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Catskill Regional and Orange Regional Medical Center Announce Affiliation Agreement

June 25, 2007

Catskill Regional Medical Center (CRMC) and Orange Regional Medical Center have announced an affiliation agreement with the goal of working together to enhance healthcare in the Hudson Valley. Catskill Regional will officially seek approval from the New York State Department of Health to become an affiliate member of the Greater Hudson Valley Health System (GHVHS), joining Orange Regional Medical Center which currently is the sole GHVHS affiliate. A press conference to discuss the affiliation will be held in the CRMC Board Room on Tuesday, June 26 at 1:00 p.m.

Orange Regional’s President & CEO Scott Batulis said, “The affiliation agreement between Catskill Regional and GHVHS offers additional resources to Catskill Regional which ultimately will benefit the entire region. The affiliation agreement is not a full asset merger. It will not impact Orange Regional’s financial position and will not affect Orange Regional Medical Center’s new hospital construction project currently being planned. Orange Regional and CRMC will operate as two independent stand-alone hospitals under the GHVHS parent.”

GHVHS will enter into a management contract with CRMC and will assume responsibility for day-to-day management of Catskill Regional. Under this management contract, the Senior Management team at Orange Regional will assist with all aspects of CRMC’s planning and delivery of healthcare services.

A new Catskill Regional Board of Directors will be appointed by the Board of the GHVHS. Joyce Salimeno, currently Chair of Catskill’s Board, will step down from the CRMC Board and become a member of the GHVHS Board. The individual selected to replace Ms. Salimeno as Chair of the CRMC Board will become a member of the GHVHS Board. Gerald Skoda has agreed to serve as acting Chair once a new CRMC board is selected. Darrell Supak, currently a member of the CRMC Board, will also become a member of the GHVHS Board.

As a GHVHS affiliate, Orange Regional will help Catskill Regional develop and enhance clinical programs while continuing to promote quality care. Rich Shapiro, the Board Chairman of GHVHS and Orange Regional, said, “We recognize that Catskill Regional is an extremely important part of the community. By working together with their Board and management, we can achieve many things that are difficult to do alone.”

Ms. Salimeno said, “I am delighted to have taken part in bringing this exciting affiliation to fruition and look forward to serving on the GHVHS Board. This affiliation will provide a tremendous benefit to the community that we serve in the Hudson Valley region.”

Among the areas of assistance, Orange Regional will help Catskill Regional develop a financial transition plan to address Catskill’s short-term cash needs. Grant procurement, debt relief and restructuring strategies, revenue cycle issues, cost reduction and physician participation and support will also be areas of focus.

Both Boards of Directors and top administrators from each hospital have been working on the management agreement since December 2006. “There were many, many people involved in the dialogue about potential collaboration,” said Batulis. “We would like to thank Senator John Bonacic who was instrumental in bringing the two hospitals together. Additionally, Assemblywoman Aileen Gunther has been an ardent supporter of the hospital and the community. Also key to the agreement were the New York State Department of Health and New York State Dormitory Authority, Crystal Run Healthcare, Catskill Regional Medical Staff, managers and staff at both hospitals.”

Licensed for 164 acute beds, CRMC is the sole hospital provider in Sullivan County and plays a critical role in caring for the residents of the region. CRMC provides services at its campuses in Harris and Callicoon and at its family health centers in Harris, Ferndale, Monticello and Wurtsboro. Focused on providing the highest quality care, CRMC has recently added a new MRI and a dedicated emergency response helicopter; and renovated its state-of-the-art Birthing Center to offer the best possible environment to welcome a new life into the world. Catskill Regional’s Cancer Program holds the highest rating of the Commission on Cancer of the American College of Surgeons. Catskill Regional is accredited by the Joint Commission on Accreditation of Healthcare Organizations.

Orange Regional Medical Center, formed by the merger of Arden Hill Hospital and Horton Medical Center in 2002, is licensed for 450 beds and has 520 doctors on its medical staff. Orange Regional has continued to bring many advanced medical services to the community including Diagnostic Cardiac Cath, electrophysiology, ultra fast 64-slice CT and Open Bore MRI among others. Orange Regional also provides multiple outpatient locations including the Orange Regional Medical Pavilion in the Town of Wallkill, which offers surgical and diagnostic services. Orange Regional is planning to build a 374-bed hospital with private rooms on 61 acres in the Town of Wallkill to be occupied in 2011.

Working together, Catskill Regional Medical Center and Orange Regional Medical Center will redefine healthcare for the region.

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