Cochlear implants can provide significant benefits for those with severe to profound hearing loss. They allow for improved auditory skills, speech development, educational achievement, employment opportunities, and quality of life. Early identification of hearing loss and implantation before age 2 provides the best outcomes, with children developing language skills within normal ranges. Cochlear implants are a cost-effective intervention when considering both direct medical costs and indirect costs related to productivity losses.

1. The Value of Cochlear Implants
Georgina Sanderson
Director Reimbursement, Quality, Regulatory Affairs
Cochlear Limited, Asia Pacific Region

2. 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

3. Key Population Statistics for HL
Incidence and prevalence of severe to profound hearing loss. The
quality of life and productivity of these individuals and their families
may be significantly reduced.
Incidence Addressable Incidence
Age Group (1/1000) Australia Russia
0 - 3 y. 0.13 124 714
4 - 19 y 0.02 77 434
20 - 49 y 0.06 572 4115
50 -70 y 0.45 2101 14605
70+ 1.04 2042 13747
Total 4916 33615
Addressable: Disposable income per household > USD 5k p.a.
SHI- PHI: a HL > 80dB at 1KHz
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
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

4. Consequences of unmanaged HL
The reduced capacity to communicate resulting from a severe to
profound HL has significant impacts family, friends and society.
q Delayed auditory skills and limited speech and language development
q (Sininger et al 1999, Ruben 1997, Davis et al 1997, Helfand et al, 2001)
q Limited access to education and scholastic achievement
q (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 economic impact of hearing loss in Australia = AUD 11 billion per annum

5. Economic Impact of HL
The 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.
q Productivity Loss (56%) Summary of Financial Costs
q Lost earnings to individuals with hearing loss
q Cost of Carers (27%) 9% 6%
2% Total health costs
q Employment of informal carers
Lost earnings
q Deadweight costs (9%)
q Loss of taxation revenue, finding alternate
sources of taxation to fund increased welfare 27% Value of carers
and health services
56%
Education, support,
q Direct Health System Costs (6%) aids
q Direct health costs including hearing aids and Dead weight losses
cochlear implants
Average cost per year
q Education & Support Services (2%)
q Early intervention, Special Education services, =$ 3,314 per HI person
Interpreters, Captioning, Specific social
services, communication devices
Source: Listen Hear! The Economic Impact and Cost of
Hearing Loss in Australia, A report by Access Economi cs
Pty Ltd

6. Comparison to key health priorities
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.
Hearing Loss 0.2
Diabetes mellitus 0.7
Asthma 0.8
Cancer 2.9
Injuries 2.9
Mental health 3.7
Musculoskeletal
4.6
disease
Cardiovascular
5.5
disease
0 1 2 3 4 5 6
AUD Million
$A M
Source: Listen Hear! The Economic Impact and Cost of Hearing Loss in Australia, A report by Access Economi cs Pty Ltd

7. 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 adulthood
Summerfield & Marshall, 1998

8. Measuring the outcomes
Benefit Measure
Compliance Device use
Complications Surgical, medical, device
Cost of revision surgery, hospitalisation
Auditory 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 graduation
Employment status % Full employment
Improved productivity tax revenue
Quality of Life Health Utility Index (HUI), $/ QALYs
Savings to society

9. Predictors of outcome
q Age at implantation
q Detection
q Intervention
q Cognitive ability
q Expertise of CI team
q CI infrastructure
q Habilitation
q Family involvement
q Re/habilitation
q Communication mode
q Oral, Total, Cued..
Source: Hodges et al, 1999; Beadle et al 2005

10. Age at Implantation
There is an established association between identification of hearing loss
before 6 months of age and i mproved results in language at 3 years of age.
Hearing outcomes may be opti mised by early identification and intervention.
q Better audi tory performanc e
q Yoshinago-Itano, 2000, Blamey et al 2001; Geers 2006; Sharma 2007
q Rate and level of language development
q Yoshinago-Itano, 2000
q Better speech intelligibility
q Coulter & Thomson, 2000, De Raeve, 2002
q Better parent attachment
q Pressman, 1998; Lichert 2001, 2003
q Higher reading (literacy) level and number in mainstream
q Archbold et al, 2002; Geers, 2003; Scherf et al 2008; Leigh, 2008
q On set of social-emotional development as normal hearing
children
q Wiefferink et al, 2008

11. UNHS supports earl y identification
In 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% nati onal coverage. UNHS 2009
2009
57%
> 98%
65% > 96%
> 95%
> 57% 95%
> 90%

12. UNHS supports earl y identification
The impact of early identification and intervention may be as sessed on a
cohort of children across Australia, all receiving the same technology and with
access to similar cochlear implant infrastructure.
Hearing Screening Age at First Fitting
(months)
State Status Method Coverage n Median Mean
New South Wales Universal 2-stage >95% 40 2.8 4.5
AABR
Queensland Universal 2-stage > 97% 45 4.0 10.0
AABR
Victoria Partial 2-stage ~30% 38 5.2 8.6
AABR
Total 123 3.5 7.8
Leigh 2006, Ching et al 2006, Ching et al 2007

13. Language ski lls at 3 years
Children who received an implant before 12 months of age devel oped expressive
and receptive language within the range of normal hearing peers, when meas ured at
12 months after implantation and at 3 years of age.
Effect of age at implant, p = 0.02
Source: Ching T, 2009 Outcomes of children with hearing impairment: a population-based,
prospective study comparing early and later-identified children

14. Language devel opment
The deafened child is at risk for listening & spoken
language skill development
q The rate of language development
q after CI implantation -
q exceeded that of non-implanted
q children
q was similar to that of children
q with normal hearing
Svirsky MA, Robbins AM, Kirk KI, Pisoni DB, Miyamoto RT.
Psychological Research 2000;11:153-158.
q Speech intelligibility improved
q post-implantation
q Allen MC, Nikolopoulos TP, O Donoghue G.
q Am J Otol 1998;19:742-746.

15. Categories of Auditory Performance (CAP)
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.
use of telephone
discrimination of speech sounds
response to speech sounds
Source: Govaerts, et al, Otology & Neurotology 2002

16. Speech Intel ligibility
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).
100%
90%
80%
70%
SIR at 4 y post CI
60%
50%
40%
30%
20%
10%
0%
9-18 mths 19-30mths <3y 3-5 y 5-7 y
All Age Group at Implantation
Little Experience Exerperince to Deaf Speech
Source: Archbold 2001; De Raeve, 2006

17. Educational placement
Children implanted before the age of 2 years were in mainstream education
almost 6 times as often as children with hearing aids
The Hannover Experience
100%
14 12
90%
29
80%
70% Type of School
69
60% Mainstream
50% Integrated
40% Hearing impaired
30% Hearing impaired + Deaf
20% Deaf
10%
0%
Group 1 Group 2 Group 3 Group 4
CI 0-1.9 yr CI2-3.9 yr CI 4-6.9 yr Hearing
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)
Schulze Gattermann, MHH 2000

18. Educational costs
There are significant savings in education to be realized if a child is able to
participate successfully in mainstream education system.
$60,000
$53,200 Educational Placement
$50,000
90% saving
Annual Costs
$40,000 compared to
education in
$28,200
$30,000 Residential Deaf
$14,500 school
$20,000
$6,100 $5,030
$10,000
$0
Residential School Residential School, Self-contained Resource Room Regular-
Day Student Classroom Mainstream
Education
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.

19. Employment
Adults with a cochlear implant are twice as likely to be in paid work and more
likely to have a hi gher income than peopl e with a moderate hearing loss
Deafened adults
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 13 th National Confer ence. 28th
April 1998, Sydney, Australia.

20. Employment
42% of the severe to profound hearing loss populat ion, between
the ages of 18- 44 years, in USA are not working .
90% 82%
80% 73%
70%
58%
60%
46%
50%
40%
30%
16%
20% 11%
2% 3%
10%
0%
18-44 yrs 45-64 yrs 65-79 yrs 80+ yrs
Severely to Profoundly Hearing Impaired US Population
Source: Project HOPE calculations from the 1990-91 National Health Survey

21. Quality of Life - Health Utility Index (HUI 3)
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
Source: Cheng et al, JAMA, 2000

22. Quality of Life
The improvement in quality of life resulting from a medi cal intervention may be
calculated using validated assessment tools such as the Health Utilities Index
(HUI). The quality (utility) and quantity (life expectancy) of life are calcuated.
(Perfect health) 1.0
0.48 No
treatment
Health Related Cochlear
Quality of Life QALYs implant
(Utility) 0.11
(Death) 0.0
Duration 63.0
(Years)
(QALYs) = (Life Years x Health Utility)

23. Health utility scores
HUI 3 Pre-implantation Score Post-implantation Score
Attribute Mean (95% CI) Mean (95% CI)
(n = 48)
Hearing 0.75 0.82
0.07
(0.74 0.76) (0.8 0.83)
Speech 0.80 0.92
0.12
(0.78 0.82) (0.90 0.93)
Emotion 0.58 0.94
0.36
(-0.03 0.61) (0.93 0.96)
Cognition
1.0 1.0 0
Ambulation 0.99 0.99
0
(0.98 1.0) (0.98 1.0)
Vision
1.0 1.0 0
Pain
1.0 1.0 0
Dexterity
1.0 1.0 0

24. Estimate lifetime costs of implantation
Variables No of Years Costs (USD)
Direct Costs
Preoperative Costs 1 2863
Operative Costs
Cochlear Implant 1 19,153
Hospital and Surgery 4612
Post-operative costs
Audiology Follow-up 1 73 5148
Rehabilitation follow-up 1- 2 8984
Device failure (if any) 1 73 1007
Loss or Damage insurance 1 73 4013
Special batteries 1 73 1293
Speech processor upgrades 4 - 73 5104
Subtotal (Direct costs) $ 60 228
Indirect Costs
Time off Work 1 73 4623
Travel expenses 1 73 4830
Car parking expenses 1 73 589
Change in educational costs 1 73 - 65 558
Change in Future Earnings 11 - 73 - 55 574
Total (Direct + Indirect) $- 53 198
Source: Cheng et al, JAMA, August 16, 2000

25. Calculation of Cost Utility
The cost utility is calculated as the incremental costs associated with the
provision of cochlear implantation, divided by the i ncremental gain in Quality
Adjusted Life Years (QALYs).
Costs ($)
Cost Utility = (QALYs)
= Discounted Lifetime Costs ($)
(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

26. A cost effecti ve treatment
Due to the cascade of benefits resulting from oral communi cation the cost utility of
paediatric and adult cochlear implantation compares favourabl y with many other
common funded interventions.
More cost effective
Paediatric cochlear 5,197
implant 7,500
Source: Cheng et al, JAMA, August 16, 2000,
*Wyatt JR et al, Laryngoscope 106: July, 1996
Neonatal intensive
7,968
care (1.0-1.5kg) 7,968*
Adult cochlear 11,125
implant 11,125
Implanted 34,836
34,836
defibrillator
Knee replacement 59,292
59,292
0 10,000 20,000 30,000 40,000 50,000 60,000
Less cost effective
Cost per Quality Adjusted Life Year (QALY) in $US

27. Summary
q An unmanaged hearing loss has significant impact on the devel opment 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 opti mised by age of implantation and good infrastructure
q Cochlear implantation is a cost effective medical intervention.