PRESS RELEASE

St. Margaret’s Health Announces Plans for Replacement Hospital Facility

(Spring Valley, IL, January 17, 2008) -- St. Margaret’s Health today announces its intent to construct a 65-bed replacement hospital facility. The facility, which is to include a medical office building, will be constructed on a 50-acre site at the northwest corner of US Route 6 and Dalzell Road, within the city limits of Spring Valley in Bureau County.

This decision caps years of deliberation over the feasibility of suitably renovating the current hospital facility versus building a replacement hospital to meet emerging healthcare standards and technology requirements. St. Margaret’s Hospital is landlocked on its present property located at 600 East First Street in Spring Valley.

"We recently completed an extensive study to determine whether to renovate our present hospital facility, which continues to age rapidly, or to replace it in a new location to better meet the needs of our patients and community, " states Tim Muntz, President & CEO of St. Margaret’s Health for the past 14 years. “Our experience with continuous renovation has proven that costs tend to be higher due to unexpected problems encountered in older buildings. It is also difficult to renovate an area without disrupting patient care and services. In addition, the challenges we have with the topography of our existing hospital site, and the limitations it presents for future expansion, weighed heavily in our decision to relocate. This is a tremendous opportunity to build on level ground that allows ample room for growth,” adds Muntz. “We are positioning ourselves to remain viable in the future – offering convenient access for patients throughout the Illinois Valley region, as well as excellent opportunities for growth in new services and technology.”

Frank Zeller, Board Chairperson adds, "We knew we were looking at continuing to spend large amounts to renovate in the future. It makes more economic sense to take those renovation dollars and, instead, apply them to a new facility. This would not only prevent disruption to existing services but also allow us to take advantage of evidence-based design that would be more patient friendly, efficient and provide for quality healthcare for years to come.” Zeller continues, “Our board has been extremely sincere and diligent throughout the entire process. I believe we have found a solution where everybody wins, especially our patients.”

In planning the new facility, hospital officials will utilize the following guiding principles: improving the level of privacy throughout; improving access to hospital services; improving way finding and patient flow; improving efficiency and cost effectiveness; improving adjacency between parking and desired services; and employing evidence-based design features.

Muntz states, “ We are excited for the opportunity to provide our patients with all private rooms and designated patient elevators, separate from service/staff elevators. Our intent is to create a healthcare environment that will help improve patient outcomes, promote patient safety and increase patient satisfaction.”

The projected cost of the 200,000 square foot replacement facility, including equipment, is $90 million. Matthei & Colin Associates (Chicago) has been appointed as the architectural firm for the project. They will work in tandem with the construction firms of Pepper Construction (Chicago) and Mangieri Companies (Peoria). All of these firms have extensive experience in the hospital design/construction. St. Margaret’s has been assured that every consideration will be given to the utilization of qualified local businesses, services and union labor.

Earlier today, a Letter of Intent relative to the project was filed with the Illinois Health Facilities Planning Board (IHFPB). Within the next 60 to 90 days, St. Margaret’s will complete the next step in the State’s approval process by filing a Certificate of Need (CON) application. Efforts are underway to fulfill the legal, regulatory, financial and infrastructure requirements to develop the site and, pending CON approval, begin construction. The planning phase for a project of this magnitude is estimated at 6 months, followed by approximately three years of construction. Hospital officials thus anticipate a 2011 completion date.

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