Select Committee on Health Written Evidence


Evidence submitted by Specsavers Hearcare (AUDIO 17)

EXECUTIVE SUMMARY

  Our proven retail model of providing high quality, community-based hearing care at low prices clearly demonstrates that it would be possible for the independent sector to deliver a professional, cost-effective hearing service on behalf of the NHS. Specsavers believe we could deliver such a service, including the entire patient journey and the supply of digital hearing aids themselves, for a total inclusive cost of circa £350-£400 per patient journey for a monaural fitting[64] and £500-£550 for a binaural[65] fitting, with hearing tests and hearing aid fittings being completed within two to four weeks of referral.

  A "prescription" based model (see paras 28-34) would fully engage spare independent sector capacity, could halve current NHS waiting lists within a year and reduce the total cost of public sector hearing provision.

  75% of hearing aids dispensed in the UK are funded and fitted by the NHS (500,000+ units pa). The independent sector currently fits some 170,000 units pa but has the capacity to fit up to 200,000 pa more. The independent sector has the skills, the capacity and much of the infrastructure already in place to assist the NHS in both reducing current waiting times and improving overall value for money for public hearing provision.

  The most effective mechanism for service delivery would be a "prescription" based system similar to that already in use in the UK optical market and as used for hearing care provision in a number of European countries. In effect, the patient is entitled to a sum of money that would be used for full payment of an agreed specification of hearing aid or which could be used at the patients' discretion as part-payment towards a higher specification of hearing system with patient themselves making up the extra cost.

  The "hearing prescription" would also cover the cost of the hearing test, dispense and fitting process and an agreed level of aftercare support. If necessary, entitlement to the prescription or the face value of the prescription would be dependent on the severity of the hearing loss with patient entitlement being limited to being able to claim every four to five years.

  The adoption of such a system would be seen as equitable and would encourage the maximum participation of all independent sector hearing aid dispensers. Other proposed models of supply being considered by the NHS [such as commissioning or local partnership agreements] would engage only a small proportion of the independent sector and consequently would not be able to deliver sufficiently increased capacity to make the desired impact on current waiting lists or provide the value the NHS are seeking.

  The introduction of a "prescription" system would allow the NHS rapid access to an additional, qualified resource capacity equivalent to up to 200,000 patient journeys a year, suggesting that existing waiting lists could be almost halved within the first year. Independent sector capacity would also further increase over the following years as independent sector businesses geared up to invest more heavily in staff training and providing greater physical testing capacity.

  The "prescription" model is fair and equitable for practitioners inasmuch as it allows ALL hearing aid dispensers to "compete" equally for NHS business and more importantly, it empowers the patient/consumer to take control of their own well-being and gives them the freedom to choose the provider, location and specification of hearing care that best meets their needs. This is a major step forward from the current "one size fits all", hospital-based approach to public hearing provision which in reality does not suit the majority of patients at all and which is failing to deliver the choice or speed of delivery to which the patient is both entitled and increasingly demanding.

  The following document discusses briefly some of the issues that would need to be addressed in detail in the short-medium term to allow the NHS to implement such a "prescription" system to take maximum advantage of the independent sector capacity and expertise. We would be pleased to supply more information on request.

ABOUT SPECSAVERS

  1.  Founded in 1984, Specsavers is now a multinational company providing services in the UK, Republic of Ireland, Netherlands, Denmark, Sweden, Norway and Spain. The Group has over 800 practices in total (560 in the UK) and over 15 million customers.

  2.  The Company is still privately [family] owned and family run; it is the UK's largest optical retailer accounting for one in four sight tests and one in three spectacle dispenses in the UK and is by far the largest provider of sight tests and spectacle dispenses to the NHS.

  3.  Specsavers business model is built around a joint-venture structure incorporating over 1,000 community-based healthcare specialists across the country, including hearing aid dispensers and opticians, who each own their own practices in partnership with the Group.

  4.  Each Specsavers Hearcare practice is owned by a Registered Hearing Aid Dispenser [RHAD] on a joint-venture basis. This assures the full commitment and sustained focus on giving excellent customer service and customer care. Specsavers customer satisfaction/hearing aid acceptance rate is over 95% with over 90% of customers choosing binaural fittings, compared to the rest of the independent sector where average satisfaction/acceptance rates are less than 80%[66] with only 30% binaural fitting.

  5.  Specsavers diversified into hearing services in 2003 through the acquisition of Hearcare Limited. Over the past three years, Specsavers has invested heavily in hearing care and has expanded it's store network to encompass over 220 stores (100 "dedicated" hearing services and 120 "day centres") with plans to open in a further 150 locations during 2007-08.

  6.  By 2010, it is anticipated Specsavers will be providing hearing care from ALL of its optical stores in the UK, Republic of Ireland and the Netherlands.

  7.  Specsavers Hearcare is now the largest independent dispenser of digital hearing aids in the UK, dispensing some 5,000 units per month with an estimated volume market share of 18% of customer transactions and 23% of hearing aid dispenses. Only the NHS fit more than we do.

  8.  Specsavers Hearcare has been nominated for the third year running in the prestigious Retail Week Awards for retail excellence in the "Emerging Retailer of the Year" category.

CURRENT SYSTEM OF HEARING PROVISION

  9.  RNID figures indicate one in seven people (16%) of the UK population have some form of hearing loss yet, according to the Government's "Living in Britain General Household Survey 2002", only 4% of all men and 3% of all women wear hearing aids.

  10.  75% of all hearing tests carried out and hearing aids dispensed in the UK (an estimated 500,000+ units per annum) are dispensed via the NHS at a total cost [ie including staff and premises] of over £500 per hearing aid dispensed.

  11.  While everyone is effectively entitled to free hearing aids under the NHS, 25% of people already choose to pay privately to source their hearing care citing better product choice, wider choice of hearing aid styles[67] and speed of service as the main reasons for choosing the independent sector over public hearing provision.

  12.  The NHS tends to dispense a single hearing aid for most patients [we assume due to cost/ budget constraints] despite the medical evidence and best advice from the Hearing Aid Council [HAC] that a hearing aid in each ear gives a better overall result and greatly assists the wearer in most situations through providing a more balanced, near-normal hearing experience.

  13.  The relevance of this being that despite all of the recent media attention regarding long waiting times for NHS hearing provision, there is growing evidence that increasing speed of NHS provision is not necessarily going to provide the complete solution to giving people what they actually want.

  14.  There is growing anecdotal evidence also that many people are put off applying for an NHS hearing aid because the NHS service is delivered from hospitals in most instances. In our experience, people with hearing problems do not perceive themselves as being "ill" and would prefer to be able to source their hearing care from the "high street" or within their local community [GP practices, health centre] rather than have to visit a hospital—much in the same way they are already able to do for NHS funded sight tests or spectacles.

  15.  And while there is concern over increasing waiting terms now, the population is ageing and demand for hearing services is projected to increase significantly over the next 10-15 years suggesting that the current waiting problems will get substantially worse unless there is a fundamental change in the way hearing provision is delivered.

INDEPENDENT SECTOR CAPACITY

  16.  The NHS and consumers alike want to see waiting lists for hearing services reduce significantly. Consumers would also prefer to be able to choose their hearing provider from the "high street". Although it would take time for the independent sector to gear up to be able to take all of the NHS demand, there is significant spare capacity already available which could "immediately" take on up to 200,000 patient journeys per annum. By way of explanation, there are currently only circa 1,000 practising RHADs[68] dispensing hearing aids in the UK independent sector, limiting current independent sector capacity to an estimated 350,000 dispenses/patient journeys per annum. Private dispenses currently account for c 150,000-170,000 units per annum suggesting there is existing "spare capacity" of up to 200,000 patient journeys per annum.

  17.  However, there a number of structural and regulatory issues, identified below, which would need to be addressed/removed to make such independent sector involvement possible:

People and regulations

  18.  The HAC currently regulates UK independent hearing provision and different regulations apply in the independent sector from those governing public hearing provision—not least in terms of the recognised qualifications for public and independent sector staff.

  19.  The lack of a commonly recognised qualification, which allows someone to practise in both the independent and public sector, makes it almost impossible for the independent sector to source suitably qualified staff quickly to gear up to meet NHS demand. The "additionality" clauses in existing public/ private sector contracts prevent independent companies from actively recruiting NHS staff and restrict any short-term transfer of skills between the sectors.

  20.  This skill shortage is being addressed in the medium term by providing more training capacity via Higher Education Institutes but consideration should also be given in the short-term to reviewing the current HAC insistence on trained NHS audiology staff still having to acquire the HAC Registered Hearing Aid Dispenser qualification and complete the six months pre-registration period before they can work unsupervised in the independent sector. Within the NHS staff with different levels of training are already permitted to handle parts of the patient's hearing test, dispense and aftercare journey yet this is not permitted to the same extent in the independent sector. Reviewing this restriction would significantly help increase capacity as new staff could be trained and introduced into the independent sector within months to undertake the more basic procedures which then would free up much needed RHAD time for the more specialist areas of the test and dispense process.

Premises

  21.  While Specsavers operates from a retail based "high street" model, many independent sector hearing practitioners trade from a variety of premises using calibrated, portable equipment. Domiciliary visits (ie providing the service in the customers own home) currently account for circa 50% of all UK private hearing aid dispenses while the remainder are provided from a mix of "dedicated" hearing centres and "day centres"—the latter being where the RHAD conducts the hearing service from "borrowed" premises such as optical testing rooms in local opticians stores, health centres and even hotel rooms.

  22.  In contrast, the NHS tends to provide hearing tests using soundproof booths in hospital consulting rooms. The use of such soundproof booths is not standard practice in the independent sector yet there is no evidence to suggest that an independent sector test and dispense is in any way less effective than that provided by the NHS. Determining whether independent sector providers have to provide sound-proof testing conditions will have a major impact on physical capability as well as the cost of service delivery. Specsavers is one of a minority of the national companies that actually fit soundproof booths in our 100 hearing centres but even we don't yet have them in our 120 "day centre" stores. Providing the regulations focus on ensuring that test rooms meet suitable noise standards (ie ambient noise less than 35 dBA), then most independent hearing providers would be able to provide suitable testing conditions almost immediately. If the requirement for soundproof booths remains, the investment costs and physical space constraints would significantly restrict the speed that many companies could and would make more physical testing space available to take on NHS patients. (For information, the cost of soundproof booths is between £4,000-£6,000 per unit.)

PRICING AND SERVICE DELIVERY

Private sector

  23.  The independent sector is often seen (with justification in some cases) as providing hearing aids and hearing services at high, if not extortionate prices; a situation not helped by the remuneration model used by many companies based on paying dispensing staff a % commission of the retail sales value. Given the relatively low volume of private customers and lack of transparency in private hearing aid pricing, this model has become self-perpetuating in many companies with no apparent incentive for dispensers to drop prices. However, Specsavers entry into the independent hearing market in 2002, trading on a no-commission, value-for-money platform and our rapid growth subsequently, has shown it is possible for independent companies to make a fair return on investment by driving high volumes at much reduced prices. Our transparent approach to pricing has now started to force greater price competition across the independent sector resulting in better services at lower retail prices for consumers.

  24.  By way of example, the estimated average retail price per digital hearing aid dispensed across the independent sector is believed to be in the region of circa £1,200, whereas Specsavers average dispense value per digital hearing aid dispensed is circa £550. Being able to also provide services to NHS patients within an appropriate "prescription" based model would allow us to improve efficiency even reduce costs even further.

NHS pricing

  25.  A balance needs to be struck that gives the independent sector a fair return on resources deployed, gives the NHS the same (and ideally, better) value for money for public sector provision and guarantees consumers, who choose the NHS option, the same [or higher] level of patient care that they currently receive from the NHS. It is Specsavers view that a fee of circa £350-£400 for a monaural fitting and £500-£550 for a binaural fitting would be required for the independent sector to be able to cost-effectively take on this work and cover the required increased investment in staff, equipment and premises necessary to take on the increased patient volumes. These figures include the cost of the digital hearing aid(s) and all professional testing, fitting and aftercare.

  26.  The influx of NHS business would obviously grow the independent sector and should make all hearing businesses more efficient overall. Nonetheless, it remains a fact that most independent sector companies would need to subsidise what is, in reality, the necessary low-cost provision required by the NHS through offering private sales to those customers who wanted to "trade up" to a higher specification of product or who chose to pay for a cosmetically more attractive option. This situation mirrors the UK spectacle market whereby most opticians similarly subsidise NHS optical services by offering a wide range of frame and lens options for those customers who want something over and above their NHS-funded entitlement and are who prepared to pay for that difference themselves.

  27.  It is Specsavers considered opinion that only the following "prescription" based model would create the necessary environment to guarantee maximum independent sector engagement:

The "prescription"/managed care model

  28.  The underlying basis of this model is that the NHS would provide/fund a "hearing prescription" for each patient to cover the cost of hearing tests and a digital hearing aid to an agreed level of specification and value.

  29.  Costs per patient could be controlled/capped as required by limiting the issue of prescriptions based on need (defined by the severity of hearing loss) and/or via a time limit—ie patients would only be able to claim a monaural or binaural prescription depending on the degree of hearing loss in each ear with their prescription only "renewed" once in a four or five year period.

  30.  The "prescriptions" could be issued by the patient's GP—although the existing General Ophthalmic Service provides an alternative model (which is both established and proven)—here it is the optometrist who issues the "optical voucher and prescription statement" at the point of service delivery. This "GOS type" model would ultimately be most cost-effective.

  31.  All "routine" hearing tests and hearing aid dispenses would be carried out by the independent sector, freeing up NHS resources to concentrate on the more complex audiological procedures.

  32.  Experience in other countries (eg Netherlands, Republic of Ireland etc) already shows such mechanisms work very effectively, with the additional benefit of encouraging greater competition between independent sector providers so raising the overall standards of choice and patient care and bringing down prices. This system has been in use in the optical sector for many years and there is no reason why it would not be equally as effective in the provision of hearing care.

  33.  The key benefits of such a system is that it would both:

    (a)  engage the whole of the independent sector, allowing all companies/dispensers to participate equally, and making hearing services more accessible and more convenient across the UK; and

    (b)  give the consumer the freedom to choose their preferred supplier of hearing services and to give them the opportunity to trade up to buy a different hearing aid if they so required.

  34.  The cost of service to the NHS per patient journey would be capped under the prescription system at a given agreed amount, giving an immediate saving per patient. Nonetheless NHS spending would have to increase in the short term in line with the increased numbers of patients being treated as waiting lists are reduced. Longer term however this model would reduce the total cost of public hearing provision via the savings achieved from engaging the independent sector and from freeing up NHS staff and physical resources for use in the provision of other, more acute patient care.

Governance and "gatekeeping"

  35.  It is obviously essential that costs are properly controlled and the NHS has an appropriate audit mechanism to validate claims as required and to control the aftercare entitlement for the patient. In the Netherlands the "KNO" consultant [equivalent of a UK ENT consultant] or designated audiology centre carries out the first hearing test to determine the patient's initial need and generates the patients audiogram[69] for them to take to the independent sector for dispensing. Thereafter all regular hearing tests, hearing aid fittings and patient aftercare are carried out directly by the independent sector.

  36.  It may be desirable for the patient's GP to play a similar "gatekeeper" role by authorising the initial need for a hearing test, to receive notification of the level of hearing loss determined during the test and confirmation that any appliance dispensed was both necessary and has been performed to the appropriate standard.

  37.  The HAC Code of Practice already requires the hearing aid dispenser to sign and keep a physical copy of the patient's audiogram and it is proposed that this document could be submitted [either with every claim or on demand] to substantiate claims for "prescription" reimbursement from the NHS.

  38.  The Dutch system also includes a mandatory period of one month's trial for the patient to wear the hearing aid and determine that it is correctly fitted and programmed before the provider's claim for re-imbursement of the "prescription" is paid.

OTHER POSSIBLE MODELS

  39.  We understand the NHS is looking at a variety of possible business models to allow the engagement of the independent hearing sector, including commissioning and local partnership agreements. While we understand that these might seem potentially attractive solutions, both have severe drawbacks and will not allow the NHS to fully maximise the independent sector opportunity. Furthermore, both have been tried and largely discredited in trying to engage the independent sector to take on public dental provision and, given the similarities between the professions, we see no reason why either would be any more successful in providing hearing care.

Commissioning

  40.  Asking independent sector providers to tender for public hearing provision meets one NHS requirement of driving value for money but would not meet the need to sufficiently increase capacity to reduce waiting lists. Our understanding is the commissioning process will only award business to the lowest tender; by definition therefore and irrespective of whether such commissioning is actioned on a national, regional or local scale, only one company can win a tender and therefore all the other possible suppliers would be excluded. Even if the largest independent employer of RHADs in the UK won all tenders, this would still only provide some 30% of potential independent sector capacity with the subsequent 70% excluded from the provision of public care.

  41.  In our view, it is highly unlikely in any event that any one company would be able to secure the necessary resources in terms of staffing or suitable premises to be able to meet the demand, either nationally or regionally. A "single provider" solution, whilst expedient for the commissioner, does not offer genuine patient choice.

Local partnership agreements

  42.  One model we know is already on trial in some parts of the NHS would enable the independent sector and NHS, probably on a regional SHA or local PCT basis, working together on a "partnership" basis. The underlying thesis of such a model is that independent sector expertise is used to manage the service dispensing both public and private sector hearing aids from community based premises, and with a proportion of the profits from the enterprise being reinvested to further extend hearing services in the community.

  43.  Audiology staff are effectively seconded to work in the new partnership but retain their existing NHS employment benefits. The SHA/PCT provide facilities at existing community-based premises (health centres, community centres) for the establishment of full-time hearing centres or "day centres". The independent sector company would run the service for an agreed fee or a share of the resulting profits.

  44.  This model may have attractions for the NHS but also has constraints inasmuch as it would again only engage a small proportion of the independent sector and would be unlikely to generate any significantly increased capacity in the short-term to help reduce waiting lists. It would also be subject to legal challenge under UK and European Law if it were seen to unfairly prejudice other independent sector companies from being able to compete on equal terms for the NHS element of the service being provided. This model also suffers from only providing limited patient choice.

CONCLUSIONS

  45.  It is Specsavers conclusion that only the "prescription" model would engage the greatest possible support, capacity and cost-savings from the independent sector and while regulation and codes of conduct would be necessary to ensure the consistency of clinical excellence and consumer protection, this model also gives the patient the greatest choice and involvement in how and from where their hearing care is delivered. This solution offers the public the best combination of access, choice and quality.

  46.  The "prescription" model would enable the NHS to make the most rapid progress in both reducing waiting times and reducing the total overall, long-term cost of public hearing provision.

  47.  Costs per patient could be controlled/capped as required by limiting the issue of prescriptions based on the severity of hearing loss and/or via a time limit, giving the NHS greater budgetary control overall.

  48.  Experience in other countries (eg Netherlands) clearly demonstrates that increased level of competition generated by the "prescription" system has a positive effect in improving the quality of patient care, improving speed and range of service delivery, increasing choice and driving down prices. It is a proven model, popular with patients and allows the greatest utilisation of audiological resources across the country. It is our contention that such a model would work effectively in the UK also.

Keith Willis

Director, Specsavers Hearcare Group Limited

29 January 2007






64   Monaural = hearing aid for one ear only. Back

65   Binaural = hearing aids for both ears. Back

66   Hearing aid manufacturers figures as measured by customer-cancelled orders. Back

67   Typically, only the traditional "behind the ear" [BTE] models are dispensed by the NHS despite consumers preferring the more discrete "in the ear/canal" [ITE, ITC and CIC] styles which are deemed more cosmetically attractive for many. Back

68   There are some 1,400 RHADs registered with the HAC but it is believed only circa 1,000 actively practice on a full-time basis. Back

69   Effectively the customers prescription which details the level of hearing loss in both ears at specific sound frequencies. Back


 
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