Salem Hospital Signs Daou For Enterprise Mobile Health Strategy; Wants Comprehensive Plan To Effectively Deploy Wireless Technology

EXTON, Pa., June 6 /PRNewswire-FirstCall/ -- Daou Systems, Inc. , a provider of IT consulting and management services to healthcare organizations, today announced it has contracted with Salem Hospital in Salem, Ore., to develop a comprehensive plan for integrating wireless technology with the organization’s overall IT systems strategy. The contract represents the third significant mobile health project Daou has signed so far this year.

Daou is providing a similar strategic plan for wireless to Southern Regional Health System, located outside of Atlanta, in addition to a mobile health design and implementation for Adventist Health System, headquartered in Lake Mary, FL.

“Forward-thinking organizations like Adventist, Southern Regional and Salem understand the wisdom of taking an approach to wireless technology that takes the entire organization, and the organization’s future, into account,” said Vince Roach, Daou’s CEO. “In Salem’s case, the facility has particularly ambitious goals for integrating wireless into its community health network, and a variety of other challenges -- including construction of a new building -- that make a strategic plan all the more important.”

Daou will develop a master plan to carry Salem Hospital forward through the next three to five years, addressing a number of initiatives. First, the hospital is working to install a clinical information system, a system designed to support mobile computing. “Mobile computing -- point of service computing where a wireless IT device replaces manual record-keeping at a patient’s bedside and anywhere else clinical care is delivered -- is key to our overall mission in implementing the system, and that’s one of the reasons Daou’s assessment of our wireless needs is vitally important, being sure we have the infrastructure in place to support the system,” said Dennis Sato, the hospital’s CIO.

In addition, Salem plans to build a six-story medical tower slated for completion in 2008. “We’re already talking about how wireless will be used in the new building, and Daou’s plan will address that,” Sato said.

Another important component of the strategy Daou develops will be off- campus mobile computing requirements, according to Sato. “One of our priorities is to connect physicians and other clinicians in our community to Salem’s clinical information systems, and mobile computing will facilitate this,” he said. “We want to integrate our systems with those of the Salem community’s physician groups, so that we can eventually build a community health record that physicians can access anytime, anywhere -- not just clinical information, but Picture Archiving and Communication Systems (PACS). Our infrastructure must be robust to support these requirements.”

Daou was scheduled to begin its work in mid-April, with completion of the strategic plan in five to six weeks. Daou is also completing a six-month project for Salem with the design and implementation of an Internet portal solution for the hospital’s physicians, nurses and other authorized clinical and administrative staff. The portal provides a single platform that integrates information from disparate systems into a single view, so clinicians can easily access updates and summaries of patient data.

About Salem Hospital

Salem Hospital is one of the largest of Oregon’s 63 acute care hospitals. It is a not-for-profit hospital, licensed for 454 acute care beds, and is guided by a 15-member volunteer Board of Trustees. Salem Hospital is a regional medical center offering top medical services and technology to people in and around Oregon’s Willamette Valley. As the leading regional medical center in the Willamette Valley, Salem Hospital provides a broad range of top health services to all of Marion and Polk Counties. The hospital is the region’s largest private employer, with approximately 3,400 full- and part- time employees. There are over 400 physicians representing all specialties who admit patients to the hospital. More than 500 volunteers provide non-medical support for the hospital.

About Daou

Daou Systems, Inc. provides expert consulting and management services to healthcare organizations in the design, deployment and support of IT infrastructure and application systems. Our business focus is in three markets, 1) payers of health care services in the commercial markets; 2) providers of clinical services (hospitals and hospital systems); and 3) government healthcare organizations. Daou offers services that include application implementation and support, management and technology related business consulting, wireless and wired infrastructure, mobile health and network services, application development and integration, and web-based portal solutions. Daou has provided services to more than 1,600 healthcare organizations, including leading private and public hospitals, managed care organizations on both the payer and provider sides of the market, as well as integrated healthcare delivery networks and some of the nation’s largest government healthcare entities. Daou Systems, Inc. is a publicly traded company listed on the OTC Bulletin Board under the stock symbol DAOU.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of Daou Systems, Inc. You should not place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements usually contain the word “estimate,” “anticipate,” “hope,” “believe,” “think,” “expect,” “intend,” “plan” or similar expressions, and are subject to numerous known and unknown risks and uncertainties. In evaluating such statements, you should carefully review various risks and uncertainties identified in this report, including the matters set forth under the captions “Risk Factors” and in Daou’s other SEC filings, including those more fully set forth in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of Daou’s Form 10-K for the year ended December 31, 2004 on file with the SEC. These risks and uncertainties could cause Daou’s actual results to differ materially from those indicated in the forward-looking statements. We do not undertake any obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments.

Daou Systems, Inc.

CONTACT: Sandra Taylor, Ph.D., Vice President of Marketing, Daou,+1-610-594-2700, sandra.taylor@daou.com

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