Initiation of Cochlear Implant Program at an Urban Public Hospital: A Committee Report
During the past 30 years, cochlear implants have been widely successful in the management of severe to profound sensorineural hearing loss in both adults and children worldwide. According to the National Institute on Deafness and Other Communication Disorders, as of December 2010, roughly 219,000 people worldwide have received cochlear implants; in the United States, this accounts for nearly 42,600 adults and 28,400 children1. Unfortunately, these figures represent less than 10 percent of those eligible to receive a cochlear implant. The two main factors that limit access to this technology include lack of knowledge throughout the community and with primary care physicians, and the burden of cost associated with these devices. The majority of implants currently placed are for patients with private pay insurance in developed countries. Insurance compensation (including private pay, Medicare, and Medicaid) often does not cover the complete cost of the operation or rehabilitation2,3 which has caused even large tertiary care centers to close due to excessive cumulative financial losses3. The financial burden associated with cochlear implantation has significantly limited access to this rehabilitation program, particularly in the case of publicly funded hospitals. Treatment can easily cost $40,000-50,0004, including more than $20,000 for the device5. However, evidence indicates that these costs are typically outweighed by the resulting benefits, such as reduced costs of special education4 and improved quality of life6. Hearing rehabilitation also allows for improved socialization (less isolation), particularly for adult and/or elderly patients who may not be capable of learning American Sign Language (due to a learning disability, poor dexterity, limited transportation, etc.). The otolaryngology department at Grady Memorial Hospital has attempted to initiate a cochlear implant program with the help of our cochlear implant specialist, Rebecca Blankenhorn, AuD. Grady Memorial Hospital is a 919-bed facility, the largest hospital in Georgia, and the public hospital for the city of Atlanta. It is the fifth-largest public hospital in the United States and serves a large proportion of low-income patients. We have successfully activated our first implant recipient, an 80-year-old man with longstanding sensorineural hearing loss. Unfortunately, Medicare has reimbursed only $6,453, which clearly does not cover even the cost of the implant. It will not be economically feasible to continue providing this service to our patients, limiting their access to this valuable technology. The Grady Memorial Hospital Cochlear Implant team, headed by Dr. Rebecca Blakenhorn, AuD (in blue scrubs), Drs. Candice Colby, and Charles Moore (far right). Implant surgeon Dr. Douglas Mattox not pictured here. We hope to continue working toward developing a program to provide this service to our patient population, while balancing the clinical and financial implications. An insightful article written by Brian J. McKinnon, MD, has given a supply-chain and revenue management business model that outlines parameters that may lead to a successful, sustainable program3; the transition to this model reduced the net loss per case at his institution by 96 percent. Key components to this model include cost reduction through selection of a single external-processor cochlear implant combination and contracting with a single supplier to maximize volume discounts, surgical cost reduction by practice opened when requested, and revenue management with a dedicated accounting, preauthorization, and collections system. However, compensation rates must be reevaluated (particularly by Medicare and Medicaid) if this technology is to become universally available. Currently, Medicaid coverage of cochlear implantation varies by state, and may cover only half of the cost3. Cochlear implants have proven safe, successful, and cost-effective, yet there continues to be a disparity in the publicly insured deaf population, largely due to lack of immediate profitability. We will continue our attempt at working toward a cochlear implant program in our public institution based on the supply chain and revenue management business model outlined above, and hopefully develop a financially sustainable operation to support this patient population. References NIH Publication No. 11-4798 (2011-03-01). “Cochlear Implants.” National Institute on Deafness and Other Communication Disorders. Avail: http://www.nidcd.nih.gov/health/hearing/pages/coch.aspx Content updated: March 2011. Accessed April 2013. Garber S, Ridgely MS, Bradley M, Chin KW. Payment under public and private insurance and access to cochlear implants. Arch Otolaryngol Head Neck Surg. 2002 Oct;128(10):1145-52. McKinnon BJ. Cochlear implant programs: balancing clinical and financial sustainability. Laryngoscope. 2013 Jan;123(1):233-8. doi: 10.1002/lary.23651. Epub 2012 Sep. 5. Francis HW, Koch ME, Wyatt JR, Niparko JK. Trends in educational placement and cost-benefit considerations in children with cochlear implants. Arch Otolaryngol Head Neck Surg. 1999 May;125(5):499-505. Wyatt JR, Niparko JK, Rothman M, deLissovoy G. Cost utility of the multichannel cochlear implants in 258 profoundly deaf individuals. Laryngoscope. 1996 Jul;106(7):816-21. Cheng AK, Rubin HR, Powe NR, Mellon NK, Francis HW, Niparko JK. Cost-utility analysis of the cochlear implant in children. JAMA. 2000 Aug. 16;284(7):850-6.
During the past 30 years, cochlear implants have been widely successful in the management of severe to profound sensorineural hearing loss in both adults and children worldwide. According to the National Institute on Deafness and Other Communication Disorders, as of December 2010, roughly 219,000 people worldwide have received cochlear implants; in the United States, this accounts for nearly 42,600 adults and 28,400 children1.
Unfortunately, these figures represent less than 10 percent of those eligible to receive a cochlear implant. The two main factors that limit access to this technology include lack of knowledge throughout the community and with primary care physicians, and the burden of cost associated with these devices. The majority of implants currently placed are for patients with private pay insurance in developed countries. Insurance compensation (including private pay, Medicare, and Medicaid) often does not cover the complete cost of the operation or rehabilitation2,3 which has caused even large tertiary care centers to close due to excessive cumulative financial losses3.
The financial burden associated with cochlear implantation has significantly limited access to this rehabilitation program, particularly in the case of publicly funded hospitals. Treatment can easily cost $40,000-50,0004, including more than $20,000 for the device5. However, evidence indicates that these costs are typically outweighed by the resulting benefits, such as reduced costs of special education4 and improved quality of life6. Hearing rehabilitation also allows for improved socialization (less isolation), particularly for adult and/or elderly patients who may not be capable of learning American Sign Language (due to a learning disability, poor dexterity, limited transportation, etc.).
The otolaryngology department at Grady Memorial Hospital has attempted to initiate a cochlear implant program with the help of our cochlear implant specialist, Rebecca Blankenhorn, AuD. Grady Memorial Hospital is a 919-bed facility, the largest hospital in Georgia, and the public hospital for the city of Atlanta. It is the fifth-largest public hospital in the United States and serves a large proportion of low-income patients. We have successfully activated our first implant recipient, an 80-year-old man with longstanding sensorineural hearing loss. Unfortunately, Medicare has reimbursed only $6,453, which clearly does not cover even the cost of the implant. It will not be economically feasible to continue providing this service to our patients, limiting their access to this valuable technology.
The Grady Memorial Hospital Cochlear Implant team, headed by Dr. Rebecca Blakenhorn, AuD (in blue scrubs), Drs. Candice Colby, and Charles Moore (far right). Implant surgeon Dr. Douglas Mattox not pictured here. We hope to continue working toward developing a program to provide this service to our patient population, while balancing the clinical and financial implications. An insightful article written by Brian J. McKinnon, MD, has given a supply-chain and revenue management business model that outlines parameters that may lead to a successful, sustainable program3; the transition to this model reduced the net loss per case at his institution by 96 percent. Key components to this model include cost reduction through selection of a single external-processor cochlear implant combination and contracting with a single supplier to maximize volume discounts, surgical cost reduction by practice opened when requested, and revenue management with a dedicated accounting, preauthorization, and collections system. However, compensation rates must be reevaluated (particularly by Medicare and Medicaid) if this technology is to become universally available. Currently, Medicaid coverage of cochlear implantation varies by state, and may cover only half of the cost3.
Cochlear implants have proven safe, successful, and cost-effective, yet there continues to be a disparity in the publicly insured deaf population, largely due to lack of immediate profitability. We will continue our attempt at working toward a cochlear implant program in our public institution based on the supply chain and revenue management business model outlined above, and hopefully develop a financially sustainable operation to support this patient population.
References
- NIH Publication No. 11-4798 (2011-03-01). “Cochlear Implants.” National Institute on Deafness and Other Communication Disorders. Avail: http://www.nidcd.nih.gov/health/hearing/pages/coch.aspx Content updated: March 2011. Accessed April 2013.
- Garber S, Ridgely MS, Bradley M, Chin KW. Payment under public and private insurance and access to cochlear implants. Arch Otolaryngol Head Neck Surg. 2002 Oct;128(10):1145-52.
- McKinnon BJ. Cochlear implant programs: balancing clinical and financial sustainability. Laryngoscope. 2013 Jan;123(1):233-8. doi: 10.1002/lary.23651. Epub 2012 Sep. 5.
- Francis HW, Koch ME, Wyatt JR, Niparko JK. Trends in educational placement and cost-benefit considerations in children with cochlear implants. Arch Otolaryngol Head Neck Surg. 1999 May;125(5):499-505.
- Wyatt JR, Niparko JK, Rothman M, deLissovoy G. Cost utility of the multichannel cochlear implants in 258 profoundly deaf individuals. Laryngoscope. 1996 Jul;106(7):816-21.
- Cheng AK, Rubin HR, Powe NR, Mellon NK, Francis HW, Niparko JK. Cost-utility analysis of the cochlear implant in children. JAMA. 2000 Aug. 16;284(7):850-6.