beck: Thanks Amyn. I believe your article brings forward many interesting facts and lessons from the real world, and I hope our professional colleagues and legislators read it before they make up their minds on this very important issue.
Amlani: Thanks Doug. I appreciate your endorsement and thanks for your interest.
Amlani AM. How patient demand impacts pricing and revenue. Hearing Review. 2008;15(3)[Mar]:16-19.
Amlani AM. Impact of elasticity of demand on price in the hearing aid market. January 9, 2007. Available at: http://www.audiologyonline.com/articles/impact-elasticity-demand-on-price-955
Amlani AM. It’s not immoral to increase hearing aid prices in an inelastic market. Hearing Review. 2009;16(1)[Jan]:12-16.
Valente M, Amyn M. Cost as a barrier for hearing aid adoption. JAMA Otolaryngol Head Neck Surg. Published online May 18, 2017.
Grundfast KM, Liu SW. What otolaryngologists need to know about hearing aids. JAMA Otolaryngol Head Neck Surg. 2017;143(2):109-110.
Yueh B, Collins MP, Souza PE, et al. Long-term effectiveness of screening for hearing loss: the screening for auditory impairment–which hearing assessment test (SAI-WHAT) randomized trial. J Am Geriatr Soc. 2010;58(3)[Mar]:427-34.
- HIA comments on FTC “Now Hear This” workshop and OTC hearing aids. Hearing Review. 2017;24(6)[Jun]:44-50.
Douglas L. Beck, AuD, is Executive Director of Academic Sciences at Oticon Inc, Somerset, NJ. He has served as Editor In Chief at AudiologyOnline, and Web Content Editor for the American Academy of Audiology (AAA). Dr Beck is an adjunct professor of audiology at Lamar University, and adjunct clinical professor of communication disorders and sciences at State University of New York, Buffalo. He also serves as Senior Editor of Clinical Research for the Hearing Review’s Inside the Research column.
CORRESPONDENCE to Dr Beck at: [email protected]
Citation for this article: Beck DL. OTC, hearing aids, and cost as a barrier to purchase: An interview with Amyn M. Amlani, PhD. Hearing Review. 2017;24(7)[July]:38-39.