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                                                                    EXHIBIT 99.1

                                                                            NEWS

Contact:      Geoffrey G. Meyers, Chief Financial Officer
              HCR ManorCare
              (419) 252-5545
              Internet:  gmeyers@hcra.com

              Thomas Komula, Chief Financial Officer
              Alternative Living Services
              (414) 641-7431



                  HCR MANORCARE AND ALTERNATIVE LIVING SERVICES

                           ANNOUNCE STRATEGIC ALLIANCE

      INCLUDES ALI'S PURCHASE OF $200 MILLION OF ASSISTED LIVING RESIDENCES

TOLEDO, OHIO AND BROOKFIELD, WISCONSIN, JANUARY 4, 1999 - HCR ManorCare, Inc.
(NYSE: HCR) and Alternative Living Services, Inc. (ASE: ALI) announced today the
formation of a strategic alliance between the two companies which includes the
sale of 29 HCR assisted living and Alzheimers residences to ALI for
approximately $200 million in cash. The strategic alliance also includes a joint
venture to develop and construct up to $500 million of Alzheimer's/dementia and
assisted living residences in HCR core markets and various cross-licensing and
consulting services with respect to assisted living and Alzheimer's residences.

ALI will acquire from HCR a portfolio of 29 Alzheimer's/dementia care and
assisted living residences, including Arden Court(R) and Springhouse(R)
residences, with a capacity for 2,611 residents located throughout 12 states. Of
these, 8 residences, with a capacity for 626 residents, are under construction
and are expected to open during 1999. Consummation of the acquisition is subject
to regulatory and other customary conditions and is expected to occur throughout
the first and second quarter of 1999.

Additionally, HCR and ALI have agreed to establish and capitalize a joint
venture to develop and construct during the next three to five years up to $500
million of ALI-branded Alzheimer's/dementia care and assisted living residences
in HCR core markets. Both HCR and ALI will provide development services to the
joint venture, with ALI managing the residences.

Finally, HCR ManorCare and ALI have agreed in principle that the companies will
enter into a licensing arrangement involving HCR ManorCare's use of ALI's Clare
Bridge(R) service mark, the sharing of best practices, and joint marketing
activities. In addition, a newly formed company will be established to provide a
variety of ancillary services to ALI's resident population, including
rehabilitation therapy and hospice care.

Paul Ormond, President and Chief Executive Officer of HCR ManorCare said, "We
are delighted to be teaming up with ALI, which we believe is the assisted living
industry leader. This series of transactions with ALI provides a number of
important benefits to HCR ManorCare. First, it continues our focus on


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HCR's core competencies, in markets where we have a strategic concentration of
facilities, by the sale of 29 residences that are either outside our core
markets or non-specialized. Second, the strategic alliance with ALI increases
HCR's participation in the private pay opportunities in and around our nearly
300 long-term care centers. And third, financially, the transaction will provide
us almost $200 million in cash."

William Lasky, Chief Executive Officer and President of ALI said, "The formation
of this strategic alliance represents a significant milestone for the assisted
living industry. ALI is proud to join forces with HCR, the premier provider in
the long-term care field. In addition to the acquisition of the 29 HCR
ManorCare residences, ALI will greatly expand its brand recognition through its
long-term management arrangements within the joint venture development agreement
and has teamed up with an experienced industry provider of ancillary services.
This alliance establishes a new network from which to deliver care and services
to the nation's elderly."

HCR ManorCare has approximately 55,000 employees providing high quality care
through a network of long term care centers, assisted living facilities,
outpatient rehabilitation clinics, home health care offices, and management
services for professional organizations. HCR shares are traded on the New York
Stock Exchange under the ticker symbol ("HCR").

ALI operates and manages 350 assisted living residences with a resident capacity
of 15,003. ALI offers supportive and health care services to the frail elderly
and is the nation's largest operator of freestanding Alzheimer's/dementia care
residences. Currently operating in 25 states, ALI has residences under
construction and development in many of its existing markets as well as in eight
additional states. ALI's common stock is traded on the American Stock Exchange
under the symbol ("ALI").

Statements contained in this press release, which are not historical facts, may
be forward-looking statements within the meaning of federal law. Such
forward-looking statements reflect management's beliefs and assumptions and are
based on information currently available to management. The forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results, performance or achievements of either Company to
differ materially from those expressed or implied in such statements. Such
factors are identified in the public filings made by both Companies with the
Securities and Exchange Commission and include changes in the healthcare
industry because of political and economic influences, changes in regulations
governing the industry and changes in the competitive marketplace. There can be
no assurance that such factors or other factors will not affect the accuracy of
such forward-looking statements.