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«THE ECONOMIC IMPACT AND COST OF HEARING LOSS IN AUSTRALIA A report by Access Economics Pty Ltd February 2006 Listen Hear! The economic impact and ...»

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Andrews and Smith (1992:175) estimated that on average, students with disabilities required support by degree of disability with costs increasing from low support ($91 per student), additional support ($391 per student) and high support ($1,147 per student) (all in 1992 dollars). They further assumed that costs of the lowest category would be absorbed by the College, therein leaving an average cost of $1,540 (rounded) per student with a disability (see also Devlin, 2000:21). Devlin (2003:23) suggested that the average cost of providing for all enrolled students with a disability was $327 per student and $832 for students with support needs. Notably, students with very high support needs such as signers were identified with costs on average of $5,000 per annum Numbers of tertiary students requiring services: In 2004, some 10,300 deaf and hearing impaired people were enrolled in vocational educational programs in Australia (National Centre for Vocational Educational Research (NCVER), specific data request).

For deaf and hearing impaired students who access post-school education, support is available to them on the basis of need.

The estimate of students using support in vocational and educational training services was derived as follows, based on data provided by NMIT, NCVER and New South

Wales Department of Education and Training:

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vocational and educational training enrolments of deaf and hearing impaired students by state, roughly reflect national ABS population distributions with New South Wales and Victoria being the two largest states.

in 2004 in Victoria, 3.5% (105/3,010) of deaf and hearing impaired students accessed support services as per NIMT’s report. Victoria’s enrolment represents 30% of the national in vocational and educational training enrolment of deaf and hearing impaired students.

the New South Wales Department of Education and Training reports that there were 518 deaf and hearing impaired students accessing support services in 2005 and that this is a representative number for their usual enrolment. This represents 16.9% (500/3,070) of deaf and hearing impaired students accessing support services. New South Wales’ enrolment represents 37% of the national in vocational and educational training enrolment of deaf and hearing impaired students. It is generally acknowledged that the New South Wales’ system is more readily accessed than the other states and that Victoria’s rate probably reflects a more realistic level of support provision.

so, rather than taking a crude average between these two states, it is more appropriate to cost services for New South Wales at their reported rate and the rest of the country using Victoria’s rate. On this basis New South Wales has 518 students accessing services and the remainder of the country is estimated to be

223. Thus it is estimated that at least 741 students are accessing support services such as sign language interpreting in vocational and educational training.

Current and real costs data were provided by New South Wales as $3,508 per student.

Although not as high as the Devlin estimate for students with higher support needs, the New South Wales costs are used as the estimate because of its currency and the number of students under-pinning the estimate. The costs of supporting deaf and hearing impaired tertiary students in 2005 was thus estimated as $2.6 million.

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People with hearing loss require additional services relative to other people in the community, such as audiological and interpreter services and support to the Deaf Community.

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A national sign language service for Medicare rebate-able medical interpreting services is provided through Wesley Mission Brisbane, under a tender arrangement from the Commonwealth Department of Family and Community Services. The actual costs of this interpreting service could not be obtained, so they have been derived on the basis of the Department’s request for tender. In the request for tender the Department advised that it had allocated interpreter funding of $18.4 million over 4 years to establish a national service to book and pay for accredited Auslan interpreters (John Paton, Victorian Deaf Society, personal communication). These costs were averaged over four years with $4.6 million allocated for this year for interpreter services.

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A range of community services are provided to the Deaf Community in Australia by various Deaf Societies. The nature of services provided varied by State/Territory but encompassed services across the life span including community-based family support services, community support, community education, interpreting15 and aged care.

Costs associated with fund raising are not reported here. The costs of services were provided by the New South Wales, Victorian, South and West Australian Deaf Societies. Costs for Tasmania and the Territories were established on a proportional population basis against the data provided by the other societies using population data.

Excluding the costs of audiology services (which are more likely to be provided to people with acquired hearing loss), the cost of delivering these services to the Deaf Community in the last financial year were estimated to be $13.6 million.

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22% 15 Communications with the national provider of interpreter services shows that these costs are not double counted but represent additional services provided.

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The costs detailed in this section sum to $13.8 million – comprising $2.1 million for non-health communication devices (since hearing aids and cochlear implants are included in Chapter 3), $1.2 million for specific Telstra telephones and $10.5 million for ACA TTY machines.

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Table 5-9 reports data from the Survey of Disability Ageing and Carers on the use of communication devices by people who reported their hearing loss as their main condition.

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Earlier it was noted that the SDAC is likely to under report hearing loss by a factor of 1:3. The estimates in the above table need to be adjusted for this factor, leaving aside the costs of hearing aids and cochlear implants, which were covered in Section 4.4.

Similarly, telecommunications technologies (e.g. high technology writing aids) are addressed in Section 5.3.2. The remaining (additional) communication aids and the

adjusted number of users are then:

low technology reading or writing aids (probably pen and paper): 10,800 low technology speaking aids (e.g. communication device such as the Franklin Speaking Language Master @ $588 16): 1,500 fax machine (e.g. Samsung SS341p $159.95 17): 58,500 reading, writing or speaking aid not specified (as these cannot be directly priced they are imputed using the average sale price of $129.53 from Deafness

Resources Australia, who in 2004-05 had sales of $388,603 to 3,000 customers:


16 http://www.novitatech.org.au/product.asp?p=247&id=1601 17 Harvey Norman Woden November 10, 2005 pers.com

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Using these estimated volumes and unit prices, the total cost of these communication aids is estimated as $2.1 million (see Table 5-10).


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Telstra provides telecommunications equipment for deaf and hearing impaired people through its disability equipment program. The number of units provided and costs associated with these services for the year 2004-05 are available through the Telecommunications Performance Report (ACMA, 2005) and Telstra’s terms of business for its wholesale customers. Actual costs to the market would be higher than the figures reported although, as the overall estimate is small, a retail margin has not been included. The estimated cost of these devices is $1.2 million in 2005. The major cost driver was volume control telephones. Volume controls have just become standard on all telephones, so the cost of this item will reduce considerably next year.


1% 2% 18%

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A National telephone relay service is provided by the Australian Communication Exchange (ACE) funded by the Australian Communications Authority (ACA). This service provides a telecommunications interface so that Deaf people and hearing people can communicate via telephone. The Deaf person uses a telephone typewriter to communicate with ACE who in turn communicate with the hearing person being called and relay the communication back to the Deaf person. The TTY can be likened to an interactive facsimile machine. The service is funded via levies to the telecommunications industry.

For the year 2003-04, ACA reports that the total cost of the relay service was $15.7 million. ACA reports that two thirds of incoming calls were from TTY machines.

Assuming that this represents Deaf people using the service, the cost of the relay service directly to Deaf people would be $10.5 million for the year.

Deaf people also use texting or SMS to communicate. As this cost is likely to be similar to other market segments e.g. young people communicating via SMS, no additional cost is allocated in this study.

5.4 CARERS Informal care, in a hearing loss context, can encompass repeating what has just been said for a person, buying a train ticket for them, making telephone calls, taking notes in a meeting at work or in a classroom, or assisting with communication at a medical appointment. Such care is usually provided by a family member or close friend. By example, the reader may recall the scene in Four Weddings and a Funeral where the lead actor Charles (Hugh Grant) was required to interpret in sign language for his brother at a job interview.

Informal community care is provided by family and friends of the person with hearing loss at no monetary cost. However, informal care still has an economic cost, as the caregiver cannot spend that time doing other activities, including paid work or other leisure activities.

Presently, there are no data available on the costs of caring for people with hearing loss in Australia from the ABS Survey of Disability and Ageing due to the very small number of responses and consequent very high standard errors. The absence of primary carers for people with hearing loss is interesting, particularly given Wilson’s finding that people with hearing loss were more than twice as likely to require help with managing communication difficulties as other Australians (Wilson 1997; OR 2.15 CI (95%) 1.35-3.42). Similarly, it would be very unlikely that large numbers of young children and older people with hearing loss would be accessing the health services reported in Section 4 alone. It is feasible that the nature of caring in hearing loss is not well recognised, and/or that most carers are not primary carers but do provide nonprimary care services.

While accepting that people with hearing loss have a need for communicative assistance, the level of need will vary with the extent of impairment. Since some people with mild hearing loss may be unaware of their hearing loss, it would not be realistic to attribute caring needs to these people. However, it would be reasonable to attribute caring needs to people with moderate or worse hearing loss in their better ear. Five hours per week is the imputed rate of care being taken as the lowest levels of imputed

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care from the study on carers in Australia (Access Economics, 2005b: 14) provided by non-primary carers. Adjusting the imputed rate by the odds ratio ((5 * 2.15) -5) the imputed rate is 5.75 hours. This provides for 126.6 million care hours per year based on 422,765 people for 5.75 hours per week and 52.1 weeks per year.

From a methods perspective, it is noted that this analysis is partial (rather than a general equilibrium approach) and that, as with the approach to production losses, an implicit principle is that the economy is operating at full capacity (and therefore household tasks are a net resource cost). In this context, there are several possible

methods for valuing the time foregone by caregivers including:

Opportunity cost: the value of lost wages foregone by the carer;

Replacement valuation: the cost of buying a similar amount of services from the formal care sector; and Self-valuation: what carers themselves feel they should be paid.

Access Economics has adopted the replacement valuation approach in this report, due to the lack of information about the demographic characteristics of carers of Australians with hearing loss, noting that replacement valuation will generally give higher results than the other two methods, for which data are not available.

The estimate of the replacement value of informal community care is sensitive to changes in the estimate of the wage parameter for alternate formal sector care. In this analysis, the unit cost used has been based on the wage of moderately skilled formal sector carers (supervised employees). In May 2004, full-time carers and aides employed in the formal sector received an average wage of $17.20 per hour, or $650.30 for a 37.8 hour week (ABS 2005c). This average includes payment of overtime for after hours work. However, the hourly rate received by employees does not account for on-costs such as superannuation incurred by employers, the wages of supervisors, managers or administrative support staff or other capital overheads.

Loadings are added for each of these additional costs, and for average wage growth between May 2004 (when the survey was last undertaken) and February 2005 (the most recent period for which estimates of average weekly earnings across all employees are available).


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