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HILLHAVEN ISSUES LETTER TO INVESTORS, ANALYSTS

 TACOMA, Wash., Feb. 22 /PRNewswire/ -- The following letter was released today by Hillhaven (AMEX: HIL) to the company's investors and analysts:
 "Hillhaven's common stock, along with others in long-term care, has come under pressure in the last few weeks. The market may be concerned about President Clinton's health care program; we believe that the long- term care industry will be a net beneficiary of any changes.
 "On Feb. 18, Lucy Olwell, a health care analyst with Merrill Lynch, issued a report which addresses the anticipated impacts of health care reform to the long-term care industry. In case you missed her comments, we wanted to provide you an opportunity to review them.
 "Please call if you have any questions."
 /s/
 Tim Carroll
 Director of Investor Relations
 The Hillhaven Corporation
 206-572-4901
 Merrill Lynch, Long Term Care Industry, Summary:
 "Most of the stocks in the long term care group have been rather weak during the past several days reflecting both the general sell-off in healthcare issues due to concern over President Clinton's health care reform initiatives as well as profit taking after an exceptional performance in the group since late last year. We would view the weakness as an excellent buying opportunity. Regarding concern over President Clinton's health care reform initiatives, we would note the following:
 "(i) There are no significant proposals in Washington to radically alter the payment mechanism to the nursing home industry.
 "(ii) Long term care/nursing homes are already the lowest margin part of healthcare and the most highly r stay for a Medicare patient.
 "(iii) We expect that most of the companies in our universe should benefit from proposals to reduce healthcare costs. The industry is already treating a more intensely ill patient and future reimbursement should reflect this. The nursing home industry is no longer viewed as an industry that is merely a 'caretaker' of the elderly, but as an industry that is providing more intensive care in a cost efficient and effective manner. The 'caretaker' role of the nursing home industry has been replaced by assisted living situations and home healthcare.
 "We continue to recommend purchase of the shares of Long Term Care companies based on our belief that they are entering a period of above average growth and profitability and in fact additional upward earnings surprises are possible."
 STOCK TABLE
 5-YEAR PRICE 52-WEEK
 SYMB ORO GROWTH RATE 02/18/93 PRICE RANGE
 BEV C-2-1-9 30 percent $11 1/2 $14-7
 GHV(a) C-2-1-9 20 percent 15 1/2 19-6
 Cal
 HCR B-1-1-9 20 percent 30 38-17
 HHC(b) C-2-1-9 20 percent 10 7/8 15-5
 Cal
 HIL(c) D-2-2-9 NM 3 1/8 4-2
 Cal
 LCA(d) C-2-1-9 20 percent 19 3/4 24-11
 Cal
 Earnings Per Share P/E Ratio
 SYMB 1991 1992(A) 1993(E) 1994(E) 1993(E) 1994(E)
 BEV $0.37 $0.55 $0.75 $1.00 15.3 11.5
 GHV(a) 0.58 0.80 1.00 1.25 15.5 12.4
 Cal 0.83 1.05 1.30 14.8 11.9
 HCR 1.10 1.63 1.95 2.35 15.4 12.8
 HHC(b) 0.19 0.38 0.60 0.77 18.1 14.1
 Cal 0.29 0.48 0.63 0.83 17.3 13.1
 HIL(c) -- -- 0.14 -- 22.3 --
 Cal 0.18 17.4
 LCA(d) 0.80 1.16 1.40 1.70 14.1 11.6
 Cal 1.22 1.43 1.75 13.8 11.3
 NOTE (a) Fiscal year ends Sept. 30
 (b) Fiscal year ends May 31; 1994 EPS is midpoint of range
 of $0.75 - 0.80.
 (c) Fiscal year ends May 31.
 (d) Fiscal year ends Sept. 30.
 (HIL) An affiliate of Merrill Lynch serves as a specialist in this stock on a regional exchange. Such specialist may have a long or short position in this stock or in options on this stock, and may be on the opposite side of public orders.
 (BEV) An affiliate of Merrill Lynch serves as a specialist or market maker, or has a financial interest in the performance of a market maker, in listed options on this stock. Such specialist or market maker may have a long or short position in this stock or in options on this stock, and may be on the opposite side of public orders.
 (BEV,HIL,GHV,LCA,HCR) MLPF&S was a manager of the most recent public offering of securities of this company within the last three years.
 -0- 2/22/93
 /CONTACT: Tim Carroll, investor relations director, of Hillhaven, 206-572-4901/
 (HIL)


CO: Hillhaven Corp.; Merrill Lynch ST: Washington IN: HEA SU:

JH-SW -- SE008 -- 9119 02/22/93 17:57 EST
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Date:Feb 22, 1993
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