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FOR IMMEDIATE RELEASE

First Annual Collaborative Healthcare Forum Spotlights Open Source to Improve Care, Reduce Costs

Medsphere Brings Together Industry Expertise on the Heels of Proposed Federal Legislation on Open Source Health IT

New York City, New York, Oct. 15, 2008 - Medsphere Systems Corporation, the leading provider of Open Source healthcare IT solutions, today announced the success of its first annual Collaborative Healthcare Forum. The event brought together healthcare IT experts from across the country to discuss the promise of Open Source as an innovative and affordable platform for delivering electronic health records (EHRs), reducing healthcare costs and improving patient care.

The timing of the one-day forum is significant with last month's introduction of new legislation by Rep. Pete Stark (D-CA). The Health-e Information Technology Act of 2008 would establish federal standards and deadlines for a national, interoperable EHR network and require the federal government to create an Open Source health IT system that would be made available to all healthcare providers at little or no cost. (Open Source is the public development of source code for software creation. In the Open Source environment, collaboration across various organizations and unaffiliated individuals contributes to the design and improvement of software.)

"It doesn't require tremendous insight, especially during these challenging economic times, to recognize that the American healthcare system is in trouble," said Michael J. Doyle, CEO of Medsphere. "While many fixes have been proposed over the years, we are convinced of the need for collaboration between the public and private sectors and cooperative development of IT tools to improve interoperability, increase efficiency, protect patient safety and control costs. This is truly the only way to change the course of healthcare in this country."

Astute healthcare investors, Doyle explained, are looking to Open Source solutions because they make more economic sense than proprietary systems that cost more money in the long run. The savvy investor sees the future in Open Source EHRs because they reduce health care costs, help drive clinical transformation and are affordable, often paying for themselves within three years.

"We are already seeing dramatic improvements at organizations like Midland Memorial Hospital, West Virginia Department of Health and Human Resources and Memorial Hospital of Sweetwater County," Doyle said, citing specific examples of clinical transformation and cost savings. "These institutions decided to forego expensive, vendor-locked systems and adopt Open Source as the foundation for their IT solutions. Today, they are models for change in the healthcare industry and we are proud to be their technology partner."

In many ways, as forum presenters demonstrated, Open Source has already changed America's healthcare system. Dr. Kenneth W. Kizer, former undersecretary of health in the U.S. Department of Veterans Affairs (VA), outlined the experience of the Veterans Healthcare System, the country's largest provider network and one of the earliest adopters of a system-wide EHR. More than a thousand healthcare sites run VistA, the Open Source EHR created and developed by the VA, Kizer explained. For more than 20 years, interested individuals have fine-tuned VistA, worked together on code and created an Open Source community that shares best practices in health IT even today.

Many healthcare industry leaders and government officials are now looking to EHR mandates to increase adoption of healthcare technology. Open Source provides a realistic alternative to proprietary vendors in building a universal solution, according to Dr. John Halamka, CIO and dean of technology at Harvard Medical School and Boston's Beth Israel Deaconess Hospital. The potential of Open Source, Halamka explained, is found in its numerous benefits: lower costs compared to proprietary vendors, a community of IT collaborators, the ability for developers to share intellectual property and the immediate identification of security issues, including the testing and patching of potential bugs.

"Open Source is everywhere," said Halamka, noting its use in healthcare operating systems, browsers, databases, and search engines and its influence on standards and interoperability.

In his comments, Larry Augustin, founder of VA Linux (now SourceForge) and a Medsphere board member, went so far as to call Open Source "the safe bet". "Open Source has gone mainstream and it is now the default choice," Augustin said.

Additional forum presenters shared valuable, relevant information:

• Cherilyn Murer, president and CEO of The Murer Group and chairman of the board of trustees for Northern Illinois University, focused on navigating the complex regulatory, strategic and financial issues facing healthcare today.
• Jeffrey Miller, vice president of WW Health and Life Sciences Industry for Hewlett-Packard, spoke about developing technology solutions that increase access to vital information and improve patient care by integrating technology, devices and providers.
• From Medsphere, Dr. Edmund Billings, chief medical officer, Kathy English, vice president of product management, and Kris Hanke, director of clinical consulting, shared their insights into the Open Source business model, adoption challenges and clinical transformation using Open Source EHRs.

Collaboration around an Open Source platform is Medsphere's governing philosophy and the driving force behind the Healthcare Open Source Ecosystem, a community of individuals and organizations developing and promoting OpenVista as a viable alternative to prohibitively expensive proprietary solutions. To facilitate communication and collaboration, Medsphere has created a community gathering place found at Medsphere.org where healthcare administrators, clinicians, developers and enthusiasts can interact, share and collaborate in the largest ecosystem in healthcare.

OpenVista is a commercialized version of the highly acclaimed VistA EHR created and developed by the U.S. Department of Veterans Affairs for more than 20 years. OpenVista enables hospitals and other healthcare facilities to reduce operating costs and improve patient care more rapidly and inexpensively than other approaches. As a disruptive technology, OpenVista meets the needs of acute, ambulatory, and long-term care environments, as well as multi-facility, multi-specialty healthcare organizations, and offers clinicians a feature-rich, user-friendly and secure environment for accessing all critical patient information in real time.

Medsphere supports the core principles of the Open Source community and has released the enhanced code base for the OpenVista Clinical Information System (CIS), the EHR's core medical record application. The Open Source release of CIS enables customers and other interested parties to use, modify, and enhance it in support of improved processes and workflows, and better patient safety.

About Medsphere Systems Corporation

As a disruptive force in healthcare information technology, Medsphere is revolutionizing the industry by delivering commercially supported Open Source software based on the U.S. Department of Veterans Affairs' proven VistA EHR. The product of 20-plus years of development and more than $8 billion invested, VistA enabled the transformation of the VA into the nation's most efficient and clinically effective healthcare organization. Currently VistA contains roughly 2.1 billion clinical documents, 2.76 billion orders, and 1.51 billion images. As the commercialized version of VistA, Medsphere's OpenVista is a portfolio of products and professional services for hospitals, clinics and integrated delivery networks. OpenVista is currently used by over 20,000 individuals, including 2,500 physicians and contains hundreds of thousands of medical records. Medsphere addresses healthcare's capital constraints through an innovative business model:

• A unique subscription-based pricing model minimizes upfront costs.
• The Healthcare Open Source Ecosystem and Medsphere.org portal coordinate a unique grassroots community of customers/subscribers, partners and developers driving OpenVista innovation and providing a parallel development and support structure.
• Medsphere's experienced team of healthcare technology professionals and unique suite of implementation tools deliver a fluid transition to a comprehensive healthcare information technology solution.

Founded in 2002, Medsphere is backed financially by Azure Capital Partners, Thomas Weisel Venture Partners and EPIC Ventures (formerly the Wasatch Venture Fund). Medsphere clients include Midland Memorial Hospital, Midland, Texas; West Virginia Department of Health and Human Resources (WV DHHR); Memorial Hospital of Sweetwater County, Rock Springs, Wyoming; Lutheran Medical Center, Brooklyn, New York; and the federal government's Indian Health Service. For more information, visit http://www.medsphere.com and http://www.medsphere.org.

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