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Press Release


Chestertown, MD, November 27, 2007 � After a 16-month process of evaluation and negotiation, the Board of Directors of Chester River Health System voted on Tuesday, November 27, to join the University of Maryland Medical System (UMMS).

�Our study process convinced a super-majority of our Board that the qualities which make Chester River Health System so valued and vital to our community can best be protected and strengthened by partnering with a major health system,� said Charles D. �Chip� MacLeod, Chair of the Chester River Health System's Board of Directors. �The University of Maryland Medical System brings distinct benefits to the partnership and offers us collaborative opportunities that will enhance health care services and access in the region.� MacLeod cited as the cornerstone of the agreement the commitment to maintain Chester River Hospital Center as an acute care inpatient facility with staff to include the same physicians, nurses and providers who are currently serving the community.

The agreement also provides immediate access to funding for facility improvements at Chester River Hospital Center and the development of new clinical initiatives for the health system.

The Board of UMMS has already voted to move forward with the agreement.

Chester River Health System includes an acute care hospital licensed for 62 beds, a 98-bed nursing and rehabilitation facility and a home care and hospice agency.

In July 2006, the Board of Chester River Health System initiated a study of the potential benefits of joining UMMS and last spring approved the terms of agreement that would govern its entry into medical system. In the months following, physicians practicing at Chester River Hospital Center were invited to participate with Board members, health system administrators and UMMS representatives to develop a business plan to guide future development along with clinical and facility investments.

As part of its evaluation process, the CRHS Board engaged an independent consulting firm, Navigant Consulting, to assess the proposed terms of the agreement. Navigant is a publicly traded company providing consulting services to health industry clients nationally.

The Navigant report concluded that entry into UMMS is the �best option for addressing short and long term needs of CRHS and its community.� The reasons cited by Navigant include:

� access to capital at comparatively low rates
� enhanced ability to renovate the existing hospital facility
� financial stability in the face of future financial challenges
� benefits derived from economies of scale in areas such as info technology and purchasing
� ability to enhance clinical services and address persistent clinical challenges
� participation in developing a regional health care delivery network
� enhanced ability to recruit and retain physicians
� enhanced ability to recruit quality management

The agreement with UMMS provides for the majority of the Chester River Health System Board to live or work within CRHS's primary service area. Additionally, the Chester River Board will appoint a representative to the Board of Directors of the University of Maryland Medical System. The agreement maintains the CRHS Board's responsibility for governing its medical staff, and the Board of Chester River Health Foundation will remain under the control of the Chester River Health System Board. Distribution of donor funds will remain consistent with what the donors specified, and the use of unrestricted contributions will have to be approved by the Chester River Health System Board of Directors.

�The health care needs of this community � now and in the future � have guided us at every stage of this process,� said MacLeod. �My hope, and the hope of our Board, is that all members of our community will come together, whatever their position on this decision, and work as one to support Chester River Health System.�


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