September 23, 2003 -- As the Health System continues to grow in terms of patient admissions,
referrals, advanced technologies and procedures, capital spending will need to keep pace.

“To meet patient needs and to continue to prepare for a future of innovative care, discovery and excellent training, the Health System needs to consistently invest in our capital needs,” says R. Edward Howell, vice president and chief executive officer of the Medical Center.

“We have become more efficient over the past year, and we have attained a more fiscally sound Health System,” Howell notes. With this success, the fiscal year (FY) 2004 budget will address a number of pressing capital needs, including facilities renovation, equipment and clinical programs.

Capital spending for the Health System in FY 2004 is projected at $126.5 million, which includes the hospital expansion, the new medical office building at Fontaine and ongoing capital requirements.

“The capital budget for routine expenditures for facilities, equipment and program needs is almost twice as much as it was three years ago,” Howell says. “To fulfill our leadership position, this level of capital spending will be required over the next decade. For example, technologies
are changing aggressively in the area of radiology and other types of imaging. For the best care of our patients and the best trained physicians, we need these new technologies.”

The FY 2004 capital budget is devoted to the future of the Health System. Some examples of budget items include:

Facilities:

• Hospital expansion

• Modular operating rooms

• Opening and consolidation of inpatient beds

• Electrophysiology/Catheterization Lab addition

• Renovations in 1222 Jefferson Park Avenue to facilitate moving and supporting of medical records, coding, psychiatry and other services

• Lobby and elevator renovations

Equipment:

• Imaging equipment in the Electrophysiology Lab and other Heart and Vascular Center diagnostic and therapeutic equipment

• Ergonomic equipment to help move patients safely and reduce the risk of job-related injuries

• Replacement of physiological monitors

• Replacement of ventilators

Clinical Programs:

• Significant investments in relocation of and resources for the Sleep Lab and neurodiagnostics

• Investments to accommodate the infusion center and new projects at the Cancer Center.

• Expanding the telemetry capability for medicine patients.

In addition to the money invested by the Medical Center, the nutrition service vendor is making a $3.1 million capital investment that will be used to remodel the West Complex cafeteria into a food court, remodel the University Hospital cafeteria and create a 24/7 grill area there, remodel
the Kluge Children’s Rehabilitation Center cafeteria and replace the cook/chill heating and cooling units used to prepare patient meals. This investment by Morrison Management
Specialists is part of the FY 04 budget as well.

“The needs are great, and our resources must be utilized to maintain and grow our capital infrastructure to preserve our position as a top health system,” Howell says.

Major capital commitments over the next five years (through FY 2008) include:

• Hospital expansion project – this project will be completed in 2006 to provide new resources and space, plus extensive renovations of existing space, for the cardiac catheterization laboratory and operating rooms

• Significant expenditures for the Cancer Center

• Consolidation of certain hospital laboratories

• Renovations for the heating plant

• Major investments in health information systems, particularly the IHIMS (Integrated Health
Information Management Systems), a patient-centered information services initiative with the
goal of delivering high-quality information to caregivers and staff across the Health System.

Howell notes, “We will continuously focus on the needs of our patients and set priorities for the best use of our precious resources.” •