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Zix Corporation Announces Conference Call on July 17 to Discuss Medicare e-Prescribing Requirement

Thursday, July 17, 2008 General News J E 4
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DALLAS, July 16 Zix Corporation (ZixCorp(R)),(Nasdaq: ZIXI), the leader in hosted services for email encryption ande-prescribing, today announced a conference call to discuss the potentialimpact on the Company of the e-prescribing requirement contained in theMedicare Improvements for Patients and Providers Act of 2008, which became lawon July 15, 2008 when both the House of Representatives and the Senate votedto override President Bush's veto. The conference call will be held onJuly 17, 2008 at 2:00 p.m. Eastern Time to address the strategic implicationsfor the Company.

"This new e-prescribing requirement for Medicare prescriptions completelychanges the landscape in the emerging e-prescribing market. Because Medicareis the largest payor in the country and the vast majority of physicians seeMedicare patients, technology adopted for Medicare is expected to spreadquickly to the entire healthcare industry and we believe e-prescribing willsoon become the standard of care in the U.S.," said Rick Spurr, ZixCorp'schief executive officer. "I believe the e-prescribing requirement in Medicarewill be a catalyst that accelerates growth in this industry."

"With this law, Congress has endorsed our approach and validated ourpersistent, focused pursuit of this market," continued Spurr. "For years,people have looked to electronic medical records ("EMR's") as the panacea forimproving the healthcare system, but until recently, ZixCorp has been the lonevoice advocating e-prescribing as the best way to introduce clinicalinformation technology across the entire spectrum of physician practices.Once physicians have embraced e-prescribing, they can choose to add additionalfunctionality at their own pace for improved clinical decision making. Thisis particularly applicable to doctors who practice in offices of 5 or fewerphysicians, which represent 75 percent of the highest prescribing physiciansin this country, because they tend not to have large capital budgets or ITstaffs to provide support. The physicians who work in these smaller practicesare largely underserved by the major healthcare technology vendors, so we viewthis target market of the approximately 100,000 primary care physicians whopractice in these smaller groups as being fertile ground for the fewstandalone e-prescribing vendors, including ZixCorp, of course, who is theleader in this space and only publicly traded e-prescribing vendor."

"The structure of the financial incentives in the law puts ZixCorp in anideal position to continue its industry leadership," said Spurr. "IncreasingMedicare reimbursement levels promotes better adoption and utilization ofe-prescribing while implicitly encouraging others to step in to pay for theupfront costs. Our payor-based strategy where insurance companies help tofund these upfront costs including the ability for us to offer a turnkeysolution to the physician addresses the primary barriers to the wider spreadadoption of e-prescribing. These primary barriers, cost and administrativehassle, were identified by a survey of physicians completed last year by theGorman Health Group and presented to Congress. Our deep relationships withour payor customers, including Aetna, BCBS Illinois, BCBS Louisiana, BCBSMassachusetts, BCBS North Carolina, Independence Blue Cross, LA Care andUnited Health Care, have taken years to cultivate, so we are well-positionedto partner with them to address the needs of physicians. Other supposedlyfree offerings, including the National e-Prescribing Patient Safety Initiative(NEPSI), do not address the administrative hassles, including loading patientidentifying information into the system, individual training and support, orconfiguring a handheld device to enable the mobility that the market demands.To this point, while there are claims that physicians sign up for thesecompetitive offerings, there has been no evidence presented of actual usage of
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