FOR IMMEDIATE RELEASE

Contact: Barb Meyer
Director of Communications
Sisters of Mercy Health System www.mercy.net
v: 314.628-3633
f: 314.628-3734
e: bmeyer@corp.mercy.net

OWNERSHIP OF MERCY HEALTH CENTER TO TRANSFER TO COMMUNITY HEALTH SYSTEMS

Laredo, TX (June 10, 2003) — The Sisters of Mercy Health System, St. Louis, has signed a letter of intent to transfer ownership of Mercy Health Center in Laredo, Texas, to Community Health Systems of Brentwood, Tennessee. The agreement includes the 325-bed hospital, outpatient facilities and related assets. The transfer, which is expected to be completed in the fall of 2003, is subject to normal closing conditions and regulatory approvals.

The Sisters of Mercy will continue their history of service to the Laredo community by expanding their existing community outreach programs. This ministry will be carried out through Mercy Ministries of Laredo, a newly formed non-profit organization. Net proceeds from the sale of the hospital will be used to establish and initially fund Mercy Ministries of Laredo, which will serve a variety of community needs in areas such as primary healthcare, social services, education and advocacy.

“For nearly 110 years, Mercy Health Center has been at the heart of the sisters’ ministry in Laredo. While our ministry is changing, we remain committed to this community and will continue to find ways to nurture the soul, heal the sick and serve people most in need,” said Sister Mary Roch Rocklage, RSM, chair of the Board of Directors, Sisters of Mercy Health System.

She added, “The decision to relinquish sponsorship of Mercy Health Center was an incredibly difficult but necessary one. Today, we face challenges on many fronts in our efforts to continue to operate Mercy Health Center in the tradition of the Sisters of Mercy. We believe we have found a partner in Community Health Systems that will help the hospital face its future challenges and prosper.”

“Mercy Health Center has always taken care of all those in need, regardless of their ability to pay. Throughout its history, Mercy has provided nearly all of Laredo’s charity care. This is a commitment we accepted as part of our faith-based heritage and non-profit status,” said Ron Ashworth, president and chief executive officer of the Sisters of Mercy Health System. “However, today this responsibility is combined with ever-growing payment reductions from government programs such as Medicaid and Medicare, and significant increases in the cost of malpractice coverage. In addition, we are challenged by the introduction of for-profit specialty hospitals and freestanding healthcare centers that are eroding our revenue.”

He added, “We have examined every possibility for further reducing our costs and allowing us to continue sponsorship of Mercy Health Center. Unfortunately, we have determined that community needs will continue to far outpace growing and anticipated revenue. The decision to sell Mercy Health Center at this time ensures that this hospital will continue to serve the community under ownership that will be on an equal competitive footing with other area healthcare organizations. And, the decision enables the Sisters of Mercy to remain in Laredo and devote their resources to meeting other community needs.”

Mercy Health Center’s current facility was constructed in 1999 and includes 325 private rooms, a medical office building and cancer treatment center. An ambulatory care center in north Laredo, as well as other properties throughout Laredo and the surrounding region, will be included in the sale.

Mercy Ministries of Laredo
The development of the Sisters of Mercy’s new outreach ministry, Mercy Ministries of Laredo, is under way. This organization will significantly expand the variety of outreach services provided by the Sisters of Mercy in Laredo, with particular emphasis on meeting the needs of people who are economically poor. A board with significant local participation will be established, and community input will be sought in determining any new services to be offered. Daniel Guevara, currently chief operating officer of Mercy Health Center, has accepted the position of chief executive officer of Mercy Ministries of Laredo.

“It has been the privilege of the Sisters of Mercy to be a part of the Laredo community for so many years,” said Sister Mary Roch Rocklage. “While our ministry of service is changing, we look forward to continuing to walk with and among the people of Laredo through this new endeavor.”

Community Health Systems, Inc.
Located in the Nashville, Tennessee suburb of Brentwood, Community Health Systems is a leading operator of general acute care hospitals in non-urban communities throughout the country. Through its subsidiaries, the Company currently owns, leases or operates 70 hospitals in 22 states. Community Health Systems’ hospitals offer a broad range of inpatient and outpatient medical and surgical services. The organization has a demonstrated commitment to maintaining charity care in the communities it serves. Shares in Community Health Systems, Inc., are traded on the New York Stock Exchange under the symbol “CYH.”

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