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New Cost-Effectiveness Study Shows Hospitals Could Save More Than $1 Million Annually With Masimo Patient SafetyNet(TM)

Wednesday, March 17, 2010 Research News J E 4
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IRVINE, Calif., March 17 Masimo (Nasdaq: MASI), the inventor of Pulse CO-Oximetry(TM) and Measure-Through Motion and Low Perfusion pulse oximetry, announced today that a new cost-effectiveness study shows that implementation of the Masimo Patient SafetyNet remote monitoring and clinician notification system with Masimo SET pulse oximetry saved one hospital $817,000 in its first year. The study, being presented on Monday, March 22, 2010, at the International Anesthesia Research Society (IARS) Annual Meeting in Honolulu, Hawaii, also projects that the hospital's future annual savings will be $1,295,000 -- providing a compelling financial rationale to expand monitoring in post-surgical patients on the general floor.(1)

In the study titled: "Cost-effectiveness of Patient Surveillance Systems," researchers at Dartmouth-Hitchcock Medical Center in Lebanon, NH, analyzed the cost savings associated with clinical outcome improvements shown in their clinical study published in the February 2010 issue of Anesthesiology -- the first published report to demonstrate that continuous Measure-Through Motion and Low Perfusion pulse oximetry monitoring of post-surgical patients on the general floor with Masimo SET and automatic clinician notification with Masimo Patient SafetyNet leads to a "significant drop" in key clinical outcome measures, including fewer rescue events, fewer ICU transfers, and reduced annualized ICU days.(2) After comparing cost data gathered before and after installation on Dartmouth's 36-bed post-surgical general care unit, researchers showed that implementation of Masimo Patient SafetyNet enabled clinicians to reduce hospital costs by $255 per patient the first year and a projected $404 per patient in subsequent years. Researchers concluded that these findings could "aid hospital administrators and physician leadership in their decision to deploy patient surveillance systems."

In the past, four primary factors prevented many hospitals from utilizing continuous pulse oximetry monitoring in post-surgical patients on the general floor: 1) An un-manageable number of false alarms; 2) costly and overly complex patient monitoring solutions; 3) the lack of clinical outcomes data demonstrating improved patient safety; and 4) the lack of clear financial justification. Today, the false alarm problem has been solved with gold-standard Masimo SET pulse oximetry -- proven to reduce false alarms by 95%. The costly and overly complex problem has been solved with Masimo Patient SafetyNet -- offering easy-to-use, but powerful remote monitoring that leverages the hospital's existing wireless network, requires only minimal equipment at the bedside, and does not require central station monitoring. And now, both unprecedented clinical outcomes and cost savings have been attained by utilizing Masimo SET and Masimo Patient SafetyNet together on the general floor.

According to Steve Moreau, President and CEO, San Antonio Community Hospital in Upland, California, "This study quantifies what we have believed all along -- that rapid response and the prevention of costly transfers to ICU saves both lives and dollars. It's clear that the annual cost savings enabled by the Masimo Patient SafetyNet System could be significantly impactful on an individual hospital's bottom-line, but may also have bigger implications for healthcare economics overall."

Under the financial model established by researchers, if all 5,815 registered hospitals in the U.S. were to implement Patient SafetyNet and realize the cost savings attained in the study, it would save between $4.7 and $7.5 billion in healthcare expenses each year -- representing a compelling financial justification for the U.S. healthcare system.

Michael O'Reilly, MD, EVP of Medical Affairs at Masimo, stated, "Researchers at the Dartmouth-Hitchcock Medical Center have continued their groundbreaking clinical research into the patient and hospital impact of implementing Masimo technologies for post-surgical patients on the general floor with this cost-effectiveness study. Although many new technologies improve patient care, they typically do so at an increased cost. However, as this new study shows, Masimo SET and Masimo Patient SafetyNet have transcended the cost barrier to become part of a very select group of technologies that improve clinical outcomes and provide net cost savings. In today's challenging healthcare climate, these benefits cannot be underestimated."

(1) J.A. Morgan, A.H. Taenzer, S.P. McGrath, G.T. Blike. Dartmouth-Hitchcock Medical Center. "Cost-effectiveness of Patient Surveillance Systems." Presentation S-249, Monday, March 22, 2010, 9-10:30 a.m.; International Anesthesia Research Society (IARS), Honolulu, Hawaii. Available online at: http://www.abstractsonline.com/Plan/ViewAbstract.aspx?mID=2481&sKey=00f42012-e254-4e88-9828-f8cc6e370103&cKey=9c549b96-143a-4aae-a1e3-370031a85e57&mKey=%7bBA0F4D4C-6673-49B4-9438-7D745CEA2C01%7d

(2) Taenzer, Andreas H.; Pyke, Joshua B.; McGrath, Susan P.; Blike, George T. "Impact of Pulse Oximetry Surveillance on Rescue Events and Intensive Care Unit Transfers: A Before-and-After Concurrence Study." Anesthesiology, February 2010, Vol. 112, Issue 2. Available online at: http://journals.lww.com/anesthesiology/Abstract/publishahead/Impact_of_Pulse_Oximetry_Surveillance_on_Rescue.99692.aspx

About Masimo

Masimo (NASDAQ: MASI) develops innovative monitoring technologies that significantly improve patient care -- helping solve "unsolvable" problems. In 1995, the company debuted Measure-Through Motion and Low Perfusion pulse oximetry, known as Masimo SETŪ, which virtually eliminated false alarms and increased pulse oximetry's ability to detect life-threatening events. More than 100 independent and objective studies demonstrate Masimo SET provides the most reliable SpO2 and pulse rate measurements even under the most challenging clinical conditions, including patient motion and low peripheral perfusion. In 2005, Masimo introduced Masimo Rainbow SETŪ Pulse CO-Oximetry(TM), allowing noninvasive and continuous monitoring of blood constituents that previously required invasive procedures, including total hemoglobin (SpHb(TM)), oxygen content (SpOC(TM)), carboxyhemoglobin (SpCOŪ), methemoglobin (SpMetŪ), and PVIŪ, in addition to SpO2, pulse rate, and perfusion index (PI). In 2009, Masimo introduced Masimo Rainbow SETŪ Acoustic Monitoring(TM), the first-ever noninvasive and continuous monitoring of acoustic respiration rate (RRa). Masimo's Rainbow platform offers a breakthrough in patient safety by helping clinicians detect life-threatening conditions and helping guide treatment options. Founded in 1989, Masimo has the mission of "Improving Patient Outcomes and Reducing Cost of Care by Taking Noninvasive Monitoring to New Sites and Applications." Additional information about Masimo and its products may be found at www.masimo.com.

Forward Looking Statements

This press release includes forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, in connection with the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations about future events affecting us and are subject to risks and uncertainties, all of which are difficult to predict and many of which are beyond our control and could cause our actual results to differ materially and adversely from those expressed in our forward-looking statements as a result of various risk factors, including, but not limited to: risks related to our assumptions regarding the repeatability of study results, risks related to our assumptions that Masimo Patient SafetyNet will provide an effective early warning system of a patient's deteriorating physiological condition to enable timely rescue, risks related to our belief that Masimo Rainbow SET Pulse CO-Oximetry measurements and Masimo Desat Index 3D Alarms will provide sufficient sensitivity and specificity to detect physiological abnormalities and potentially life-threatening conditions in real-time for all patients, and risks related to our assumptions regarding the systems' ability to deliver clinical improvement over alternative patient monitoring and assessment methods to increase patient safety and allow for further adoption of the technology, as well as other factors discussed in the "Risk Factors" section of our most recent reports filed with the Securities and Exchange Commission ("SEC"), which may be obtained for free at the SEC's website at www.sec.gov. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date. We do not undertake any obligation to update, amend or clarify these forward-looking statements or the "Risk Factors" contained in our most recent reports filed with the SEC, whether as a result of new information, future events or otherwise, except as may be required under the applicable securities laws.

Masimo, SET, Signal Extraction Technology, Improving Outcomes and Reducing Cost of Care by Taking Noninvasive Monitoring to New Sites and Applications, Rainbow, SpHb, SpOC, SpCO, SpMet, PVI, RRa, Radical-7, Rad-87, Rad-57, Rad-9, Rad-8, Rad-5, Pulse CO-Oximetry and Pulse CO-Oximeter are trademarks or registered trademarks of Masimo Corporation.

Media Contacts: Dana Banks Masimo Corporation (949) 297-7348 dbanks@masimo.com

SOURCE Masimo
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