Previous articles have addressed growing concerns within the field regarding impact and changes in the practice of audiology now that big-box stores and their low-cost hearing aids are reality. There has also been much debate surrounding third-party payer plans that reimburse for hearing-aid services, but at a much lower rate than most independent audiology practices can afford to accept. 

Another, perhaps more disturbing issue that the profession must address, or at least be cognizant of, is the growing trend of hospitals purchasing small primary care and specialist practices. These acquisitions continue to merge other previously independent health and medical care facilities under a much larger corporate umbrella, and may impact practice patterns. This article reviews the shift towards mergers in health care, and its potential effects on audiology as a profession and the independent audiology practice.

How Did We Get Here?

Goldstein (2001) eloquently summarizes the transition from audiology as primarily an academic pursuit aimed at rehabilitation to the adoption of hearing-instrument dispensing within the profession, in order to ensure that our patients were receiving appropriate devices, adequate services, and follow-up care. Unfortunately, with little business training and relatively few examples to go by, well-meaning audiologists adopted similar business models (i.e., bundling services with devices, not charging for hearing tests, etc.) as those we wished to protect our patients from.

While the technology of hearing aids has transformed dramatically over the past few decades, the model of traditional dispensing has not. Arguably, audiologists, particularly those that focus solely on adult hearing aid dispensing, are unfortunately viewed by the general population as not significantly different from hearing instrument dispensers (except for that expensive degree hanging on the wall). Yes, there are true centers of professional excellence that abide by the best practice guidelines for fitting and dispensing, but there are also many who do not. Yes, there are some that are adopting unbundled service models, but there are many who have not. 

The point of this article is not to enter into a debate into the merit or feasibility of various dispensing practices. However, some historical context is important to determine the best direction ahead. 

Another Front to Watch

As pointed out recently by Frazer (2017), less than half of the hearing instruments are being dispensed by independent offices in the United States. Many instruments were provided by manufacturer and retail storefronts with the prediction that this share will increase over the next few years. Frazer (2017) suggests that unification of the independents to gain equivalent buying power will help to level the financial playing field between independents and large retail/manufacturer chains. In other words, by concentrating purchasing power, we are able to negotiate lower cost-of-goods, enabling the audiologist to offer lower prices while still maintaining the necessary margins in order to collect a salary and keep the doors to our practices open. 

This is not a new concept. Currently, various buying groups and practice management cohorts do exist and have existed for years. Enrollment benefits in these groups can include lower cost-of-goods, marketing, staffing support, business development, etc. However, while the cost per device is significantly reduced compared to single-unit costs they are not as low as needed, possibly due to the need for these entities to cover their costs in running their business and support services. It is important for a practice considering joining one of these groups to do their research, as internal structures and associations may cause potential concerns down the road. 

Not Quiet on the Western Front

While the manufacturer/big-box store “non-health-care” retail model is a disruptive concern, there may be yet another. We must consider what is happening in the health-care arena. It turns out that audiology is not the only health-care profession looking at minimizing overhead in order to increase chances of survival. 

A 2016 article by David Squires and David Blumenthal reports that the number of small physician private practices have been steadily decreasing for the past 30 years. They report that solo practitioner offices that once accounted for 41 percent in 1983 has shrunk to just 17 percent in 2014. They also note that practices of 25 or more physicians grew from five percent to 20 percent in that same time. 

The authors give a few reasons for this trend. First, the younger generation of physicians report preference to larger practices for reasons like stability and better “work-life balance,” instead of the unpredictability and entrepreneurial stresses solo practices offer. Second, the retiring physicians are not being replaced with new solo physicians, ultimately leading to a “cohort effect” (Squires and Blumenthal, 2016). 

In addition to the consolidation and retirement factor, Kocher and Sahni (2011) report that hospitals are buying independent primary-care physician offices at a fast rate. These buyouts often result in substantial initial monetary loss ($150,000 to $250,000 per year over the first three years). The rationale behind this, they state, is the potential long-term return on investment these practices have to offer. By incorporating primary-care physicians into their network, they  will retain specialist referrals and eventually break even and profit from these referrals a few years after the initial loss. 

You might be thinking “Isn’t this a violation of the STARK Laws?” Because the physician has given up ownership for employment, these internal referrals are in fact, not in violation (Gosfield, 2003). This should be a concern to any independent audiology practice, as some have spent countless hours and marketing dollars building a referral base of primary-care physicians. What happens when the local independent primary-care office is acquired by the large regional health center? Will they still refer their patients to your office, or will the expectation be that they refer to a provider that shares their electronic health record? Hospitals and health networks are also acquiring specialty practices at a growing rate. They are building nearly impenetrable fortresses of health care. 

At the Macro Level

We should not just consider the impact of independent practices merging with hospitals. That is just the tip of the iceberg. According to the Institute for Mergers, Acquisitions and Alliances, health-care deals topped $2.64 trillion between 2000–2015 (MacDonald, 2017). The mergers of hospitals into health networks spanning large territories is a continuing trend that has been growing in the past few years. With ever decreasing reimbursements and increasing costs, health-care entities have adopted this model under the assumption that consolidation will guarantee survival. 

These expansions have raised serious concerns and are reportedly scrutinized for violations of antitrust laws. The antitrust laws are designed to protect the public from one entity monopolizing the market. However, large regional health-care giants have been allowed to continue and dominate certain areas due to their assertion that, by consolidation, they are able to provide better services to meet unmet needs of the communities and do so more cost efficiently. Those in opposition of these mega-mergers argue that large health networks force health plans to accept all providers contained within their system, which could ultimately lead to higher insurance costs and premiums.

So, what is actually happening? Melnick and Konkyck (2016) found that hospital prices in the largest health networks in California increased from 2004–2013 at a much faster rate than others (113 percent compared to 70 percent). This difference led to an approximately $4,000 difference in admittance costs per patient. The results of this study argue against the notion that large multi-hospital networks included in the study are meeting their goal of lowering costs and improving efficiency. 

Can Audiology Function Within Big Health?

That is a tough question. But there is some hope. Take the Veterans Administration (VA), for example. They have been able to negotiate lower cost-of-goods in terms of hearing aids and have an integrated referral network whose providers have access to the patient’s comprehensive electronic health record. The VA is also the largest employer of audiologists (over 1,100) on staff. The VA system is not perfect, no system is. However, they are positioned to perform self-examination, and implement programs and policy aimed at improving quality of care. 

There are also many examples of strong, independent audiological departments within many other hospital programs. But as mergers continue, it is important to reflect upon office policy, particularly as previously independent practices join forces. Are audiologists from previously independent “Group A” using the same billing codes as the hospital and every other group they are now a part of? 

What Big Health Means for Compliance

While hospital mergers are not new, the new wave of Big Health strategy was set into high gear, reportedly, as a response to the changing reimbursement landscape. The primary aim of the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) is to provide higher-quality, patient-centered care at a lower cost (Thomas, 2016). This switch in billing and reimbursement philosophy may be a disruptive force in and of itself. The burden of billing and compliance may prove to be the straw that breaks the small practices’ backs, particularly those who have not fully converted to electronic health records and billing software. 

While the repeal of the sustainable growth rate (SGR) formula in 2015 and the shift towards a value-based reimbursement has happened, its full effects on practices, large and small, obviously have yet to be realized. However, it would appear that larger organizations might have the upper hand in transitioning to this new reimbursement model. The ultimate goals of MACRA are to increase the level of transparency within health care and to address growing costs, but to also emphasize quality-of-care. Those entities with built-in support systems will be better equipped to perform the necessary systematic reviews without the burden falling upon the practitioner or office staff.

What does MACRA mean to audiology as a profession? Unfortunately, that is a tough question as audiologists are currently not allowed to participate in the quality reporting portion of MACRA, Merit–Based Inceptive Payment Program (MIPs) for 2017 and 2018. However, audiologists can “practice” submitting MIPs, which replaced the previous quality reporting system (PQRS) that ended in 2016 (Thomas, 2016). 

Transitioning to MACRA and the new health-care   system that is lurking on an ever-closer horizon is going to be tricky at best. One way to prepare, if independent practices haven’t already, is to transition away from paper charts and adopt an integrated electronic health record (EHR). The EHR is a game changer and one of the two principles that MACRA is using to facilitate better care. EHRs and billing software with the capability to meet compliance standards can be an expensive endeavor to independent practitioners. Fifteen years ago, paper charts were still considered the gold standard and the electronic chart was considered complimentary (Stausberg et al, 2003). With more and more facilities of various sizes switching from paper to electronic records, we see the benefits in the form of coordinated care, access to data, integrated billing, and research (Crenshaw, 2016).

Where Do Audiology and Independent Private Practices Fit into Big Health?

Have we positioned ourselves as a profession to retain autonomy within a larger health network, or will our services within these large health networks be swallowed up by other medical professions? Will we be recognized as a part of the rehabilitative service providers (i.e., speech-language services)? Where do vestibular diagnostics and rehabilitative services enter into the equation? Will the independent practice be able to stand up to insurance companies and suppliers, and command better reimbursement, lower cost-of-goods? 

Squires and Blumenthal (2016) maintain that small independent practices will still have a place in the future. There will always be those that prefer small practices to large. The concept of knowing your provider and developing a close relationship with them, particularly in more rural areas, is looked upon as a key benefit to patients. Those patients get the feeling that they aren’t just a number. There is also evidence, at least in the primary-care setting, that smaller practices have lower rates of preventable readmission to hospitals. 

Interestingly, Squires and Blumenthal’s (2016) suggestions to primary-care physicians surviving big health are similar to Frazer’s (2017) advice to audiologists surviving big-box stores. A few helpful strategies include the following: 

Encourage physician networks that enable small practices to share resources.

Provide technical support to solo and small practices, as the HITECH Act did through a system of regional extension centers.

Develop payment models that include upfront grants or loans for practices to invest in necessary infrastructure. 

Improve health information technology so that it reduces—rather than increases—the burdens of solo practice (Squires and Blumenthal, 2016).

Changing the Model, Changing the Profession

Is the previous and currently most recognizable model of hearing health-care delivery sustainable (i.e., bundled hearing aid price structure)? Are we still in the position where the hearing aid is the answer to all of our patients’ hearing needs? Numerous examples have repeatedly demonstrated that when the thrust of a cure or answer is on a “widget,” those with the cheaper, most available, or most desirable “widget” will have an advantage. When we undervalue the knowledge and services that are required for our patients to be successful with them, we are truly undervaluing ourselves. This mindset is proving to be devastating to our legitimacy as a member of the healthcare team.

Pharmacy as an Example 

Audiologists often compare themselves or look to other professions within healthcare for guidance. One area that we may have overlooked, but is worth investigating, is pharmacy. We have all witnessed the corporatization of pharmacies over the past decade. Where an independent pharmacy once stood, either a Walgreens, Rite Aid, or CVS (or all in some towns) have been erected. 

Mabee (2015) warns that corporate leaders and store managers fail to recognize the importance or value a pharmacist brings to the table. He argues that proper patient care, particularly in the case of complex and sometimes deadly drug interactions, is at odds with the corporate mindset of “never discouraging a sale.” While hearing aids themselves have not proven to be deadly, ignoring hearing- and ear-related issues can be. Zangaria (2015) suggests the need for innovation and creative utilization, the specific set of skills that her training as a pharmacist has given her. 

What Next?

To deny that the consolidation of health care is happening is dangerous. The challenge of the profession should be to remain autonomous within this structure. We cannot be so focused in one direction and ignore our blindside. We need to be able to anticipate the hit so that we can counter it and maintain, or hopefully enhance, our position. 

The unfortunate truth is that, as many have pointed out, complacency with the status quo within the field is rampant. Why? Perhaps it is because the ones who are often hit first are the independent practitioners while the rest of us are somewhat cushioned from the direct effects of legislation, market disruptions, and health-care trends. But how long will the cushion remain?


Crenshaw B. (2016) Big Data and Audiology: Using Integrated Database Resources to Enhance Research and Clinical Practice in Audiology. Audiol Today 28(1):42–49.

Dafny L. (2014) Hospital industry consolidation—Still More to Come? N Engl J Med 370:198–199. 

Frazer G. (2017) Future of Independent Practice in Audiology. Audiol Today 29(4):57–61

Goldstein D. (2001) Hearing aid dispensing: a historical vignette. Audiol Today 13(3):39.

Gosfield AG. (2003) The stark truth about the Stark Law. Fam Pract Manag (10):27–33. 

Kocher R, Sahni N. (2011) Hospitals’ race to employ physicians—the logic behind a money-losing proposition. N Engl J Med 364:1790–1793.

Mabee RL. (2015) Is corporate pharmacy shooting itself in the foot? Modern Medicine Network. (accessed November 15, 2017).

MacDonald I. (2017) Hospital merger mania continues throughout the country Fierce Health Care. (accessed November 8, 2017). 

Melnick G, Fonkych K. (2016) Hospital Prices Increase in California, Especially Among Hospitals in the Largest Multi-hospital Systems. J Health Care Org, Prov Finan 53:1–7.

Squires D, Blumenthal D. (2016) Do Small Physician Practices Have a Future? To The Point. The Commonwealth Fund. (Accessed November 8, 2017).

Stausberg J, Koch D, Ingenerf J, Betzler M. (2003) Comparing paper-based with electronic patient records: lessons learned during a study on diagnosis and procedure codes. J Am Med Infor Assoc 10(5):470–477. 

Thomas K. (2016) Centers for medicare and medicaid services’ new quality payment program. Audiol Today 28(5):52–53.

Zangaria M. (2015) Editorial: Innovation: the promise of financial viability for pharmacy practice opportunities. J Pharm Pract Res 45:259–260.   

Share this