National Surgical Hospitals and John Muir/Mt. Diablo Health Systems Form Joint Venture to Develop Surgical Facilities.

CHICAGO -- National Surgical Hospitals, which owns, operates and develops freestanding specialty surgical hospitals and surgery centers in association with local physicians, today announced an agreement with the John Muir/Mt. Diablo Health System, a premier healthcare provider in Northern California, to form a joint venture relationship. The new joint venture, Bay Area Surgical Ventures, LLC, along with area physicians, intends to develop at least two and up to five surgical facilities in the area. The joint venture also plans to evaluate the feasibility of a surgical hospital to complement its health care services.

The John Muir/Mt. Diablo Health System, with the John Muir Medical Center, Mt. Diablo Medical Center, and the Medical Pavilion for behavioral and substance abuse treatment, is a premier healthcare provider in the San Francisco Bay area. It offers a wide array of clinical services, advanced technologies, facilities and equipment, providing a broad spectrum of outpatient services and community outreach programs dedicated to improving the health of the communities served. The System includes one of the fastest-growing physician groups in Northern California, with well over 700 physicians direct patient care facilities.

National Surgical Hospitals currently has a presence in the area through its Sequoia Surgical Pavilion in Walnut Creek, California. This surgery center specializes in general surgery, ENT, orthopedic surgery and pain management, and many of its physician partners practice at one or more of the John Muir/Mt. Diablo Health System's facilities.

Commenting on the announcement, John G. Rex-Waller, Chairman, President and Chief Executive Officer of NSH, said, "We are excited to announce our first joint venture relationship as we seek to expand the breadth and momentum of our business. This system already has a successful presence in Northern California, and we expect to build on the strong relationships that we already enjoy with our physician partners - and embark on new ones as we align with other physicians - to bring new surgical capabilities to the area. Clearly, the John Muir/Mt. Diablo Health System is the preeminent health care provider in the region, providing our new joint venture with unmatched resources and reach. Consequently, we expect this partnership to create attractive expansion opportunities in this vibrant community."

Also commenting on the formation of joint venture, J. Kendall Anderson, President and Chief Executive Officer of John Muir/Mt. Diablo Health System, said, "Considering the size of our physician network, and faced with a growing market, we recognize the need for additional surgical facilities that will support the network by helping physicians streamline their surgical practices and increase their efficiency in handling greater caseloads. National Surgical Hospitals brings invaluable leadership skills in development, management, operations and marketing to this venture that will help us achieve our mission. Moreover, with a group of area physicians already in partnership with NSH, we think there will be greater goal congruence as we undertake the development of new centers and prospects for a stand-alone specialty surgical hospital."

National Surgical Hospitals is the innovative healthcare partner that empowers physicians to thrive in a changing marketplace. NSH has operational surgical hospitals located in Arizona, Idaho, Michigan, North Carolina, Texas, Utah, and Wisconsin. Aside from its focus on surgical hospitals, NSH has operational orthopedic-focused surgery centers located in Arizona, California, Indiana, and Pennsylvania. NSH has a strong pipeline of additional opportunities under consideration.

For information about NSH and how it is pioneering a better way to deliver surgical care, visit the company's website at www.nshinc.com.