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Exhibit 99.1 (EXTENDICARE LOGO) NEWS RELEASE
FOR IMMEDIATE RELEASE
September 1, 2004  Extendicare Announces Retroactive Pennsylvania Medicaid Funding Increase and
Sale of Arkansas andBritish Columbia Facilities MARKHAM, ONTARIO (TSX: EXE and EXE.A; NYSE: EXE.A), Extendicare Inc. and its
wholly owned U.S. subsidiary, Extendicare Health Services, Inc. (EHSI),
announced that the Governor of Pennsylvania has approved a Medicaid rate
increase retroactive to July 1, 2003. EHSI will be recording in the third quarter of 2004 a revenue pick up of
approximately US$4.5 million for the 12-month period ended June 30, 2004. The
State has not confirmed rates for the July 1, 2004 to June 30, 2005 fiscal
year, however payment rates will remain at the newly revised level until
further notice. In addition, EHSI has closed on the sale of its operations in Arkansas and
Extendicare Inc. is announcing the sale of its sole nursing facility in British
Columbia. The Company is disposing of the facilities because they are small stand alone
operations in each jurisdiction and have been subject to difficult market
conditions and do not contribute significantly to earnings. The Arkansas operation includes a 96-bed nursing facility and three assisted
living facilities of 181 assisted living units located on one campus. The sale
price of US$6.1 million consists of cash and a US$0.9 million five-year note.
The loss on sale is approximately US$0.7 million. These operations contributed
US$4.0 million to revenue and US$0.2 million to EHSIs pre-tax earnings for the
six months ended June 30, 2004. Extendicares 75-bed nursing home in British Columbia is being sold this month
for $5.5 million cash, of which $3.2 million will be used to retire long-term
debt associated with the facility. The gain on sale is estimated to be $0.5
million. In the first half of 2004, these operations contributed $2.1 million
to revenue and $0.1 million to Extendicares pre-tax earnings. Extendicare will continue to monitor the performance of its various operations
and rationalize its portfolio as required. Extendicare, through its subsidiaries, operates 268 long-term care facilities
across North America, with capacity for over 27,900 residents. As well, through
its operations in the United States, Extendicare offers medical specialty
services such as subacute care and rehabilitative therapy services, while home
health care services are provided in Canada. The Company employs 35,600 people
in North America. Statements contained in this release other than statements of historical fact,
including statements regarding anticipated financial performance, business
strategy and managements plans and objectives for future operations, are
forward-looking statements. These forward-looking statements can be identified
as such because the statements generally include words such as expect,
intend, anticipate, believe, estimate, plan or objective or other
similar expressions. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in, or implied by, these statements. In addition to the risks and
uncertainties related to these statements, other risks and uncertainties are
identified in Extendicare Inc.s or Extendicare Health Services, Inc.s filings
with Canadian and United States securities regulators and include, but are not
limited to, the following: changes in the health care industry in general and
the long-term care industry in particular because of political and economic
influences; changes in regulations governing the industry and the Companys
compliance with such regulations; changes in government funding levels for
health care services; resident care litigation, including exposure for punitive
damage claims and increased insurance costs, and other claims asserted against
the Company; the Companys ability to attract and retain qualified personnel;
the availability and terms of capital to fund the Companys capital
expenditures; changes in competition; and demographic changes. Given these
risks and uncertainties, readers are cautioned not to place undue reliance on
the Companys forward-looking statements. All forward-looking statements
contained in this report are necessarily estimates reflecting the best
judgement of the party making such statements based upon current information,
and the Company assumes no obligation to update any forward-looking statement. For further information, contact: Extendicare Inc.
Christopher Barnes
Manager, Investor Relations
Telephone: (905) 470-5483
Fax: (905) 470-4003
Visit Extendicares Website @ www.extendicare.com