U.S. Hearing Aid Sales Recovery Stalls In Second Quarter Of 2010 Even As Veterans Administration Fits More Hearing Aids Than Ever

Are we in for a double-dip recession in the hearing-aid business? According to the most recent analysis of U.S. hearing aid sales by the Hearing Industries Association (HIA), the number of hearing aids sold in the U.S. only grew by 2.9 percent in the second quarter of 2010. When you exclude an 11.6 percent increase in units bought by the U.S. Veterans Administration (VA), which now purchases 20 percent of the hearing aids sold in the U.S., the American market grew by an anemic one percent in the quarter. Similarly, in the entire first half of 2010, the overall market grew 4.2 percent, with VA sales growing 15 percent but private sales growing only by 1.8 percent over the first half of 2009.

The slowdown from the much faster sales ramp in 2009 is bad news for an industry hoping for a quick recovery from the 2008-2009 recession. It may also indicate that even the raft of new products and capabilities introduced by hearing aid manufacturers in the past two years may not be enough to spark the long-awaited takeoff in hearing aid sales to a generation of Baby Boom consumers steadily losing their hearing at predictable rates.

The surge in government-funded purchases by the VA can be attributed to loosened restrictions on reimbursement for veterans needing hearing aids over the past several years, as well as to the age wave of Korean War and Vietnam War veterans now requiring hearing assistance and the many younger veterans returning from Iraq and Afghanistan with hearing damaged by overexposure to environmental noise in the war zones.

While the government-supported VA market is a welcome shot in the arm to the industry, it’s still an open question why sales to ordinary consumers have yet to take off. With up to a third of the 35 million Americans in need of hearing assistance doing without hearing aids, the question to answer is “when,” not “if.” However, the poor sales improvement in 2010 so far makes it clear the hearing aid industry has yet to crack the code to realizing the expected surge in sales to a market that needs hearing assistance more and more all the time.

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