Are hearing aid centres ripping us off?

March 29, 2015
hearing aid device

Instead of berating my mother about her dodgy hearing, I should have listened to her when she told me about the hearing aid industry. Hearing aid centres were proliferating around her like mushrooms after rain, she told me. Local newspapers were full of advertisements for free hearing tests. And some of her friends were being cold-called by clinics. “It’s gone mad over here,” said my mother from the other side of the country.

A couple of weeks ago, I wrote a blog post titled, Mum, Dad: why won’t you get a hearing aid? It garnered a big response, elicited various experiences, but also quite a lot of dissatisfaction with the product, price and service. What I’ve learnt since has led me to believe we need an inquiry into the hearing aid industry and the government’s Hearing Services Program that provides free aids to pensioner concession card holders.

It’s no wonder so many hearing aids are left in the drawer, as I mentioned last time. Many consumers aren’t getting a good enough service in a system open to conflicts of interest. It’s a system that encourages the flogging of hearing aids rather than the provision of a holistic service with happy outcomes. Secret commissions are paid to staff for ‘upselling’ to more expensive products, according to insiders. Overseas hearing aid manufacturers have bought up hundreds of Australia’s hearing centres to distribute their product. Ethical audiologists resent the way they’re sometimes forced to practise, including having to meet sales targets.

As well, taxpayers are losing out. Around $150 million of taxpayers’ money is wasted every year due to unused hearing aids that were provided through the government scheme, according to Professor Anthony Hogan, of the University of Canberra and ANU. His book, advocating a new approach to hearing services, will be published in August.

“The hearing aid industry has developed an extensive direct marketing campaign where they target, and in turn, hassle older people to come in for a hearing aid,” Professor Hogan told me. It’s a case of “catch, match and despatch.” But too little attention is paid to help people prepare for a hearing aid – if they’re not psychologically ready they won’t use it. They’re not given enough help to manage the aid, or offered an alternative (cheaper) device. And they get little advice on communication techniques as simple as knowing where to sit in a room.

Using a data base of 13,000 Australians over 55, Professor Hogan has found 25 per cent of those with a hearing aid don’t use it, and another 13 per cent use it only sometimes. “While hearing aids sales are up, usage is down,” he said. This is a colossal waste. Even though many customers get their hearing aids free, the taxpayer foots the bill and should not be subsidising an inefficient system that’s leading up to 40 per cent of clients to abandon their aids or use them incorrectly.

A major problem, according to Michele Barry, chief executive officer of Better Hearing Australia (Victoria), a non-profit service, is that hearing aid centres are paid by the government for dispensing hearing aids but aren’t accountable for the outcome. “They should be required to ask their customers ‘Are you using your hearing aid? Why not?’” she said.

As first outlined in the ABC’s Background Briefing program in November, the payment of secret commissions to staff, especially for “upselling” customers into more expensive hearing aids, is a problem. This occurs even in Australian Hearing centres, the retail outlets run by the government and which are expected to be privatised.

It’s unclear how widespread commissions are in the industry. I spoke to one audiologist who’d refused to take commissions from his former boss. The practice is against the audiologists’ code of ethics but centres can be owned by business people who aren’t audiologists. “We’re hearing of most people being ‘upsold’ hearing aids and that’s often because audiologists are paid a commission,” said Ms Barry.

Ross Dineen, past president of Independent Audiologists Australia, tells of one woman in her late 60s with mild hearing loss, having been given a single option of hearing aids that cost her $12,000. “And she was told if she didn’t use them she’d probably suffer cognitive decline…..She didn’t need anything.” The IAA is co-sponsoring a conference in May on conflicts of interest in the profession and maintaining independence. If commissions are bad in the financial advice industry, they’re surely unacceptable in the medical field.

A wide range of high quality hearing aids is free under the government scheme. Not every older adult needs, or can use, the extra options on models that cost them thousands more. In September, Gareth Brown, of Australian funds management firm, Forager, invited readers of his blog to respond with their experiences of hearing aids. The firm was considering whether to invest in the big hearing aid manufacturers, a “growth sector with high margins,” as he told me. One man responded: “My best mate is an Aud[iologist] for one of the leading audiologist clinics in Australia, and I’ve asked about the difference in hearing aids. He basically summed it up by saying there is no difference between all the products. Other than the price range of $1k and $12k, and his commission that he receives ranging from very little to over $1000 for the top of the range device…..”

Brown concluded that “many of the customers seem as, or more, happy with their $2,000 unit as a $10,000 unit”, and that the big manufacturers would soon come under pressure from cheaper generics. As well, according to Professor Hogan, online sales and alternative distributors, such as Hear for Less, will further jolt the status quo. People might consider paying for a hearing test, getting a copy of the results, and buying online.

Professor Louise Hickson, the president of Audiology Australia, the peak body for audiologists, said the profession had unsuccessfully entreated governments to regulate the fitting of hearing aids. She said customers had “every right to ask questions about actual or potential conflicts of interest….. They should trust their audiologist – that is very important as the relationship is ongoing.”

She also said she was very comfortable when her mother was recommended hearing aids that cost $4000 more than those she could have received through the government program. “Her communication needs were quite complex and I had the advantage of knowing ….the higher level of technology would benefit her and it did.”

It seems to me a Senate inquiry or Australian Human Rights Commission inquiry is needed to shed light on the industry. Customers, taxpayers and professionals need a more transparent system.

How satisfied have you been with product, price and service? Please leave a comment.

Coming of Age is updated every Monday. Click ‘Subscribe for free’ to have it emailed to you.

Recent Posts

    Getting rid of our parents’ stuff is painful work



    It was hard to believe no-one wanted the antique dining table, the setting for 50 years of family celebrations. The children couldn’t sell it or give it away. Nor the matching chairs. Far from fighting over their mother’s possessions, the …


    read more...

    Mum, Dad: why won’t you get a hearing aid?



    The television is blaring. The Islamic State propaganda screams from the set. My mother is watching the news. She’s left her hearing aids in the bedroom. Hearing aids, the joke goes, can be found in three places – in the …


    read more...

    Older workers: more action, less rhetoric



    The ‘grey army’ is a key to Australia’s future prosperity, according to Treasurer Joe Hockey. But what can the government do to increase participation of older people in the workforce? Its Restart program which offers employers $10,000 to hire an …


    read more...