August 10, 1998

FOR IMMEDIATE RELEASE

Company Contact
Harry Dermer, President
Lexington Healthcare Group, Inc. (NASDAQ: LEXI)
860-674-2700
860-674-5900 Fax

LEXINGTON HEALTHCARE GROUP ANNOUNCES THE ACQUISITION OF FIVE CONNECTICUT NURSING
FACILITIES - 600 SKILLED NURSING BEDS

Farmington, CT August 10, 1998 - Lexington Healthcare Group, Inc. (NASDAQ-LEXI),
announced today that it has signed a letter of intent to acquire five skilled
nursing facilities located in Connecticut from Sun Healthcare Group, Inc. The
five homes are located in Bloomfield, Danbury, Torrington, and Westport and have
approximately 600 skilled nursing beds.

Jack Friedler, Lexington Healthcare's CEO stated, "The acquisition of these five
nursing facilities will almost double our existing facility base in Connecticut
bringing the total number of facilities to eleven and the number of beds to
1,452." Harry Dermer, Lexington Healthcare's President, said "This transaction
implements our growth strategy of concentrating facilities and ancillary
services within a selected geographic area to enhance operating efficiencies.
The five new facilities will add approximately $50,000,000 to our existing
revenue base and will bring our combined annual revenues to approximately
$110,000,000."

In a separate development, Lexington Healthcare Group said that
previously-announced plans to acquire a nursing facility in Braintree, MA were
terminated when the owner, Pioneer Health (NASDAQ: PIHC) moved the operation
into Chapter 7 reorganization and closed the facility prior to obtaining
regulatory approvals for the sale to Lexington Healthcare Group.

Lexington Healthcare Group is a provider of management, healthcare and ancillary
services to the long term and home care industries. It operates six nursing
facilities with a total of 853 beds in Connecticut, and manages one nursing home
with a total of 136 beds in Massachusetts. It also provides medical supplies,
durable medical equipment, pharmacy and respiratory services.

This Press Release contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in the forward-looking statements as a result of certain factors.