Managed Care – Threat or opportunity?

Not a day goes by in today’s industry without the words or topic of ‘Managed Care’ coming up – whether it is in a passing conversation, in business meetings, or even a professional education course. Managed Care (MC) is a topic that reigns supreme. Some might even say that it’s a topic that is ‘as clear as mud ’ for many of us.

Yet, at the end of the day, it is an area that is gaining momentum and strength within the hearing healthcare industry and is not going away. That means that we, as hearing care providers (HCP), have to navigate a rather congested highway of reimbursement systems while keeping our eye on the most important light at the end of the tunnel: our patient.

So what is Managed Care exactly? Managed care is a “health delivery system organized to manage costs, utilizations, and quality”.¹ In a healthcare setting like hearing, MC provides rules and regulations around the providers a patient is able to see to maximize a financial benefit through their insurance as well as the products and services that are covered and the financial responsibility of the healthcare plan.

Perhaps the most well-known Managed Care entities in the United States are Medicare and Medicaid.

Why are we seeing hearing healthcare in Managed Care?

The health plan landscape is extremely competitive and our patients have many choices for overall healthcare, some of which offer a varying hearing healthcare benefit. Companies are vying for our patient’s selection of their policies and aim to provide an attractive overall policy and benefits. Plainly stated – hearing healthcare, specifically hearing aids, is a popular benefit among consumers and insurance companies are using it as a way to sell policies! However, as many HCPs know, the benefits their patients may receive are often limited to a defined cost over a specific timespan (e.g., $2000.00 every 3 years), may be regulated to specific devices, and often still leave a large out-of-pocket cost for the patient.

Third party involvement

In order to meet the needs of nearly 40 million Americans with hearing loss², the hearing industry has seen a rising trend of healthcare plans offering hearing aid benefits. Some of these plans have used direct-to-consumer models, eliminating the involvement of HCPs completely, while others reimburse HCPs for their services, ultimately reducing their costs.

In an effort to effectively offer and meet the needs of patients and providers, many health insurers have partnered with third party companies (often referred to as third party referral networks, TPRNs) to control costs by outsourcing the daily management of the provider network, benefits administration, and price negotiation with manufacturers.

While TPRN programs aid in reaching more adults with untreated hearing loss, it is still a priority for each insurance company to offer the best value proposition they can to their members.

But … what about the patient?

Patient (consumer) pressure is one of the main reasons healthcare insurers are including hearing aid benefits as differentiators to their plans versus others. If a patient seeking the most ‘well rounded’ and beneficial health plan is comparing healthcare plans and sees one plan offering a hearing benefit and its competitor does not – then they’re more likely to choose the health plan that has a hearing benefit included.

Nowadays, consumers are more informed than ever before about what is available to them, what they should be looking for in a plan and how to plan for the future. In comparison to even 5-10 years ago, when a patient might have reached out to their general physician for a recommendation on hearing needs, many patients now start by reaching out to their insurance companies to see if they are eligible, and what their benefits may be, before even going to the doctor.

To meet the patient where they are looking for information, it has never been more important for HCPs to recognize not only the pathway their patients are taking, but the ever increasing amount of resources and education to which they have access. This also places a higher level of responsibility on the HCP in understanding what is available in the market, and how it not only impacts their hearing healthcare, but also how it impacts the HCPs business.

Managed Care – Threat or opportunity?

By this point you may be asking yourself –are we suggesting you be in support of MC or against it? Well, neither. Your managed care team at Phonak wants you to feel educated and informed about what is out in the hearing healthcare marketplace. We want you to understand the parties and governing bodies that are working together, and we want you to feel as though you have a resource to rely on for information you can trust.

Let’s face it – history has proven, even in the most financially supported healthcare systems like the Veterans Health Administration where hearing aids are free – that hearing aid adoption rates are still astonishingly low. However, we are among a generation of consumers that are not only more educated about their health and their healthcare benefits, but also perhaps more motivated to ensure they are living well and enjoying their lives to the fullest. Therefore, it makes sense to assume that – for those with greater hearing healthcare coverage and benefits – the higher the adoption rate of hearing aids might be. HCPs that make the decision to strategically and thoughtfully understand and work with a hearing health plan or TPRN, will have the first right of refusal to those well-informed and highly motivated patients.

In contrast, patients are astutely aware and educated that if they can’t find what they desire in one place, that there has to be an alternative in another. From over-the-counter (OTC) to big box retailers, HCPs have all experienced the questions of the ’shopper’ who is looking for the best hearing aid price. Perhaps they’re not looking for the lowest price simply to be ’cheap’ – but rather to maximize their benefits available. In some cases, HCPs may see TPRNs as a threat – providing the lowest price available to turn a quick profit. Other HCPs may see it as an opportunity to open up their clinic doors to those patients who are looking to use the benefits they have, regardless, and are just wanting to hear better again. Once they’re in your door and their experience is positive, we all know – they are typically a patient for life.

Finally – Medicare isn’t going anywhere – and every day more and more of our patients start to use the benefits they’ve paid in for throughout their lives. In fact, in 2018, 73% of Medicare Advantage enrollees across the nation chose a Medicare Advantage plan that offered a hearing aid benefit.³

The future is now

We’ve spent the last 5-10 years ‘preparing for the boomers’ – well the boomers are here! And they are informed, educated and like to weigh their options. HCPs in today’s hearing health landscape will need to adapt various areas of the practice to be consistent with the service model TRPNs are leading with, as well as putting value on their own expertise and service experience. Managed Care expands the reach to new patients who are seeking information, ready to take action, and who might have never come through your doors otherwise.

Change is uncomfortable. Change is intimidating. Maybe that’s just because we don’t know what to expect. When you understand what is changing and how you can adapt to it and still remain successful while providing top-notch hearing healthcare, then the outlook and future looks promising.

The hearing healthcare industry is evolving – and we hope that throughout this series we’ll be able to answer the questions you have as we strive to support you in navigating the Managed Care landscape.

Join us over the next 6 months as we take a deeper dive into Managed Care, talk with experts in our industry, learn what tools are available to support you, and start to clear away the concerns you may have for the success of both your and your patients’ futures.

Have a question?

At Phonak, we strive to be your valued partner, and the resource you trust when you have questions about Managed Care and TPRNs. Send us your questions at managedcare@phonak.com , and we’ll do our best to earn your trust!

 

References

1. Centers for Medicare & Medicaid Services. Managed Care. Retrieved from www.medicaid.gov/medicaid/managed-care/index.html
2. Centers for Disease Control and Prevention. New Vital Signs study finds noise-related hearing loss not limited to work exposure. Retrieved from www.cdc.gov/media/releases/2017/p0207-hearing-loss.html
3. The Academy of Doctors of Audiology (2019) Adapting your practice to a new generation of consumers. Audiology Practices, vol 10, no. 3.