APACHE Medical Systems Announces New Versions of Two Leading Clinical Decision Support Products.

MCLEAN, Va.--(BUSINESS WIRE)--May 17, 1999--

Systems Include Major Scientific

Advances, JCAHO ORYX Measures and Full Y2K

Compliance Certification

APACHE Medical Systems, Inc. [NASDAQ:AMSI], a leading provider of clinical decision support products and consulting services, today officially introduced two new industry-leading clinical decision support products, the APACHE Critical Care Series(tm) 1.6, and APACHE Acute Care Voyager+(tm) 2.0. The first "Go-Lives" and standard production shipments of both products are now well underway.

In conjunction with the above, the Company announced the following:

-    Both of these new products have received full Y2K-compliance
     certification and validation by an independent consulting firm.

-    Henry Mayo Newhall Memorial Hospital in Valencia, California, has
     become the first long-time APACHE client to successfully complete
     its migration from the Company's old platform to the new Critical
     Care Series.

-    The Company has completed the first successful, on-time
     electronic reporting of APACHE measures to the Joint Commission
     for the Accreditation of Healthcare Organizations for its "ORYX"
     requirement.

-    Both APACHE's Critical Care Series and Acute Care Voyager+
     products may now be used to fully comply with JCAHO's stated ORYX
     reporting requirements.

"The advances in risk adjustment and predictive capability in both of these products are statistically significant. The scientific basis of the new equations in our Critical Care Series includes the largest contemporary database of clinical and outcomes data ever assembled for critical care," said Peter Gladkin, APACHE President and CEO. "The APACHE Medical Outcomes Repository now exceeds 600,000 critical care patients and provides the statistical basis required for valid, rigorous analysis of specific disease groups, treatments and acuity adjusted outcomes. The APACHE Medical Outcomes Repository is unique in this regard."

"Healthcare administrators want to engage medical leadership to manage clinician-controlled costs and reduce variance in medical practice without eroding the quality of care. APACHE's systems have proven highly effective in these efforts, and that effectiveness is rooted in APACHE's science." Gladkin added.

Overview of APACHE Scientific Advances for Critical Care and Acute Care:

APACHE Critical Care Series: Critical Care Voyager+ and Discover+

The scientific advances within the Critical Care Series are statistically significant and represent a major update of both the APACHE methodology and predictions based upon the largest contemporary database of clinical and outcomes data ever assembled for critical care. The new predictions also were prepared using additional statistical techniques not used in older versions--such as splining--which improve validity by better representing the complicated, non-linear relationships that often exist among medical data variables.

The APACHE Critical Care Series is used to reduce cost and improve outcomes for critically ill patients both within Intensive Care Units and throughout their hospital stay. The system is comprised of two primary modules. Voyager+ is an analytical system that enables retrospective analysis of critical care unit, hospital and health system outcomes and resource use. Discover+ provides clinicians with concurrent and prospective information that clinicians apply in making daily patient care decisions as well as for unit triage and other important daily management decisions.

Highlights of the new and updated APACHE critical care predictions and selective validations include:

-    The addition of predictions specifically for 13 new disease
     categories, increasing the total number of disease categories for
     which predictions are available to 94. Much of this work was made
     possible by the large volume of patient data available,
     particularly in disease groups occurring less frequently. For
     example, APACHE has now created separate categories for Bacterial
     and Viral Pneumonia, and added Unstable Angina (previously mapped
     to the AMI category), Cardiomyopathy (previously mapped to
     Congestive Heart Failure), and S/P Valcular Repair/Replacement
     with CABG (previously mapped to the category of Valvular
     Repair/Replacement. Also,within the AMI category, separate
     coefficients have been developed for AMI with Thrombolytics and
     AMI without Thrombolytics.

-    Updates to Day 1 through Day 7 ICU Mortality. Discrimination of
     the Day 1 ICU Mortality, as measured by the area under the
     Receiver Operating Characteristic curve (ROC) rises to .923.

-    Updates to Day 1 through Day 6, for Hospital Mortality; Day 1
     Mortality ROC rises to .90.

-    Updates to both ICU and Hospital Length of Stay equations,
     including new calculations of both national and peer group norms
     to reflect changes in medical management, which particularly
     impacted hospital length of stay predictions.

-    Updates to the Hospital Length of Stay equations, and new
     calculations of national and peer group norms.

-    Updates to all of the CABG-specific predictions, including ICU,
     Hospital Mortality and ICU/Hospital Length of Stay which reflect
     the reduction in ICU and hospital mortality in ICU and hospital
     mortality following CABG in recent years, and also predict a
     reduction in mean ICU and hospital length of stay consistent with
     "fast-tracking" protocols.

-    Updates to the Risk of Active Treatment equations for Days 1-7.

APACHE Acute Care Voyager+ 2.0

Similarly, the Acute Care Voyager+ 2.0 product represents a revolutionary new approach to clinically valid outcomes measurement for hospitals and integrated healthcare delivery networks (IDNs). The Acute Care Voyager+ product measures hospital performance within many of the highest cost, highest risk disease categories, (see below). The product enables meaningful comparisons at the provider, hospital, and IDN level, and among all the participating hospitals. The system helps medical professionals and quality improvement staff prioritize their clinical outcomes improvement and cost reduction efforts and accurately measure the results of these efforts. The product also provides whole hospital analysis and trends in patient demographics, resource use and outcomes for all disease groups.

The new equations in APACHE's Acute Care Voyager+ 2.0 product also represents an important advance in the science of outcomes measurement. By leveraging IDNs' existing information systems investments to create a fully electronic data capture process, has introduced a practical solution to having clinically based, scientifically validated data for high cost, high risk acute care episodes. The Acute Care section of APACHE's Medical Outcomes Repository now includes data on over 660,000 patients, and the new model development and validation efforts have incorporated data collected through June of 1998.

Specifically, APACHE's extensive analysis of patient risk factors and outcomes determined that two readily available and commonly used electronic data sources, UB82/92 data tapes and laboratory information systems, could provide patient descriptive and physiologic data sufficient to produce models and comparisons that are substantially more accurate and more acceptable to physicians than older systems based on UB data alone. The new models also reflect very contemporary practice patterns and outcomes, reflecting acute care patient outcomes through June of 1998.

Disease categories with new APACHE predictive models available (all of which may be used for JCAHO ORYX reporting) are listed below:

Acute Myocardial Infarction (AMI)        Obstructive Airway Disease
Congestive Heart Failure                 Lung Resection
Pneumonia                                Prostatectomy
Stroke                                   Laminectomy
GI Hemorrhage                            Reduction of Franction
Coronary Artery Bypass                   Vascular Repair
Hysterectomy                             Lower Bowel Resection

Development of the Acute Care equations utilized APACHE's well-documented approach to identifying pertinent risk variables, including patient diagnosis, chronic health, age, origin, and laboratory physiology. The models also considered the characteristics of the institutions to which the equations were going to be applied. Hospitals included in the analysis represented a cross-sectional sample of different types of institutions representing small community hospitals as well as large teaching hospitals. As with APACHE's critical care modeling effort, the acute care R&D utilizes new statistical techniques to reflect non-linear relationships and improve discrimination and calibration. For example, the new Mortality equations achieved ROCs (measuring discrimination) as high as .89 for AMI.

About APACHE Medical Systems

APACHE Medical Systems, Inc., is the recognized leader in the delivery of clinical decision support systems, strategic and clinical consulting services for the care of high-risk, high-cost patients. The Company's products and services enable health systems, hospitals and providers to apply an evidence-based approach to achieve clinical performance excellence, substantially reduce cost, and compete effectively under managed care. Now in its tenth year of operation, the Company is today helping providers to better manage the clinical, financial and patient satisfaction outcomes of high-risk, high-cost patients in critical care, acute care, cardiovascular services, and HIV/AIDS.

Statements in this press release which 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.