2014-05-12T13:24:33-05:00 2013-06-30 KPMG LLP 191 West Nationwide Blvd Ste 500 Columbus OH 432152568 990 2012-07-01 371058692 HOSPITAL SISTERS HEALTH SYSTEM % MICHAEL W COTTRELL HOSP 2175234747 4936 LaVerna Road Suite SPRINGFIELD IL 62707 Michael W Cottrell 2175234747 2014-03-18 true 6142492300 2012 2015-11-30 17:44:51Z MICHAEL W COTTRELL 4936 LAVERNA ROAD SPRINGFIELD IL 62707 145381438 false 0928 X WWW.HSHS.ORG X 1978 IL TO PROMOTE AND SUPPORT, DIRECTLY OR INDIRECTLY, BY DONATION, LOAN, OR OTHERWISE, THE INTERESTS AND PURPOSES OF THE HOSPITAL SISTERS OF THE 3RD ORDER OF ST. FRANCIS. 11 10 626 10 514920 -435468 0 0 100864957 128945140 8505813 7974682 7744261 8427724 117115031 145347546 0 0 0 0 43751546 63143948 0 0 0 65496922 77788455 109248468 140932403 7866563 4415143 295036965 341171486 150117040 169952331 144919925 171219155 TO REVEAL AND EMBODY CHRIST'S HEALING LOVE FOR ALL PEOPLE THROUGH A HEALTH CARE MINISTRY BY PROMOTING AND SUPPORTING, DIRECTLY OR INDIRECTLY, BY DONATION, LOAN, OR OTHERWISE, THE INTERESTS AND PURPOSES OF THE HOSPITAL SISTERS OF THE 3RD ORDER OF ST. FRANCIS. false false 136576385 0 128430220 HOSPITAL SISTERS HEALTH SYSTEM (HSHS) SERVES AS THE PARENT ORGANIZATION FOR VARIOUS INCORPORATED MINISTRY ORGANIZATIONS WITH THE DESIGNATED MEMBERS OF HSHS BEING THE PROVINCIAL SUPERIOR AND PROVINCIAL COUNCILORS OF THE AMERICAN PROVINCE OF THE HOSPITAL SISTERS OF ST. FRANCIS. THE MISSION OF HSHS IS TO PROVIDE A STRUCTURE AND THE MEANS WHEREBY THE HOSPITAL SISTERS CONTINUE THEIR HEALING MINISTRY. HSHS PROVIDES PROFESSIONAL AND TECHNICAL EXPERTISE IN THE MANAGEMENT OF THE AFFILIATED ORGANIZATIONS. 136576385 true false false true false false false false false false true false false false true true false true false false false false false false false false false false false true false false false true false false false false false false false false true true true true true false true 90 0 true 626 true true true false false false false false false false false false false X 11 10 false false false false true true true true true false false true true true true true true true true false X MICHAEL W COTTRELL 2175234747 3215 EXECUTIVE PARK DRIVE SPRINGFIELD IL 62703 X SISTER MARY ANN MINOR OSF 2.25 0.75 X 0 0 0 SISTER MAUREEN O'CONNOR OSF 1.25 0.75 X X 0 0 0 JOHN E STAUDT 1.25 0.75 X 0 0 0 SISTER MARY MOLLISON CSA 1.25 0.75 X X 0 0 0 SISTER BERNICE COREIL DC 1.25 0.75 X 0 0 0 STEPHEN J BOCHENEK 1.25 0.75 X X 0 0 0 Mary Starmann-Harrison 53.25 6.75 X X 1115981 0 225048 ROBERT B ATWELL 1.25 0.75 X 0 0 0 STEVEN A HASSEBROCK 1.25 0.75 X 0 0 0 SISTER GERTRUDE O'CONNOR OSF 1.25 0.75 X 0 0 0 John Combes MD 1.25 0.75 X 0 0 0 ANN M CARR 55.25 4.75 X 272146 0 138031 MICHAEL W COTTRELL 55.75 4.25 X 620195 0 120098 Lawrence Schumacher 39.75 20.25 X 958737 0 168542 ROBERT P RITZ 0.0 75.0 X 695726 0 115400 THERESE B PANDL 0.0 60.0 X 663886 0 124666 Frank L Mikell 53.0 7.0 X 841930 0 132140 KEVIN KAST 0.0 60.0 X 585194 0 114028 SONIA MEHTA 0.0 60.0 X 504967 20911 Stephanie S McCutcheon 0.0 X 731191 0 0 6989953 0 1158864 83 true true false DEARBORN ADVISORS LLC PO BOX 66391 CHICAGO IL 606660391 COMPUTER CONSULTING 3665777 ESD LLC 4352 West Sylvania Ave Ste M TOLEDO OH 43623 healthcare 7587994 Medical Information Technology Inc Meditech Circle WESTWOOD MA 02090 computer consulting 5214012 MARSH USA INC PO Box 96772 CHICAGO IL 606936772 insurance 3876758 PARAGON DEVELOPMENT SYSTEMSIN 1823 Executive Dr OCONOMOWOC WI 53066 Computer Consulting 5331465 118 0 AFFILIATE FEES 561000 128945140 128430220 514920 128945140 5713166 5713166 0 0 0 0 0 2295408 33892 2295408 -33892 2261516 2261516 0 0 0 ADMINISTRATION REVENUE 561000 7827767 7827767 OTHER 900099 599957 599957 8427724 145347546 128430220 514920 16402406 0 0 0 0 3013165 2711849 301316 0 46883827 44972470 1911357 4431245 4165863 265382 5774757 5579888 194869 3040954 2946799 94155 0 848049 766970 81079 1135400 1021860 113540 789042 789042 0 0 7733317 7293085 440232 377153 339438 37715 3329138 3302473 26665 0 0 1720076 1687022 33054 469872 441274 28598 0 1651979 1540306 111673 3304876 3304553 323 0 28098364 28002026 96338 0 2281710 2058682 223028 EQUIP. RENTAL AND MAINT. 14009432 13973213 36219 SOFTWARE SUBSCRIPTIONS 10616856 10388968 227888 DUES & MEMBERSHIPS 461520 416460 45060 RECRUITING 168523 159612 8911 793148 714532 78616 140932403 136576385 4356018 0 X 0 0 9179126 6380714 0 0 15327504 14430316 0 0 0 0 0 0 40578 40578 4241676 9034025 292330564 118673137 163536207 173657427 102711874 137628426 0 0 0 0 0 0 0 0 295036965 341171486 47120660 52019383 0 0 0 0 0 0 0 0 0 0 0 0 0 0 102996380 117932948 150117040 169952331 X 144208674 170459308 711251 759847 0 0 144919925 171219155 295036965 341171486 X 4415143 3542501 18341586 X false true X true false X X X HOSPITAL SISTERS OF ST FRANCIS FOUNDATION INC 371186514 03 true true true 0 HOSPITAL SISTERS SERVICES INC 371163402 03 true true true 0 HSHS HEALTH CARE PLAN TRUST FUND 371137724 0 true true true 0 HSHS SELF INSURANCE TRUST FUND 371120626 03 true true true 0 SACRED HEART HOSPITAL 390807060 03 true true true 0 ST ANTHONY'S HOSPITAL 370661233 03 true true true 0 ST ELIZABETH'S HOSPITAL 370663597 03 true true true 0 ST FRANCIS HOSPITAL 370661236 03 true true true 0 ST JOHN'S HOSPITAL 370661238 03 true true true 0 ST JOSEPH'S HOSPITAL 371208459 03 true true true 0 ST JOSEPH'S HOSPITAL 370663568 03 true true true 0 ST JOSEPH'S HOSPITAL 390810545 03 true true true 0 ST MARY'S HOSPITAL 370661244 03 true true true 0 ST MARY'S HOSPITAL 372169181 03 true true true 0 ST MARY'S HOSPITAL MEDICAL CENTER 390818682 03 true true true 0 ST NICHOLAS HOSPITAL 390808480 03 true true true 0 ST VINCENT HOSPITAL 390817529 03 true true true 0 HOSPITAL SISTERS HEALTHCARE - WEST INC 510157933 03 true true true 0 HSHS MEDICAL GROUP INC 263956318 03 true true true 0 HSHS WISCONSIN MEDICAL GROUP INC 264515959 03 true true true 0 20 0 Hospital sisters health system ("HSHS") administers the workers compensation fund, health care trust fund, self insurance fund, flex plan, and investment fund for HSHS and the related hospitals and exempt organizations. HSHS utilizes these funds to provide centralized management and computer services to its thirteen affiliated hospitals and other related affiliates. The hospitals and other related affiliates pay a management fee to HSHS for these services. Monetary amount of support provided are not determinable. The following is a list of management fees paid by each Local Hospital system: St. Elizabeth's Hospital - Belleville $13,103,796 St. Joseph's Hospital - Breese $2,338,200 St. Mary's Hospital - Decatur $7,927,080 St. Anthony's Hospital - Effingham $6,666,908 St. Joseph's Hospital - Highland $1,423,780 St. Francis Hospital - Litchfield $2,024,677 St. John's Hospital - Springfield $28,446,830 St. Mary's Hospital - Streator $4,080,716 St. Joseph's Hospital - Chippewa Falls $4,236,203 Sacred Heart Hospital - Eau Claire $11,227,224 St. Mary's Hospital - Green Bay $6,293,375 St. Vincent Hospital - Green Bay $25,995,877 St. Nicholas Hospital - Sheboygan $3,939,577 Kiara $514,920 Kiara Clinical Integration Network LLC $3,665,364 Hospital Sisters of St. Francis Foundation, Inc. $700,464 HSHS Medical Group, Inc. $1,968,646 Physician Clinical Integration Network LLC $542,167 ---------- TOTAL $125,095,804 ========== false true false true false true 679800 false false true 317173 996973 false false SCHEDULE C, PART II B HSHS engages in legislative advocacy to support the organization's mission and to promote health care access for all. A portion of designated staff time is committed to advocacy on laws and regulations at the federal, state, and local levels. HSHS also retains some outside organizations to assist with this lobbying. The dollar figure shown includes compensation costs for the portion of time spent by staff members on public policy advocacy, amounts paid to organizations that assist with this lobbying, and an estimate of other office expenses related to these activities. This amount also includes mailings to legislators, direct contact with them or their staffs, other officials and the general public,these are not reported separately because of the small dollar amounts involved. 25936 25936 26835500 5352373 21483127 308575 180118 128457 35464098 24286558 11177540 229696455 88854088 140842367 173657427 0 RELATED HOSPITALS IT NOTES PAY 117932948 117932948 X FIN 48 DISCLOSURE FORM 990, SCHEDULE D, PART X HSHS has adopted ASC Subtopic 740-10, Accounting for Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109. ASC Subtopic 740-10 addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under ASC Subtopic 740-10, HSHS must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC Subtopic 740-10 also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. As of June 30, 2013 and 2012, HSHS does not have an asset or liability for unrecognized tax benefits. X X X X X true true X X X X X X true true false false false false false false false ANN M CARR 193454 0 29440 0 49252 0 121170 0 17686 0 411002 0 18215 0 MICHAEL W COTTRELL 492349 0 91403 0 36443 0 92874 0 28117 0 741186 0 0 0 Mary Starmann-Harrison 872738 0 183216 0 60027 0 198743 0 27198 0 1341922 0 0 0 ROBERT P RITZ 558815 0 106586 0 30325 0 86678 0 40417 0 822821 0 0 0 THERESE B PANDL 565288 0 77968 0 20630 0 100815 0 28586 0 793287 0 0 0 Frank L Mikell 602758 0 110977 0 128195 0 112963 0 20070 0 974963 0 59328 0 Lawrence Schumacher 647266 0 259077 0 52394 0 152700 0 16735 0 1128172 0 0 0 KEVIN KAST 378897 0 55273 0 151024 0 90300 0 24621 0 700115 0 112204 0 Stephanie S McCutcheon 0 0 0 731191 0 0 0 0 0 731191 0 0 0 SONIA MEHTA 361423 0 143544 0 21477 526444 0 TRAVEL FOR COMPANIONS SCHEDULE J, PART I, LINE 1A Lawrence Schumacher received $550 for companion travel. The fair value of this travel was included in his annual report income. Tax Indemnification and gross-up payments Schedule J, Part I, Line 1a Tax gross-ups were paid by HSHS to Ann Carr for $11 and to Lawrence Schumacher for $11 during the year. The fair value of these were included in their annual reported income. Health or social club dues Schedule J, Part I, Line 1a Social club dues were paid by HSHS on behalf of Robert Ritz and Lawrence Schumacher during the year. The fair value of the dues were included in their annual reported income. STEPHANIE MCCUTCHEON'S SEVERANCE PACKAGE SCHEDULE J, PART I, LINE 4A STEPHANIE MCCUTCHEON RECEIVED A SEVERANCE PACKAGE DURING THE YEAR IN THE AMOUNT OF $731,191 FOR HER SERVICES AS PRESIDENT AND CEO OF HOSPITAL SISTERS HEALTH SYSTEM. ANN M. CARR SCHEDULE J, PART I, LINE 4B ANN CARR PARTICIPATED IN A SERP PLAN DURING THE YEAR IN THE AMOUNT OF $42,817. MICHAEL W. COTTRELL SCHEDULE J, PART I, LINE 4B MICHAEL COTTRELL PARTICIPATED IN A SERP PLAN DURING THE YEAR IN THE AMOUNT OF $60,989. MARY STARMANN-HARRISON SCHEDULE J, PART I, LINE 4B MARY STARMANN-HARRISON PARTICIPATED IN A SERP PLAN DURING THE YEAR IN THE AMOUNT OF $162,176. ROBERT P. RITZ SCHEDULE J, PART I, LINE 4B ROBERT RITZ PARTICIPATED IN A SERP PLAN DURING THE YEAR IN THE AMOUNT OF $68,574. THERESE B. PANDL SCHEDULE J, PART I, LINE 4B THERESE PANDL PARTICIPATED IN A SERP PLAN DURING THE YEAR IN THE AMOUNT OF $64,900. FRANK L. MIKELL SCHEDULE J, PART I, LINE 4B FRANK MIKELL PARTICIPATED IN A SERP PLAN DURING THE YEAR IN THE AMOUNT OF $133,006. LAWRENCE SCHUMACHER SCHEDULE J, PART I, LINE 4B LAWRENCE SCHUMACHER PARTICIPATED IN A SERP PLAN DURING THE YEAR IN THE AMOUNT OF $129,818. KEVIN KAST SCHEDULE J, PART I, LINE 4B KEVIN KAST PARTICIPATED IN A SERP PLAN DURING THE YEAR IN THE AMOUNT OF $157,883. therese pandl Pres/CEO mortgage extension X 250000 251973 false true true THERESE PANDL PRES/CEO STOCK PURCHASE X 4125 4125 false true true 256098 LOANS TO/FROM INTERESTED PERSONS SCHEDULE L, PART II ALL LOANS INVOLVING INTERESTED PERSONS ARE COMPLIANT WITH THE ORGANIZATION'S CONFLICT OF INTEREST POLICY. ANY TRANSACTIONS REQUIRING BOARD APPROVAL ARE REVIEWED BY AN INDEPENDENT BOARD PRIOR TO BEING APPROVED. RIGHTS OF MEMBERS TO ELECT GOVERNING BODY FORM 990 PART VI, LINES 6 AND 7A THE SENIOR GOVERNING BODY OF HOSPITAL SISTERS HEALTH SYSTEM ("HSHS") ARE THE MEMBERS, WHO ARE THE INDIVIDUAL SISTERS, WHO FROM TIME TO TIME ARE THE DULY ELECTED PROVINCIAL SUPERIOR AND PROVINCIAL COUNCILORS OF THE AMERICAN PROVINCE OF THE HOSPITAL SISTERS OF ST. FRANCIS ("AMERICAN PROVINCE"). THE AMERICAN PROVINCE IS THE UNITED STATES ORGANIZATION OF THE CONGREGATION OF THE HOSPITAL SISTERS OF THE THIRD ORDER REGULAR OF ST. FRANCIS, A RELIGIOUS INSTITUTE OF THE ROMAN CATHOLIC CHURCH. PURSUANT TO SECTION 2.3 OF THE HSHS BYLAWS, THE MEMBERS HAVE THE RIGHT TO APPOINT AND REMOVE HSHS BOARD OF DIRECTORS, CHAIRPERSON OF THE BOARD, AND PRESIDENT. member reserved powers form 990 part vi, line 7b Responsibility for the policy and operations of Hospital Sisters Health System (the "Corporation") is vested in its Board of Directors, except with respect to specific powers reserved in the Corporation's Bylaws to the Corporation's Members. The members of the corporation are the individual sisters, who from time to time are the duly elected Provincial Superior and Provincial Councilors of the American Province of the Hospital Sisters of St. Francis ("American Province"). The American Province is the United States organization of the Congregation of the Hospital Sisters of the Third Order Regular of St. Francis, a religious institute of the Roman Catholic Church. The governance and operations of the Corporation are subject to the members' rights to exercise these reserved powers with respect to the Corporation and organizations of which the Corporation is either directly or indirectly a controlling member, or a controlling shareholder ("Affiliates"). The members' reserved powers include all rights granted to the members by law and the right to: (a) Adopt, approve amendments to, or amend any statement of philosophy, mission, mission integration or values, or any name, logo, or mark of the Corporation or of any Affiliate; (b) Adopt, approve amendments to, or amend the Articles of Incorporation of the Corporation or of any Affiliate; (c) Adopt, approve amendments to, or amend the Bylaws of the Corporation or of any Affiliate; (d) Appoint and remove the Board of Directors, any one or more of the Directors of the Corporation or of Hospital Sisters Services, Inc. ("HSSI"), and the Chairperson and President of the Corporation or of HSSI; (e) Approve the recommendation of the Board of Directors to appoint or remove the Board of Directors, any one or more Directors of the Corporation or of HSSI, or the Chairperson and President of the Corporation or of HSSI. (f) With respect to the Corporation or any Affiliate, approve the purchase, sale, alienation, exchange, lease, or encumbrance of any real property of the Corporation or of any Affiliate, which property has a value in excess of limits set from time to time by the members; (g) approve debt incurred by the corporation or any affiliate in an amount in excess of limits set from time to time by the members; (h) Approve deviations by the Corporation from the annual capital and operating budgets in an amount or percentage specified by the members from time to time; (i) Approve the consolidated strategic plan and goals of the Corporation; (j) Approve the sale of substantially all of the assets of the Corporation or of any Affiliate; (k) Approve the merger or dissolution of the Corporation or of any Affiliate; (l) Adopt or amend the plan for ministry education and governance for the Corporation and its Affiliates; (m) Approve the Corporation's Mission Accountability Reports and those of any Affiliate; (n) Adopt policies to implement the Reserved Powers of the members. FORM 990 REVIEW PROCESS FORM 990, PART VI, LINE 11b The organization employs KPMG to assist in the overall review and electronic submission of its Form 990. KPMG provides guidance in identifying critical errors in the return submission and feedback on quantitative and qualitative responses. Additionally, the organization's CFO performs a thorough review of the return, and reviews it with the organization's CEO, and/or senior leaders, before presenting it in its entirety to the hospital Board for questioning and review prior to the return's signing and submission to the IRS. CONFLICT OF INTEREST POLICY FORM 990, PART VI, LINE 12C A revised Corporate Compliance Program and Conflict of Interest Policy have been used since January, 2009 to establish the practice of managing conflicts of interest using a system-wide protocol for disclosure statements. In accordance with the organization's Conflict of Interest Policy, all Covered Persons have a duty to comply with the Conflict of Interest Policy for any contract, transaction, relationship, or activity contemplated, entered into, or conducted at HSHS. The policy defines covered persons as Board members, Board committee members, Officers, Board designees, senior management, members of any committee that oversees the approval of pharmaceuticals and medical devices, and any other individual who holds a position of trust. On an annual basis, HSHS discloses a copy of the Conflict of Interest Policy, (and all corresponding procedures, guidelines, forms, and tools), to all Covered Persons, and advises all Covered Persons in writing of any substantive changes to this Policy and such related materials. The Covered Persons are required to review and complete the corresponding Conflict of Interest Statement. The System Office Vice President, System Responsibility or members of the Audit and Integrity Committee ("Committee") are available to answer any questions a Covered Person may have. In addition, if, at any time after submitting an annual Conflict of Interest Statement, a Covered Person becomes aware of an Interest that he or she would have had to disclose at the annual interval, the Covered Person shall promptly disclose the Interest to the Committee using the HSHS Conflict of Interest Disclosure Statement. Completed Conflict of Interest statements are submitted to the Committee of HSHS which is responsible for identifying, assessing, and managing Conflicts of Interest that arise in the course of conducting the affairs of HSHS. If the Committee determines that a Conflict of Interest exists, HSHS shall not engage in, or enter into a proposed contract, transaction, relationship, arrangement, or activity unless the Committee or, where necessary, the Board of Directors (acting through its disinterested members), has investigated alternatives to the proposed contract, transaction, relationship, arrangement, or activity and, in the absence of alternatives that are in the best interests of HSHS, has determined: 1. that, regardless of whether the Covered Person participates in the implementation of the proposed contract, transaction, relationship, arrangement, or activity; 2. the contract, transaction, arrangement, or activity is in the best interests of HSHS; 3. the contract, transaction, arrangement, or activity is fair and reasonable from the perspective of HSHS; and 4. HSHS cannot obtain a more advantageous contract, transaction, arrangement or activity with reasonable efforts under the circumstances. In determining whether a contract, transaction, or arrangement is fair and reasonable to HSHS, the Committee shall consider, where applicable: 1. appraisals or other independent valuations of the Fair Market Value of the contract, transaction, or arrangement; 2. information regarding comparable contracts, transactions, or arrangements between unrelated parties; 3. offers from comparable competing entities; and/or 4. studies of comparable compensation arrangements. In any case in which the Committee finds, after taking the steps described above, that HSHS should participate in a proposed transaction or arrangement despite the existence of a conflict of interest, the Committee shall develop, implement, monitor, and enforce compliance with a Conflict Management Plan for managing the Conflict of Interest as it considers necessary for such findings to remain valid throughout the life of the contract, transaction, relationship, arrangement, or activity. All Conflict Management Plans shall: 1. state that the Committee will oversee, monitor, and enforce compliance with the plan throughout the course of the study, and specify means for doing so, including, without limitation, that the appropriate individuals must provide the Committee with written reports pertaining to compliance with the Conflict Management Plan, that the Committee shall have the right to audit the study for such compliance, and the right to impose sanctions for non-compliance; 2. state that the Plan must be shared with Covered Person whose Interests it was developed to manage; 3. state that the Plan must be shared with, and periodic reports on compliance with the Plan must be provided to, the Board, senior management and/or government agencies; and 4. provide for such other management steps and mechanisms the Committee considers necessary and appropriate. In addition to the Committee, the System Office Vice Presidents of System Responsibility and Risk & Compliance may retain such independent advisors or experts as deemed necessary to assist in making its determinations and decisions. If the Committee determines that the contemplated transaction, relationship, arrangement or activity cannot proceed due to a Conflict of Interest, the Committee shall inform the applicable Covered Person or decision-making body of such determination within one week of the Committee meeting at which the contemplated transaction was discussed. The Committee shall document its rejection of the contemplated transaction in the Committee's meeting minutes. WHISTLEBLOWER POLICY FORM 990, PART VI, LINE 13 Provisions within the Corporate Compliance Program and Conflict of Interest Policy provide protections for whistleblower type activities. COMPENSATION PROCESS FORM 990, PART VI, LINE 15 The Compensation Committee ("Committee") is comprised of independent members of the Board of Directors. The Committee develops a compensation philosophy for the System and all affiliates. The Committee selects and hires the independent compensation consultant to develop comparability data and advise the Committee during its deliberations regarding all elements of total compensation for all disqualified individuals. Integrated Healthcare Strategies ("IHS"), the consultants utilized by the Committee, use data from multiple tax-exempt peer group sources to determine salary ranges, incentive opportunity ranges, and benefits for the disqualified individuals. IHS then assists the Committee in preparing contemporaneous documentation of all actions. Each Committee meeting is conducted with the intent to create a rebuttable presumption of reasonableness for all elements of executive total compensation for the disqualified individuals. The Chairman makes this declaration and also inquires if there are any conflicts of interest by any attendees. Any conflicts are disclosed and the Committee then acts in a manner to avoid any conflicted individual participating in any manner where a conflict might exist. At the end of the meeting, the Committee prepares contemporaneous minutes that record all actions taken during the meeting. DISCLOSURE: DOCUMENTS AVAILABLE TO THE PUBLIC FORM 990, PART VI, LINE 19 BOARD-APPROVED FINANCIAL STATEMENTS ARE MADE AVAILABLE TO THE PUBLIC UPON REQUEST. THE GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE GENERAL PUBLIC AT THIS TIME. COMPENSATION ARRANGEMENT FORM 990, PART VII, SECTION A HOSPITAL SISTERS HEALTH SYSTEM EMPLOYS THE MANAGEMENT/OFFICERS OF THE VARIOUS ENTITIES WHICH ARE CENTRALLY SUPPORTED FOR THE BENEFIT OF THE THIRTEEN HOSPITALS IT SPONSORS. POOLED INVESTMENT ACCOUNT FORM 990, PART X, LINE 11 HOSPITAL SISTERS HEALTH SYSTEM CASH RESERVES ARE INVESTED IN A POOLED INVESTMENT ACCOUNT. PARTICIPATION IN THE POOLED FUND IS LIMITED TO THE 501(C)(3) HOSPITALS AND RELATED HEALTH SERVICES ORGANIZATIONS SPONSORED BY HSHS. THE POOLED ACCOUNT CONSISTS OF CASH, AND EQUITY AND DEBT SECURITIES that are publicly traded. IN ACCORDANCE WITH THE PROVISIONS OF SFAS NO. 124 "ACCOUNTING FOR CERTAIN INVESTMENTS HELD BY NOT-FOR-PROFIT ORGANIZATIONS," INVESTMENTS IN EQUITY SECURITIES WITH READILY DETERMINABLE VALUES, AND ALL INVESTMENTS IN DEBT SECURITIES, ARE REPORTED AT FAIR VALUE ON THE BALANCE SHEET. INCOME, REALIZED AND UNREALIZED GAINS AND LOSSES ARE NOT IDENTIFIED TO THE PARTICIPANTS. Other Change in Net Assets Form 990, Part XI, Line 9 Transfer from Affiliate 28,737,653 Change in Pension fund status 4,642,660 Contributions on Foundation's 990 (705,309) Investment Income on Foundation's 990 753,905 Equity in Earnings of Kiara (15,087,323) ------------ TOTAL OTHER CHANGE IN NET ASSETS 18,341,586 ============ AFFILIATED SYSTEM DISCLOSURE Hospital Sisters Health System (HSHS) is a health care ministry that includes 13 hospitals, scores of community-based health centers and clinics, and hundreds of physician partners across Illinois and Wisconsin. The Mission of HSHS is "to reveal and embody Christ's healing love for all people through our high quality Franciscan health care ministry." We live our Mission by providing holistic healing to all who seek our care, as well as through Community Benefit. Working collaboratively with others in the communities we serve, our Community Benefit initiatives are strategically and successfully expanding access to care, improving the health status of residents, and furthering medical education and knowledge. In FY2013, our 13 hospitals responded to needs identified in each of their Community Health Needs Assessments (CHNAs) completed in FY2012. The information gathered from these assessments was used to develop new and enhance existing Community Benefit programs and services that best addressed community needs. Included among the many priority needs identified in our CHNAs were chronic disease prevention and management, obesity, adequate food and nutrition, mental health, and access to health care services. HSHS hospitals are proactively addressing these and other needs through patient, provider and community education, preventative screenings, self-management classes, and new or enhanced clinical services. Across HSHS, we collectively provided $185.6 million in Community Benefit (or 10.2% of total hospital expenses) in FY2013. Included in this amount was $45.9 million provided for Financial Assistance (i.e. Charity Care) and $104.2 million for unreimbursed care provided under the Medicaid program. In addition, HSHS hospitals committed significant resources to care for Medicare patients. The cost of providing services to primarily elderly beneficiaries of the Medicare program - in excess of governmental and managed care contract payments - was $152.3 million. HSHS hospitals also recorded $107.1 million in uncollectible accounts. In addition to the dollars invested in our Community Benefit programs, HSHS also continues to reinvest any surplus revenue from operations and investments into new medical technology, facility infrastructure and health care services in our communities. By doing So, we ensure we are able to meet the ongoing demand for high quality, efficient and easily accessible health care. Recognizing that the health care delivery model in the United States is evolving, HSHS remains focused on implementing our Care Integration strategy. Care Integration coordinates the delivery of care around the needs of each patient. During FY2013, we made significant progress with this strategy as we further implemented interoperable health information technologies, expanded the number of Medical Homes, and strengthened our alignment with physicians. Greater access to care As a Franciscan health care ministry, HSHS is deeply committed to serving those who are most in need. We not only provide care to every patient who walks through our doors, but also reach out beyond the walls of our hospitals and clinics to care for those in our communities. Our efforts to ensure residents in the communities we serve receive the right care at the right time in the right setting often involve partnering with others to achieve this goal. Across our two-state System, there are numerous examples of HSHS collaborating with other organizations to enhance access to care for those in need. From 2006 to 2009, the United States saw a 16% increase in individuals seeking dental care at hospital emergency rooms. With the support of St. Mary's Hospital Medical Center and St. Vincent Hospital in Green Bay, Wisconsin, the NEW Dental Clinic on the campus of Northeast Wisconsin Technical College expanded in FY2013 and was able to accommodate up to 6,000 visits. The clinic provides dental services to low-income and uninsured persons including the homeless in Brown County. St. Francis Hospital in Litchfield, Illinois partnered with Lewis & Clark Community College to bring their mobile health unit to the Litchfield area; the unit provides dental exams and screenings, x-rays and dental hygiene to those in need. In western Wisconsin, St. Joseph's Hospital in Chippewa Falls works closely with the Chippewa Health Improvement Partnership (CHIP) to support the Open Door Clinic. The free medical clinic provides health care for those without insurance coverage. This past year, the clinic received a total of 2,672 patient visits, an 11% increase from the prior year. With more than 166 individuals volunteering, the clinic provided more than 6,751 hours (including 753 provider hours and 675 nursing hours) of service to individuals. The Open Door Clinic is an example of HSHS providing leadership and support to a community-based program designed to meet the needs of those less fortunate. In southeast Illinois, area residents can get help filling a prescription through the long-term collaboration between St. Anthony's Memorial Hospital in Effingham and Catholic Charities. Last year, St. Anthony's helped underwrite the cost of prescription medications for more than 280 residents. In southwest Illinois, St. Joseph's Hospital in Highland enhanced their offerings to their senior population based on their CHNA. "Senior Renewal" is an outpatient counseling program for senior adults who may be facing emotional and physical problems unique to the aging process such as feelings of loneliness, isolation and anxiety. Clients receive an intensive level of treatment without inpatient hospitalization through counseling strategies and education. In addition, in collaboration with the Illinois Department of Insurance, St. Joseph's Hospital participates in the Senior Health Insurance Program (SHIP), a free health insurance counseling service for Medicare beneficiaries and their caregivers. In addition to programs such as these, HSHS makes sure that those who need financial assistance for care receive it. Our Financial Assistance (i.e. Charity Care) program covers 100% of hospital charges for individuals and families who earn less than 200% of the federal poverty level. HSHS Financial Assistance programs have a sliding scale, in some instances providing up to a 60% discount on charges for those earning up to 600% of the federal poverty level. Counselors are available in our hospitals to explain our financial assistance policies to patients, provide them with assistance in filling out a simple application form, or help them enroll in publicly funded health care programs. Better community health As part of our Mission to embody Christ's healing love, we understand that we have a responsibility to improve the overall quality of life in our communities by supporting initiatives that promote health and wellness. We recognize we are most successful when we work together with a wide array of public and private organizations that share our commitment to improving lives. By doing so, we maximize our efforts and reduce the duplication of services. HSHS hospitals also understand we need to listen closely to the residents of the communities we serve to ensure the health care needs of all are being met. To that end, each of our 13 hospitals completed Community Health Needs Assessments (CHNA) during FY2012. The information gathered from these assessments is being used to help us develop new, and enhance existing, programs and services that best address the needs of the community. Among the many priority needs identified from the CHNAs include metabolic and cardiovascular disease management, adequate food and nutrition, and mental health. HSHS hospitals are addressing these and other needs by proactively offering educational opportunities, preventative screenings, and new or enhanced clinical services. In partnership with the Sangamon County Health Department (SCHD) and local farmers, St. John's Hospital in Springfield, Illinois took a lead role in bringing a Farmers Market to the east side of Springfield. The East Side Farmers Market addresses three community needs: childhood obesity, childhood poverty (26% of children in Sangamon County live in poverty vs. 18% in the state) and providing fresh produce to persons living in a known "food desert." WIC Cooking Classes are also offered in tandem with the East Side Farmers Market to teach participants how to prepare fresh produce. The Farmers Market and cooking classes are hosted at the SCHD. St. Mary's Hospital in Streator, Illinois teamed up with the Streator YMCA to offer a 12 week weight loss program - Healthy You - to motivate 282 participants (nearly double the participants from last year) to lose weight and maintain a healthy lifestyle. The program included aerobics classes, cooking classes, and a maintenance program to encourage participants to weigh in monthly. A total of 191 participants completed the program, losing a total of 2,491 pounds. The Decatur Health Coalition unites St. Mary's Hospital in Decatur, Illinois, the American Lung Association, Community Health Improvement Center, Decatur Memorial Hospital, Decatur Community Partnership, Heritage Behavioral Health and Macon County Health Department as partners in community outreach and education for people living with COPD. Breathing issues are prevalent in the Decatur area due to the concentration of manufacturing and poor air quality. St. Mary's Hospital has researched and compiled admissions data related to COPD and has increased patient, provider and community education to better coordinate care across the continuum for better patient outcomes. This model for COPD core competencies has been shared as a best practice at the national level to benefit other communities. According to the National Assessment of Adult Literacy, only 12% of adults have "proficient" health literacy, i.e. nine out of 10 adults lack the skills needed to manage their health. Health literacy was identified in the CHNA completed by St. Nicholas Hospital in Sheboygan and the Department of Public Health in FY2012. To begin addressing this need, St. Nicholas Hospital sponsored a symposium for health care providers and social services organizations and a community-wide CME for all Sheboygan physicians as well as staff training as first steps in addressing the health literacy needs of the Sheboygan community. Sacred Heart Hospital in Eau Claire, Wisconsin addressed the need for mental and behavioral health services through The Healing Place. Free grief and holistic support services such as one on one counseling, workshops and presentations are provided for individuals and families dealing with loss and major life transitions due to military service, illness, death, divorce, etc. Expanded medical knowledge HSHS works to advance medical knowledge by supporting research initiatives and educational opportunities. In Fiscal Year 2013, HSHS hospitals and affiliated physician groups contributed more than $15.6 million toward research and education. Highlights of this commitment include subsidizing medical school residency programs, offering ongoing medical education to physicians and clinicians, and providing job shadowing programs for high school students. Another example of this commitment includes St. John's College of Nursing in Springfield, Illinois, which offers the last two years of the baccalaureate degree in nursing, as well as continuing education programs for nurses and health professionals. St. John's College has been cited as the oldest Catholic hospital-based school of nursing in the United States. Founded in 1886, the College has remained dedicated throughout its rich history to the education of professional nurses whose practice exemplifies excellence in an integrated health care system. St. Elizabeth's Hospital in Belleville, Illinois provided 83,000 hours of clinical education in nursing, radiology, surgery, respiratory, dietary, physical and occupational therapy, pharmacy and behavioral health to 1,100 students in area undergraduate, graduate and internship programs and 10,206 hours of mentoring. In addition, to address a shortage of Primary Care Family Practice doctors in St. Clair County, St. Elizabeth's subsidized the St. Louis University Family Medicine Residency Program, a unique merger of a community setting, an academic center and a military-based residency. Clinical education sites included St. Elizabeth's, Cardinal Glennon Children's Hospital, area physicians' offices and Scott Air Force Base outpatient clinics. Also in southern Illinois, St. Joseph's Hospital in Breese, hosted members of the Health Occupations Students of America onsite to learn about job opportunities in health care from health care professionals; St. Joseph's Hospital was recently recognized by the Illinois Principals Association - Kaskaskia region for sponsoring the program for more than 30 years. St. Joseph's also provides clinical experience for Kaskaskia College students enrolled in the nursing, physical therapy and radiology programs. Pharmacy students have also completed their clinical training at St. Joseph's Hospital. Higher level of care HSHS's Community Benefit initiatives are a vital part of our overall Mission. We believe that through our work to create greater access to care, better community health, and expanded medical knowledge, we made a positive difference in the lives of tens of thousands of people during Fiscal Year 2013. Hospital Sisters Health System's commitment to Community Benefit stems from the Franciscan and Catholic values shared by our 14,000 colleagues across Wisconsin and Illinois. Catholic health care is committed to promoting and defending human dignity, caring for persons living in poverty and other vulnerable populations, and promoting the common good. We remain dedicated to continuously improve community health through our strategic, well-defined Community Benefit initiatives so that we can help more people live healthier lives. 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FOR ALL ORGANIZATIONS REPORTED AS 512(B)(13) CONTROLLED IN SCHEDULE R, PART II, PLEASE SEE SCHEDULE A, PART IV FOR THE ONLY TRANSACTIONS BETWEEN THESE ORGANIZATIONS. HOSPITAL SISTERS HEALTH SYSTEM (HSHS) CHARGES A MANAGEMENT FEE TO THE RELATED ORGANIZATIONS FOR SERVICES RENDERED IN FULFILLING THE MISSION OF HSHS.