Report on the regulatory framework for hearing services

Focusing on the objectives of the scheme

Review of the efficiency and effectiveness of the regulatory framework for hearing services July 2012. The Report was prepared for the Office of Hearing Services by MP Consulting

Page last updated: 28 November 2012

A. Are the policy objectives clear?

On commencement of the project, mpconsulting reviewed all relevant legislation, contracts, administrative forms and statements of intent for the scheme.

The overall objective of the scheme was rarely mentioned in legislation, contracts or quasi-regulatory documents.

For example – none of the following documents included an objects or purpose clause:
  • the Hearing Services Administration Act 1997
  • the Hearing Service Providers Accreditation Scheme 1997
  • the service provider contract
  • the schedule of service items and fees
  • the Hearing Services Rules of Conduct 2012
  • the Deed between OHS and device suppliers.

The only regulatory document that mentions the objective of the scheme is the Hearing Rehabilitation Outcomes for Voucher Holders which notes that the aim of the Australian Government’s hearing services voucher program is to:
      Assist people with hearing loss to maximise their potential for independent communication and improve their quality of life.

By contrast the OHS Service Charter for OHS clients states the goal as:
      Our goal is to reduce the consequences of hearing loss for eligible clients and the incidence of hearing loss in the broader community.

Stakeholders consistently described the scheme as providing government funded services and devices to clients who need them with the expectation that it will improve the person’s hearing and quality of life.

In relation to the overarching objective, stakeholders noted that clients often have unrealistic expectations about what can be achieved through the scheme and, specifically, the improvement to hearing that can be expected through the use of devices. This is also consistent with the data from the OHS register of complaints which records that more complaints are received about ‘expectations of the device not being met’ and ‘expectations of the service not being met’ than any other topic.

Client education has been identified by the OHS and stakeholders as an important tool for tackling unrealistic expectations.

Clarity regarding objectives, along with client education, is an area for improvement in the future.

B. Is the scheme achieving its policy objectives?

One of the ways to identify whether a regulatory scheme is achieving its objectives is to measure outcomes. In relation to the scheme, health outcomes could be measured by documenting responses to these questions:
  • Is the scheme assisting people with hearing loss to maximise their potential for independent communication and improve their quality of life?
  • To what extent can this be attributed to the provision of services and devices under the scheme or to the regulation that underpins the scheme?
Another way to measure whether or not the scheme is achieving its policy objectives is to undertake satisfaction surveys to determine whether clients are satisfied with the service being funded by the scheme.

While some limited client satisfaction information is collected by the OHS, there was no robust data available to mpconsulting for analysis in relation to either health outcomes or satisfaction measures.

It should be noted, however, that service providers are required to evaluate the outcomes of client rehabilitation programs (as part of the requirements of the Hearing Rehabilitation Outcomes for Voucher Holders). While the intent of this requirement was to drive service provider quality improvement, the information could potentially be collated and used to inform policy development or improve practice across the sector. One of the barriers to such analysis is that service providers are unlikely to undertake assessments in a consistent way, making comparisons across providers difficult.

Despite the lack of substantive data available in relation to health outcomes and client satisfaction, anecdotal information about the effectiveness of the scheme can be gleaned through:
  • stakeholder feedback From the limited number of stakeholders interviewed, all agreed that the scheme is achieving the objective of providing services and devices to those in need. However, all also acknowledged areas for improvement.
    In a written submission the HCIA noted that:
      There is no question that Australians receive good quality hearing care and good quality basic devices that are supplied to those who need them. However, we would see this outcome more as a result of Government’s willingness to fund the Hearing Services Program; the opening up of provision of devices to competition; dramatically improved access for consumers due to network expansion and improved professionalism amongst the hearing care Professional bodies. We do not see it as relating to a prescriptive regulatory framework.
  • complaints – All clients of the scheme, providers and other interested parties can lodge a complaint with the OHS about the scheme. The OHS defines a complaint as ‘any expression of dissatisfaction or any breach of conditions or standards relating to a product or service offered or provided’.

    The OHS receives only a very small number of complaints compared to the number of active clients receiving services. For example, in 2010-11, the OHS received 1,435 complaints. Given that there were 547,627 active clients of the OHS in 2010-11, this means complaints were made by 0.26% (or less) of clients (noting that some clients may have made more than one complaint).
  • compliance action – Another possible measure of the effectiveness of the scheme is the level of compliance action taken.

    In the past 5 years, the OHS has recovered money from service providers under the contract but compliance action has only been taken on 3 occasions (twice in 2008-2009 and once in 2009-2010).

    In isolation, this information is not a reliable indicator of the effectiveness or otherwise of the legislation. For example, one reason for a low level of compliance action may be a high level of industry compliance. Another reason may be low compliance monitoring by the OHS or the lack of appropriate enforcement actions under the contract or legislation.

    In relation to the level of monitoring by the OHS, it is noted that in 2010-11 only 2 site audits were conducted by the OHS along with 7 audits of new providers. This means that the total percentage of service providers audited was only 4%5 OHS had advised that compliance activities were scaled down in 2010-11 for various reasons including competing priorities. Over the past 6 months the OHS has undertaken a great deal of work to develop a risk-based compliance framework.. In addition, 483 practitioner files were audited against the Hearing Rehabilitation Outcomes for Voucher Holders. This represents 31% of practitioners who had one or more client file audited.

    Given the limited data available, it is difficult to draw any conclusions about the level of industry-wide compliance.
In summary while anecdotal information suggests that the scheme is, to some extent, achieving its objectives, the limited data means that it is not possible to confirm this.

5 OHS had advised that compliance activities were scaled down in 2010-11 for various reasons including competing priorities. Over the past 6 months the OHS has undertaken a great deal of work to develop a risk-based compliance framework.

A. Is the regulation assisting in the achievement of the policy objectives?

The regulatory framework enables the issue of vouchers, the payment of providers and the setting of prices. To some extent it also enables the control of practices. To this end, the regulatory scheme supports the achievement of the policy objectives.

However, to test whether the regulation is effective, it is also necessary to identify the risks the regulation is intending to address and the extent to which the legislation effectively mitigates such risks. In other words, what is the market failure that justifies intervention by government?

When this question was asked of stakeholders, it was generally acknowledged that:
  • there is little or no clinical harm as the result of the provision of hearing services
  • while the scheme has been used as a quasi registration scheme for practitioners in the past, this is no longer necessary as a number of professional bodies have emerged. The role of professional bodies is now clearer and there is little need for government to directly regulate hearing services practitioners (audiologists and audiometrists). The change in the industry has been reflected in changes to the contract and the Rules of Conduct which took effect on 1 July 2012
  • by funding certain services, government can have an expectation that the type and quality of the service delivered meets required standards. Regulation should therefore be directed to describing these standards.
Some stakeholders, but not all, also considered that the regulation should minimise the risk of financial harm to clients. It was suggested that there is a risk of vulnerable clients being influenced to spend money on top-ups when there is little or no clinical need for such devices. Stakeholder opinion varied regarding the likelihood of this risk being realised. Some stakeholders suggested that this was very rare and others suggested that the practice of influencing clients to purchase unnecessary top-ups was ‘rife’. This is discussed further below.

Overall, mpconsulting considers that while the program is achieving its objectives (if the objectives are interpreted broadly) the regulation is not well-adapted to the efficient and effective achievement of those objectives. As discussed below, the regulation is not well matched to the risk.