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RehabCare And Floyd Medical Center Agree to Joint Venture Specialty Hospital

Posted on: Wednesday, 5 March 2008, 00:00 CST

RehabCare Group (NYSE: RHB) and Floyd Healthcare Resources (FHR) today announced that they have reached a joint venture agreement to own and operate The Specialty Hospital, a 24-bed long-term acute care hospital (LTACH) currently owned by FHR and located on the grounds of Floyd Medical Center (Rome, GA). RehabCare will own 80 percent of the joint venture. The agreement will require approval by the Georgia Attorney General's Office.

RehabCare and FHR also have announced plans to expand the LTACH to 45 beds under a previously granted certificate of need and to relocate it to a freestanding facility that the joint venture will construct on the campus of the medical center. Construction should be completed by the end of 2009.

"We're excited about the opportunity to team with a premier facility like Floyd to continue providing this important medical service to the residents of this community," said John H. Short, Ph.D., RehabCare President and CEO. "The Specialty Hospital also fits with our strategy of forming joint ventures with premier healthcare providers within select markets."

LTACHs provide specialized, around-the-clock care for extended stay patients with chronic or medically complex conditions, such as ventilator dependency, brain injury, cardiopulmonary disease, chronic pain and neuropathy. Patients are typically admitted to an LTACH following treatment in a traditional acute care hospital, and the average length of stay exceeds 25 days.

The Specialty Hospital is the only LTACH located north of Marietta, GA.

Mark Manis, Chairman of Floyd Healthcare Resources, added "We are delighted about the joint venture relationship and the upcoming expansion of services. We started The Specialty Hospital in 2000, and a couple of years ago it became clear that there was an opportunity for expansion. The board of FHR determined that it was in the best interests of The Specialty Hospital and our community to search for a partner to assist in this expansion. Through an intensive RFP process, we selected RehabCare and we firmly believe they are the right partner for this venture."

Dr. Short said RehabCare would work to ensure a continuity of care during the transition and that no immediate changes in operations were planned. The staff of the LTACH would be employed by the joint venture following approval of the agreement.

RehabCare currently owns and/or manages three LTACHs and seven freestanding rehabilitation hospitals in locations across the country. With more than 25 years experience, RehabCare also is a leading provider of physical rehabilitation program management services in more than 1,200 hospitals, nursing homes and other long-term care facilities throughout the United States. More information on RehabCare can be found at www.rehabcare.com.

Floyd Healthcare Resources Inc. is a not-for-profit corporation created in 1991 by the Hospital Authority of Floyd County. It serves as a holding company for medically related business investments initially funded through loans made to it by the Hospital Authority of Floyd County and/or Floyd Healthcare Management, Inc. Floyd Healthcare Resources, Inc. is governed by an eight (8) member board of directors, two of whom must be members of the Hospital Authority of Floyd County.

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the Company's current expectations and could be affected by numerous factors, risks and uncertainties discussed in the Company's filings with the Securities and Exchange Commission, including the Company's most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. Do not rely on forward looking statements as the Company cannot predict or control many of the factors that ultimately may affect the Company's ability to achieve the results estimated. The Company makes no promise to update any forward looking statements whether as a result of changes in underlying factors, new information, future events or otherwise.

Source: Business Wire

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