(THC) Monterey CA Hospital Contracts for APACHE ICU Decision Support System and First Interface to McKessonHBOC Bedside Patient Monitoring System.

Business Editors/Health, Medical and Technology Writers

MCLEAN, Va.--(BW HealthWire)--June 29, 2000

APACHE Medical Systems (Nasdaq:AMSI)--a leading provider of medical decision support systems for critical care--today announced a systems and services contract with Community Hospital of the Monterey Peninsula (CHOMP). The 200-bed Monterey, Calif., hospital will implement the APACHE(R) Critical Care Series(TM) (CCS) clinical decision support system and APACHE Best Care(SM) clinical process improvement (CPI) program.

APACHE will work with CHOMP and McKesson HBOC, Inc. (NYSE:MCK), to implement an automatic electronic interface that will enable the APACHE system to receive data from McKessonHBOC's Pathways Care Manager, an acute-care oriented point-of-care information system with customized features for intensive care units (ICUs).

"We welcome CHOMP into APACHE's growing client base of quality-driven, technologically advanced hospitals," said APACHE CEO William A. Knaus, MD. "CHOMP epitomizes APACHE's continually expanding California presence . . . a presence that also includes Kaiser Permanente, Catholic Healthcare West, Memorial Health Services and Tenet HealthSystem affiliates. Our demonstrated success in a state with a large and venerable managed-care presence--and a habit of scrutinizing hospital quality closely and mandating nurse-staffing ratios--makes us even more attractive to hospital executives in other states seeking proven cost- and quality-management strategies."

Knaus also explained the project's technological significance:

"Through the implementation of an interface with one of the industry's major clinical information system (CIS) vendors, APACHE will again demonstrate the broad and complementary appeal of our advanced decision support application to hospitals that purchase these systems. While we have been interfacing successfully for many years to other HBOC applications--their ADT (admission/discharge/transfer) system, for instance--this is the first time we will be incorporating clinical data from Pathways Care Manager."

Why APACHE

"With over 20 years of research and experience in patient outcomes and strategies for the effective management of critical care patients, APACHE gives our clinicians the power to protect and improve patient care," noted CHOMP President and CEO Steven J. Packer, MD. "APACHE is one of several important CHOMP initiatives designed to ensure patient safety and enhance patient care quality through prudent application of resources."

Packer also explained a unique feature of the agreement: "APACHE's `Partnership Program' allows us to implement the system while limiting our financial risk. This creative arrangement demonstrates APACHE's confidence that they can help us achieve our quality objectives and realize a return on our investment. What makes this a true partnership is our commitment to dedicate the resources necessary to enable the APACHE system to live up to its true potential here in Monterey."

Formerly the hospital's medical director of critical care, Packer is a board-certified intensivist and a strong advocate of APACHE's value to CHOMP.

Groundbreaking Integration Strategy

CHOMP CIO Tom McNamara, who heads the implementation team, cited "the tremendous power" of these two combined tools: "APACHE's integration strategy with Pathways Care Manager addressed clinician concerns about redundant data entry. The result will certainly be one of the most technologically advanced and integrated critical-care information environments in the U.S.

"Critical-care units generate so much data it's challenging for physicians and nurses to truly measure outcome quality. APACHE helps clinicians improve their general approach to critical care, contributing to better day-to-day decisions while patients are in the unit.

"A fully operational electronic CIS interface will facilitate the transfer of all patient data automatically to the APACHE system, eliminating the need for manual data entry. The system will also incorporate a TISS (Therapeutic Intervention Scoring System) active treatment list. This standard nurse workload measure can help us better utilize scarce nursing resources.

"Other APACHE customers with similar CIS interfaces--Florida's Sarasota Memorial Hospital, for instance--have enjoyed dramatic savings. Our informatics team is very excited about being involved in this groundbreaking project and anticipates sharing lessons learned with other APACHE and Pathways users."

Benchmark Study Demonstrates How APACHE Can Drive CPI Initiative

"APACHE's initial benchmark analysis of our critical-care outcomes showed we compared well with other hospitals in our category," explained Basil Allaire, MD, CHOMP's vice president for medical affairs. "However, the study also demonstrated how useful APACHE data and methodology could be in further improving clinical outcomes. Our steering committee concluded that, without APACHE, it would be more difficult to accurately assess ICU patient outcomes, evaluate our clinical performance and advance a cost-effective continuous process improvement (CPI) initiative in this area."

"APACHE's clinical consultants are showing our critical care team how to utilize APACHE data in evaluating the level of care each patient requires," added Richard J. Kanak, MD, FCCP, who is actively spearheading the APACHE initiative from a clinical perspective.

"APACHE's unique `Active Treatment' predictor enables physicians to predict which patients can safely transfer from the ICU to more appropriate units. This system feature enables hospitals to reduce individual patient care costs and relieve patients of possibly unnecessary ICU interventions. It is one of the many reasons we expect APACHE will help us more precisely allocate nursing and other resources."

Kanak noted that CHOMP's "creative financing agreement" with APACHE enables the hospital "to implement the system fully from Day 1 so that we may achieve full benefit from the system." The pulmonary, critical care and sleep medicine specialist attended a recent APACHE user group conference where his interest in using the system to its fullest potential resulted in his election to the group's governing committee.

About the APACHE CCS

Authorized CHOMP clinicians will be able to access APACHE CCS information from ICU-based PCs linked to an enterprise-class AViiON(R) 3700 server (hardware) platform from Data General, a division of EMC Corporation.

An interface to Pathways Care Manager will feed data from CHOMP's 10 intensive care unit (ICU) beds into the APACHE CCS system, which includes the Voyager+(TM) and Discover+(TM) software applications. The system provides daily concurrent and predictive outcomes information for each ICU admission to help critical-care clinicians improve care quality and control cost for high-risk patients. A retrospective tool enables hospitals to perform severity-adjusted analyses and comparisons, identify opportunities for improvement and measure the effect of change.

About CHOMP

South of San Francisco, the independent, nonprofit Community Hospital of the Monterey Peninsula (CHOMP) serves California's famed Monterey Peninsula, which includes Pebble Beach and Carmel. CHOMP (www.chomp.org) prides itself on providing comprehensive, high-quality health services to a diverse patient population that runs the gamut from local fishermen to international celebrities.

About APACHE

APACHE Medical Systems, Inc.--a recognized leader in clinical decision support/outcomes management systems and consulting services for the care of high-risk patients--provides products and services that enable health systems, hospitals and providers to apply an evidence-based approach to achieve clinical performance excellence, reduce cost and compete effectively under managed care. APACHE is helping providers better manage the clinical, financial and patient outcomes of high-risk, high-cost patients in critical, acute, cardiovascular and HIV/AIDS care.

APACHE (www.apache-msi.com) is headquartered in Northern Virginia.

About Pathways Care Manager and McKessonHBOC

The Pathways Care Manager from McKesson HBOC, Inc. (McKessonHBOC), uses tightly integrated clinical guidelines, order/results communications and comprehensive clinical documentation to support multidisciplinary care teams in delivering and measuring high-quality, cost-effective care.

McKessonHBOC (www.mckhboc.com) is the world's largest supply management and information technology company. The Fortune 40 corporation provides supply management and information technologies across the entire continuum of healthcare, including market-leading businesses in pharmaceutical and medical-surgical distribution, automation, information technology and outsourcing for payors and providers.

McKessonHBOC's Information Technology Business (ITB) develops, implements and supports patient care, financial, clinical, homecare, managed care and strategic management software that facilitates the integration of data throughout the enterprise. ITB provides a full complement of network technologies as well as outsourcing services for managing business offices and information system operations. ITB's only focus is the healthcare market, and it is an industry leader in revenue and market share with products and services that are sold throughout the world.

About AviiON and Data General/EMC

Data General, based in Westboro, Mass., is a division of EMC Corporation (NYSE:EMC), the world's leading provider of enterprise storage systems and software. With its AViiON server line, Data General is a major supplier of high-end NT and UNIX computing solutions, NT server consolidation, and related software and services. Data General solutions are currently in use at more than 3700 hospitals worldwide (www.dg.com/healthcare).

APACHE(R) is a registered trademark, and Critical Care Series,(TM) Voyager+,(TM) and Discover+,(TM) and Low Risk Monitor,(TM) trademarks of APACHE Medical Systems, Inc. AviiON(R) is a registered trademark of Data General Corporation. Other brand and/or product names referenced in this press release may be trademarks or registered trademarks of their respective holders.

Statements in this press release that are not historical facts are forward-looking statements under provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. The Company wishes to caution readers that the following important factors, among others, in some cases have affected, and in the future could affect, the Company's actual results and could cause its actual results in fiscal 1999 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of the Company.

Important factors that could cause actual results to differ materially include but are not limited to the Company's having sufficient sales and timely collections to meet cash requirements and achieve profitability; ability to attract and retain key employees; success of its strategy to concentrate its product offerings on high-risk, high-cost patients; ability to timely develop new products and enhance existing products; ability to compete in the competitive and rapidly evolving healthcare information technology industry; ability to correctly estimate and manage its Year 2000 costs and liabilities; success of its marketing and consulting efforts and ability to effectively utilize its direct sales force; ability to protect proprietary information and to obtain necessary licenses on commercially reasonable terms; and ability to comply with and adapt products and services to potential regulatory changes.

URL: http://www.apache-msi.com