Apache Signs Exclusive Agreement With Vencor.

McLEAN, Va.--(BUSINESS WIRE)--Oct. 8, 1997--APACHE Medical Systems, Inc. (NASDAQ:AMSI) today announced an exclusive agreement with Vencor, Inc. of Louisville, KY to develop decision support tools and disease management programs for the burgeoning long-term healthcare industry. APACHE provides products and services to over 600 healthcare organizations nationwide; Vencor is the nation's largest provider of long-term acute care services. Financial terms of the agreement were not disclosed.

"Vencor continues to raise the bar in long-term healthcare," said Gerald E. Bisbee, Jr., Ph.D., Chairman and Chief Executive Officer of APACHE. "While other long-term healthcare providers are still struggling to implement basic, rate-based quality indicators, Vencor is moving towards patient-specific outcomes methodologies."

W. Bruce Lunsford, Chairman, President and Chief Executive Officer of Vencor, adds, "We are excited about working with APACHE. Our goal has always been to improve clinical practice methodologies so that we can provide our patients with the best quality care at the least possible cost. This is another step toward realizing that goal."

Initially, APACHE and Vencor will produce a comprehensive outcomes plan that will define and prioritize Vencor's clinical outcomes data and databases across the entire continuum of care. Next, APACHE will develop long-term healthcare decision support methodologies and tools aimed at enhancing Vencor's ability to deliver superior outcomes.

"As the government, private insurers, and managed care planners move acutely ill patients to our settings in ever-increasing numbers, we must be prepared to meet their needs by providing superior outcomes," Lunsford said. "APACHE's capabilities in outcomes management, and their thorough understanding of our needs, make them uniquely qualified to partner with Vencor on this project."

Vencor, a $3.5 billion long-term healthcare company, owns and operates a national network of hospitals, nursing centers and contract service providers in 46 states.

The APACHE family of companies combines evidence-based medicine and knowledge-based consulting to deliver tools and techniques for clinical, financial, and operational performance improvement across the continuum of care. APACHE's data-driven solutions provide a strategic "blueprint" for performance improvement, helping providers and healthcare organizations to improve variations in practice patterns and reduce clinical costs.

APACHE patient management products and services give clients real-time, risk-adjusted clinical and financial information they need to manage care, especially for high- risk, high-cost patients. Health Outcomes Research provides clinical trial design services, research support for product marketing, and disease management programs. National Health Advisors focuses on strategy and management support services to improve the performance of hospitals and integrated delivery systems. Worldwide, over 600 healthcare organizations have used APACHE products and services to measure, monitor, and manage change.

CONTACT: APACHE Medical Systems, McLean

Vi Shaffer, Vice President

703/847-1400