EAR Inc president and founder, Garry Gordon, is leading the campaign for hearing health care and awareness in the recreational market.

By Chris Wolski
HearingProductsReport.com Industry Spotlight

As government subsidies for medical care fall and consumers face more out-of-pocket expense, hearing professionals experience a decline in income. One solution for these European-based dispensing audiologists is to provide their customers with a variety of peripheral supplies and services.

Tina Imreh (left), owner of Die Hšrberatung, and employee, Heidi Sailer. Imreh opened the NŸrnberg-based office in September 2000.

Like the hearing market in the United States, Europe’s is evolving. Analog instruments are giving way to digital instruments—which accounted for 65% of European sales in 2003 according to an Audio magazine report—and changes in government-funded health programs mean that patients are paying more out of pocket.

Unlike the United States market, where in-the-ear devices are popular, the European market is dominated by behind-the-ear (BTE) instruments. According to the Audio survey, sales of BTE instruments in Europe increased over 14% overall between 2002 and 2003. And digital BTE instruments saw an increase of over 30%. But even with this market growth, dispensing audiologists are finding that times are not necessarily tough, but challenging.

Since Tina Imreh started her career in audiology in NŸrnberg, Germany, in 1988, she has seen demand for instruments, like digital BTEs, climb as government subsidies fall. The result: patients have to pay more out of pocket while audiology practices are making less money. For instance, the German government subsidizes BTE devices at the rate of about 300 Euros, which includes free maintenance for 6 years, when a digital device costs 1,500 Euros. The difference has to be paid by the patients, some of whom are opting not to get the device that will help them most.

Imreh blames the reimbursement disparity on the inability of government bureaucracy to keep up with the evolving technology. The end result is that there are gaps in public health coverage with those in the middle falling through the cracks. “The standard health care has two faces,” she says. “On the one hand, it allows more poor people to get supplied with a hearing instrument without paying out of pocket. So the standard of supply could be very high. Because of the low price, the hearing instruments are naturally not cutting edge and the majority still contain analog technical features. Therefore we cannot offer the same services. It would not cover all of our expenses. On the other hand, it’s troublesome to explain to [welfare patients] the modern facts and the actual prices involved. They are not ready to pay for hearing aids—suddenly. So we still have a wide range of standard technology, selling in the high end segment to those who can afford to stay healthy. That leaves the middle range of hearing instruments as less popular.” During the 6-year lifetime of a patient’s hearing aid, she expects to supply two to three additional earmolds.

Setting Up Shop
Imreh has headed her own organization—Die Hšrberatung—since September 2000. Her shop, which is a modern retail space, is located in a section of NŸrnberg that is convenient to her referral base. There are about 12 other hearing aid stores located throughout NŸrnberg—a city of 500,000—including one near Imreh that specializes in caring for children.

Die Hšrberatung is located in a modern storefront in NŸrnberg. Owner Imreh places a high value on a comfortable atmosphere, personable staff, and customer service.

In addition to dispensing hearing instruments from a wide variety of manufacturers, including Audio Serive, Hansaton, Siemens, Unitron, Beltone, Oticon, Widex, Interton, Bruckhoff, Phonak, and GN Resound, Imreh also offers a wide variety of other services and peripherals. These supplies include batteries, cleaning supplies, and assistive listening devices such as FM systems for school, work, and home use. Other assistive products include mobile phones, text phones, light and vibration signal products, and headphones for TV viewing. Imreh also sells articles for those who are not hard of hearing, such as those suffering from tinnitus or who are exposed to noisy environments.

The free services that patients under the public health service are entitled include hearing tests, hearing aid fittings, and repairs.

The typical hearing aid client in Germany is elderly—65 and older, and is typically referred by specialists. However, Imreh has been able to build a much more diverse patient profile. “Fortunately, we have clients who are younger. Our average patient is 55 years old,” she says. “We also supply aids to children younger than 6 years old.” As in the United States, most patients suffer with hearing loss for several years before finding a solution.

Imreh does get some referrals through word of mouth, which she credits to her staff and the atmosphere of the store. “I am convinced that our good handiwork, our customer service, personal presence, and the comfortable atmosphere in our store will be valued by our customers and inspire word of mouth,” says Imreh.

Imreh has also embarked on something a bit unusual for the German hearing market—advertising. “We are discovering the power of advertising for a product unfamiliar to the public,” she says. “It is rather a new and unusual way to do business in our line of work … and has been a public relations hit.”

This is a big step forward for Imreh, because one of her challenges is the German taboo against wearing hearing aids. For her, this points to one of the big differences between Europe and Germany. “What we know about hearing aid users in the United States is that hard of hearing people there are more open to using hearing instruments,” she says. “They are not so ashamed to use them as [many] people are in Germany.”

Though Imreh’s business is not very different than those of her counterparts in the United States, one area where she has not been able to devote much time is preventative care. “Preventative care is not widespread in Germany, because it is not paid for by health insurance,” she says. This does not mean there is no preventative care available. Imreh adds that she offers consultations covering noise protection, ear protection for the middle ear, and solutions for middle ear pressure while flying. She fits protective devices as well.

Getting the Message Out
Garry Gordon, president of EAR Inc, Boulder, Colo, USA, has encouraged Imreh and other European audiologists to develop a recreational or preventative hearing market. It has been a tough sell for Gordon in the face of the realities of the European hearing market—with its falling state-sponsored reimbursements. Ironically, according to Gordon, the recreational market is a way to make money. “We’ve got some of our providers in [Europe] that we can count on are working directly with a manufacturer … so we are trying to get that message out, so that the manufacturers and the providers know how to work with one another to develop these markets,” he says. Gordon adds that one of the problems with hearing health care in Europe is not the ignorance of the consumer but the audiologist to the sorts of resources—preventative or otherwise—that are available.

Garry Gordon (standing) gives a presentation at a symposium in Moscow, Russia, in the early 1990s.

However, Gordon is pleased to note that several companies are looking at potentially getting into the preventative and other markets. “There are now manufacturers that are beginning to surface to take a look at the other markets that their product lines could go into whether they be hearing aids or electronic ear plugs or ear protection systems,” he says. “If they do that, then these manufacturers can be helpful in aiding consumers to get connected to providers that are in their delivery system.”

Unlike Imreh who sees many of her challenges stemming from cuts in the public health system and cultural taboos that prohibit acknowledgement of hearing loss, Gordon places more blame on manufacturing leaders for being out of touch. “[When we were in Europe recently,] the question that came up were CEOs of big companies ... losing touch with the needs of the provider as well as those of the consumer,” he says. “Is the CEO on the battlefield or does he simply send the staff to examine the potential? Supposedly, from my knowledge, CEOs are the ones who approve programs and make them run. Unfortunately, most often they are the ones out of touch with the marketplace because of the number of management layers that exist between them and the market. So the providers that are in touch with their customers, such as Tina, have a great deal to say, but we believe that top management are responsible for [responding] to legitimate and repeated requests from providers. Any company, whether publicly held or owned by a private family or group of people, needs to be innovative and sensitive to the market. They have the capability of making several things, but how are they going to get these things to the people that really need them? When you create the future, you introduce a product or service whose very success creates a trend, then you run with it.”

Imreh (left) and Sailer demonstrate one of the technologies available at Die Hšrberatung. Imreh not only dispenses hearing instruments, but offers her clients a variety of peripheral hearing products and services, including tinnitus treatments, assistive listening devices, mobile and text phones, and batteries.

No matter the challenges, Imreh sees the market changing, resembling the American model more and more. “First of all, because of the European Community there are new markets all around Germany, particularly in the Eastern European countries,” she says. “How exactly the Eastern European market is going to develop is dependent not only on its buying power, but also on the health insurance companies and their willingness to refund costs. But even here Eastern Europe can’t offer a uniform picture, because the conversion of a socialist health care system to a Western-based health system would have mixed results. The European market will go the American way, when public health systems leave the market.”

Imreh hopes to follow a business model already well established in Germany. “Generally, we are looking forward to working in a similar way as opticians have for some years,” she says. “The public health system has left this market, so the opticians have a very great market with free and market-driven prices and services. The customers are used to taking care of their own health and do this in a responsible way. Following this model could allow us to work with up-to-date instruments, and fairly calculate our expenses for our products and services in a real way. And, consequently, offer the best products and services to those hard of hearing.”

And no matter how the market changes, one reality will not in the near future—it is large and untapped. “We have a big market with about 14 million hard of hearing people, and only about every eighth one has a hearing instrument,” says Imreh. “In addition, there are many young people who have hidden hearing loss and tinnitus.”

Chris Wolski is associate editor of Hearing Products Report.