HEARx and The Permanente Federation Form Hearing Services Joint Venture.

WEST PALM BEACH, Fla.--(BW HealthWire)--Aug. 18, 1998--HEARx Ltd. (AMEX: EAR) Chairman of the Board Paul A. Brown, M.D., stated that the formation of HEARx West LLC, a nationwide joint venture in hearing care with The Permanente Federation, has been completed.

The joint venture will be owned fifty percent by HEARx and the balance by The Permanente Federation and Kaiser Foundation Health Plan & Hospitals. The partners intend to dramatically raise the level of quality in hearing services in addition to offering greater access to hearing aids through competitive prices. The joint venture will be established to meet the needs of Kaiser Permanente's membership, as well as to provide services to members of other managed care organizations and "self-pay" patients.

Initially the joint venture will concentrate on providing hearing aids and diagnostic audiology testing in the State of California. Dr. Brown added that, "Since residents of the State of California annually spend in excess of $300 million on hearing care, this new joint venture with The Federation is a business opportunity with substantial potential." Dr. Brown stated that HEARx has signed a letter of intent with Kaiser Permanente's southern region to provide hearing aids to 350,000 Kaiser Permanente members with a hearing aid benefit in the greater Los Angeles and San Diego markets. HEARx West LLC has identified several Southern California retail sites and is actively recruiting professional staff. Centers will be open for business in January 1999.

HEARx, with the largest network of audio-vestibular rehabilitative centers in the $2 billion field of hearing services, operates 75 company-owned centers in Connecticut, Florida, New York, New Jersey and Pennsylvania. The company provides hearing care to patients whose health insurance and managed care organizations have contracted with HEARx as well as "self-pay" patients who are unaffiliated with those organizations.

The Permanente Federation is a national association of the 12 Permanente Medical Groups and is responsible for practice expansion and improvement, care management initiatives, development of clinical information technology, and new venture development.

Certain of the statements made in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995, including those concerning the timing of the opening of the first centers of the joint venture and the future potential of the joint venture. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include the ability of the company to execute suitable leases for the sites identified and hire appropriate staff and initiate the quality control for the new centers, the ability of the joint venture to obtain contracts on favorable terms with the California-based Kaiser Permanente business units, and other risks associated with the company's business described company's Form 10K for the fiscal year ended Dec. 26, 1997 and Form S-3 resale registration statement dated June 25, 1997.

CONTACT: HEARx Ltd.

Paul A. Brown, M.D., 561/478-8770, ext. 123

or

The Permanente Federation

Beverly Hayon, 510/271-6437