Goldman Sachs Capital Partners Invests In XLHealth

BALTIMORE, Jan. 4 /PRNewswire/ -- XLHealth Chairman and CEO Patrick Hervy announced today that the Baltimore based firm has closed on a private placement of $63,750,000 of Preferred Stock and related options to GS Capital Partners 2000, L.P., a private equity fund managed by Goldman, Sachs & Co., and to Dr. Norman Payson, the former Chairman and Chief Executive Officer of Oxford Health Plans. The investment represents one of the largest capital financing transactions in the growing disease management sector and marks Goldman Sachs Capital Partners' entry into the field.

XLHealth ( is a disease management firm nationally recognized for its work in managing chronically ill patients in the Medicare markets. The firm uses a unique approach that includes combining the positive aspects of one-on-one patient visits and examinations with advanced technology tools. XLHealth's clinical outcomes and healthcare cost savings are among the best in the industry. XLHealth was recently awarded the 2003-2004 Disease Management Association of America's (DMAA) Recognizing Excellence Award for "Best Disease Management Program: Medicare."

"We are delighted that Goldman Sachs decided to invest in XLHealth," said XLHealth Executive Vice President Paul Serini. "This investment -- and the interest and participation of a preeminent firm such as Goldman Sachs -- provides further validation of the disease management business model and confirms that XLHealth's business approach has the potential substantially to improve the delivery of healthcare."

In addition to the investment from Goldman Sachs Capital Partners, XLHealth was recently selected by the Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) to design and manage the largest disease management demonstration to date currently throughout the state of Texas. CMS again selected XLHealth earlier this month to manage an even larger disease management program under the new Chronic Care Improvement Programs created by Congress as part of the Medicare Modernization Act in 2003. The new program will begin in 2005 in Tennessee. The CMS awards are the latest in a series of significant new contracts which have increased the number of covered lives that XLHealth has added in the past few years.

"In XLHealth, we've identified both a profitable, well-positioned company and an experienced and innovative management team that we believe can drive substantial growth over the next few years," said Goldman Sachs Managing Director Joseph Gleberman.

Goldman Sachs Vice President Nat Zilkha added, "We believe that XLHealth's model of improving patient care and quality of life in order to drive cost savings provides a great benefit to the chronically ill and to the broader healthcare system."

As part of the terms of investment, Goldman Sachs Capital Partners will appoint three members to a nine-member XLHealth Board of Directors. Proceeds from the investment by Goldman Sachs Capital Partners will be used by XLHealth to provide capital for internal growth and further expansion and acquisitions within the disease management and affiliated industries.

Goldman Sachs is a global leader in corporate equity and mezzanine investing. To date, Goldman Sachs has formed ten investment vehicles aggregating over $17 billion of capital. With $5.25 billion in committed capital, GS Capital Partners 2000 ( is the current primary investment vehicle for Goldman Sachs to make privately negotiated equity investments.

About XLHealth

XLHealth ( has been at the forefront of disease management innovations since its inception. Founded by physicians, many of whom were affiliated with Johns Hopkins, XLHealth replaces the more customary remote telephone "call-center" or direct mail support with ongoing, face-to- face meetings with patients and physicians. XLHealth also uses tight coordination of care, behavior modification, and in-depth patient profiling integrated with claims, pharmacy, and lab information to generate sophisticated, predictive modeling. The firm emphasizes preventing avoidable and expensive disease complications and hospitalizations. XLHealth was recently awarded the Disease Management Association of America's (DMAA) Recognizing Excellence Award for "Best Disease Management Program: Medicare."


CONTACT: Amy Levy, +1-301-656-6212, cell: +1-202-686-3902,, for XLHealth

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