SAN DIEGO-Hearing aids can become a reliable source of ancillary income for otolaryngologists, according to four speakers in the miniseminar, Hearing Aids: The Dollars and Cents of Dispensing, presented at the annual meeting of the American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS). The key, said panelists, is to adopt a medical model for prescribing hearing aids, and pair that with an organized business and marketing plan.
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December 2009Untapped Market
Would a dispensing service be a good addition to your practice? Tabulating the number of your patients diagnosed with sensorineural hearing loss is one way to gauge the potential market, said the session’s first presenter, Brad H. Volkmer, MBA, President, CEO, and Founder of EPIC (Ear Professionals International Corporation) Hearing Healthcare.
Hearing aids constitute the most significant intervention for the 85% to 90% of patients whose hearing impairment is sensorineural in nature, and yet only 20% of the estimated 34 million Americans with hearing impairment have hearing aids. Although hearing impairment is often associated with older adults, the boomer population comprises another sizable untapped market, said Mr. Volkmer. These are people who, for the most part, tend to embrace medical technology. Pointing to widespread use of hands-free mobile devices, he noted, It’s not a stigma anymore to have something in your ear.
Advantages of Physician-Managed Dispensing
Patients trust their physicians to make appropriate treatment recommendations, so this lends credibility to the audiologist and/or dispensing technician employed in the otolaryngologist’s practice. When hearing aids are presented correctly-as an effective intervention for the medical disease of sensorineural hearing loss-60% to 70% of patients will follow through with a purchase, said Mr. Volkmer.
The main advantage of a dispensing service, he continued, is that hearing aids are a cash and carry business. Despite inventory costs and regulatory and personnel requirements, the average profit margin can be 15% to 20%. And, he added, dispensing does not come out of your time. Compare this to a stapedectomy, which requires your presence and is reimbursed by Medicare in the range of $870 to $1530-with the requisite wait time of 90 to 180 days for payment.
Necessary Infrastructure
Preparation for instituting hearing aid sales includes knowledge of your state’s licensing and regulatory requirements; decisions about location of the testing booth; investment in the appropriate testing software; training staff to receive and handle products; and decisions about hiring ancillary personnel. If patient volumes justify it, you may want to hire both an audiologist and an instrument specialist. There are many payment models (base pay; base plus commission; commission only), said Mr. Volkmer, and no one sacred way to structure payments to audiologists and hearing aid dispensers. Both the American Speech-Language-Hearing Association (www.asha.org ) and the American Academy of Audiology (www.audiology.org ) publish salary surveys, which can help determine pay structures.