COVENTRY CORPORATION/SOUTHWEST INTEGRATED DELIVERY NETWORK ALLIANCE EXPANDED TO INCLUDE COMMERCIAL MEMBERS.

NASHVILLE, Tenn.--(BUSINESS WIRE)--May 24, 1996--Coventry Corporation (Nasdaq/NM:CVTY) and Southwest Integrated Delivery Network (SIDN) announced this week that a strategic agreement recently consummated by HealthAmerica, a Coventry Corporation subsidiary, and SIDN to serve Medicare HMO members will be expanded to include up to 70,000 commercial HMO members.

HealthAmerica administers health care benefits for 310,000 members in the Pittsburgh and southwestern Pennsylvania region. Currently, HealthAmerica is the only managed care organization in the region to enter into such strategic partnerships with health care providers.

Southwest Integrated Delivery Network was formed nearly two years ago to create an alliance of health care providers willing to share financial responsibility with insurers in caring for their members. The alliance is also intended to eliminate duplicate services, coordinate delivery and management of care, achieve greater efficiencies and economies of scale. SIDN comprises five hospitals, Allegheny General, Sewickley Valley, St. Clair, Forbes Health System, Allegheny Valley and their physician organizations, which include more than 1,200 doctors.

Lawrence N. Kugelman, interim president and chief executive officer of Coventry Corporation, said, "This agreement is consistent with our strategic plan of improving the fundamentals of our cost and operating structure in every market. Also, creating such alliances should result in better care, more attractive products and enrollment increases."

Daniel J. Lebish, HealthAmerica executive vice president for medical delivery systems, said, "Like the original strategic agreement earlier in the year, the first of its kind in the Pittsburgh region, this contract is designed to reduce costs, improve access and enhance patient care management and outcomes. The agreement also gives health care providers the opportunity to have a more direct and active role in the management of medical services and also creates an opportunity for them to share premium dollars with HealthAmerica. HealthAmerica members enrolled in its Health Maintenance Organization (HMO) program select a primary care physician through its community based network or one of nine area Penn Group Medical Associates offices. For those members selecting a physician who is also affiliated with SIDN, the member's care will be managed through this agreement."

James S. Fritz, president of Southwest Integrated Delivery Network, said, "This strategic agreement with HealthAmerica reflects the most important factor in bringing effective managed care arrangements to the market ~ the alignment of providers and insurers through a risk/reward relationship. There is more to managing health care costs than simply acquiring more and more facilities, creating costly duplication in the local community or arbitrarily reducing payments to providers. In this case, we have the opportunity to improve patient outcomes and reduce costs at the same time by more effectively managing care at every point in the system. This can be accomplished through agreements such as this which ensure access to high quality, competitively priced health care services."

HealthAmerica Pittsburgh, a subsidiary of Coventry Corporation, is part of a statewide Pennsylvania organization administering health care benefits to more than 492,000 members and contracting with 6,300 employer groups who offer its health maintenance organization (HMO), point-of-service (POS) and preferred provider organization (PPO) plans to their employers. Coventry Corporation currently serves more than 820,000 members through its various managed care operations.

Coventry Corporation, headquartered in Nashville, Tennessee, is a managed health care company that provides a wide range of health benefits and services to a broad cross section of employer and government-funded groups in Pennsylvania, Ohio, West Virginia, Missouri, Illinois, Virginia and Florida. The Company operates from regional headquarters in Pittsburgh and Harrisburg, Pennsylvania; St. Louis, Missouri; Richmond, Virginia; and Jacksonville, Florida.

CONTACT: Coventry Corporation, Nashville

Richard H. Jones, 615/391-2448,

Annette Fetchko, 412/937-1396 or

Scott Whitaker, 615/231-1159