Georgina SandersonDirector Reimbursement, Quality, Regulatory AffairsCochlear Limited, Asia Pacific Region

The Value of Cochlear Implants

Agenda

q Incidence and prevalence of hearing loss

q Consequence of unmanaged hearing loss

q Economic impact of hearing loss

q Benefits of cochlear implants

q Cost effectiveness of cochlear implants

Key Population Statistics for HLIncidence and prevalence of severe to profound hearing loss. The quality of life and productivity of these individuals and their families may be significantly reduced.

Addressable: Disposable income per household > USD 5k p.a.

SHI- PHI: a HL > 80dB at 1KHz

IncidenceAge Group (1/1000) Australia Russia0 - 3 y. 0.13 124 7144 - 19 y 0.02 77 43420 - 49 y 0.06 572 411550 -70 y 0.45 2101 1460570+ 1.04 2042 13747

Total 4916 33615

Addressable Incidence

Fortnum, H.M. et al. (2001), Prevalence of permanent childhood hearing impairment in the United Kingdom and implications for universal neonatal hearing screening: questionnaire based ascertainment study, BMJ volume 323

Adrian Davis, Hearing in Adults, The prevalence and distribution of hearing impairment and reported hearing disability in the MRC Institute of Hearing Research's National Study of Hearing, MRC Institute of Hearing Research, Nottingham, Whurr Publishers Ltd London, 1995, ISBN 1-897635-40-0

Consequences of unmanaged HL

q Delayed auditory skills and limited speech and language developmentq (Sininger et al 1999, Ruben 1997, Davis et al 1997, Helfand et al, 2001)

q Limited access to education and scholastic achievementq (Punch et al 2004)

q Underemployment / Unemployment q (Hogan et al 1998, Project HOPE, Scherf et al 2008, Leigh 2008)

q Difficulty participating in social activities q (Pressman, Pipp-Siegal, 1999; Watson et al 1999; Wiefferink et al, 2008)

q Adverse health (physical and mental/ emotional) effects q Access Economics Report 2006

The reduced capacity to communicate resulting from a severe to profound HL has significant impacts family, friends and society.

The economic impact of hearing loss in Australia = AUD 11 billion per annum

Economic Impact of HLThe real financial cost of hearing loss may be 1-2% of GDP, with > 50% of the cost resulting from productivity. Direct health expenditure = 0.034% GDP.

2%9% 6%

56%27%

Total health costs

Lost earnings

Value of carers

Education, support,aidsDead weight losses

Average cost per year

= $ 3,314 per HI person

q Productivity Loss (56%)q Lost earnings to individuals with hearing loss

q Cost of Carers (27%)q Employment of informal carers

q Deadweight costs (9%)q Loss of taxation revenue, finding alternate

sources of taxation to fund increased welfare and health services

q Direct Health System Costs (6%)q Direct health costs including hearing aids and

cochlear implants

q Education & Support Services (2%)q Early intervention, Special Education services,

Interpreters, Captioning, Specific social services, communication devices

Source: Listen Hear! The Economic Impact and Cost of Hearing Loss in Australia, A report by Access Economics Pty Ltd

Summary of Financial Costs

Comparison to key health priorities

5.5

4.6

3.7

2.9

2.9

0.8

0.7

0.2

0 1 2 3 4 5 6

Cardiovasculardisease

Musculoskeletaldisease

Mental health

Injuries

Cancer

Asthma

Diabetes mellitus

Hearing Loss

$A M

Despite the significant economic impact of hearing loss, the allocated health expenditure for hearing health is AUD 0.2M, 0.35% of the money spent on the Australian national health priorities, 2001.

Source: Listen Hear! The Economic Impact and Cost of Hearing Loss in Australia, A report by Access Economics Pty LtdAUD Million

Maximising the return on heari ng health $Enhanced auditory receptive skills

Evidence of emerging aural/oral communication modes

Useful levels of ability in spoken language

Enhanced integration in process of primary education

Enhanced scholastic achievement (reading, writing, arithmetics)

Enhanced versatility and social robustness

Successful transition to secondary education

Enhanced opportunities in employment and further education

Enhanced social independence and Quality of Life in adulthoodSummerfield & Marshall, 1998

Measuring the outcomesBenefit Measure

Compliance Device use

Complications Surgical, medical, device

Cost of revision surgery, hospitalisationAuditory performance Expressive Language development

PLS-4, Categories of Auditory Performance (CAP)Speech development Communication ability

Speech Intelligibility Rating (SIR)Educational placement, % Mainstream school,

Savings in education, Academic achievement Numeracy and Literacy

% High School graduationEmployment status % Full employment

Improved productivity – tax revenueQuality of Life Health Utility Index (HUI), $/ QALYs

Savings to society

Predictors of outcome

q Age at implantationq Detectionq Intervention

q Cognitive ability

q Expertise of CI teamq CI infrastructureq Habilitation

q Family involvementq Re/habilitation

q Communication modeq Oral, Total, Cued..

Source: Hodges et al, 1999; Beadle et al 2005

Age at ImplantationThere is an established association between identification of hearing loss before 6 months of age and improved results in language at 3 years of age. Hearing outcomes may be optimised by early identification and intervention.

q Better audi tory performanceq Yoshinago-Itano, 2000, Blamey et al 2001; Geers 2006; Sharma 2007

q Rate and level of language developmentq Yoshinago-Itano, 2000

q Better speech intelligibilityq Coulter & Thomson, 2000, De Raeve, 2002

q Better parent attachmentq Pressman, 1998; Lichert 2001, 2003

q Higher reading (literacy) level and number in mainstreamq Archbold et al, 2002; Geers, 2003; Scherf et al 2008; Leigh, 2008

q On set of social-emotional development as normal hearing childrenq Wiefferink et al, 2008

UNHS supports earl y identificationIn 2001 an Australian National Newborn Heari ng Screening Committee agreed upon a Consensus Statement. Each State and Territory was then tasked with implementing a program. There is now 83% national coverage. UNHS 2009

65% > 96%

57%> 98%

> 95%

> 57%

> 90%

95%

2009

UNHS supports earl y identificationThe impact of early identification and intervention may be assessed on a cohort of children across Australia, all receiving the same technology and with access to similar cochlear implant infrastructure.

Leigh 2006, Ching et al 2006, Ching et al 2007

Hearing Screening Age at First Fitting (months)

State Status Method Coverage n Median Mean

New South Wales Universal 2-stage AABR

>95% 40 2.8 4.5

Queensland Universal 2-stage AABR

> 97% 45 4.0 10.0

Victoria Partial 2-stage AABR

~30% 38 5.2 8.6

Total 123 3.5 7.8

Language ski lls at 3 years

Effect of age at implant, p = 0.02

Children who received an implant before 12 months of age developed expressive and receptive language within the range of normal hearing peers, when measured at 12 months after implantation and at 3 years of age.

Source: Ching T, 2009 Outcomes of children with hearing impairment: a population-based, prospective study comparing early and later-identified children

Language devel opment

Svirsky MA, Robbins AM, Kirk KI, Pisoni DB, Miyamoto RT.

Psychological Research 2000;11:153-158.

• The deafened child is “at risk” for listening & spoken language skill development

q The rate of language developmentq after CI implantation -

q exceeded that of non-implanted q children q was similar to that of children q with normal hearing

q Speech intelligibility improved q post-implantationq Allen MC, Nikolopoulos TP, O’Donoghue G.

q Am J Otol 1998;19:742-746.

Categories of Auditory Performance (CAP)

Source: Govaerts, et al, Otology & Neurotology 2002

response to speech sounds

discrimination of speech sounds

use of telephone

Children implanted before the age of 3 years of age reach the CAP rating 7 after 2 years of implantation, however those implanted before the age of 18 months have an auditory development pathway close to that of normal hearing peers.

Speech Intel ligibility

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

SIR

at 4

y p

ost C

I

9-18 mths 19-30mths < 3 y 3-5 y 5-7 yAge Group at ImplantationAll Little Experience Exerperince to Deaf Speech

Children who receive a cochlear implant before the age of 18 months has a significant effect on their speech intelligibility at 4 years, compared with those children implanted at an older age (an do not have addi tional needs).

Source: Archbold 2001; De Raeve, 2006

Educational placement

•

•

• Schulze Gattermann, MHH 2000

The Hannover Experience

69

2914 12

0%10%20%30%40%50%60%70%80%90%

100%

Group 1 CI 0-1.9 yr

Group 2CI2-3.9 yr

Group 3 CI 4-6.9 yr

Group 4Hearing

Aid

Group 1: Average of grades 1 & 2 (6 to 8 years)Group 2: Average of grades 1 to 5 (6 to 11 years)Group 3: Average of grades 1 to 6 (6 to 12 years)Group 4: Average of grades 1 to 10 (6 to 16 years)

MainstreamIntegratedHearing impairedHearing impaired + DeafDeaf

Type of School

Children implanted before the age of 2 years were in mainstream education almost 6 times as often as children with hearing aids

$53,200

$28,200

$14,500

$5,030$6,100

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Residential School Residential School,Day Student

Self-containedClassroom

Resource Room Regular-MainstreamEducation

Ann

ual C

osts

Educational costs

Source: Department of Education’s Office of Special Education and Rehabilitative Services; Annual Report to Congress on the Implementation of Individual’s with Disabilities Education Act, 1997.

Educational Placement

There are significant savings in education to be real ized if a child is able to participate successfully in mainstream education system.

90% saving compared to education in

Residential Deaf school

Employment

Deafened adul ts

q Fewer educational qualifications

q Higher unemployment

q Lower incomes

q Greater under-employment

Hogan A, et al . Employment and Economic Outcomes for deafened adults with cochlear Implants.

Presented to Audiological Society of Australia 13th National Conference. 28th

April 1998, Sydney, Australia.

Adults with a cochlear implant are twice as likely to be in paid work and more likely to have a higher income than people with a moderate hearing loss

EmploymentEmployment

Source: Project HOPE calculations from the 1990-91 National Health Survey

58%

82%

46%

73%

11%16%

2% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

18-44 yrs 45-64 yrs 65-79 yrs 80+ yrsSeverely to Profoundly Hearing Impaired US Population

42% of the severe to profound hearing loss populat ion, between the ages of 18- 44 years, in USA are not working .

q Multi-attribute health status classification

q Suitable for Cochlear Implantation

q Includes sensory attributes: Vision, Hearing, Speech

q Administered as a questionnaire

q Scoring system based on preferences of general public

Quality of Life - Health Utility Index (HUI 3)

Source: Cheng et al, JAMA, 2000

Quality of Life

Δ (QALYs) = Δ (Life Years x Health Utility)

Cochlear implant

63.00.0

1.0

Health RelatedQuality of Life

(Utility)

(Perfect health)

(Death)Duration (Years)

No treatment

QALYs

0.11

0.48

The improvement in quality of life resulting from a medical intervention may be calculated using validated assessment tools such as the Health Utilities Index (HUI). The qual ity (utility) and quantity (life expectancy) of life are calcuated.

Health utility scoresHUI 3

Attribute

(n = 48)

Pre-implantation Score

Mean (95% CI)

Post-implantation Score

Mean (95% CI) Δ

Hearing 0.75

(0.74 – 0.76)

0.82

(0.8 – 0.83)0.07

Speech 0.80

(0.78 – 0.82)

0.92

(0.90 – 0.93)0.12

Emotion 0.58

(-0.03 – 0.61)

0.94

(0.93 – 0.96)0.36

Cognition 1.0 1.0 0

Ambulation 0.99

(0.98 – 1.0)

0.99

(0.98 – 1.0)0

Vision 1.0 1.0 0

Pain 1.0 1.0 0

Dexterity1.0 1.0 0

Estimate lifetime costs of implantationVariables No of Years Costs (USD)

Direct Costs

Preoperative Costs 1 2863Operative Costs

Cochlear Implant

Hospital and Surgery

1 19,153

4612Post-operative costs

Audiology Follow-up

Rehabi litation follow-up

Device failure (if any)

Loss or Damage insurance

Special batteries

Speech processor upgrades

1 – 73

1- 2

1 – 73

1 – 73

1 – 73

4 - 73

5148

8984

1007

4013

1293

5104Subtotal (Direct costs) $ 60 228

Indirect Costs

Time off Work

Travel expenses

Car parking expenses

Change in educational costs

Change in Future Earnings

1 – 73

1 – 73

1 – 73

1 – 73

11 - 73

4623

4830

589

- 65 558

- 55 574Total (Direct + Indirect) $- 53 198

Source: Cheng et al, JAMA, August 16, 2000

Calculation of Cost Uti lity

Cost Utility =Costs ($)Δ (QALYs)

Discounted Lifetime Costs ($)Δ (Life Years x Health Utility)

=

USD 60 228 (Direct costs only)

11.59 QALYs=

USD 5,197 / QALYs=

Source: Cheng et al, JAMA, August 16, 2000

The cost utility is calculated as the incremental costs associated with the provision of cochlear implantation, divided by the incremental gain in Quality Adjusted Life Years (QALYs).

Adult cochlear implant

A cost effective treatment

59,292

34,836

11,125

7,968*

7,500Source: Cheng et al, JAMA, August 16, 2000, *Wyatt JR et al, Laryngoscope 106: July, 1996

More cost effective

Less cost effective

5,197

11,125

7,968

34,836

59,292

Paediatric cochlear implant

Neonatal intensive care (1.0-1.5kg)

Implanted defibrillator

Knee replacement

0 10,000 20,000 30,000 40,000 50,000 60,000

Cost per Quality Adjusted Life Year (QALY) in $US

Due to the cascade of benefits resulting from oral communication the cost utility of paediatric and adult cochlear implantation compares favourabl y with many other common funded interventions.

Summary

q An unmanaged hearing loss has significant impact on the development and socialisation of an individual

q Hearing loss has a significant economic impact a country’s gross domestic product (GDP)

q Appropriate hearing intervention provides hearing impaired people with access to spoken language, education and society

q Children fitted with a cochlear implant have an improved quality of life. These benefits may be optimised by age of implantation and good infrastructure

q Cochlear implantation is a cost effective medical intervention.