A hearing aid is an electroacousticic device created to amplify sounds.  These devices are adjusted to make soft sounds audible, speech intelligible, and loud sounds tolerable.  Hearing aids are considered medical devices, and are regulated by the FDA.  

Modern digital hearing aids are engineering marvels.  Microphones, digital amplifiers, and receivers work together to make sounds available to a person with hearing loss they otherwise could not hear.  Hearing aids seem simple on the surface.  They all have basic components:

The microphone picks up sound.  Inside the hearing aid is an amplifier which adds to the sound, and a receiver (or speaker) which transmits the sound.  Additional features that could be available depending on the model include vents, and volume controls.  There are many different hearing aid styles to choose from, and the choices should be based not just on aesthetics, but also based on a person's hearing loss and their communication needs.  

Today's digital amplifiers aren't simple transistors or resistors, they are advanced miniature computers which add to the incoming signal from the microphone according to prescriptive algorithms based on the patient's hearing loss, and other factors.  There are potentially millions of different settings possible in each hearing aid...and many things that can be set improperly.  This is why having hearing aids adjusted by a professional is so important.  To make sure your fitting is appropriate, I combine thorough testing with real ear measurements (tests that measure the output of the hearing aid and take into account each individual's anatomy), and of course, feedback from the patient.  Hearing aid fittings are not something to take lightly! Each manufacturer takes years to research the custom designed computer chips inside modern hearing aids, and all of this comes together to help our patients hear better.  

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There are differences in hearing aid prices, because of the complexity of design in hearing aids.  The higher the price of hearing aids, the more features to help aid in hearing are available.  Just as in purchasing a car, you get what you pay for.  

There are risks and benefits to hearing aids.  If fit improperly, hearing aids may cause more hearing loss.  This is why it is crucial to be fit by an experienced ASHA Certified Audiologist or licensed hearing instrument specialist.  

For additional information, you can read from these articles:

Hearing Aid Article by Wikipedia

FDA regulations on Hearing Aids

FDA article on Benefits and Safety Issues with Hearing Aids