The Sordid Little Secret About Hearing Care Networks

More than a decade ago, manufacturer-owned hearing benefit administrators created a solution that focused on their specific products. It served their self-interest, as it continues to do today. An administrator’s typical formulary offers less than a dozen hearing aid options (we’ve seen as few as eight), all representing the manufacturer-owned brands.

How does a limited formulary affect the member experience? Looking at the table above, let’s say your formulary only includes two (e.g., Signia and Widex) or one (e.g. Oticon) products. Suddenly, the number of locations in your network plummets from the advertised 7,000 locations to roughly 2,0000 locations — because they are the only ones offering these brands.

Here’s a look at the real-life impacts on your members:

• Convenience — Members are steered to locations much farther away from their homes (an especially big deal for seniors), and they may wonder why they have to travel 30 or more miles to receive care when there’s a provider only a few miles away.
• Quality of care — Members are less likely to get a hearing aid that matches their specific needs and lifestyle; consequently, they may return the devices or simply not wear them.
• Utilization — We’ve observed a hearing benefit utilization of 1% or less among our competitors. In contrast, Amplifon can improve appropriate utilization by 2x.

Hearing aid choice is critical for both members and providers. More than 80% of hearing care providers rate it important to have a wide range or product choices for their patients, and close to 90% believe they should be able to choose whichever hearing aid best serves their patients.[1]

Regarding utilization, let me make one important point. Health plan leaders often perceive “utilization” as a dirty word because it equates to higher costs. For a hearing benefit, however, increased utilization makes sense. Because health plans often have a copay/PMPM benefit in which costs are capped, you want as much utilization as possible to maximize its value. Plus, hearing care represents a lower-cost expense than other benefits, and it can have a significant positive impact on chronic health conditions and comorbidities related to untreated hearing loss. I encourage you to read an article on this topic by Scott Kosinski, our Vice President of Sales and Account Management.

Besides product availability, another key factor driving the member experience is how network providers are reimbursed for their services.

Our competitors in the hearing care market use a “graded” reimbursement schedule, meaning providers are rewarded for upselling members to higher-priced hearing aids — even if the member doesn’t need all the “bells and whistles” of that technology level. For example, a senior who leads a mostly sedentary lifestyle probably doesn’t require a high-end product that’s designed for someone who’s much more active. But the provider is incentivized to upsell the member to maximize revenue and return on investment.

Amplifon, by comparison, is the only hearing health administrator that uses a universal reimbursement rate.[2] This means the provider receives the same reimbursement rate for services, regardless of the level/cost of hearing aid technology. We implemented this structure to put the focus on quality of care rather than maximizing ROI.

At Amplifon, we also believe that our universal reimbursement rate can help protect our health plan partners from potential regulatory issues arising from the graded model. Consider this: The state of California has launched an investigation into inappropriate provider incentives. Should this investigation lead to action, it would likely require all of our competitors to re-contract their entire provider network, inevitably causing disruption. It also would likely lead to similar actions by other states. Amplifon partners can feel protected by our proactive steps to avoid these potential issues.