The Ups and Downs of Hearing Aid Reimbursement

One of my monthly tasks as Sales Analyst for Phonak is to monitor official market sales data within Europe. Changes to reimbursements and subsidies affect the number of hearing aids that are sold, as funding becomes more or less available to the end user. This has an impact on the trends that can be seen within the market data.

For example, a German court ruling stated that the hearing aid subsidies should rise by 76% to 740€ per hearing aid. No one could have predicted the dramatic effect it would have on the German market.

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Baby Boomers Will Be Sporting More Hearing Devices

As a media futurist, I’ve been pondering what’s ahead for hearing aids since I first got a pair less than a year ago to improve my own deteriorating hearing. “Futurists” can’t precisely predict the future — no one can — but it is possible to identify likely “plausible” futures, or forecasts that are among the most likely to be accurate.

I’ve been thinking for a while that people with mild hearing issues who are in middle age today will begin to purchase hearing aids at a younger age than their elders did. A bit of support for that prediction came this week in a well-done New York Times article, “Conjuring Images of a Bionic Future,” by technology columnist Farhad Manjoo. He wrote:

“It’s only a slight exaggeration to say that the latest crop of advanced hearing aids are better than the ears most of us were born with. The devices can stream phone calls and music directly to your ears from your phone. They can tailor their acoustic systems to your location; when the phone detects that you have entered your favorite sports bar, it adjusts the hearing aids to that environment.

“The hearing aids even let you transform your phone into an extra set of ears. If you’re chatting with your co-worker across a long table, set the phone in front of her, and her words will stream directly to your ears.

“… I’m 35 and I have normal hearing. But if I could, I’d wear these hearing aids all the time.”

Most longtime hearing-aid users, I’m certain, don’t consider hearing aids “sexy.” But the new surge of features that turn new models into something “more than just hearing aids” have the potential to become desired wearable-technology devices.

You may be familiar with the term “wearables” used to describe small advanced technology devices that are worn on the body: fitness trackers, smart watches, smart glasses, wearable tiny cameras, etc. Get ready for “hearables” to be the next big thing. In fact, analyst Nick Hunn predicts in an upcoming market forecast that hearables, or smart earbuds, will be a $5 billion market by 2018. Of course, many of these coming-soon in-ear computing devices will not be primarily for solving hearing problems, but rather to provide users with entertainment, information, and communication direct to the ears.

Photo from Warner Bros. Pictures
In the recent movie “Her,” the main character (Joaquin Phoenix) wears a cordless ear device to communicate with his custom artificial-intelligence operating system, or digital assistant.

Now, I don’t expect that non-hearing-impaired teenagers and young adults will begin appearing in public wearing hearing aids. But the coming wave of cordless smart earbuds — no more tangled earbud wires! — using some of the same technology mentioned in the Times article to provide streaming music and phone calls directly to the ears, should sell well to the mass market. That strikes me as a safe prediction. Early devices in that category — for those with normal hearing — are still too visible to others and have short battery life, but it’s only a matter of time before they get better and are made more “invisible.”

What’s more likely (i.e., a plausible future) is that people with still-mild hearing problems will get tested, fitted for, and purchase new and coming-soon models of hearing aids with innovative, dare I say it, “sexy” features, earlier than the generation ahead of them did.

Currently, the average time that it takes a person who first recognizes that his or her hearing is declining to actually purchase hearing aids is about 7 years! (USA-only figures.) That sounds about right; my own experience was noticing some tinnitus and high-frequency hearing loss several years before purchasing my first pair of hearing aids.

Pete, a friend in his late 40s (I’m 57), seemed to confirm the validity of my prediction. I’ve told him about my experience, from the traditional (vast improvement in quality of life since my hearing aids restored the ability to hear birds sing and hold a cogent conversation in a noisy restaurant) to the innovative (how I love walking the family dog with music streaming in my ears and smartphone in a pocket, sans wires). Pete told me that while he had noticed some mild hearing loss, he hadn’t considered exploring hearing aids until he had that conversation with me.

Pete also noticed the Times coverage mentioned above, and forwarded me the article with these words: “I am starting to consider this hearing-aid thing, even before my hearing gets worse. Why wouldn’t I want to hear better than the average person?”

So, as far as “plausible scenarios” for the future of hearing aids, I’ll confidently predict that one is that of those people, especially in the Baby Boom age bracket, who begin to experience hearing decline, the time between recognition of the (still-minor) problem and resolution (purchasing hearing aids) will drop significantly from the current 7-year-average lag.

I hope that this future scenario does play out. It will improve the lives of many hearing-impaired individuals who otherwise would have procrastinated about finding a solution. And, of course, the makers of hearing aids will benefit from a growing customer base with a lower average age than current hearing-aid users. This likely future scenario also could be expected to increase the percentage of people with hearing problems who actually purchase and use hearing aids (which MarkeTrak estimates at only 25%), especially if hearing-aid prices drop due to technology trends and manufacturers getting a much larger customer base.

This sounds all rosy, I realize, but it’s not so simple. Modern hearing aids remain expensive, and millions of people suffer with untreated hearing loss because they cannot afford to purchase them. This is especially a problem in countries like the USA, where health insurance most often excludes coverage for hearing aids. The U.S. Affordable Care Act (better known as “Obamacare”) takes hearing aids into consideration, but most states’ ACA health insurance offerings don’t cover hearing devices, nor does Medicare.

Nations with more-generous healthcare systems (e.g., Finland) don’t leave behind as many poor people with impaired hearing — but even with hearing-aid assistance from a single-payer health-insurance system, the less affluent probably won’t be able to afford to upgrade to models that include “fancy” features such as linking with a smartphone.

Still, this technological revolution in hearing-aid technology should improve what today are some dismal statistics. Indeed, if hearing-aid manufacturers can succeed in making their products “sexy” and thus reduce the stigma that many people feel about wearing hearing aids, perhaps someday we’ll be walking in public and on close observation realize that a large percentage of our fellow citizens also have digital devices in their ears. … That’s a pleasant future scenario.