FOR IMMEDIATE RELEASE

June 29, 2007

(DES MOINES, IA) - Mercy Medical Center - Des Moines and Wellmark Blue Cross and Blue Shield of Iowa have reached an agreement that will allow construction of a West Des Moines hospital.

“We are pleased to reach a resolution that will allow both Mercy and Wellmark to meet the future health care needs of the patients we serve,” said Mercy President & CEO David H. Vellinga. “Mercy is committed to providing access to affordable medical services to everyone. The efficiencies of a new hospital will ensure that we can work together to make this possible.”

With the settlement reached, Mercy will begin site preparation in mid-July. A blessing and groundbreaking ceremony for the state-of-the-art facility will be held on July 19.

“To provide world-class health care, we must continually seek new ways to deliver clinical excellence in safe, efficient and healing environments. Moving forward with this hospital in West Des Moines fulfills our promise to the patients and families we serve to provide outstanding health care services across the metro area. It also honors the tradition of our founders, the Sisters of Mercy, to make a profound, positive difference in the quality of people’s lives,” Vellinga said.

The agreement is described by leaders of both organizations as mutually acceptable and will benefit Mercy’s patients, Wellmark’s customers and the Central Iowa community as a whole.

As part of the agreement, Mercy will go forward with plans to close Mercy Capitol once Mercy West Lakes is completed, and Wellmark will drop Mercy from a pending lawsuit against the Iowa Department of Public Health and hospitals in Polk and Jones Counties.

“The lawsuit is likely to take some extended time to be resolved and, without a certain outcome, the arrangement with Mercy seems to be prudent and clearly in the best interests of our customers and their patients,” Wellmark Chairman and CEO John Forsyth said. “This ensures that our customers and their patients get maximum value in the West Des Moines facility while replacing an outdated facility with approximately the same number of beds,” he said.

“We want to again thank the State Health Facilities Council and staff, Wellmark, many community leaders, prospective donors and elected officials who have played a role in making Mercy West Lakes a reality,” Vellinga said. “We look forward to moving ahead with this project that will benefit so many patients and families.”

Mercy Medical Center - Des Moines is a 917-bed acute care, not for profit Catholic hospital, with more than 40 clinics and a 15-hospital rural network. The Mercy corporation includes nine wholly-owned subsidiaries including: Mercy Capitol, Mercy Medical Center-Centerville, Mercy College of Health Sciences, Mercy Clinics Inc., House of Mercy Mercy Foundation. Mercy Park Apartments, Bishop Drumm Retirement Center and Mercy Professional Practice Associates. Mercy has 800 physicians on staff and employs 6600 people as a member of Mercy Health Network. Mercy Health Network is co-sponsored by Mercy’s owner, Catholic Health Initiatives (CHI). CHI is a national non-profit health corporation based in Denver, Colorado. The CHI health system includes 70 hospitals; 43 long-term care, assisted and independent living and residential facilities; and two community-based health organizations located in 19 states. Catholic Health Initiatives represents approximately 66,000 employees and total revenues of $7.1 billion. It is the second largest Catholic health system in the United States.