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HEALTH ONE AND LIFESPAN ANNOUNCE INTENT TO CONSOLIDATE

 HEALTH ONE AND LIFESPAN ANNOUNCE INTENT TO CONSOLIDATE
 MINNEAPOLIS, Jan. 14 /PRNewswire/ -- LifeSpan Inc. and Health One


Corporation, two Minneapolis-based, not-for-profit health care organizations, today announced their boards of directors have approved principals of affiliation. A letter of intent is expected to be signed within 3-5 days.
 The consolidation would combine all assets of Health One and its owned organizations with LifeSpan and several of its controlled organizations, including Abbott Northwestern Hospital and LifeSpan's outstate affiliates.
 Minneapolis Children's Medical Center will modify its current relationship with LifeSpan while pursuing a relationship with Children's Hospital of St. Paul, Minn. It will retain a wide variety of joint clinical and administrative programs with Abbott Northwestern Hospital. Methodist Hospital, a member of LifeSpan, is expected to pursue an affiliation with Park Nicollet Medical Center and will not participate in the consolidation. Methodist intends to work closely with the consolidated system to find ways for the innovative delivery of health care.
 Children's Hospital of St. Paul will not be part of the consolidation, but will remain associated with United Hospital, a Health One-owned hospital, in a wide variety of joint clinical programs. Earlier this summer, Health One sold the assets of Metropolitan-Mount Sinai Medical Center, a 700-bed hospital in downtown Minneapolis, to Hennepin County.
 Donald C. Wegmiller, president and chief executive officer of Health One, said, "The consolidation is being finalized because both organizations believe a single integrated regional health delivery system will improve service and efficiency which will, in turn, conserve scarce resources. And even though recent studies show that health care costs in the Twin Cities are lower than virtually any other metro area, consumers want hospitals to do more to lower costs. With this consolidation, we will be able to do more."
 Gordon M. Sprenger, president and chief executive officer of LifeSpan, stated that, "We started these discussions because we thought a consolidation could benefit the community. Now, some eight months later, we're more strongly convinced than ever that the community will benefit from our broader, stronger new system."
 The new organization would have 13 hospitals in Minnesota and western Wisconsin, consisting of 2,600 beds and employing approximately 15,000 persons. The combined organizations will have assets in excess of $825 million and a net worth (general fund balance) of over $275 million.
 Stanley R. Cowle, chairman of the Health One Board of Directors, said, "This is not a case of one health care system taking over another. This is a consolidation of equals. Health One and LifeSpan share a similar vision of the future and we're anxious to make that vision a reality for this community."
 Conley Brooks, chairman of the LifeSpan Board of Directors, said, "Our vision is to create an integrated, regional health care system that can more efficiently act on a commitment to deliver high quality services at the lowest possible cost. And that will benefit not only patients, but employers, payors, physicians and the entire community, as well."
 Wegmiller said, "The benefits of this consolidation will be realized in many ways, including less duplication and greater utilization of costly healthcare technology, which will help lower the cost to the community, and an expanded opportunity to provide support and services in the non-metro and rural areas."
 Sprenger added that, "There are other direct benefits to be realized, such as an improved ability to build long-term relationships with third party payors in order to provide services tailored to the unique needs of the customer at lower cost, and expanding our "out-of- hospital" services, such as home health care and ambulatory clinics to provide more care in cost-effective settings."
 A new board of directors for the consolidated organization will be formed consisting of 30 members. LifeSpan and Health One will each have equal representation on the board, nominated by their current organizations.
 Once regulatory reviews have been completed, Health One and LifeSpan will spend several months bringing the organizations together.
 -0- 1/14/91
 /CONTACT: Jean Price of LifeSpan, 612-863-5607, or David Peters of Health One, 612-574-7841/ CO: LifeSpan Inc., Health One Corporation ST: Minnesota, Wisconsin IN: HEA SU: TNM


KH -- MN009 -- 9582 01/14/92 13:20 EST
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Date:Jan 14, 1992
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