Private sector sales. Last year, unit sales gains (3.4%) in the private sector—which includes dispensing activity from big box retailers and all units outside the VA—returned to more traditional levels (2-4%) after 8-11% growth in 2015-16. The first three quarters of 2017 saw more typical 2-4% growth, with a surge of 7.3% sales growth in the fourth quarter. Thus, the 7.2% growth for the first quarter of 2018 might be viewed as a continuation of that fourth quarter surge, albeit with a relatively lower basis (3.9%) from Q1 2017.
As noted in our previous market reports, it’s increasingly difficult to understand what the private sector statistics actually mean for traditional dispensing practices. Big box retailers like Costco and Sam’s Club have certainly impacted these figures, with Costco now making up about 12% of the total hearing aid market and growing at what many speculate to be a 5-8% annual pace. IntriCon—which manufactures hearing aids for United Health, owns Hearing Help Express (HHE), and provides hearing aids to a wide array of direct-to-consumer (DTC) and other firms— has also been growing rapidly and reported a 30% gain in sales revenues in 2017. In particular, how various companies’ buying cycles are impacting quarterly sales is difficult, at best, to gauge. But it’s a good bet that the average independent practice did not experience a 7.2% gain in Q1 2018. (See the discussion last month about the results from Hearing Review’s recent dispenser RIC pricing survey.)
VA sales. The VA has held pretty steady in terms of hearing aid unit volume for the past 3 years, dispensing only 7.3% more hearing aids in 2017 compared to 2014. It has not seen a quarterly increase above 3% since the first quarter of 2016. With a net unit decrease of -0.5% in the first quarter of 2018, it would appear the trend will continue barring any changes to eligibility requirements or wars—the two factors that dramatically drove up hearing aid usage rates (along with an aging veteran population) in the 2000s.
Hearing aid styles. Receiver-in-the-canal (RIC) type hearing aids continue to dominate sales, inching up toward almost three-quarters of the entire hearing aid market. For the total market, behind-the-ear hearing aids made up 84.8% of all hearing aids sold in the first quarter of 2018 (private sector 85.9%; VA 79.8%). RICs, a subset of BTEs, comprised 71.7% of the total market (private sector 72.0%; VA 70.6%). Traditional BTEs made up 13.1% of all hearing aids dispensed in the first quarter (private sector 14.0%; VA 9.2%), while ITEs constituted 15.2% (private sector 14.1%; VA 20.2%). In full-year 2017, BTEs made up 82.8% and RICs 69.4% of all units dispensed.