4.5. National health insurance systems in H.I.C.s have been able to increase adoption rates, sustainably deliver services and reduce prices obtained on Big 5 models through volume-based negotiation.
By having a centralised payer or provider, public systems are able to conduct centralised procurement and leverage volumes to achieve reduced prices, thereby increasing adoption and accessibility of hearing aids. For example, while the penetration of hearing aids in many H.I.C. is on average only 20%, in countries such as Norway and the U.K., the strength of a publicly supported provision system has contributed to ~45% market coverage.56, 57 In these countries, governments play a critical role in providing the funding for products and provision, and negotiating terms with suppliers, while service provision may be delivered by either the public sector or contracted out to the private sector.
For example, N.H.S. England is a public procurer that conducts volume-based negotiation to drive down prices (refer to Case Study 4). U.K. tender information is made available on the E.U. website and is often consulted by E.U. countries that are procuring hearing aids. However, under U.K. regulations, other countries are not able to procure from the procurement framework.58 Over time, the prices have proved sustainable, and as volumes have increased, prices have further decreased.59 The Clinical Commissioning Group for each local area within the N.H.S. sets the tariff for reimbursement of providers (both public and private) contracted to provide hearing services. The recommended tariff for 2016/2017 for hearing assessment, fitting of two hearing aids device, cost of two devices, and three years of follow up was around G.B.P.£370 but can vary based on a number of adjustment factors.60
N.H.S. England provides hearing aids free of charge to end-users as part of the U.K.'s system of universal health coverage. N.H.S. England purchases and dispenses 1.2 million hearing aids every year through more than 300 hearing service clinics.63 Over time, the N.H.S. has developed a system that allows them to procure high-quality hearing aids from Big 5 manufacturers at an affordable rate, averaging G.B.P.£56 (U.S.$68). The approach is led by the N.H.S. Supply Chain office and is characterised by the following:
Image Description
A line chart that compares the number of hearing aid units procured over 8 fiscal years from 2007-2015 with the average pricing for these units over this time period.
- Consultations with potential suppliers in advance of the release of the tender specification documents;
- Clear specifications around a limited range of products that cover the entire spectrum of needs and that focus on items with basic features;
- Consolidated volumes across N.H.S. departments that procure hearing aids, allowing for volume-based negotiations with multiple suppliers, including minimum order commitments in some cases;
- Extensive quality testing