Six Bidders Compete To Acquire Siemens Hearing Instruments

Siemens has narrowed down the list of potential acquirers in its auction of the Siemens Hearing Instruments business to five private equity firms plus one strategic acquirer. Siemens is among the top five hearing aid companies worldwide but, according to news reports, its shrinking sales and profit margins lagged industry leaders Sonova and William Demant in 2009. News reports put the value of the unit at more than 2 billion euros ($2.88 billion US). The winning bidder is expected to be picked by the end of February. I can’t wait to see whether the newly independent entity will inject a shot of investment and growth into a hearing-aid industry that’s badly in need of new competitive energy.

America Hears, Inc. Upgrades Entire Hearing-Aid Line to 32-Channel Digital Signal Processors

With its new Independence Family of hearing aids, America Hears, Inc., has upgraded its entire family of digital hearing aids to 32-channel digital signal processors. And, in line with its stated goal of remaining the price/performance leader among hearing-aid manufacturers, it has set prices ranging from $799 to $1,299 per hearing aid, less than half the price charged by other name-brand manufacturers of comparable-performance hearing aids. Disclosure: I wear a pair of America Hears custom hearing aids and am incredibly happy with them. I also intend to get a pair of the new Independence hearing-aid models to hear for myself the improvements the company has made in its sound-processing system.

The new, high-performance, low-cost hearing aids feature a Voyageur II digital signal processor from Sound Design Technologies, Ltd., that processes 32 independent streams of sound to provide tuned amplification at the broadest range of frequencies available in the industry. And the Advanced Dynamic Range Optimization (ADRO) sound processing software from Dynamic Hearing Pty Ltd. features a new, improved enhance speech in noise (ESIN) algorithm that amplifies the high-frequency sounds that comprise 60% of speech, attacking the problem of hearing speech in noisy environments such as crowded restaurants.

The America Hears direct-from-factory-to-consumer Internet sales model enables the company to keep costs to the end user low. At the same time, its user-adjustable programming software enables you to take charge of tuning your own hearing aids after they are programmed to your audiogram at the factory.

The America Hears Independence hearing aids come in a range of styles, from receiver-in-the-canal, to open fit, to behind the ear, to custom models. There are up to four user-selectable four program settings for different listening environments. And it features data logging–the ability to record and track the output of your hearing aids over time to understand how they are being used in different listening environments.

HearUSA Scores Hearing-Aid Distribution Deal With AARP

HearUSA, the U.S. chain of hearing-aid retail outlets, scored a major distribution deal with AARP Services, Inc. to offer discounted hearing aids and extended warranties to the nearly 40 million U.S. members of the world’s largest service organization for adults aged 50 and older. Next to an endorsement by Oprah, a distribution deal with AARP is one of the most coveted marketing prizes for companies selling to middle-aged-and-older consumers. AARP has long offered advice on hearing health but has been short on commercial offers for hearing aids to match the discounts it provides for vision products and general health insurance plans. The HearUSA deal should provide similar incentives for seniors to take care of their hearing needs, although the initial press release held back on details of the discounts and other offers that will initially be offered to customers in New Jersey and Florida and later throughout the United States.

The arrangement is good news for Siemens, which is a major investor in HearUSA and supplies most of the hearing-aid products sold by the company. In addition to providing a financial boost to HearUSA, the AARP deal may enable geographic expansion of its retail chain, which currently sells hearing aids through 180 company-owned hearing care centers in 10 states in the U.S. and its Hearing Care Network comprised of over 1,900 affiliated audiologists in 49 states.

HearUSA this week also announced second-quarter net income of $1.1 million, compared to a half-million-dollar loss in the previous quarter. Like other companies in the hearing-aid industry, HearUSA has seen a falloff in sales due to the recession, but cost-control measures in addition to the sale of its Canadian subsidiary boosted both the bottom line and balance sheet in the second quarter of 2009.

Rock & Roll Icon Stephen Stills Talks About How Hearing Aids Alleviate His Lifelong Hearing Loss

Oticon USA has used the 40th anniversary of the Woodstock concert to do a nice PR piece on Crosby, Stills & Nash player Stephen Stills, who uses Oticon Dual hearing aids. The group’s performance at Woodstock was a centerpiece of the film made about the event and kept their music at the top of the charts for years.

Unlike many rock musicians whose first deafness was a direct result of constant exposure to too-loud music, Stills was diagnosed at nine years old with a slight hearing loss in one ear. In the interview published on the Oticon web site, he shares some good insights on what it’s like to gradually accept your hearing loss and do something about it. He’s also a good example of someone who’s managed to cope with his hearing loss and continue doing what he loves:

“Now when I perform, I am able to hear the top end of the music and get back in tune….Now I can hear the subtleties of the music. This has improved my playing and my singing.”

Geek Alert: How Knowles Electronics Makes Hearing-Aid Microphones Smaller and Smarter

I’ve always been amazed by the directional microphones in my hearing aids. They are super-sensitive, they can be adjusted to catch noise either 360 degrees or just from the person speaking to me, and they are smaller than your fingernail. The technology that has to go into such finely tuned instruments is amazing, and I recently came across a good video of Daniel Warren, director of research for Knowles Electronics, that gives a flavor of the rocket science behind them. (It’s a promotional video for Wolfram Research, known for the Mathematica software tools used by engineers and, more recently, for the revolutionary computational search engine, Wolfram Alpha, developed over the past decade by computer science genius Steve Wolfram). The video is also a good example of the pains engineers have to go through to explain in layman’s terms how their inventions work and why they are so important. My rule of thumb is, even if I can’t understand half of what they say, if the product works, I will use it.

Opinion: Hearing Aid Pricing Should be More Transparent

The recent Consumer Reports survey of hearing-aid pricing and fitting practices highlighted a growing problem for the hearing-aid industry. Increasingly, consumers are starting to wonder why a few small digital components that can be purchased individually from wholesalers for tens of dollars each (digital signal processor, microphone, amplifier and software) end up in a set of hearing aids that can cost thousands of dollars. It’s time for more transparent pricing in the hearing-aid industry. Digital technologies are becoming standardized, and the cost of components continues to decline.

And there are good alternatives to the established brands now for cost-conscious, tech-savvy do-it-yourselfers: America Hears, which builds top-quality digital hearing aids and sells them online, programs them to your audiogram at the factory, sends you the software to make your own adjustments, and has licensed audiologists at the end of the phone to give you as much help as you need. All for under $1,000 a hearing aid. But most other comparable top-quality digital hearing aids still cost two to three times that much. Why? The answer is in the cost of the service required to get a custom fit. If you don’t dare do it yourself, a good audiologist truly is worth his or her weight in gold, especially if your hearing profile is complex. Getting a comfortable fit and programming assistance tuned to your audiogram usually requires multiple tries and is seemingly as much art as science. An audiologist who will stick with you through multiple adjustments is worth a significant mark-up. But it’s fair to question the value of the markup above and beyond the wholesale price of the basic hearing instrument components.

The hearing industry for the most part remains stuck in a very old distribution model which has restricted growth and shut off affordable options for a large segment of potential buyers in need of hearing assistance. Today most hearing aids are sold by audiologists who charge a single price for the hearing instrument and the service they provide. They give you a hearing test and fit you with hearing aids that meet your specific needs. Their invoice most often does not include line items for the cost of the hearing test, for the ear molds, for the hearing instrument, or for follow-up service. If it did, you would see there’s a lot of cost built into the time they put into helping you out. If you don’t need much help, they make a lot of money. If you are a difficult case requiring a lot of adjustments, they make less. This model worked well until recently. But now, digital technologies are making many more options available for people with different kinds of hearing loss. Open-fit designs mean many consumers don’t need an earmold fitting, and good digital amplification is making it possible for many people to get the hearing assistance they need from low-cost manufacturers selling direct, over the counter. One manufacturer, Songbird Hearing, is even offering disposable hearing aids that you can buy direct from their web site to address mild hearing loss, without a hearing test if you sign a medical waiver. Read more

Consumer Reports Survey Finds Resellers Routinely Double Wholesale Prices of Hearing Aids

A Consumer Reports Magazine investigation of hearing-aid sales and fitting practices found that resellers commonly mark up the prices of new hearing aids more than 100 percent over the wholesale prices paid to manufacturers. In a major report published in the magazine’s July issue, Consumer Reports editors followed a dozen hearing-impaired patients for 6 months as they shopped for and used hearing aids, lab-testing the features of 44 hearing aids. The magazine’s National Research Center also conducted a survey of 1,100 Americans who had bought a hearing aid in the last three years.

“Consumer Reports verified the wholesale price of several of the hearing aids tested, finding on average a markup of 117 percent,” the magazine said in a news release. “This means that there is room to bargain,” said Consumer Reports Senior Editor Tobie Stanger, who added that only 15 percent of survey participants negotiated for a lower price.

Consumer Reports also found that most hearing-aid purchasers they tracked got what it called “mediocre” fittings. “Two-thirds of the 48 aids purchased were misfit: They amplified too little or too much,” the news release said. However, even with substandard fittings, the survey indicated that the hearing-aid industry has started to overcome past problems with customer satisfaction by finally delivering hearing assistance that actually helps users hear better: 73 percent of the users who bought hearing aids were highly satisfied.

The prices of the hearing aids in the Consumer Reports investigation ranged from $1,800 to $6,800 per pair. Currently most hearing aids are sold by manufacturers to audiologists, who resell the products while providing essential services such as a hearing test, fitting, programming the amplification settings to match the patient’s unique hearing profile, and providing warranty repair service. Audiologists justify the mark-up over the manufacturers’ wholesale prices by providing service as part of a set price for the hearing aids.

More Courts Should Provide ‘CART’ Real-Time Video Transcription Services

I was excused from jury duty today after I told the officer at the reception desk that none of their amplification schemes, even the portable listening devices they provide as an accommodation for people with hearing loss, would work for me. I told him I’d be happy to serve if they could provide CART service–communications access real-time transcription–where they wheel a TV monitor into court and provide real-time video captioning of the proceedings. But they still don’t provide that service in the Massachusetts Superior Court House where I was called to serve.

CART systems have been around for many years and have long been recognized by the federal government as a “reasonable accommodation” under the Americans with Disabilities Act (ADA). So it’s disappointing and a little surprising that CART service isn’t yet a standard accommodation for hard-of-hearing people called to jury duty. Read more

It’s Better Hearing and Speech Month

Better Hearing and Speech Month is a 75-year-old tradition celebrated every May. The American Speach Language Hearing Association website has some nice ideas on how you can promote it, along with materials you can download and/or buy. Enjoy.

Back in Business, After a Long Break

I’ve been letting people know I’m re-booting my Hearing Mojo hearing-loss blog after having taken a long break from posting new entries. In the past year I’ve let this blog lie dormant as I’ve gone completely “mainstream” with my communications consulting business, Aquarius Advisers. We have been successful, with a number of happy high-technology clients, but it’s been an education in coping with hearing loss in the business world. During my blogging hiatus, I’ve stayed current with the new developments in the world of hearing loss and hearing aids, including time spent consulting with America Hears, Inc., the leading online manufacturer and marketer of premium digital hearing aids. However, I’ve sorely missed writing about this industry and all the issues involved with it, so I intend to start doing so again. I’m still managing a transition to a new blogging platform (the new look and feel are enabled by the WordPress open-source content management system, as opposed to the Moveable Type platform I used in the past). So it might take me a while to get the new platform exposed to the search engines. But I’m starting to write again as of now. A lot has happened in my absence, and I intend to catch people up with all I’ve seen and heard, starting with my visit earlier this month to the American Academy of Audiology Audiology Now 2009 conference.

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