2015-06-24T10:08:25-05:00 2014-08-31 450250958 Eide Bailly LLP 800 Nicollet Mall Ste 1300 Minneapolis MN 554027033 990 2013-09-01 410693880 HealthEast St Joseph's Hospital HEAL 6512321000 PO Box 64624 St Paul MN 551640624 Doug Davenport SVP/CFO 6512322300 2015-06-22 1 Kim Hunwardsen P00484560 6122536500 2015-06-22 2013 2016-03-07 17:11:31Z Kathryn Correia 559 Capitol Blvd St Paul MN 55103 270475080 0 X www.healtheast.org X 1987 MN HealthEast St. Joseph's Hospital is an acute care hospital. 16 14 2201 319 10847494 -131933 549453 1000574 279362845 269296543 181503 167235 3189244 5800 283283045 270470152 0 0 0 0 132359000 130505643 0 0 0 155285470 157392766 287644470 287898409 -4361425 -17428257 165033393 166332380 19569171 18167572 145464222 148164808 X Rooted in Judeo-Christian values, our mission is high quality, compassionate, cost effective health care for the communities we serve. 0 0 237254230 269296543 HealthEast St. Joseph's Hospital is HealthEast Care System's largest hospital. St. Joseph's offers a comprehensive range of programs, including medical, surgical, maternity, diagnostic, rehabilitation, mental health and addiction treatment. State-of-the-art heart care has been a mainstay of the hospital's care delivery for generations of Twin Cities residents.Our scope of services includes: * Bariatric Care* Mental Health/Addiction* Cancer Care* CyberKnife Center* Diabetes Care* Digestive Care* Emergency Care* Heart Care* Hospice Care* Kidney Stone Institute* Maternity Care* Medical Laboratory services* Neuroscience* Orthopaedic Care* Pain Care* Radiology* Respiratory Care* Rehabilitation* Sleep Care* Speech Therapy* Stroke Care* Surgery* Vascular Center HealthEast St. Joseph's is Minnesota's first hospital and was founded by the Sisters of St. Joseph of Carondelet in 1853. Located in downtown St. Paul, St. Joseph's has 401 licensed beds. The hospital is a member of the University of Minnesota's Family Medicine and Community Health residency program and is Medicare certified. HealthEast St. Joseph's services listed above support the hospital's health care mission to provide high quality, cost effective compassionate health care for Twin Cities east metro residents. Hospital revenue includes payment from the Medicare and Medicaid programs. The medical services relate directly to the exempt purpose of caring for sick, infirm, aged and injured persons regardless of their race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, membership or activity in a local commission, disability, sexual orientation, gender identity or expression, age or genetic information. HealthEast seeks to be a welcoming and inclusive provider of care providing optimal health and well-being for our patients, our communities and ourselves. This organization provides emergency and medically necessary non-emergency services regardless of ability to pay. Additionally, this organization offers financial aid for eligible services in the form of free or discounted care to those low income, underinsured or uninsured individuals who meet qualification criteria.HealthEast St. Joseph's Hospital Fiscal Year 2014 Statistics: *Hospital Inpatient Admissions: 11,246 *Outpatient Visits: 47,969 *Births: 1,089 *Emergency Department Visits: 23,599 HealthEast St. Joseph's is part of the HealthEast Care System. HealthEast Care System is a community-focused, non-profit health care system that provides innovative technology, compassionate care and a full spectrum of family health services. In 1986, the leaders of seven hospitals in St. Paul blended their Baptist, Roman Catholic and Lutheran cultures to become HealthEast Care System, united in pursuit of a common mission built on Judeo-Christian values. Today, HealthEast Care System includes three short-term acute hospitals and one long-term acute care hospital, as well as 14 clinics, outpatient services, home care, hospice, medical transportation and community outreach programs. Practicing financial responsibility, HealthEast Care System is one of the largest, locally-owned health care organizations in the St. Paul/Minneapolis East Metro area. *Mission: Rooted in Judeo-Christian values, our mission is high-quality, compassionate, cost effective health care for the communities we serve. *Values: HealthEast Care System values originate in the tradition of its sponsor organizations, forming the foundation for the Mission and Vision of the HealthEast Care System. *Life: Life is a gift to be valued highly. *Compassion: Caring attends to physical, emotional and spiritual dimensions of persons. *Respect: Each person is unique and deserving of respect. *Community: We exist to serve our community. *Vision: Optimal health and well-being for our patients, our communities and ourselves. *Milestone Goal: Building on our benchmark performance, HealthEast will be a national leader in clinical quality, patient experience and cost effectiveness - the best value - by 2015. HealthEast Care System fiscal year 2014 statistics: *Total Hospital Inpatient Admissions: 31,654 *Total Outpatient Visits: 220,602 *Total Emergency Department Visits: 86,643 *Lab tests: over 2 Million *Home Care Patients Served: 8,316 *Home Care Patient Visits: 71,076 *Health Alert Subscribers: over 3,400 *Primary and Specialty Care Professional Visits: 1,074,656 *Primary and Specialty Care Ancillary Services: 1,342,419 *Total Clinic Patients: 154,030 *Patient Transports: 35,898 *Employees: 6,825 *Volunteers: 1,258 237254230 1 1 0 1 0 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 1 0 0 1 X 0 0 2201 1 1 1 0 0 0 0 0 0 0 0 0 X 16 14 1 0 0 0 1 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 MN X Doug Davenport 6512322300 559 Capitol Blvd St Paul MN 55103 X Diane M Berthel Director 0.00 2.00 X 0 35000 0 Julie S Causey Director 0.00 2.00 X 0 30000 0 Michael R Connly Director 0.00 2.00 X 0 23000 0 Patrick J Donovan Director, ended 12-2013 0.00 2.00 X 0 35000 0 John R Finnegan Jr PhD Director 0.00 2.00 X 0 26833 0 Fred Harris Jr Immediate Past Chair 0.00 2.00 X X 0 65000 0 Roland L Hayes Chair 0.00 2.00 X X 0 40000 0 Louis C Henry Jr Director 0.00 2.00 X 0 28000 0 Anne M Pearson MD Director 0.00 42.00 X 0 327935 42745 Leonard M Randolph Jr MD Director 0.00 2.00 X 0 27833 0 Sister Marie H Seiter CSJ Director 0.00 2.00 X 0 0 0 Jone M Tiffany Director 0.00 2.00 X 0 28667 0 Laure Waschbusch MD Director 0.00 2.00 X 0 30000 0 Wayne A Sensor Director, began 1-2014 0.00 2.00 X 0 0 0 James W Wiltz Director 0.00 2.00 X 0 24000 0 Kathryn G Correia President/CEO 0.00 40.00 X X 0 1032779 158137 Howard P Kern Director, began 1-2014 2.00 0.00 X 0 0 0 Daniel Kaye Interim VP/CFO-HECS, ended 3-2014 0.00 40.00 X 0 536420 7650 Douglas Davenport SVP/Chief Financial Officer, began 3-2014 0.00 40.00 X 0 0 0 Scott L North SVP, President Acute Care 0.00 40.00 X 0 549794 90323 Catherine J Barr SVP Commuity Services, President Bethesda Hospital 0.00 40.00 X 0 449278 66345 Thomas A Schmitt SVP ACO/Clinics/Outpaitent 0.00 40.00 X 0 415652 79359 Julie A Schmidt SVP CAO 0.00 40.00 X 0 548836 78971 Stephen J Kolar MD SVP CMO 0.00 40.00 X 0 596919 113293 Joanne M Sunquist SVP/Chief Information Officer 0.00 40.00 X 0 366110 65948 Michael McMahan VP Acute Care Operations 40.00 0.00 X 261478 0 37806 Debra J Hurd VP Acute Care Nursing 0.00 40.00 X 0 286630 51909 Brian Ness MD Medical Director, ED 40.00 0.00 X 384280 0 59100 Daniel Berndt MD Physician 40.00 0.00 X 379764 0 46595 Nancy Blonigen MD Physician 40.00 0.00 X 320578 0 38318 Verna Arcedo MD Physician 40.00 0.00 X 319308 0 33929 Wael Khouli MD Physician Adv Care Mgmt 40.00 0.00 X 311282 0 25042 Michael F Nass Former Officer 0.00 0.00 X 0 436216 49741 Brian Patty MD Former Officer 0.00 40.00 X 0 443669 107604 Craig A Svendson MD Former Officer 0.00 40.00 X 0 526966 69453 Timothy H Hanson Former President/CEO 0.00 0.00 X 0 623123 0 Brendon Cullinan MD Former Officer 0.00 40.00 X 0 331378 68937 Mary F Pynn Former Officer 0.00 40.00 X 0 359109 53251 Mary L Arnold Former Officer 0.00 30.00 X 0 183662 19745 Mindy A Smith Former Officer 0.00 0.00 X 0 176179 34527 Roger E Green Former Officer 0.00 0.00 X 0 283061 128069 Scott W Hinrichs Former Officer 0.00 30.00 X 0 369924 92003 Shirley A Germann Former Officer 0.00 30.00 X 0 206394 17847 John Kvasnicka MD Former Physician 0.00 40.00 X 0 479527 94049 Ellen N Garbo MD Former Physician 0.00 40.00 X 0 327541 54489 Darcy R McBride MD Former Physician 0.00 40.00 X 0 838123 63439 Andrew Portis MD Former Physician 0.00 40.00 X 0 743232 84446 1976690 11831790 1933070 136 1 1 0 Regents of the University of Minnesota NW 5960 PO Box 1450 Minneapolis MN 554855960 Medical Services 3107783 GE Healthcare Financial Services PO Box 641419 Pittsburgh PA 152641419 Equipment Maintenance Services 1824851 Mayo Collaborative Service Inc PO Box 9146 Minneapolis MN 554809146 Medical Services 1744467 Specialtycare Cardiovascular Resources I PO Box 11407 Dept 1614 Birmingham AL 354261614 Medical Services 1429537 Associated Anesthesiologists CM-9710 PO Box 70870 St Paul MN 551709710 Medical Services 916648 52 1000574 81379 1000574 Patient Revenue 622110 251858841 251858841 Lab Services 621500 12523185 2981738 9541447 Research Revenue 900099 1233308 1233308 Cafeteria Revenue 722310 1049173 1049173 Meaningful Use Revenue 900099 988220 988220 1643816 1571077 72739 269296543 136705 136705 5800 0 5800 5800 5800 35458 4928 30530 30530 30530 270470152 258449049 10847494 173035 X 208909 208909 93149 93149 100521359 97188590 3332769 8945259 8648680 296579 13425529 12980408 445121 7311438 7054368 257070 77696 77696 10965 10965 39906847 36411501 3495346 64828 55971 8857 10541021 9398825 1142196 4051320 1096 4050224 4757617 4736575 21042 365014 351250 13764 124680 122478 2202 6803934 6803934 7765318 7622497 142821 1933928 1933928 Medical Supplies 36683171 36683171 HealthEast Mgmt Fee 34739821 34739821 Bad Debt Expense 4018281 4018281 Minnesota Care Tax 2444710 2444710 3103615 2627781 475834 287898409 237254230 50644179 0 7411 7600 122177 103116 32173886 38856152 3573553 4102177 3789331 2642887 214956174 96672483 123820534 118283691 210919 210919 1314985 1323172 20597 802666 165033393 166332380 14629500 16201366 757242 461704 4182429 1504502 19569171 18167572 X 145253303 147953889 210919 210919 145464222 148164808 165033393 166332380 X -17428257 20128843 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 10965 10965 0 Part II-B, Line 1: The organization pays annual membership dues to the American Hospital Association and the Minnesota Hospital Association. A portion of these annual dues are determined to be used for lobbying purposes. 844435 844435 153627816 62730193 90897623 583413 328068 255345 58934992 33120700 25814292 965518 493522 471996 118283691 Asbestos Abatement Liability 742570 Note Payable - Infusion Pump Contract 761932 1504502 X Part X, Line 2: The FASB issued guidance regarding accounting for uncertainty in income taxes in July 2006, which requires recognition in the financial statements of the effect of a tax position if that tax position is more likely than not of being sustained on audit based upon the technical merits of the tax posiiton. HealthEast has not identified any significant liability for uncertain tax positions, and accordingly, no such liability is recorded for 2014 or 2013. 1 1 X 1 X 1 X 0 1 0 1 1 1494129 1494129 0.00530 34597929 20166744 14431185 0.05080 5560869 1330940 4229929 0.01490 41652927 21497684 20155243 0.07100 136967 136967 0.00050 4948432 2309311 2639121 0.00930 11638177 5903029 5735148 0.02020 45167 45167 0.00020 16768743 8212340 8556403 0.03020 58421670 29710024 28711646 0.10120 1371 1371 0.00000 72412 72412 0.00030 73783 73783 0.00030 1 4018281 0 97658378 111146563 -13488185 X 1 1 1 Gallery Imaging LLC Radiology Imaging Center 0.50000 0.50000 1 1 HealthEast St Joseph's Hospital 45 West 10th Street St Paul MN 55102 http://www.healtheast.org/st-josephs-h 371350 X X X HealthEast St Joseph's Hospital 1 1 X X X X X X X 12 1 1 1 X http://healtheast.org/community-involveme X X X X X X X 0 0 1 1 200.000000000000 1 300.000000000000 1 X X X X 1 1 X X X 1 0 X X X X 1 X 0 0 HealthEast St. Joseph's Hospital Part V, Section B, Line 3: In conducting the Community Health Needs Assessment, the organization took into account input from representatives of the community it serves, including those with special knowledge of or expertise in public health in the following ways:Four town hall discussions, located in community centers in the East Metro, were conducted in May 2012 with members of HealthEast Passport, a program to keep people 50 and better healthy and active in the community. Sessions were held at community centers in Inver Grove Heights and Maplewood, at Woodwinds Health Campus in Woodbury, and at City Passport in downtown Saint Paul. In collaboration with HealthEast staff, a mixed-method approach consisting of interviews with Bethesda staff and advocacy organizations, surveys with Bethesda support group participants, and follow up interviews with recently discharged patients was used to gather information about the unique needs of Bethesda patients. Key informant interviews were conducted with individuals representing the following cultural communities: African American; African; Hispanic/Latino; Hmong; Karen; and homeless. The informants included key stakeholders who were members of (or who had direct experience working closely with) each community of interest, and who could speak to the health needs of community members of the east metro. Informants were asked about barriers to health and wellness in specific cultural communities and provided recommendations for health systems to consider when working to address these barriers.The organization consulted with leaders in the community with special knowledge of or expertise in public health when conducting the Community Health Needs Assessment.The External Advisory Committee included local & state public health representatives from the Ramsey County Department of Public Health, Dakota County Department of Public Health, Washington County Public Health, and the Office of Minority and Multicultural Health at Minnesota Department of Health.Key informant interviews in diverse communities were conducted with theHmong American Partnership, Wilder Foundation, Westside Community Health Services, HealthCare for the Homeless and HouseCalls, YWCA, Karen Organization of Minnesota, Minnesota Department of Human Services, Minnesota Department of Health, and Ramsey County Public Health. HealthEast St. Joseph's Hospital Part V, Section B, Line 4: The organization's community needs health assessment was conducted with the following hospital facilities:HealthEast Bethesda HospitalHealthEast St. John's HospitalHealthEast Woodwinds Hospital HealthEast St. Joseph's Hospital Part V, Section B, Line 6i: The website where the oranization's CHNA report and implementation strategy can be viewed is: http://healtheast.org/community-involvement/community-outreach.html HealthEast St. Joseph's Hospital Part V, Section B, Line 7: While many opportunities for community health improvement initiatives were identified, the organization determined that in order to make an impact, a focused approach was more prudent. Therefore, in order to make an impact, it was decided to initially focus on a high-risk, high-utilizer population with an ambulatory sensitive condition. This past fiscal year ending August 2014 we continued to expand our initial community health initiative centered on chronic disease prevention, specifically on pre-diabetes prevention. We targeted patients on Medicaid, as well as other community groups using evidenced-based diabetes prevention programs. The results exceeded our established targets: * number of participants 101* average weight loss 8.5% (target 7.0%)* minutes of weekly activity 188 minutes (target 150 minutes)In addition to chronic disease prevention, we initiated an injury/falls prevention program, Matter of Balance. Minnesota ranks 5th in the nation for falls related deaths. By partnering with Minnesota Area Agency on Aging and local community centers and churches, we were able to bring this program 131 community members. One metric we tracked was "fear of falling interferes with daily activities". This measurement decreased from 21% to 17%. In order to respond to community need to work with culturally-specific organizations, HealthEast partnered with Hmong American Partnership to bring Matter of Balance to groups from Cambodia and Viet Nam. Additionally, we worked with Karen Organization of Minnesota, Fairview Health System, and local churches to bring immunization clinics to the local neighborhood. From the three clinics where HealthEast provided service, over 600 family members from the underserved Karen community were immunized.The organization did not address the following community health needs during the filing year and intends to address them going forward:* Adopt a comprehensive view of health and wellness *HealthEast patients, support people, and key informants consistently described health as more than the absence of illness, but instead describe health more holistically, with an emphasis on quality of life, social connectedness, spirituality, and maintaining independence. * Expand patient and community knowledge of services *Patients, support people, and cultural informants identified a lack of knowledge of the health care system as a major barrier to accessing care.* Expand culturally competent services *Limited access to health care providers of color was identified as a major concern among communities of color. They perceive a need for expanding workforce, at all levels, to be more culturally-representative and provide additional training for providers, staff, and interpreters to provide more culturally responsive services.* Improve Care Coordination *HealthEast patients and Passport member described experiences with perceived lack of care coordination for medical and non-medical needs. HealthEast St. Joseph's Hospital Part V, Section B, Line 14g: The facility publicized a summary of the organization's financial assistance policy in the following manner: * A summary of the policy was attached to billing invoices. * A summary of the policy was posted in the hospital facility's emergency rooms or waiting rooms. * A summary of the policy was posted in the hospital facility's admissions offices. * The organization also communicates to patients during admission, financial counseling and collection calls that we have a financial assistance program and we can provide them with an application. 3 HealthEast Hospice Care - The Pillars 6025 Upper 35th Street North Oakdale MN 55128 Hospice Residental Facility HealthEast Hospice 45 West 10th Street St Paul MN 55102 Hospice Facility Mental Health & Addiction Care - St Jos 45 West 10th Street St Paul MN 55102 Outpatient Mental Health Care Part I, Line 6a: This organization is part of the HealthEast Care System which prepares an annual community benefit report called "HealthEast Report to the Community" on a consolidated basis. Part I, Line 7: The amounts reported on Form 990, Schedule H, Part I, Line 7a, 7b, 7c and 7g were determined using the cost to charge ratio derived from Worksheet 2 in the Schedule H, Form 990 Instructions. Form 990, Schedule H, Part I, Lines 7e, 7f and 7i are reported at charges as recorded by the organization. Part I, Ln 7 Col(f): The Bad Debt expense included on Form 990, Part IX, Line 25, Column (A), but subtracted for purposes of calculating the percentage in this column is $4,018,281. Part II, Community Building Activities: HealthEast St. Joseph's Hospital promotes the health of the community it serves by providing community building activities. One such activity is by providing a Pregnancy Loss Support Group for parents who have experienced a miscarriage, ectopic pregnancy, stillbirth or newborn death. Parents are invited to attend with each other, individually or with a family member or friend. This is a safe environment for sharing. The purpose of the group is to help parents cope with the pain and sadness of their loss. HealthEast St. Joseph's Hospital also provides free access to its Passport Program through their parent organization, HealthEast Care System. This program is dedicated to enhancing the quality of life for all as we age. We lead positive social change and deliver value to members through information, advocacy, lifelong learning, self-development and fulfillment. We accomplish this goal by offering social opportunities, educational seminars, opportunities to meet other members and volunteer opportunities.HealthEast St. Joseph's Hospital is also active in the community by participating in various committees and collaborative efforts to address health care issues. Part III, Line 2: The bad debt expense reported on Part III, Line 2 is reported at charges as recorded by the organization.The following describes the costing methodology used in determining bad debt and the rationale for including a portion of bad debt as community benefit:The bad debt allowance is calculated as a percentage of patient receivables after deductions for estimated provisions for contractual adjustments (discounts) on services provided to enrollees of Medicare, Medicaid, third-party payor programs, charity care, uninsured discounts, and other administrative adjustments. Part III, Line 4: The footnote to the financial statements that describes the bad debt expense is located on page 10 of the audited financial statements. Part III, Line 8: The organization believes that at least some portion of the costs we incur in excess of payments received from the Federal government for providing medical services to Medicare enrollees and beneficiaries under the Federal Medicare Program (shortfall or Medicare shortfall) constitutes a community benefit. Providing these services clearly lessens the burdens of the government by alleviating the Federal government from having to directly provide these medical services. As demonstrated and calculated on Form 990, Schedule H, Part III, Lines 5, 6 and 7, our Medicare "allowable costs" clearly exceed the payments we receive for providing these medical services under the Medicare Program. By absorbing the Medicare shortfall costs we are providing a community benefit as well as easing the burden of the Federal government having to cover these costs.To arrive at the Form 990, Schedule H, Part III, Line 6 amount we used actual Medicare charges from internal records and applied an estimated cost to charge ratio to determine the Medicare allowable costs. The estimated Medicare cost to charge ratio is the prior period Medicare Cost Report cost to charge ratio. Part III, Line 9b: The organization's collection policy and practices provide that a patient who indicates an inability to pay be provided with the information and application for the organization's financial aid policy. When a completed financial assistance application is received, it is processed according to the organization's policy to determine whether the patient qualifies for discounted or free medical services. The organization will not begin the billing process until a determination is made whether the patient qualifies for discounted or free medical services. However, if a patient expires or files for bankruptcy prior to providing a completed financial assistance application, there is no way to determine if the patient qualifies for charity care.The patient handbook also provides information regarding collection policies and practices. Bills provided to patients include the following statement: "Financial Aid Available: It is important that you let us know if you will have trouble paying your bill. HealthEast may be able to help you get free or low-cost health coverage through community or government programs. Although HealthEast can assist you in this process, you must apply for these benefits if you are eligible." Part VI, Line 2: During fiscal year 2013, the organization along with affiliated entities conducted a community health needs assessment to understand the health needs of the community. The community health needs assessment process was guided by HealthEast advisory groups that represented each hospital and key departments. At multiple points in the assessment planning and implementation process, local public health departments were also contacted to provide input and feedback to the process and review relevant data.A mixed method approach was developed collaboratively by HealthEast and Wilder Research to describe the health and wellness needs of east metro residents, with particular attention to the needs of aging residents, those with chronic conditions, and medically underserved populations, including communities of color and uninsured/underinsured populations. Secondary, or existing, data sources were used to describe the characteristics of residents and patients, while the primary, or new, data collection approaches selected for the assessment were designed to gather feedback from specific priority populations during a short 6-week timeframe in order to align with HealthEast's decision making and reporting timelines.Mixed method approaches to gather feedback from HealthEast Bethesda Hospital (Bethesda) staff and patients was also utilized. In collaboration with HealthEast staff, a mixed-method approach consisting of key informant interviews with Bethesda staff and advocacy organizations, surveys with Bethesda support group participants, and follow up interviews with recently discharged patients was used to gather information about the unique needs of Bethesda patients. In addition, interviews were held with current members of the HealthEast Passport program. Wilder Research facilitated a guided discussion about the strategies Passport members currently use to support their health, challenges they have in supporting their health, and their suggestions for how medical professionals can better support them in their efforts to stay healthy. Part VI, Line 3: HealthEast St. Joseph's Hospital has Financial Counselors and Social Workers available to assist patients in determining whether they qualify for help with their medical bills. Billing and Insurance Information brochures are also available to patients which explain the organization's billing and payment policies as well as contact information for discussing financial assistance with our Financial Counselors and Social Workers. Patients are informed about the availability of federal, state and local medical assistance programs, charity care availability as well as discounted care eligibility requirements.The patient handbook also provides information regarding collection policies and practices. Bills provided to patients include the following statement: "Financial Aid Available: It is important that you let us know if you will have trouble paying your bill. HealthEast may be able to help you get free or low-cost health coverage through community or government programs. Although HealthEast can assist you in this process, you must apply for these benefits if you are eligible." Part VI, Line 4: The primary service area for three of the four HealthEast Care System hospitals includes the three east metro counties of Dakota County, Ramsey County, and Washington County. Combined, the service area includes over one million residents. During the past decade, the east metro region has become increasingly culturally diverse and home to a growing aging population. In addition, as a result of the recent economic recession, a growing number of east metro residents live in poverty. These recent and anticipated changes in the region's population may influence the types of services provided by HealthEast and the ways in which services are delivered.HealthEast currently serves a diverse patient population and is seeing growth in the number of hospital visits by patients of color, particularly new patients of new immigrant and refugee communities. Although most patient hospital visits are with patients who speak English as their primary language, over 8,000 of hospital visits in 2010 were with patients who spoke languages other than English. The demand for culturally and linguistically appropriate care is likely to increase. Over the next 30 years, the number of residents of color in the Twin Cities region is expected to double, while at the same time, the White, non-Hispanic population is expected to slightly decline.In 2010, 11 percent of east metro residents were age 65 or older. Not surprisingly, many of the patients who receive services at HealthEast hospitals also fall into this age group. In the three hospitals that serve the east metro region, as few as one in five patient visits and up to one in three patient visits were with patients age 65 or older in 2010. A dramatic increase in the number of seniors is expected over the next 30 years; by 2040, over 20 percent of Twin Cities residents are expected to fall into this age category.The recent economic recession has also had an impact on east metro residents. The percentage of residents living in poverty has roughly doubled in each of the east metro counties. Poverty rates are higher overall in Ramsey County, where there has also been a sharp increase in the percentage of residents living in poverty, from 9 percent in 2000 to17 percent in 2010. A substantial number of east metro residents may also have difficulty accessing health care services due to lack of insurance, limited money to afford services, or a lack of medical service providers. Although a growing number of residents will have health insurance as a result of federal health care reform, the percentage of uninsured residents varies from 7 percent in Washington County to 12 percent in Ramey County. In addition, American Indians are considered a medically-underserved community in the east metro and there are five federally-designated medically underserved neighborhoods in Ramsey County.Bethesda Hospital, serves individuals who live throughout the state of Minnesota.Although HealthEast serves a predominantly English-speaking population, the hospital system provides care to patients who speak a variety of different languages. At each hospital, the vast majority of patient visits (94-97%) were with patients who spoke English as their primary language. However, HealthEast does need to address the needs of patients who speak a variety of languages. The interpretation and translation services to provide culturally-appropriate care to HealthEast patients is better understood by describing the number of patient visits with patients who spoke languages other than English. During 2010, nearly 5,000 patient visits were held with patients who primarily spoke Hmong, while over 1,000 patient visits were with patients who spoke Karen or Spanish. Overall, patients spoke a total of 11 different languages. While some patients may have family members who can serve as informal interpreters, many likely need medical interpreters and translated materials.The region will continue to become increasingly culturally diverse. This is the result of ongoing migration and higher birth rates among Hispanic, African American, and Asian populations. Between 2010 and 2040, the number of residents of color in the Twin Cities region is expected to double while the White, non-Hispanic population will decrease 2 percent. Population growth is expected to be greatest within the Hispanic/Latino population, but African American and Asian populations are expected to more than double, as well. Part VI, Line 5: In addition to the community benefits and activities described in other parts of this filing, HealthEast St. Joseph's Hospital is part of the HealthEast Care System which furthers its tax-exempt charitable purpose and promotes the health of the communities it serves including, but not limited to the following: The organization's hospitals extend medical staff privileges to all qualified physicians in the community. HealthEast St. Joseph's Hospital as part of the HealthEast Care System, a tax-exempt health care system, reinvests any excess revenues back into the core operations of the organization for which the tax-exemption was granted.The organization offers various health care classes, health screenings, support groups and other events related to the promotion of health. Some examples are in the following areas: Diabetes, Pain Care, Pregnancy, Birthing, Parenting, Heart Disease, Weight Loss, Women's Health, Vein Therapy, Chemical Dependency, Stoke, Cancer, Brain Injury, Smoking Cessation and CPR (Cardiopulmonary Resuscitation).HealthEast Care System is governed by a board of directors that are members of the community the organization serves. Part VI, Line 6: HealthEast Care System is a community-focused, non-profit health care organization that provides innovative technology, compassionate care, and a full spectrum of family health services. HealthEast includes Bethesda Hospital, St. John's Hospital, St. Joseph's Hospital, and Woodwinds Health Campus as well as outpatient services, clinics, home care, and medical transportation services.Organization Mission and Goal:The mission of HealthEast is to provide high quality, cost-effective, compassionate health care for the communities it serves. Our current focus is around creating value for our patients. This is articulated in our 2015 Milestone Goal: "Building on our benchmark performance, HealthEast will be a national leader in clinical quality, patient experience and cost effectiveness - the best value - by 2015."HealthEast includes four hospitals, 14 primary care clinics, outpatient services, home care and medical transportation services. With 7,000 employees and 1,500 physicians on staff, it meets a broad array of community health needs, through a blend of "high tech" services, traditional medicine and integrative therapies. Part VI, Line 7, Reports Filed With States MN 1 1 0 0 0 0 0 1 0 Anne M Pearson MD Director 0 303719 0 11959 0 12257 0 21498 0 21247 0 370680 0 8189 Kathryn G Correia President/CEO 0 698717 0 323326 0 10736 0 141114 0 17024 0 1190917 0 0 Daniel Kaye Interim VP/CFO-HECS, ended 3-2014 0 536420 0 0 0 0 0 7650 0 0 0 544070 0 0 Scott L North SVP, President Acute Care 0 360363 0 137028 0 52403 0 58322 0 32001 0 640117 0 48616 Catherine J Barr SVP Commuity Services, President Bet 0 291008 0 109970 0 48300 0 50986 0 15359 0 515623 0 39057 Thomas A Schmitt SVP ACO/Clinics/Outpaitent 0 295313 0 113872 0 6467 0 56961 0 22398 0 495011 0 0 Julie A Schmidt SVP CAO 0 356446 0 133864 0 58526 0 63309 0 15662 0 627807 0 46090 Stephen J Kolar MD SVP CMO 0 389949 0 146678 0 60292 0 86648 0 26644 0 710211 0 52253 Joanne M Sunquist SVP/Chief Information Officer 0 286852 0 70926 0 8332 0 44766 0 21182 0 432058 0 0 Michael McMahan VP Acute Care Operations 203413 0 57507 0 558 0 14789 0 23017 0 299284 0 0 0 Debra J Hurd VP Acute Care Nursing 0 222195 0 61772 0 2663 0 49305 0 2604 0 338539 0 0 Brian Ness MD Medical Director, ED 320509 0 43524 0 20247 0 39605 0 19495 0 443380 0 13349 0 Daniel Berndt MD Physician 341242 0 25000 0 13522 0 25614 0 20981 0 426359 0 12107 0 Nancy Blonigen MD Physician 286783 0 23000 0 10795 0 23763 0 14555 0 358896 0 0 0 Verna Arcedo MD Physician 283425 0 25000 0 10883 0 23575 0 10354 0 353237 0 0 0 Wael Khouli MD Physician Adv Care Mgmt 262586 0 41303 0 7393 0 15300 0 9742 0 336324 0 0 0 Michael F Nass Former Officer 0 297649 0 39357 0 99210 0 22401 0 27339 0 485956 0 47766 Brian Patty MD Former Officer 0 299046 0 84742 0 59881 0 81346 0 26258 0 551273 0 44018 Craig A Svendson MD Former Officer 0 235819 0 82253 0 208894 0 52652 0 16801 0 596419 0 131053 Timothy H Hanson Former President/CEO 0 0 0 0 0 623123 0 0 0 0 0 623123 0 0 Brendon Cullinan MD Former Officer 0 257987 0 72415 0 976 0 49284 0 19654 0 400316 0 0 Mary F Pynn Former Officer 0 254508 0 71070 0 33531 0 35666 0 17585 0 412360 0 29692 Mary L Arnold Former Officer 0 119510 0 17589 0 46563 0 9073 0 10672 0 203407 0 0 Mindy A Smith Former Officer 0 105825 0 0 0 70354 0 22928 0 11599 0 210706 0 59263 Roger E Green Former Officer 0 129404 0 0 0 153657 0 111164 0 16905 0 411130 0 142219 Scott W Hinrichs Former Officer 0 155069 0 58715 0 156140 0 53153 0 38851 0 461928 0 86942 Shirley A Germann Former Officer 0 128726 0 37002 0 40666 0 10093 0 7755 0 224242 0 0 John Kvasnicka MD Former Physician 0 379972 0 97269 0 2286 0 66018 0 28032 0 573577 0 0 Ellen N Garbo MD Former Physician 0 321167 0 5000 0 1374 0 26777 0 27712 0 382030 0 0 Darcy R McBride MD Former Physician 0 799986 0 0 0 38137 0 41542 0 21897 0 901562 0 29591 Andrew Portis MD Former Physician 0 740064 0 0 0 3168 0 51516 0 32930 0 827678 0 0 Part I, Line 3 HealthEast Care System, a related tax-exempt organization, engages an external consulting firm to review annually the compensation of the organization's CEO, Senior Vice Presidents, Vice Presidents. The review was last completed in November 2013. The process includes the external consulting firm evaluating current base salaries and total cash and benefits compared to comparable positions within the comparator group. The external firm presents its findings to the affiliated tax-exempt organization's Executive Committee of the Board and indicates any recommendations for change. The affiliated tax-exempt Executive Committee of the Board approves the salaries of the CEO, Senior Vice Presidents, Vice Presidents . The consulting firm issues a reasonable compensation letter to affiliated tax-exempt organization's Board of Directors. Part I, Lines 4a-b The following individuals received severance payments during the year from this organization or a related organization: Michael F. Nass $282,355 Roger E. Green $134,053 Mindy A. Smith $120,074 Mary Arnold $ 29,568 Shirley Germann $ 31,100 Scott Hinrichs $ 39,480 Craig Svendson $ 55,308 The terms and conditions of the severance payments are a signed release of rights and an agreement to not make any disparaging remarks about the organization from each individual. Eligible executives receive severance payments for one year. The following individuals participated in or received payment from a supplemental nonqualified retirement plan. The amount listed is the amount paid to the individual and reported accordingly on their 2013 W-2 Form. The terms and conditions of this supplemental nonqualified retirement plan is a five year cliff vesting arrangement: Michael F. Nass $ 47,766 Catherine J. Barr $ 39,057 Anne M. Pearson, M.D. $ 8,189 Julie A. Schmidt $ 46,090 Stephen J. Kolar, M.D. $ 52,253 Scott W. Hinrichs $ 86.942 Scott L. North $ 48,616 Mindy A. Smith $ 59,263 Craig A. Svendson, M.D. $131,053 Brian Patty, M.D. $ 44,018 Roger E. Green $142,219 Mary F. Pynn $ 29,692 Brian Ness, M.D. $ 13,349 Daniel Berndt, M.D. $ 12,107 Verna Arcedo, M.D. $ 10,376 Nancy Blonigen, M.D. $ 10,359 Wael Khouli, M.D. $ 7,229 Darcy R. McBride, M.D. $ 29,591 The following individuals were participants in the supplemental nonqualified retirement plan but did not receive any payment as they are not yet vested in the plan. The following amounts are their current year contribution into the plan and are accordingly included in Schedule J, Column C: Kathryn Correia $121,799 Brendon M. Cullinan, M.D. $ 32,073 Thomas A. Schmitt $ 41,661 Joanne M. Sunquist $ 35,246 Douglas Davenport $ 0 Michael McMahan $ 0 Debra J. Hurd $ 25,310 John Kvasnicka, M.D. $ 50,718 Andrew J. Portis, M.D. $ 35,867 Ellen N. Garbo, M.D. $ 11,477 The following individuals were participants in the supplemental nonqualified retirement plan. The following amounts are their current year contribution into the plan and are accordingly included in Schedule J, Column C: Michael F. Nass $ 0 Catherine J. Barr $ 26,751 Anne M. Pearson, M.D. $ 6,198 Julie A. Schmidt $ 34,684 Stephen J. Kolar, M.D. $ 39,464 Scott W. Hinrichs $ 0 Scott L. North $ 35,744 Mindy A. Smith $ 0 Craig A. Svendson, M.D. $ 0 Brian Patty, M.D. $ 26,399 Roger E. Green $ 0 Mary F. Pynn $ 20,366 Brian Ness, M.D. $ 8,463 Daniel Berndt, M.D. $ 9,012 Verna Arcedo, M.D. $ 6,002 Nancy Blonigen, M.D. $ 6,637 Wael Khouli, M.D. $ 0 Darcy R. McBride, M.D. $ 26,242 Part I, Line 7 HealthEast Care System provides a Management Incentive Program. The program provides lump sum financial awards based on system-wide, business unit and/or department financial and quality measures. Annual goals, specifically tied to productivity and quality indicators, are set for the fiscal year and an incentive paid out annually if key goals and measures are achieved. Before HealthEast Care System can authorize payment of any awards, it must meet the following qualifications: * Financial - HealthEast must have sufficient net income for the fiscal year to cover the cost of any awards. * Accreditation - All HealthEast business units must maintain a level of quality and performance that results in, and maintains, accreditation by Joint Commission (JCAHO) and equivalent licensing boards * Approval -The HealthEast Board of Directors has final approval of all incentive program payouts. In addition, each participant must meet individual performance qualifications to be eligible to receive an award. Denice Hinrichs Family member of Scott Hinrichs', former Officer. 93149 Compensation 0 Health Systems Cooperative Laundries Key employee Michael McMahan, board member Health Systems Coop. Laundries 803444 Laundry Services 0 X Medical Equip 2 36129 Cost X Computer Equi 3 26063 Cost X Security Moni 1 16736 Cost X Office Furnit 1 2451 Cost 0 0 1 0 Form 990, Part IV, Line 24a This organization along with related organizations HealthEast Care System, HealthEast St. John's Hospital and HealthEast Woodwinds Hospital are equally liable for the repayment of the bonds reported on the HealthEast Care System Form 990. Form 990, Part V, Line 1a Cash disbursements are centralized through the parent organization. Therefore the parent organization, HealthEast Care System, makes the payment and files the related Form 1099's and Form 1096 instead of HealthEast St. Joseph's Hospital. Form 990, Part VI, Section A, line 1 The Executive Committee shall consist of five or more members, including the ex officio members. The Chair shall chair the Executive Committee. The Executive Committee shall recommend to the Board of Directors changes in the by Bylaws, approve conflict of interest policies and review compliance with conflict of interest policies. The Executive Committee shall have all the power and authority of the Board of Directors. The Executive Committee shall have the power to act only in the intervals between meetings of the Board. Only the Outside Directors of the Executive Committee shall be entitled to vote on any action taken by the Executive Committee in discharging its duties with regard to human resources and governance. Members of the Executive Committee who are Inside Directors shall not participate in, or be present during, any discussion of actions proposed or taken with respect to the duties with regard to human resources and governance, except to the extent requested to do so by the Outside Directors on the Executive Committee. Form 990, Part VI, Section A, line 2 All officers and employees are employed by related organizations in which the board members are also board members of the related organization. Therefore, a business relationship exists between these individuals. Form 990, Part VI, Section A, line 6 The sole member of HealthEast St. Joseph's Hospital is HealthEast Care System, a 501(c)(3) tax-exempt, non-profit organization. The member organization does not elect the members of HealthEast St. Joseph's Hospital Board of Directors because HealthEast St. Joseph's Hospital has a self-electing board. The member organization does not approve any decisions of the board. The member of the organization receives the organziations net assets upon dissolution. Form 990, Part VI, Section B, line 11 The Form 990 is sent electronically to all members of the Board of Directors prior to the filing of the Form 990 and prior to the Finance Committee and Board of Directors meetings in which it will be reviewed. A representative of the tax department, if necessary, will attend the Finance Committee meeting and/or the Board of Directors meeting to discuss the Form 990 with the members of the Board and answer any questions from the Board. Form 990, Part VI, Section B, line 12c HealthEast Care System monitors proposed or ongoing transactions for conflicts of interest through the procedures set forth in its Conflicts of Interest Policy (the Policy). The Policy covers HealthEast Care System's Directors, Officers and members of a Committee with Board-delegated powers. A Director, Officer or member of a Committee with Board-delegated powers who has a direct or indirect financial interest, is an interested person under the terms of the Policy. If a person is an interested person with respect to any entity in the HealthEast Care System he or she is an interested person with respect to all entities in the HealthEast Care System. Pursuant to the terms of the Policy, in connection with any actual or possible conflicts of interest, an interested person must disclose the existence of his or her financial interest and must be given the opportunity to disclose all material facts relating to his or her financial interest to the Directors or members of Committees with Board-delegated powers considering the proposed transaction or arrangement. After disclosure of the financial interest and all material facts, and after any discussion with the interested person, the interested person must leave the Board (or Committee) meeting while the financial interest is discussed and voted upon. The remaining Board (or Committee) members shall decide if a conflict of interest exists. An interested person may make a presentation at the Board or Committee meeting regarding the proposed transaction or arrangement, but after such presentation, the interested person shall leave the meeting during the discussion of, and the vote on, the proposed transaction or arrangement that results in the conflict of interest. Form 990, Part VI, Section B, line 15 The Chair of the Board of Directors engages an external consulting firm to review the compensation of the organization's CEO, Senior Vice Presidents and Vice Presidents annually and was last completed in November 2013. The process includes the external consulting firm evaluating current base salaries and total cash and benefits compared to comparable positions within the comparator group. The external firm presents its findings to the Executive Committee of the Board and indicates any recommendations for change. The Executive Committee of the Board approves the salaries. The consulting firm issues a reasonable compensation letter to the Board of Directors. Form 990, Part VI, Section C, line 19 The Articles of Incorporation for this organization are available to the public through the Secretary of State Office. The organization's conflict of interest policy and other governing documents are not made available to the public. The financial statements for this organization are made available to the public through the Attorney General's Office and are also attached to this Form 990. Form 990, Part VII In recent fiscal years, the organization had internal leadership changes which resulted in a change in the roles and responsibilities of certain employees. As such, some individuals who were treated as officers in the past are no longer with the organization and others no longer meet the definition of officer or key employee. Based on the IRS instructions, they are listed on Part VII as former officers or key employees as they were considered in this role within the past five years. Individuals listed as former physicians were listed as highest compensated employees in the past, but are no longer employed by the reporting organization. These individuals are now compensated by a related entity, and meet the requirements for reporting as a former highest paid employee. Form 990, Part VII, Section A, Column B This organization is a subsidiary of HealthEast Care System, a 501(c)(3), tax-exempt, non-profit organization. The Board of Directors for this organization is the same as the Board of Directors for HealthEast Care System. All hours worked as a member of the Board of Directors are reported on the Form 990 for the parent organization, HealthEast Care System. Therefore, we have reported 0.00 hours worked by each member of the Board of Directors on this organization's return. Form 990, Part IX, line 11g Staffing Services: Program service expenses 909,875. Management and general expenses 0. Fundraising expenses 0. Total expenses 909,875. Professional Fees: Program service expenses 1,602,332. Management and general expenses 63,905. Fundraising expenses 0. Total expenses 1,666,237. Purchased Services: Program service expenses 17,229,353. Management and general expenses 138,686. Fundraising expenses 0. Total expenses 17,368,039. Inter-department Services Charge: Program service expenses 16,669,941. Management and general expenses 3,292,755. Fundraising expenses 0. Total expenses 19,962,696. Form 990, Part XI, line 9: Transfers from Parent Company 20,128,843. D & T Facility Management Company PO Box 64624 St Paul MN 55164 411928275 Management of Diagnostic Medical Services MN 501(c)(3) 11a HealthEast Woodwinds Hospital 1 HealthEast Medical Research Institute PO Box 64624 St Paul MN 55164 411765832 Medical Research MN 501(c)(3) 4 HealthEast Care System 1 HealthEast Professional Services PO Box 64624 St Paul MN 55164 261226617 Physician services provided to related tax-exempt hospitals. MN 501(c)(3) 9 HealthEast Care System 1 HealthEast St John's Hospital PO Box 64624 St Paul MN 55164 411456897 Hospital MN 501(c)(3) 3 HealthEast Care System 1 HealthEast Woodwinds Hospital PO Box 64624 St Paul MN 55164 411592761 Hospital MN 501(c)(3) 3 HealthEast Care System 1 HealthEast Care System PO Box 64624 St Paul MN 55164 363517697 Hospital MN 501(c)(3) 3 N/A 0 Maplewood Professional Building Limited Partnership 1655 Beam Avenue Maplewood MN 55109 411431847 Rental Real Estate MN N/A HealthEast Surgery Center-Maplewood LLC 1655 Beam Avenue Maplewood MN 55109 203349887 Outpatient Surgery Center MN N/A East Metro Insurance LTD 62 Forum Lane 3rd Floor Camana Ba Grand Cayman CJ KY1-1203 980417513 Captive Insurance Organization CJ N/A C 1 HealthEast Diversified Services Inc PO Box 64624 St Paul MN 55164 411388583 Reference Lab & Rental Real Estate MN N/A C 1 0 0 0 0 0 0 0 0 1 0 1 1 1 0 0 0 0 1 0 HealthEast Diversified Services Inc K 515720 Fair Market Value HealthEast Woodwinds Hospital L 916633 Cost HealthEast Diversified Services Inc L 9541447 Cost HealthEast St John's Hospital L 1791776 Cost East Metro Insurance LTD M 1158861 Cost HealthEast Medical Research Institute M 15559330 Cost HealthEast Diversified Services Inc M 60000 Cost