Kindred Recaps Quality Improvement and Growth in 2013 and Issues Quality and Social Responsibility Report

<0> Kindred Healthcare, Inc.Susan E. Moss, 502-596-7296Vice President, Communications and Marketing </0>

Kindred Healthcare, Inc. (the “Company” or “Kindred”) (NYSE:KND) today released a year-end recap of major achievements for the Company in 2013.

Kindred’s dedication to patient-centered care management, which coordinates the care and rehabilitative needs of each patient across the post-acute continuum, and its progress in improving quality and clinical outcomes, is highlighted in the Company’s 2013 Quality and Social Responsibility Report. The report also recaps Kindred’s “Continue the Care” strategy – focusing on our efforts to break down the silos between care settings and more efficiently partner with patients, families, hospitals and other health providers to best improve patient outcomes with safe transitions across an entire episode of care. The report is available at .

“Because of the hard work and commitment of our teammates, Kindred was able to continue to deliver quality care and improve clinical outcomes for patients in over 2,200 care settings across the U.S.,” said Paul J. Diaz, Kindred’s Chief Executive Officer. “We thank our caregivers and colleagues throughout our organization who delivered on Kindred’s promise of hope, healing and recovery as they worked to advance our Mission in spite of a challenging operating environment.”

Major initiatives and highlights for Kindred in 2013 include:

– Kindred is expanding its capacity and expertise in delivering post-acute care across a continuum of care settings – from hospital to home – to enable the best in care coordination and clinical outcomes. Kindred’s Integrated Care Market strategy recognizes the need for all Kindred service lines to partner with healthcare networks, managed care providers and other healthcare entities in local markets to best meet patient needs, drive down costs and improve care outcomes.

–In 2013, Kindred established Care Transitions Managers (“CTM”) to follow patients with specific diagnoses and/or risk factors through the entire care continuum in key markets. The CTM follows the patient throughout his or her stay at a Kindred Transitional Care Hospital, Nursing and Rehabilitation Center or at home with Kindred at Home until 35 days post-discharge.

– In 2013, 66 of Kindred at Home’s 143 home health locations, or 46%, were named to the HomeCare Elite™ list of the most successful home care providers. This annual review identifies the top 25% of Medicare-certified agencies and further highlights the top 100 and top 500 agencies overall. Winners are ranked by an analysis of publicly available performance measures in quality outcomes, process measure implementation, patient experience (Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Home Health Care Survey), quality improvement, and financial performance. Kindred at Home home health and hospice locations outperformed national benchmarks in key quality measures, including patient satisfaction.

– As part of Kindred’s core strategy of innovation through expansion of high quality, value-based care delivery systems, Kindred acquired Western Reserve Senior Care (“Western Reserve”), its first home-based primary care medical practice in 2013. Located in Kindred’s Northeast Ohio Integrated Care Market, Western Reserve provides full service primary and urgent care services to patients who cannot easily access traditional outpatient care settings.

– Kindred’s Transitional Care Hospitals and Nursing and Rehabilitation Centers continue to reduce rehospitalizations and average length of stay. From 2009 to 2013, we reduced rehospitalizations by 14% from our Transitional Care Hospitals and by 15% from our Nursing and Rehabilitation Centers. From 2009 to 2013, we reduced the total average length of stay in our Transitional Care Hospitals by 10.3% and in our Nursing and Rehabilitation Centers by 11%. In 2013, Kindred’s Transitional Care Hospitals treated the most medically complex patients, discharging nearly 70% of patients home or to a lower setting of care after an average length of stay of 27.1 days and Kindred’s Nursing and Rehabilitation Centers discharged 56% of patients home – after an average stay of 32 days.

– Patients in Kindred’s freestanding inpatient rehabilitation hospitals achieved 19.9% greater functional improvement than the national average.

– In 2013, Kindred therapists helped more than 518,500 patients attain nearly 80% of their prior level of function before transitioning home or to their next level of care. Applying innovative approaches to care, including the use of handheld technologies, enables our therapists to improve clinical outcomes and operational results, resulting in millions of dollars of estimated savings and productivity gains for Kindred and its customers.

– In 2013, Kindred created a Care Management Division to improve care transitions and patient outcomes by further developing capabilities to deliver integrated care across various care settings. The Care Management Division includes Kindred at Home, which grew in 2013 with seven acquisitions that added more than 50 locations in six Integrated Care Markets. In addition, Kindred established a joint venture with Dignity Health in San Bernardino, California. The Kindred at Home home health and hospice division now consists of 159 locations in 107 local communities or metropolitan areas throughout 13 states. Forty-four locations are strategically located within an established Integrated Care Market.

– Kindred acquired TherEX, Inc., a provider of on-site, hospital-based rehabilitation services in 11 states.

– In July 2013, Kindred acquired 54-bed Mercy Continuing Care Hospital in St Louis.

– Kindred announced plans to build a new Transitional Care Center (“TCC”) in Phoenix, Arizona (120 beds) and broke ground on new TCCs in Southern Indianapolis (100 beds) and Las Vegas, Nevada (160 beds).

– The Company purchased the real estate associated with Kindred Hospital Bay Area Tampa, Kindred Transitional Care and Rehabilitation – Bridgewater in Indianapolis and entered into an agreement to acquire nine Nursing and Rehabilitation Centers leased from HCP, Inc. (NYSE:HCP) and its affiliates. Kindred completed the acquisition from HCP in February 2014.

– Kindred initiated a quarterly cash dividend in August 2013, reflecting the strength of its operating cash flows, confidence in the Company’s business outlook, and our commitment to growing shareholder value.

– In November 2013, Kindred conducted its fifth Annual Clinical Impact Symposium – Clinical Excellence in Care Transitions and Disease Management: Managing Diabetes, Infections and Cognition Across the Continuum – attracting physicians, clinicians and therapists from all divisions to learn from the nation’s leading experts in care transitions across the continuum. By bringing together over 400 professionals from across the Kindred enterprise and from many different disciplines, Kindred furthered its commitment to provide the best in interdisciplinary care for our patients and customers.

– As part of the Company’s commitment to attract, develop and retain outstanding talent and to provide them with the training to continue to excel and grow professionally, Kindred invested $29 million in employee training and $3 million in tuition reimbursement in 2013.

– Kindred’s commitment to its patients and residents extends to helping raise money and awareness to fight the diseases that most affect them and their loved ones. Throughout 2013, employees nationwide participated in events and fundraisers strengthening the Company’s state and national relationships with the American Lung Association, the Alzheimer’s Association and the American Heart Association. In 2013, Kindred entered its second year as a national corporate team partner with the American Lung Association. During the first year of our partnership, Kindred contributed nearly $463,000 through fundraising and sponsorships. As a Gold National Team for the Alzheimer’s Association’s “A Walk to End Alzheimer’s,” Kindred had 112 teams that raised close to $200,000 for the cause. Through Kindred’s national partnership with the American Heart Association, the Company and 187 teams in 67 locations raised approximately $95,000.

Kindred Healthcare, Inc., a top-150 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of approximately $5 billion and approximately 63,000 employees in 47 states. At December 31, 2013, Kindred through its subsidiaries provided healthcare services in 2,280 locations, including 101 transitional care hospitals, five inpatient rehabilitation hospitals, 100 nursing centers, 22 sub-acute units, 159 Kindred at Home hospice, home health and non-medical home care locations, 104 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,789 non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for six years in a row, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to . You can also follow us on and .

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