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Cheng AK, Rubin HR, Powe NR, Mellon NK, Francis HW, Niparko JK. Cost-Utility Analysis of the Cochlear Implant in Children. JAMA. 2000;284(7):850–856. doi:10.1001/jama.284.7.850
Author Affiliations: Departments of Otolaryngology-Head and Neck Surgery (Drs Cheng, Francis, and Niparko and Ms Mellon), Medicine (Drs Rubin and Powe), Health Policy and Management (Drs Rubin and Powe), and Epidemiology (Dr Powe), Johns Hopkins University, Baltimore, Md.
Context Barriers to the use of cochlear implants in children with profound deafness
include device costs, difficulty assessing benefit, and lack of data to compare
the implant with other medical interventions.
Objective To determine the quality of life and cost consequences for deaf children
who receive a cochlear implant.
Design Cost-utility analysis using preintervention, postintervention, and cross-sectional
surveys conducted from July 1998 to May 2000.
Setting Hearing clinic at a US academic medical center.
Participants Parents of 78 profoundly deaf children (average age, 7.5 years) who
received cochlear implants.
Main Outcome Measures Direct and total cost to society per quality-adjusted life-year (QALY)
using the time-trade-off (TTO), visual analog scale (VAS), and Health Utilities
Index—Mark III (HUI), discounting costs and benefits 3% annually. Parents
rated their child's health state at the time of the survey and immediately
before and 1 year before implantation.
Results Recipients had an average of 1.9 years of implant use. Mean VAS scores
increased by 0.27, from 0.59 before implantation to 0.86 at survey. In a subset
of participants, TTO scores increased by 0.22, from 0.75 to 0.97 (n = 40)
and HUI scores increased by 0.39, from 0.25 to 0.64 (n = 22). Quality-of-life
scores were no different 1 year before and immediately before implantation.
Discounted direct costs were $60,228, yielding $9029 per QALY using the TTO,
$7500 per QALY using the VAS, and $5197 per QALY using the HUI. Including
indirect costs such as reduced educational expenses, the cochlear implant
provided a savings of $53,198 per child.
Conclusions Cochlear implants in profoundly deaf children have a positive effect
on quality of life at reasonable direct costs and appear to result in a net
savings to society.
Impairment of hair cell function induces profound deafness in approximately
0.3% of children younger than 5 years.1,2
Cochlear implants may affect the auditory rehabilitation of an estimated 200,000
US children with profound deafness who fail to benefit from conventional hearing
aids. Rising health care costs, due in part to advances such as the cochlear
implant, have led to pressures that discourage the use of cost-increasing
technology. Two thirds of US health care plans cited "no timely cost-effectiveness
data" as a barrier to reimbursement.3 Policymakers,
third-party payers, and pediatricians have called for more cost-effectiveness
data on pediatric cochlear implantation.
Conversely, costs associated with profound deafness are already substantial.
The expected lifetime cost to society for a child with prelingual onset of
profound deafness exceeds US $1 million, largely because of special education
and reduced work productivity.4 Cochlear implantation
may result in a net savings to society if benefits translate into reduced
educational costs and increased earnings.
A recent multicenter study of the cochlear implant in postlingually
deaf adults reported a reasonable cost-utility of $14,670 per quality-adjusted
life-year (QALY) using the Health Utility Index (HUI).5
Published cost-utility ratios of pediatric cochlear implantation have been
limited by using hypothetically estimated utilities6-9
or visual analog scale (VAS) scores obtained from adult patients.10-12 Empirical data are
necessary, and utilities from adult patients may not capture the impact of
issues unique to childhood deafness, including development and language acquisition.
We conducted a cost-utility analysis of the cochlear implant in children
from the societal perspective using 3 different instruments to measure quality
We conducted preintervention, postintervention, and cross-sectional
surveys of parents of profoundly deaf children (average hearing loss ≥90
dB for both ears) each of whom have received or will receive a cochlear implant.
The institutional review board of The Johns Hopkins Hospital approved the
study. All participants gave informed consent. The VAS was mailed to parents
of each child who received an implant at The Listening Center at Johns Hopkins.
The HUI, appropriate only for children aged 5 years or older, was mailed to
families of school-aged children who responded to the VAS. The time-trade-off
(TTO), which is more demanding in time and emotions, was conducted as parental
interviews during routine appointments, following standardized protocols with
To assess potential selection or recruitment bias, we compared sociodemographic
and audiological characteristics and VAS scores of all participants (n = 78)
with subgroups that also completed the TTO (n = 40) or HUI (n = 22). We also
compared these characteristics of study participants with characteristics
of parents of children who had received an implant but who did not participate.
Each parent rated his/her child's health state at survey, immediately
before and 1 year before the implantation using the VAS and TTO instruments,
and at survey and before implantation using the HUI.
The VAS is presented as a vertical 10-cm "feeling thermometer" with
grid marks from 0 (death) to 100 (perfect health); respondents mark a number
corresponding to perceived quality of life. In the TTO,14
respondents are offered 2 alternatives. Alternative 1 is current health state
(deaf without cochlear implant) for time t (rest
of life expectancy). Alternative 2 is perfect health for time x. The x is then varied until the respondent
is indifferent between the 2 alternatives, at which point health utility is
expressed as x/t.
The HUI,15 a population-based health
utility instrument, postulates the domains of health as hearing, speech, vision,
emotion, pain, ambulation, dexterity, cognition, and self-care. Respondents
are mapped into 1 of 972,000 health states depending on their functional capacity
based on a 15-question survey. For example, deafness without other comorbidities
would generate a score of approximately 0.61 because in the derivation of
the HUI, 532 nondeaf adults representing the general population rated the
state of being deaf as 0.61 using the standard gamble.
Mean group VAS scores can also be transformed into TTO scores by a power
function. Several investigators, in mapping the relationship between VAS and
TTO scores obtained from individuals who completed both, found concordance
in the formula TTO = 1 − (1 − VAS)b,
with b ranging from 1.5516
to 1.6117 to 1.81.18
Transformed scores using these coefficients can be compared with empirically
obtained TTO scores as another means of evaluating the validity of the TTO
Because of the possibility of recall bias in retrospective assessment
of quality of life before the implantation, we also administered the instruments
to parents of deaf children who were eligible but had not received an implant.
Parents rated their children's health state at the time of the survey and
1 year ago. We also retested a small group of patients to assess test-retest
reliability. For those who completed multiple instruments, Pearson correlations
Direct medical costs were estimated using the Medicare resource-based
relative-value scale (RBRVS) for inpatient and outpatient preoperative, operative,
and postoperative services covered by the Physician Fee Schedule,19 average Medicare blended payment for hospital costs,20 wholesale cost of the device, average cost per surgery
of complications and device failure, processor upgrade costs, and patient-borne
costs of warranty, loss or damage insurance, and batteries.
Wholesale device cost was used because this aspect of Medicare reimbursement
is substantially below cost (Health Care Financing Administration Common Procedure
Coding System code L8614, $14,500 for outpatient surgery; diagnosis related
group [DRG], 49; $11,000 global fee for inpatient surgery).19,20
Device, warranty, and battery costs were estimated as the average between
the most common implants currently used at The Listening Center: Nucleus-24
(Cochlear Corp, Englewood, Colo) and Clarion (Advanced Bionics, Sylmar, Calif).
An internal device failure rate of 0.2% was calculated based on observed failure
rates in all children worldwide with the Nucleus-22 for over 5 years, the
Nucleus-24 for over 1 year, and the Clarion for over 2 years (P. Parker, BA,
Cochlear Corp, oral communication, October 1999; J. Grant, BA, Advanced Bionics,
oral communication, October 1999). Because our observed complication rates
have been lower than reported figures, we derived the costs of complications
from a previous study of 2751 patients21 to
obtain more conservative and stable estimates.
Indirect costs included time off from work, travel expenses, change
in educational costs, and change in future earnings. For time off from work,
we estimated 4 hours per visit and a weighted-average salary based on employment
status and sex. We used the parents' work until their children would be aged
18 years and then used the recipient's work; 3 days off were given at time
of surgery. Change in educational costs was based on differences in school
placement before and after receiving the implant as previously described.22 Change in future earnings took into account differences
in school placement and nondeaf and deaf employment rates and wages.1,4,23
We used a life table to estimate remaining average life expectancy.24 We assumed the cochlear implant would not alter life
expectancy and that the implant would be used for the remainder of life.
Health utility is the numerical valuation of one's quality of life on a linear scale
from 0.00 (death) to 1.00 (perfect health). Both costs and benefits are discounted
at the recommended 3% rate to express future expenses and earnings in today's
We calculated cost-utility using 3 different utility instruments. To
explore the effect of potential recall bias, we also calculated cost-utility
using cross-sectional comparisons of preimplantation at-survey ratings of
candidates with after implantation at-survey ratings of recipients.
We performed 1-way sensitivity analysis for both direct and total costs,
varying the covariates about their ranges to test the robustness of the cost-utility
Response rates were 78 (74%) of 105 eligible families for the VAS, 40
(77%) of 52 for the TTO, and 22 (73%) of 30 for the HUI. The 78 children had
an average age of 7.5 years and had used their implants for an average of
There was no significant difference in characteristics among the VAS,
TTO, and HUI subgroups, nor between the recipient and candidate cohorts, in
VAS scores or sociodemographic and audiological characteristics (Table 1). There were also no significant
differences between recipients whose parents participated in the study and
those who did not.
Mean VAS scores (n = 78; age 7.5 years with 1.9 years of implant use)
increased 0.27 on a scale from 0 to 1, from an immediately before implantation
score of 0.59 to a postimplantation score of 0.86 (Figure 1 and Table 2).
Twenty-six respondents repeated the VAS a second time (average time, 9.6 months);
test-retest correlation was 0.62. The mean (SD) retest response was slightly
lower than the original response (Δ, 0.02 [0.18]).
Mean TTO scores (n = 40; age 7.4 years with 1.7 years of implant use)
increased 0.22. The 1-year-before implantation score was 0.75, followed by
an immediately before implantation score of 0.75 and an at-survey score of
0.97. When asked, the 40 TTO respondents reported that their 1-year-before
and their immediately before VAS scores did not differ.
Mean VAS scores were transformed into TTO scores by the power function
described in the "Methods." Transforming the VAS scores (0.59 preimplantation
to 0.86 postimplantation) yielded scores of 0.75 to 0.95 (Δ, 0.20),
0.76 to 0.96 (Δ, 0.20), or 0.80 to 0.97 (Δ, 0.17), respectively.
This agreed with TTO results of 0.75 to 0.97 (Δ, 0.22).
HUI scores (n = 22; age 10.0 years with 2.8 years of implant use) increased
0.39, from 0.25 before implantation to 0.64 at survey. Of the 9 health domains,
hearing and speech were solely responsible for the significant overall improvement
in utility (Table 2).
Ninety-two percent of parents perceived an improvement in quality of
life in terms of VAS scores; 4% no change (n = 3, representing 2 scores of
100 to 100; 1 of 90 to 90); and 4% a decrease (n = 3). Of those with decreased
scores, one patient required reimplantation, a second patient had difficulty
in rehabilitation, and third patient is doing well in language acquisition.
Ninety-five percent of HUI scores improved and 5% decreased (n = 1); the one
decreased HUI score correlated with a decreased VAS score. Seventy-eight percent
of TTO scores improved and 22% had no change, reflecting the fact that a significant
decrement in quality of life must generally occur before respondents are willing
to trade-off years of life.
Pearson correlations were moderate between changes in VAS and TTO scores
(n = 40; R, 0.57), VAS and HUI (n = 22; R, 0.44), and TTO and HUI (n = 15; R, 0.48).
Using fiscal year 1999 data, lifetime direct medical costs of the implantation
and associated services were $60,228 at a 3% discount rate and $51,900 at
a 5% rate (Table 3). Five percent
were preoperative costs; 9%, operative costs; 32%, device costs; and 55%,
postoperative costs. Indirect costs were a reduction of $113,426 at a 3% discount
rate and a reduction of $82,374 at a 5% rate, largely because of educational
savings (Table 4) and increased
future earnings. Combining all costs, cochlear implantation would save $53,198
per child at a 3% discount rate and $30,474 at a 5% rate.
The average age at implantation in our cohort was 5.7 years. With 54%
males and 46% females, we projected an average life expectancy of 78 years
and therefore 73 years of implant use.
Direct medical cost per QALY was $9029 per QALY using the TTO, $7500
per QALY using the VAS, and $5197 per QALY using the HUI (Table 5). Before discounting, changes in utility were assumed to
remain stable for the remainder of life. Differences between the preimplantation
at-survey scores of candidates and the after implantation at-survey scores
of recipients reflect similar improvements in utility, resulting in cross-sectional
cost-utility ratios of $10,131 per QALY using the TTO, $8809 per QALY using
the VAS, and $5957 per QALY using the HUI (Table 5). Total cost per QALY, after incorporating indirect costs,
was less than $0.
Varying relevant covariates about their ranges still generated consistently
favorable cost-utility results (Table 6).
This analysis suggests that the cochlear implant is highly cost-effective
in children, with a net expected savings of $53,198 over a child's lifetime.
Considering only direct medical costs yields cost-utility ratios of $9029
per QALY using the TTO, $7500 per QALY using the VAS, and $5197 per QALY using
the HUI. For public policy, cost-utility analysis is useful because its measure
of benefit—the QALY—incorporates the dimensions of both quantity
and quality of life, permitting comparison of all interventions on a uniform
scale. Medical interventions with a cost-utility less than $20,000 to $25,000
per QALY are generally considered to represent acceptable value for money,
ie, cost-effective.30,31 The cost-utility
of pediatric cochlear implantation compares favorably with many other procedures
that use implants, including (inflated to 1999 dollars32)
the defibrillator implant, which costs $34,836 per QALY33;
knee replacement, $59,292/QALY34; and adult
cochlear implantation, $11,125 per QALY,35
using the VAS; $16,061 per QALY5 using the
HUI. Previous pediatric cochlear implant studies, all postulating hypothetical
or adult utilities and performed in England or Australia, reported cost-utility
ratios ranging from less than $0 to $25,942 per QALY,6-12
generally including educational savings but being inconsistent in treatment
of other costs. To our knowledge, this is the first cost-utility study of
pediatric cochlear implantation that uses US cost data or directly elicits
utilities from recipients or their parents.
Of the 7 empirical adult studies, 4 used the VAS, 2 used the HUI, and
1 used the Quality of Well-being Scale.36 This
is the first cochlear implant study to use the TTO. The TTO elicited robust
gains in utility, but the scores were consistent with transformed VAS scores
using established power functions described in the literature. The preoperative
baseline TTO score may be considered conservative compared with an average
standard gamble score (generally similar to TTO) of 0.61 for being deaf obtained
in the derivation of the population-based HUI. The TTO and standard gamble
scores for being deaf from the general population may therefore require further
assessment. Comparing benefits to direct costs, all 3 instruments yielded
favorable results, ranging from $5197 to $9029 per QALY. This convergence
of results provides confidence that the true cost-utility lies within or close
to this range. Varying other covariates in a sensitivity analysis confirms
the robustness of this analysis.
Several limitations of our study deserve comment. Recall bias, inherent
in any retrospective study, may have caused overestimation of utility gains.
However, recall bias in cochlear implant patients' preoperative utilities
may be less substantial. Patients revisit the state of being deaf when the
processor is removed daily for bathing and sleeping, when the battery power
is exhausted, and when equipment failure is experienced. Patients and their
families probably appreciate the communication and sensory difficulties of
profound deafness even many years after cochlear implantation. Consistent
with this, candidates similar in key characteristics generated prospective
preoperative scores nearly identical to recipients' retrospective preoperative
Parental proxy bias also may have caused overestimation of utility gains.37,38 We thought it necessary and desirable
to use hearing parents as proxies because average age of those at the time
they received their implants was younger than 5 years and as young as 1 year,
greater than 90% of deaf children are born to hearing parents, and parents
must make this decision. However, future longitudinal assessments that include
self-reported ratings from the older children would be informative.
This study is also subject to potential selection bias, only representing
deaf children who have received or will receive an implant at a large tertiary
care center. It does not include those who did not receive implants for ideological,
medical, or insurance-related reasons, nor does it address the controversy
within the deaf community about adverse effects on deaf culture.39
However, ability to pay has no bearing on candidacy at The Listening Center,
which we currently regard as "no substantial growth in speech sound recognition
and age-appropriate verbal language abilities despite continued use of powerful
hearing aids, fit for both ears."40 We also
demonstrated no recruitment bias among the VAS, TTO, and HUI subgroups by
comparing key characteristics. Our cohort had higher socioeconomic status
than the general population, but utilities were similar across strata of parent
Our estimates of indirect costs are probably conservative. In our cohort,
with average implant experience of 2.3 years, 63% attended mainstream school
classes, compared with 75% with at least 4 years' experience in a previous
study.22 Of those in mainstream classes, we
only assumed that 75% (instead of 100%) would attain the average nondeaf employment
profile. The rest of the cohort is assumed to remain at the average deaf employment
profile, a probable underestimation of earnings. One study estimated a savings
of $38,374 in special living equipment after implantation6;
we only included the commonly used telephone text device.
In summary, direct medical cost ranged from $5197 to $9207 per QALY
using 3 utility instruments and total cost per QALY was less than $0. The
cochlear implant is extremely cost-effective, generating important health
benefits in children at reasonable direct costs and providing a net savings