Adding Ancillaries: Listen up! Audiology boosts our bottom line

December 2, 2005

Instead of sending hearing-impaired patients elsewhere, this FP helps them in his own office—and reaps the profits.

Do you often raise your voice so that older patients can hear you explain their diagnosis or how to take their medications? While you no doubt realize that these patients are hearing impaired, you may not know that they represent a "win-win" opportunity for your practice: You can have the satisfaction of greatly improving their quality of life, while boosting your practice earnings. My six-physician family practice group added a full-service audiology department early this year. It's operating profitably with very little oversight, and provides tremendous benefits for our patients.

A new model for helping patients

Audiology services have historically been offered in two settings: the ENT specialist's office and the retail hearing aid store. While these can effectively meet patients' needs, both have drawbacks. Hearing aid stores are run by people whose goal is to sell hearing aids, and patients may find the sales pressure off-putting. A visit to an otolaryngologist, on the other hand, may require a referral from a primary care physician, and will definitely mean another appointment and an additional copayment. Since patients don't see hearing problems as urgent health matters, many ignore the ENT referral.

It works this way: A patient is referred to our in-house audiologist if he or she complains of hearing loss during an office visit, or after one of our physicians or nurses notices that the patient doesn't hear well. Because we have an open scheduling system, our audiologist usually sees the patient right away. Patients who "pass" the hearing test aren't charged for the audiology screening.

Those who are found to have a hearing deficiency receive a more-comprehensive exam. Because hearing loss has now been diagnosed, we're able to bill Medicare and other third-party payers for the exam, generating more income for the practice. Indeed, the revenue from the diagnostic hearing exams alone covers a significant portion of our audiology department's overhead.

To better serve patients, we use visual speech mapping (VSM) to enable them to "see" the benefits of digital hearing aids. Our hearing loss simulator allows us to measure a hearing aid's effectiveness, and lets a patient's family hear a simulation of his hearing loss-a valuable tool in promoting empathy. We sell approximately one hearing aid for every five patients referred for screening, a rate comparable with that in traditional settings. And we offer repair services, accessories, and full refunds.

Will it work in your practice?

For an audiology department in a primary care office to succeed, the doctors have to generate referrals. Based upon our initial experience, a busy three-physician office should be able to keep a full-time audiologist busy enough to justify the costs; a group with more than three physicians should have no problem doing so. Obviously, doctors with a more-mature patient population will have less difficulty finding patients who qualify for diagnostic exams.

Your office also must have sufficient space to hold the new department. We converted a procedure room, which is working out quite nicely, but we plan to ultimately house the department in two exam-size rooms: one to hold a desk, computer, and audiometric test booth, as well as shelf and counter space for repair tools and displays; and a smaller room where patients can meet with the audiologist for fittings and discussions.

Our audiology patients check in and out at our regular reception window. We hope, though, to eventually add a dedicated audiology receptionist. That would free the audiologist from administrative duties and allow her to spend more time in direct patient care-and thereby generate additional revenue for the practice.

Getting the service up and running

Adding an ancillary service as multifaceted as audiology testing and hearing aid dispensing isn't a do-it-yourself project. We contracted with an expert in the field, Bill Burden, of American Hearing LLC in Spring City, TN. He has worked with more than 50 physician offices and has the requisite contacts with hearing aid manufacturers. In addition to developing our product line and pricing strategy, he located and screened an audiologist for us to hire. He also arranged no-interest financing for our initial equipment needs through the manufacturers and got them to finance a direct-mail marketing campaign.