Vasomedical Restructures to Pursue Congestive Heart Failure Market Opportunity.

WESTBURY, N.Y. -- Vasomedical, Inc. (NASDAQ SC: VASO), a leader in the noninvasive treatment and management of cardiovascular diseases, today announced an initiative to improve alignment of operations to pursue the congestive heart failure (CHF) market. This initiative, which includes a workforce reduction plus tighter expense control, is expected to provide a clear focus on CHF investment and to reduce expenses by approximately $3 million over the next year.

Thomas Glover, president and chief executive officer, commented, "We have recently concluded several large successful projects, the PEECH clinical study trial and the introduction of the state-of-the-art Lumenair(TM) EECP(R) therapy system, that marked turning points in our company's history and serve to position us for the future. We have now taken the initiative to redeploy our resources to take advantage of the opportunities we feel hold the greatest promise for future revenue growth while at the same time preserving resources for key projects essential to maintaining our business. A major thrust of our restructuring plan is to focus the company's sales and marketing efforts on the large potential CHF therapy market. CHF affects over five million people in the United States, with more than 550,000 new cases diagnosed annually. Clinical data from our recent positive PEECH clinical trial shows that Vasomedical's EECP therapy provides a significant improvement in symptoms and quality of life for patients with mild to moderate congestive heart failure. In this pivotal randomized trial, significantly more patients receiving a combination of EECP therapy and optimal pharmacological therapy showed improvement as compared to patients receiving optimal pharmacological therapy alone. Aligning the company's efforts to maximize the potential of this therapy is the appropriate thing to do."

The company's EECP therapy has received FDA marketing clearance for both angina and congestive heart failure. Medicare currently provides coverage for angina and congestive heart failure patients who have angina as a primary indication. The company is now seeking to expand current Medicare reimbursement coverage for angina and to add Medicare reimbursement coverage for congestive heart failure as a primary indication. To implement this, Vasomedical plans to submit a coverage application to the Centers for Medicare and Medicaid Services (CMS) in parallel with publication of results of the PEECH clinical study by the trial's lead investigators in a major peer-reviewed journal, which is a prerequisite for final CMS decision.

The company's business plan also incorporates several targeted strategies directed at key projects essential to current and future growth. These are: the continued development of critical clinical data to support Vasomedical's EECP therapy, the continued growth of the service related business, the maintenance of the company's FDA and international quality and regulatory compliance programs as well as technical and product development support.

"This initiative coupled with the cost saving measures will make us a leaner and more effective organization which is better suited to capitalize on the large CHF market opportunity while continuing to effectively service our current market base," concluded Tom Glover.

About EECP(R) Therapy

EECP(R) external counterpulsation therapy is typically given in 35 one-hour-sessions over seven weeks. Patients lie down on a padded table and their calves, lower thighs and upper thighs are wrapped in a cuff set. The system, which is synchronized to the individual patient's cardiac cycle, inflates the cuffs with air to create external pressure when the heart is resting (diastole) and deflates the cuffs just before the heart beats (systole). The system's action, which pulses counter to the heart's beating, increases blood flow to the heart muscle and decreases the heart's workload, creating a greater oxygen supply for the heart muscle while lowering the heart's need for oxygen.

About Vasomedical

Vasomedical, Inc. is primarily engaged in designing, manufacturing, marketing and supporting EECP(R) external counterpulsation systems based on the Company's proprietary technology. EECP(R) therapy is a non-invasive, outpatient therapy for the treatment of diseases of the cardiovascular system currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The therapy serves to increase circulation in areas of the heart with less than adequate blood supply and may restore systemic vascular function. The Company provides hospitals, clinics and private practices with EECP(R) equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. Additional information is available on the Company's website at www.vasomedical.com.

EECP is a registered trademark of Vasomedical, Inc.

Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used herein, words such as "anticipated," "believes," "could," "estimates," "expects," "may," "plans," "potential" and "intends" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company's management, as well as assumptions made by and information currently available to the Company's management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the effect of the dramatic changes taking place in the healthcare environment; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in the conduct of clinical trials and other product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; uncertainties about the acceptance of a novel therapeutic modality by the medical community; and the risk factors reported from time to time in the Company's SEC reports. The Company undertakes no obligation to revise any forward-looking statements as a result of future events or developments.