This Forbes article describes the applicability of Moore’s Law to health innovation and pricing. The author needed a hearing aid. He cited a teacher who had paid $6,800.00 for a pair of hearing aids. The writer had his own hearing loss and with some shopping, found an innovative source that sold him a hearing aid online for 7% the cost — $474.50 — delivered in 2 days via FedEx.
To be fair, the author notes that he does not know how his condition compared to that of the teacher.
We have seen similar disruptive changes in eyewear with Warby Parker and others selling prescription glasses for $100.00 or so, less than the cost of lenses alone in most outlets.
Must a set of hearing aids really cost thousands of dollars? Setting aside our lack of full information, we do know that they are a solid state electronic device, sold by the thousands and mass produced at some level. They would appear to filter and amplify sound, and be quite small.
Should a set of glasses cost hundreds of dollars? One has a piece of colored plastic in the form of a frame, and a piece of plastic bent to refract light. Both made by machines in bulk. There is a fashion aspect of the frames that to many buyers matters a great deal. Eyeglasses, unlike hearing aids, are worn by many billions of users world-wide, a number of whom own multiple pairs.
Compare a hearing aid to a smart phone. A top of the line Iphone without a carrier subsidy can be bought for $750.00. This device, like similar Android phones, is remarkable. Unlike the $5,000+ hearing aid, it is a full-fledged computer that computes, locates, calls, transmits, schedules, messages, photographs, shops, informs, and performs hundreds of other functions depending upon apps installed. One might reasonably assume that these devices are far more complex than a top of the line hearing aid. The price difference likely has more to do with scale, competition, buyer motivation, and other market factors.
Those who shop for eyeglasses and hearing aids are often paying out-of-pocket, and have a motivation to shop. Those selling such devices have a motivation to attract buyers with innovative delivery and pricing models. Can and should similar innovation be applied to high priced pharmaceuticals, medical devices, and medical procedures?