New UnitedHealth Business Starts Offering Hearing Aids
October 03 2011 - 12:31AM
Dow Jones News
Health-insurance giant UnitedHealth Group Inc. (UNH) is adding a
new dimension to its increasingly broad suite of health-care
products: hearing aid sales.
A new UnitedHealth business is launching on Monday four
different kinds of hearing aids, made by supplier IntriCon Corp.
(IIN), with a goal of helping reach millions of people who don't
get the devices due to high costs and lack of insurance
coverage.
The move comes as insurers kick off marketing efforts for their
2012 Medicare-based plans. UnitedHealth is offering new hearing-aid
benefits in such plans, but is also selling devices on a retail
basis over the Internet, injecting it into a multi-billion-dollar
market where major players include European firms Sonova Holding AG
(SOON.VX), Siemens AG (SI, SIE.XE) and William Demant (WDH.KO).
UnitedHealth is using its scale--the entire company projects
$101 billion in sales this year --plus a proprietary web-based
hearing test to offer an alternative to a supply chain it says can
lead to devices that are too expensive for many people. The move
drew criticism from a professional group for hearing experts, which
said online hearing tests can't replace a face-to-face exam.
"Our goal is to put better hearing within reach of more
Americans, including the 47 million with Medicare, which does not
cover the significant cost of hearing devices," said Lisa Tseng,
chief executive of the new hearing-aid business, called hi
HealthInnovations.
UnitedHealth, based in Minnetonka, Minn., has been expanding its
business far beyond the bounds of health insurance. It has a broad
array of health-services offerings, including its
pharmacy-management business, and it has also acquired physician
groups. The latest venture marks UnitedHealth's first foray into
medical-device sales, which the company believes is an industry
first.
The U.S. market for hearing aids and other so-called audiology
devices is valued at more than $5.7 billion, according to
Vancouver-based firm iData Research. About 36 million Americans
have hearing loss, and the number is poised to grow as baby boomers
age.
The UnitedHealth businesses' hearing aids will retail for
between $749 and $949, which compares with typical prices that can
reach thousands of dollars. The new business is also contracting
with several UnitedHealthcare Medicare Advantage and Part D drug
plans to make devices available to plan members; there will be no
out-of-pocket hearing-aid costs for some Medicare Advantage
members, the company said.
Previously, the company said industry Medicare plans had some
discounts on the devices, but such discounts have been limited by
high costs and lack of Medicare coverage.
UnitedHealth is keeping costs low by simplifying the route for
patients to get hearing tests and, if necessary, hearing aids. It
has an online test designed to work with earphones and is planning
a mobile application for smart phones and tablet computers. Based
on the results, hi HealthInnovations will custom program hearing
devices.
"We're really leveraging UnitedHealth Group's scale and our
membership base" to keep costs low, Tseng noted. The company will
refer patients onto physicians if hearing tests indicate more
serious problems, Tseng said.
Therese Walden, president of the American Academy of Audiology,
a professional group for hearing experts, said mark-ups for hearing
aids cover the cost of important services that benefit patients. An
online test can't take into account all the variables that impact
successful treatment for hearing loss, she said, and audiologists
help patients maximize the potential of their hearing aids.
"Skimping on the cost-effective tests and care provided by the
audiologist, which helps to ensure accurate diagnosis and effective
short and long-term care, is not smart," Walden said.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
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