Can Medicare Save Money by Covering Hearing Aids?

Motivation. While hearing loss (HL) is the third most common chronic condition among older adults and has been linked with adverse health conditions, hearing aids (HAs) are not covered by Medicare and most other private insurers, adding to the financial barriers of acquiring HAs. While evidence shows that HAs improve health and quality of life for people with HL, no study has yet investigated and quantified the extent of their cost-savings benefit.

Objective. This novel study longitudinally followed patients 65 years of age and older who were covered by Medicare Managed Care in order to compare total healthcare costs, as well as utilization and cost of inpatient, emergency department, outpatient, and office visits within 3 years of index diagnosis of HL between those who used HAs and those who did not.

Data. We performed a retrospective cohort study of 110,611 older adults with HL diagnoses using a national, private insurance claims database Clinformatics® Data Mart Database. This claims database captures all healthcare encounters of over 79 million adults and children. To infer patients with new HL diagnoses, we excluded patients with a HL diagnosis or any HA procedure codes within one year prior to the index HL diagnosis.

Study Design. We analyzed medical claims data (2008-2016), identifying adults 65 and older who were diagnosed with HL. We applied propensity score matching to adjust for selection bias using baseline demographic, clinical, and cost characteristics. All costs were inflation adjusted to 2016 dollars. We applied a pre-post quasi-experimental design, using multiple group interrupted time series analysis (ITSA) regression models to estimate quarterly changes in total cost and use and cost of various healthcare services, comparing HA users with non- users. Our pre-period was 1 year prior to index HL diagnosis and our post-period was 3 years after.

Principal Findings. We were able to propensity match 2,974 of HA users with non-HA users. There were no significant differences between average healthcare utilization and spending between the two groups prior to index HL diagnosis (pre-period). Average total healthcare cost in 1 year prior to HL diagnosis among those with and without HAs were $12,221 and $12,653, respectively. In the first year after diagnosis, due to cost of HAs, total average healthcare cost was higher for patients with HAs vs. those without ($15,271 vs. $14,301). However, in years 2 and 3 following HL, patients with HAs exhibited lower average total cost compared to non-users with $1,102 and $1,697, respectively (p < 0.001). The difference-in-differences coefficient indicated effectiveness of HAs in reducing healthcare costs (b=-171, p=0.031; 95% CI:-325 to -17).

Policy Implications and Conclusions. HAs would substantially reduce cumulative healthcare costs across the life course of the patient. In 2016, out of 16.4 million adults 65 years and older with HL, only 14% used HAs. Our study shows that within 3 years of HL diagnosis, use of HAs could have approximately saved Medicare more than $22 billion if the remaining 86% of people with HL diagnosis would have used HAs.