Advanced Health enters into agreement with HIP Health Plan of New Jersey to cover 202,000 HIP members.

TARRYTOWN, N.J.--(BUSINESS WIRE)--June 2, 1997--Advanced Health Corp. (NASDAQ:ADVH), a leader in managing physician practices and networks, and HIP Health Plan of New Jersey, today announced the signing of a contract under which Advanced Health and the Garden State Orthopedic Network (GSON) will manage orthopedic specialty care for HIP's 202,000 members.

Terms of the agreement were not disclosed.

GSON is a specialty physician organization managed by Advanced Health. Under terms of the agreement, GSON will provide the organizational structure for HIP's existing orthopedic specialists to collaborate with ADVH and HIP. This collaboration will work to enhance the quality and efficiency of orthopedic care provided to HIP's (202,000) members. The size of HIP's orthopedic specialty panel will not be significantly affected by this agreement.

"We selected Advanced Health to manage our orthopedic specialty services," said Victoria Wicks, president of HIP of New Jersey Inc., "because of Advanced Health's history of partnering with physicians and empowering them with information and management services. This agreement provides an excellent vehicle for our orthopedic specialists to come together and be well supported in their efforts to guide the evolution of managed orthopedic care in our state."

Jon Edelson, M.D., chairman and CEO of Advanced Health described the contract as an important step for Advanced Health. "It allows us to expand and strengthen presence in orthopedics. It is also an indication that our own strategy and on-going efforts to be a major presence in the Northeastern and Mid-Atlantic markets are on track. We look forward to working with premier HMOs, such as HIP Health Plan of New Jersey."

"We welcome HIP's orthopedic specialists as affiliates of Garden State Orthopedic Network for this project," remarked James Dwyer, M.D., president of GSON. "We are looking forward to working with our colleagues in evolving improved clinical pathways and a rational reimbursement model for this next generation of managed specialty care. We are pleased that HIP has invited our physicians and our management company to be the leaders of this initiative."

HIP Health Plan of New Jersey is one of the state's oldest health maintenance organizations and has long been known for its close ties to New Jersey physicians. Headquartered in North Brunswick, the not-for-profit, 202,000 member HIP Health Plan of New Jersey offers its members a choice of a growing network of more than a thousand participating physicians in private practices as well as 18 state-of-the-art health care centers. HIP Health Plan of New Jersey is part of the 1.2 million member HIP system with affiliates in New York, Pennsylvania and Florida.

Advanced Health Corporation is a leading physician practice management company that vertically integrates practice and network management services with clinical information systems. Unlike other physician practice management companies, Advanced Health partners with -- instead of purchases -- physician group practices, thereby maintaining physicians' independence and providing the optimal incentives to achieve practice success. ADVH provides physician practice and network management and consulting services through its Advanced Health Management subsidiary and currently serves over 1,800 physicians. ADVH provides clinical information systems through its Advanced Health Med-E-Systems' subsidiary; these systems provide physicians with patient-specific clinical and health plan information at the point of care to improve the quality and reduce the costs of health care. -0-

Editor's Notes: This release is available on the Internet at http://www.advhealth.com and at http://www.noonanrusso.com

CONTACT: Advanced Health Corporation

Victoria Feder, 914/524-4204

e-mail: [e-mail]

or

HIP Health Plan of New Jersey Inc.

William Rovner, 908/937-7867

or

Noonan/Russo Communications, Inc.

212/696-4455

Jennifer Angell, investors, ext. 240

Michele Helm, media, ext. 225

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