The Influence of Third-Party Payers

Mike Metz
August 28, 2018

Views of third-party payers will vary among providers.  Professional qualifications and membership restrictions are seldom the reasons that clinicians and providers dislike the folks who control their billing and receipts.  More often, it’s likely that the amount of money paid by insurers and other third parties that’s the key issue.  On the other hand, consumers generally love these third party reimbursors (duh!).  Everyone’s view of third party payers is perhaps about to change.  A little better for consumers, but not for the better with respect to providers.

Very few reimbursements for hearing services and devices are paid at levels desired by most all clinicians, including audiologists.  The levels of payment of the 1970s have eroded over the past years to levels of less than half of those original 70s fees.  (There are many reasons for these decreasing price levels—but most people don’t seem very interested in this discussion.)  The major issue has always been the same–providers want to be paid more and insurers want to spend less. 

By now, it should be general knowledge among audiologists that several major health insurers have invested heavily in the hearing healthcare industry.  As hearing health becomes more of a national issue, as revised estimates of the number of hearing impaired appear in the news, as more consumers become involved in actions to influence the costs of hearing devices, and as the government acts to expand access to services and devices, it should come as no surprise that major companies devise methods to tap into the hearing market.  And, if there is a flow of money to be controlled and a profit to be made, no one should be surprised that major healthcare insurers are interested.

Potential for good

On one hand, the participation of insurers and other third parties in the hearing industry has the potential for significant good.  Insurance coverage lends a level of consumer credibility to the services and devices rendered to the hearing impaired.  Third party payment will likely mean that more people in need of hearing services will seek out clinicians who can relieve patients of at least some costs of treatment.  If hearing devices and services are covered under health policies, it might mean that clinicians use their skills to gather more useful data, thus improving the outcomes for many.  Perhaps best practice will take on more substance and should quickly become the “norm” for clinical services.  Maybe even better practices will emerge. 

Importantly, as third parties become invested in hearing care participation, forces will emerge to not only increase participation, but also to lower costs.  Supplier bidding, innovative participation designs, increased patient knowledge and access, tighter control of providers—all may add to act in favor of hearing loss care.  There are good aspects that will likely arise.

Potential for not-so-good

For every benefit, there is a cost.  Unfortunately, costs and benefits are not equally distributed.  What’s not to like with third party participation?  Turns out, a fair amount.

Putting a “middle-man” between a buyer and a seller seldom results in lower costs and/or higher profits for either the buyer or the seller.  That will also be likely with insurers.  To think that adding a benefit—devices or services—to health coverage will not raise costs somewhere is simply naïve.  Higher premiums (or reduced benefits) will pay for everything.  And insurers will certainly take their cut from a much larger, consumer-based “pie”.  At least the higher premium costs might be spread among all healthcare premiums.

Further, if insurer participation proves profitable, where will participation lead next?  For sure, more third-party payers will get into the game.  Perhaps the insurance companies will contract for device manufacturers to build their own models like one insurer/payer did.  With many new manufacturers offering hearing devices with relatively unproven “bells and whistles”, and with little data available to justify these enhancements, how soon will it be before “insurance specials” appear in hearing clinics and offices?  (Who will say what patients really need—clinical data or insurers?)

Unless audiologists present peer-reviewed data showing the value of participation in clinical hearing rehabilitation, how quickly will clinical participation be reduced or eliminated entirely from covered services?  Already there seems to be indications that artificial intelligence and remote programming are being considered as clinically inevitable.  Couple AI with OTC/DIY devices and what will be deemed necessary to be included in “covered services”?

As a consumer of hearing devices, I see a bright future for my treatment.  As a (hopefully) insured patient, I assume that my carrier will incorporate these new plans for hearing help into my policy. As an audiologist, I see my field struggling to gain the momentum and direction needed to participate fully in these coming changes. 

The future?  Well, that’s the fun part of things.  Everyone gets to guess.  Some will be lucky enough to help determine what the future holds.


Image from the Internet, no copyright advised.

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