2013-05-05T19:00:26-05:00 2012-06-30 CROWE HORWATH LLP 70 West Madison Street Suite 700 Chicago IL 606024903 990 2011-07-01 381297435 SPECTRUM HEALTH KELSEY SPEC 6167747322 615 S Bower Greenville MI 488382628 RYAN K JOHNSON 2013-04-23 true Geralyn R Hurd P00933422 3128997000 2011 2016-02-25 16:41:14Z CHRISTINA FREESE-DECKER 615 S Bower Greenville MI 488382628 16969746 false X HTTP://WWW.SPECTRUMHEALTH.ORG/KELSEY X 1945 MI TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. 11 9 173 4 0 0 17812 121676 14915959 16824168 -25172 -329 38360 23404 14946959 16968919 0 0 0 0 7524985 8930627 0 0 0 7306262 7639098 14831247 16569725 115712 399194 4041984 5140109 1143182 1786218 2898802 3353891 TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. false false 15535107 0 16846745 SPECTRUM HEALTH KELSEY (SHK) HOSPITAL IS A FEDERALLY DESIGNATED CRITICAL ACCESS HOSPITAL IN LAKEVIEW, MICHIGAN, WITH 16 ACUTE-CARE BEDS AND 31 SKILLED-NURSING-FACILITY BEDS. SHK IS A REGIONAL HEALTH CENTER FOR PRIMARY AND SECONDARY CARE. SERVICES INCLUDE AROUND-THE-CLOCK EMERGENCY CARE, INPATIENT ACUTE CARE, OUTPATIENT SURGICAL CARE, OUTPATIENT PHYSICAL MEDICINE AND REHABILITATION. IN FISCAL YEAR 2012 THERE WERE 235 INPATIENT ADMISSIONS, 756 INPATIENT DAYS, 101 REHAB & NURSING CENTER ADMISSIONS, 10,007 REHAB & NURSING CENTER PATIENT DAYS, AND 8,854 EMERGENCY ROOM VISITS. SPECTRUM HEALTH KELSEY HOSPITAL IS ACCREDITED BY THE JOINT COMMISSION. 15535107 true true false false false false false false false true false false true true false false true false false false false false false false false true true false false true false false false false false false false false false false false false false true false false false false true 0 0 173 true false false false false false false false false false false X 11 9 false false true false true true true true true false false true true true true true true true true false X Ryan K Johnson 6162256310 615 S Bower Greenville MI 488382628 X CHRISTINA FREESE-DECKER 2.00 X X 0 296269 98716 DAVID MACK 2.00 X X 0 0 0 LINDA BLANCHARD 2.00 X X 0 0 0 WILLIAM HAM 2.00 X X 0 0 0 BENNETT WALSTATTER 2.00 X 0 303967 35636 DAVID DULL 2.00 X 0 478825 136520 DOMENICO AUSIELLO MD 2.00 X 0 0 0 FRANZ MOGDIS 2.00 X 0 0 0 GREGORY PAGE MD PHD 2.00 X 0 165978 23440 KEVIN O'CONNOR 2.00 X 0 0 0 MARC CHIRCOP 2.00 X 0 496257 185237 PETER HAINES 2.00 X 0 0 0 STEVE BOWSER 2.00 X 0 0 0 TAD CHARLES SIMON 2.00 X 0 0 0 DAVID OEHRING 2.00 X 0 169089 30309 RYAN JOHNSON 2.00 X 0 120560 25520 BRIAN BRASSER 2.00 X 0 165875 23011 PRISCILLA MAHAR 2.00 X 0 159321 25804 VICKI JENSEN 2.00 X 0 151829 24802 LORY READ 50.00 X 185837 0 25010 MICHAEL BORGELD 50.00 X 207808 0 20653 PHILIP SCHUMACHER 50.00 X 224338 0 20713 STEVEN FAHLEN 50.00 X 267126 0 32579 TODD PRYOR 50.00 X 274236 0 18316 MARY ANNE JONES 0.00 X 0 183112 27716 PAUL BONIS 0.00 X 0 372913 114178 1159344 3063996 868162 6 true true false INCREMEDICAL LLC 8259 WICKER AVE ST JOHN IN 46373 REHAB SERVICES 391860 HAR CONSULTING 975 SPAULDING AVE SE ADA MI 49301 CONSULTING 106141 2 121676 121676 PATIENT SERVICE REVENUE 622110 16726347 16726347 CAFETERIA 722212 29015 29015 OTHER HOSPITAL OPERATING INCOME 900099 68806 68806 0 0 0 0 16824168 498 498 0 0 23404 23404 0 23404 23404 827 0 -827 -827 -827 0 0 0 0 0 0 0 0 16968919 16817730 0 29513 0 0 0 0 0 0 7052763 6476926 575837 229785 211024 18761 1194771 1097222 97549 453308 416297 37011 0 1121 1121 0 0 0 0 825344 778177 47167 0 323202 303751 19451 7601 7601 0 690704 665245 25459 36168 32111 4057 0 32739 16210 16529 0 0 249679 212227 37452 127293 108199 19094 BAD DEBTS 1471428 1471428 MEDICAL SUPPLIES 886032 877745 8287 MEDICAID QUALITY ASSESSMENT TAX 464088 464088 SHARED SERVICES 2452479 2377956 74523 71220 18900 52320 0 16569725 15535107 1034618 0 0 1095 1095 203 395 170000 954059 1297314 67291 75169 11231 44216 7068071 5291882 1899429 1776189 0 0 0 42500 1108676 1733231 4041984 5140109 53082 59224 6556 60615 1083544 1666379 1143182 1786218 X 2655189 3054384 243613 299507 2898802 3353891 4041984 5140109 X 399194 55895 X X false true false X false X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 143308 143308 3916966 2867635 1049331 155895 78676 77219 2798124 2297825 500299 53778 47746 6032 1776189 FAS 136 ASSETS 299507 DUE FROM AFFILIATES 1433724 1733231 0 THIRD PARTY PAYABLE 1544370 DUE TO AFFILIATES 122009 1666379 FIN 48 (ASC 740) FOOTNOTE PART X, LINE 2 SPECTRUM HEALTH SYSTEM CONDUCTS AN ANALYSIS ANNUALLY TO DETERMINE THE ORGANIZATION'S LIABILITY WITH RESPECT TO UNCERTAIN TAX POSITIONS. FOR THE YEAR ENDED JUNE 30, 2012 IT WAS DETERMINED THAT THERE WERE NO MATERIAL UNCERTAIN TAX POSITIONS TO DISCLOSE. AS SUCH, THERE WAS NO FOOTNOTE ADDED TO THE CONSOLIDATED AUDITED FINANCIAL STATEMENTS. true true X true X false true true true false true true 257081 257081 0.01700 3776040 3434637 341403 0.02260 0 0.00000 0 0 4033121 3434637 598484 0.03960 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0 0 0 0 0.00000 0 0 4033121 3434637 598484 0.03960 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0 0 0 0 0.00000 true 1471428 0 6541136 6864952 -323816 X true true 1 1 SPECTRUM HEALTH KELSEY HOSPITAL

419 WASHINGTON AVE LAKEVIEW MI 48850

X X X X 1 SPECTRUM HEALTH REHAB AND NURSING CENTER

418 WASHINGTON AVE LAKEVIEW MI 48850

NURSING HOME Eligibility criteria for free or discounted care Schedule H, Part I, Line 3c THE ORGANIZATION USES FPG TO DETERMINE ELIGIBILITY FOR FREE CARE. AN EVALUATION IS NOT USED FOR DISCOUNTED CARE, AS APPLICANTS THAT QUALIFY FOR ANY ASSISTANCE RECEIVE FREE CARE. Community benefit report prepared by related organization Schedule H, Part I, Line 6a SPECTRUM HEALTH RELATED ORGANIZATION INFORMATION SCHEDULE H, PART I, LINE 6A THE HEALTH SYSTEM PUBLISHES A CONSOLIDATED COMMUNITY BENEFIT REPORT ON ITS WEBSITE AT WWW.SPECTRUMHEALTH.ORG (CLICK THE LINK TITLED "ABOUT US"). IN ADDITION, THE HEALTH SYSTEM HOLDS AN ANNUAL MEETING TO THE PUBLIC TO DISCUSS ITS COMMUNITY COMMITMENTS. Costing Methodology used to calculate financial assistance Schedule H, Part I, Line 7 THE ORGANIZATION CALCULATES AN OVERALL COST-TO-CHARGE RATIO DERIVED BY USING THE IRS WORKSHEET 2 FORMAT, RATIO OF PATIENT CARE COST-TO-CHARGES. ALL PATIENT SEGMENTS AND PAYERS ARE USED IN THE CALCULATION. Bad Debt Expense excluded from financial assistance calculation Schedule H, Part I, Line 7, column(f) 1,471,428 Bad debt expense - financial statement footnote Schedule H, Part III, Line 4 CONSOLIDATED FINANCIAL STATEMENT FOOTNOTE EXTRACT RELATED TO UNCOLLECTIBLE ACCOUNTS: THE PROVISION FOR UNCOLLECTIBLE ACCOUNTS IS BASED UPON MANAGEMENT'S ASSESSMENT OF HISTORICAL AND EXPECTED NET COLLECTIONS CONSIDERING BUSINESS AND GENERAL ECONOMIC CONDITIONS IN ITS SERVICE AREA, TRENDS IN HEALTH CARE COVERAGE, AND OTHER COLLECTION INDICATORS. PERIODICALLY, MANAGEMENT ASSESSES THE ADEQUACY OF THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS BASED UPON ACCOUNTS RECEIVABLE, PAYOR COMPOSITION AND AGING, AND HISTORICAL WRITE-OFF EXPERIENCE BY PAYOR CATEGORY AND OTHER FACTORS. THE RESULTS OF THIS REVIEW ARE THEN USED TO MAKE ANY MODIFICATIONS TO THE PROVISION FOR UNCOLLECTED ACCOUNTS TO ESTABLISH AN APPROPRIATE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS. AFTER AMOUNTS DUE FROM THIRD-PARTY PAYORS ARE SATISFIED, AND REASONABLE EFFORTS TO COLLECT FROM THE PATIENT HAVE BEEN EXHAUSTED, THE SYSTEM FOLLOWS ESTABLISHED GUIDELINES FOR PLACING CERTAIN PAST-DUE PATIENT BALANCES WITH EXTERNAL COLLECTION AGENCIES. COSTING METHODOLOGY USED IN DETERMINING THE FIGURES REPORTED IN SCHEDULE H, PART III, SECTION A: ALL CHARGES ARE REPORTED AT GROSS, WHICH IS CONSISTENT WITH THE REPORTING METHODOLOGY USED IN THE ORGANIZATION'S FINANCIAL STATEMENTS. RATIONALE FOR INCLUDING BAD DEBTS (AT GROSS CHARGES) IN SCHEDULE H, PART III, LINE 2: BAD DEBTS REPRESENT AN UNREIMBURSED LIABILITY TO THE ORGANIZATION AND FURTHER DEMONSTRATE HOW, BY ASSUMING THOSE COSTS, THE ORGANIZATION PROVIDES AND FULFILLS A HEALTH NEED IN THE COMMUNITY. IN ADDITION, EMERGENCY CARE IS PROVIDED TO PATIENTS REGARDLESS OF THEIR ABILITY TO PAY FOR SERVICES. SOME SERVICES ARE PROVIDED TO INDIVIDUALS WHO QUALIFY FOR FINANCIAL ASSISTANCE BUT, FOR PERSONAL OR OTHER PRIVATE REASONS, DON'T APPLY FOR FINANCIAL ASSISTANCE. USING THIS INFORMATIONAL TAX RETURN FOR ITS INTENDED PURPOSE, THE ORGANIZATION CHOOSES TO BE FULLY TRANSPARENT AND SHARE ALL OF THE COSTS OF PROVIDING CHARITY CARE AND COMMUNITY BENEFITS TO THE COMMUNITIES WE SERVE, WHICH INCLUDES CHARITY CARE, THE COSTS OF FREE OR SUBSIDIZED COMMUNITY PROGRAMS, BAD DEBT EXPENSES AND SHORTFALLS IN GOVERNMENT REIMBURSEMENTS (MEDICARE AND MEDICAID). RATIONALE FOR REPORTING ZERO ON SCHEDULE H, PART III, LINE 3 (OR RATIONALE FOR EXCLUDING A PORTION OF BAD DEBT AMOUNTS AS COMMUNITY BENEFIT): THE ORGANIZATION HAS NOT IDENTIFIED THE AMOUNT OF BAD DEBT EXPENSE ATTRIBUTABLE TO PATIENTS ELIGIBLE FOR FREE OR DISCOUNTED SERVICES UNDER THE FINANCIAL ASSISTANCE POLICY. ALTHOUGH A PORTION OF BAD DEBT EXPENSES RELATES TO PATIENTS WHO WOULD QUALIFY FOR CHARITY CARE (HAD THEY PROVIDED INFORMATION TO DETERMINE ELIGIBILITY FOR FINANCIAL ASSISTANCE), A REPORTABLE FIGURE CANNOT BE REASONABLY ESTIMATED. THE ORGANIZATION IS IN THE PROCESS OF IMPLEMENTING A "PROPENSITY TO PAY" EVALUATION TOOL TO PROACTIVELY ASSESS PAYMENT RISK AND USE PREDICTIVE ANALYSIS TO DETERMINE A PATIENT'S LIKELIHOOD TO PAY MEDICAL BILLS. WITH THIS INFORMATION, THE ORGANIZATION WILL BE ABLE TO INITIATE MORE PRODUCTIVE FINANCIAL COUNSELING DISCUSSIONS WHICH WILL ULTIMATELY RESULT IN THE REDUCTION OF PATIENT BAD DEBT. Community benefit & methodology for determining medicare costs Schedule H, Part III, Line 8 THE METHODOLOGY DESCRIBED IN THE INSTRUCTIONS TO SCHEDULE H, PART III, SECTION B, LINE 6 DOES NOT TAKE INTO ACCOUNT ALL COSTS INCURRED BY THE HOSPITAL AND DOES NOT REPRESENT THE TOTAL COMMUNITY BENEFIT CONFERRED IN THIS AREA. REASONS WHY MEDICARE SHORTFALL SHOULD BE TREATED AS COMMUNITY BENEFIT ARE: (1) ABSENT THE MEDICARE PROGRAM, IT IS LIKELY MANY OF THE INDIVIDUALS WOULD QUALIFY FOR CHARITY CARE OR OTHER NEEDS-BASED GOVERNMENT PROGRAMS; (2) BY ACCEPTING PAYMENT BELOW COST TO TREAT THESE INDIVIDUALS, THE BURDENS OF GOVERNMENT ARE RELIEVED WITH RESPECT TO THESE INDIVIDUALS; (3) THERE IS A SIGNIFICANT POSSIBILITY THAT CONTINUED REDUCTION IN REIMBURSEMENT MAY ACTUALLY CREATE DIFFICULTIES IN ACCESS FOR THESE INDIVIDUALS; AND (4) THE AMOUNT SPENT TO COVER THE MEDICARE SHORTFALL IS MONEY NOT AVAILABLE TO COVER CHARITY CARE AND OTHER COMMUNITY BENEFIT NEEDS. IN DETERMINING MEDICARE SHORTFALLS THE ORGANIZATION USES A RATIO OF COST TO CHARGES. IN DETERMINING THE RATIO OF COST TO CHARGES THE ORGANIZATION ADJUSTS FOR BAD DEBT EXPENSES, NON-PATIENT CARE ACTIVITIES, MEDICAID PROVIDER TAXES AND COMMUNITY BENEFITS ACCOUNTED FOR, AND OR REPORTED, ELSEWHERE. THE RATIO OF COST TO CHARGES IS APPLIED TO MEDICARE CHARGES TO DETERMINE SHORTFALLS IN MEDICARE REIMBURSEMENTS. Collection practices for patients eligible for financial assistance Schedule H, Part III, Line 9b THE ORGANIZATION'S COLLECTION POLICY THAT APPLIES TO THE LARGEST NUMBER OF ITS PATIENTS DURING THE TAX YEAR CONTAINS PROVISIONS TO ENSURE COLLECTION ACTIVITY OCCURS ONLY FOR THOSE WHO ARE UNWILLING TO PAY, OPPOSED TO THOSE NOT ABLE. PATIENTS EXPRESSING OR IDENTIFIED AS HAVING INABILITY TO PAY ARE ASSESSED FOR ASSISTANCE. Used FPG to determine eligibility for providing discounted care criteria Schedule H, Part V Section B, Line 10 (1) SPECTRUM HEALTH KELSEY HOSPITAL - THE ORGANIZATION USES FPG TO DETERMINE ELIGIBILITY FOR FREE CARE. AN EVALUATION IS NOT USED FOR DISCOUNTED CARE, AS APPLICANTS THAT QUALIFY FOR ANY ASSISTANCE RECEIVE FREE CARE.; Other factors included in calculating amounts charges to patients Schedule H, Part V Section B, Line 11h (1) SPECTRUM HEALTH KELSEY HOSPITAL - THE ORGANIZATION DOES NOT CHARGE ANY AMOUNT TO PATIENTS WHO QUALIFY FOR ASSISTANCE.; Other ways hospital publicized Financial Assistance Policy Schedule H, Part V Section B, Line 13g (1) SPECTRUM HEALTH KELSEY HOSPITAL - THE ORGANIZATION PUBLICIZES THE FINANCIAL ASSISTANCE POLICY BY COMMUNICATING ITS AVAILABILITY VIA A PATIENT HANDBOOK, SIGNAGE, INFORMATIONAL BROCHURES, COMMUNITY PUBLICATIONS, AND VIA WORD OF MOUTH BY FINANCIAL COUNSELORS ASSISTING PATIENTS. ALTHOUGH THE POLICY ITSELF IS NOT PUBLICLY POSTED IN WAITING ROOMS OR ATTACHED TO BILLS, THERE IS REFERENCE THAT IT IS AVAILABLE. THE ORGANIZATION IS REVIEWING ITS POLICIES COMPARED TO THE REQUIREMENTS OF THE 501(R) PROPOSED REGULATIONS THAT WERE PUBLISHED ON JUNE 22, 2012.; Means used to determine amounts billed Schedule H, Part V Section B, Line 19d (1) SPECTRUM HEALTH KELSEY HOSPITAL - THE ORGANIZATION DOES NOT CHARGE ANY AMOUNT TO PATIENTS WHO QUALIFY FOR ASSISTANCE.; Needs assessment. Schedule H, Part VI, Line 2 THE MONTCALM COUNTY COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA) IS A SYSTEMATIC PROCESS FOR INVOLVING COMMUNITY PARTNERS IN EXAMINING INDICATORS OF HEALTH IN THE POPULATION, GATHERING INPUT FROM COMMUNITY MEMBERS IDENTIFYING STRATEGIC ISSUES, AND IDENTIFYING STRATEGIC PRIORITIES THAT, IF ADDRESSED, WOULD IMPROVE THE HEALTH OF MONTCALM COUNTY RESIDENTS. THE OVERALL OBJECTIVE OF THIS CHNA IS TO IDENTIFY KEY HEALTH AND HEALTH SERVICE ISSUES IN MONTCALM COUNTY. THE RESULTS WILL BE USED TO ASSIST IN PLANNING, IMPLEMENTATION OF PROGRAMS AND SERVICES, EVALUATING RESULTS, ALLOCATION OF RESOURCES, AND ACHIEVING IMPROVED HEALTH OUTCOMES, SPECIFICALLY RELATED TO IDENTIFIED NEEDS. MORE SPECIFICALLY, OBJECTIVES INCLUDE: * GAUGE THE OVERALL HEALTH CLIMATE OR LANDSCAPE IN MONTCALM COUNTY * DETERMINE POSITIVE AND NEGATIVE HEALTH INDICATORS * IDENTIFY RISK BEHAVIORS * ESTABLISH EXISTING CLINICAL PREVENTIVE PRACTICES * MEASURE THE PREVALENCE OF CHRONIC CONDITIONS * DETERMINE DEGREE/LEVEL OF HEALTH CARE ACCESS * ASCERTAIN BARRIERS AND OBSTACLES TO HEALTH CARE * UNCOVER GAPS IN HEALTH CARE SERVICES OR PROGRAMS * IDENTIFY HEALTH DISPARITIES Patient education of eligibility for assistance. Schedule H, Part VI, Line 3 THE ORGANIZATION INFORMS AND EDUCATES PATIENTS AND PERSONS WHO MAY BE BILLED FOR PATIENT CARE ABOUT THEIR ELIGIBILITY FOR ASSISTANCE UNDER FEDERAL, STATE, OR LOCAL GOVERNMENT PROGRAMS OR UNDER THE ORGANIZATION'S FINANCIAL ASSISTANCE POLICY THROUGH PRODUCING INFORMATION CARDS FOR THE UNINSURED, COMMUNITY OUTREACH PROGRAMS, CONSUMER INFORMATION CLASSES, ORGANIZATION WEBSITE, PERSONAL FINANCIAL COUNSELING, AND BY PROVIDING ASSISTANCE IN THE ACTUAL ENROLLMENT OF SUCH PROGRAMS. THE ORGANIZATION HAS A DEPARTMENT OF FINANCIAL COUNSELORS WHO WORK WITH PATIENTS THAT EXPRESS ANY LEVEL OF CONCERN WITH PAYING THEIR BILL. IN ADDITION, THE ORGANIZATION ALSO PROACTIVELY IDENTIFIES PATIENTS WHO HAVE QUALIFYING FACTORS FOR GOVERNMENTAL ASSISTANCE AND PARTNERS WITH ORGANIZATIONS THAT SPECIALIZE IN THE QUALIFICATION PROCESS. IF THE NEED FOR ASSISTANCE IS NOT IDENTIFIED PRIOR TO BILLING, PATIENT CONCERNS THAT ARE RECEIVED AS A RESULT OF RECEIVING A BILL ARE ADDRESSED BY FINANCIAL COUNSELORS AT THAT TIME. THE ORGANIZATION WIDELY PUBLICIZES COMMUNICATIONS TO PATIENTS AND THE PUBLIC ON THE AVAILABILITY OF FINANCIAL ASSISTANCE. THIS IS ACHIEVED THROUGH VARIOUS METHODS INCLUDING, BUT NOT LIMITED TO, VIA THE SPECTRUM HEALTH PATIENT HANDBOOK, VARIOUS INFORMATIONAL BROCHURES, SIGNAGE IN EACH HOSPITAL DEPARTMENT, ADMISSIONS OFFICES AND OTHER PUBLIC LOCATIONS, UPON REQUEST BY ANY PATIENT, GUARANTOR OR COMMUNITY MEMBER, WORD OF MOUTH VIA FINANCIAL COUNSELORS AND OTHERS, AND THROUGH COMMUNITY PUBLICATIONS AND OUTREACH EVENTS. IN ADDITION, THE ORGANIZATION LISTS OPTIONS FOR THE UNINSURED AND UNDERINSURED ON THEIR WEBSITE, ALONG WITH A COPY OF THE FINANCIAL ASSISTANCE ELIGIBILITY POLICY (SEARCH "FINANCIAL ASSISTANCE" AT WWW.SPECTRUMHEALTH.ORG). Community information. Schedule H, Part VI, Line 4 THE TAXPAYER IS A CRITICAL ACCESS FACILITY THAT SERVES THE MEDICAL NEEDS OF THE RESIDENTS OF LAKEVIEW, MI AND THE FAR-NORTHERN PORTION OF A PRIMARY SERVICE AREA SHARED WITH UNITED MEMORIAL HOSPITAL, A RELATED ORGANIZATION. THE PRIMARY SERVICE AREA IS COMPRISED OF 19 ZIP CODES SURROUNDING LAKEVIEW, WHERE KELSEY HOSPITAL IS LOCATED, AND INCLUDES MONTCALM AND PORTIONS OF ADJACENT COUNTIES THAT SUPPORTS A POPULATION OF OVER 100,000 RESIDENTS. Promotion of community health Schedule H, Part VI, Line 5 SPECTRUM HEALTH KELSEY'S BOARD OF DIRECTORS IS COMPOSED OF MEMBERS OF WHICH SUBSTANTIALLY ALL ARE INDEPENDENT COMMUNITY MEMBERS. A MAJORITY OF THE BOARD RESIDES IN SPECTRUM HEALTH KELSEY'S PRIMARY SERVICE AREA. SPECTRUM HEALTH KELSEY ALSO EXTENDS MEDICAL STAFF PRIVILEGES TO ALL QUALIFIED PHYSICIANS IN THE COMMUNITY. PEOPLE THROUGHOUT THE COMMUNITY CAN COUNT ON SPECTRUM HEALTH KELSEY TO BE STANDING BY WITH EMERGENCY CARE 24 HOURS A DAY, 365 DAYS A YEAR. THE EMERGENCY DEPARTMENT IS STAFFED WITH BOARD-CERTIFIED EMERGENCY CARE PHYSICIANS AND A NURSING STAFF THAT IS TRAINED AND EXPERIENCED IN EMERGENCY CARE. FURTHERMORE, NO PATIENT IS DENIED TREATMENT, REGARDLESS OF THEIR ABILITY TO PAY. Affiliated health care system Schedule H, Part VI, Line 6 SPECTRUM HEALTH IS AN INTEGRATED NOT-FOR-PROFIT HEALTH SYSTEM IN WEST MICHIGAN OFFERING A FULL CONTINUUM OF CARE THROUGH THE SPECTRUM HEALTH HOSPITAL GROUP, WHICH IS COMPRISED OF NINE HOSPITALS INCLUDING HELEN DEVOS CHILDREN'S HOSPITAL, A STATE OF THE ART CHILDREN'S HOSPITAL THAT OPENED IN JANUARY 2011, AND 183 SERVICE SITES; THE SPECTRUM HEALTH MEDICAL GROUP AND WEST MICHIGAN HEART, PHYSICIAN GROUPS TOTALING MORE THAN 700 PROVIDERS; AND PRIORITY HEALTH, A HEALTH PLAN WITH 600,000 MEMBERS. SPECTRUM HEALTH IS WEST MICHIGAN'S LARGEST EMPLOYER WITH 19,000 EMPLOYEES. THE ORGANIZATION PROVIDED $204 MILLION IN COMMUNITY BENEFIT DURING ITS 2012 FISCAL YEAR. SPECTRUM HEALTH KELSEY IS A MEMBER OF THE AFFILIATED GROUP OF ENTITIES WITHIN THE SPECTRUM HEALTH SYSTEM ("SPECTRUM HEALTH"). EACH MEMBER CREATES VALUE WITHIN ITS RESPECTIVE COMMUNITY AND IS RESPONSIBLE FOR THEIR ACTIONS AND THE IMPACT THESE ACTIONS HAVE. FROM ITS INCEPTION, SPECTRUM HEALTH HAS BEEN A FAITHFUL STEWARD OF ITS COMMUNITY ASSETS. AS A WEST MICHIGAN-BASED NOT-FOR-PROFIT HEALTH SYSTEM, THE ORGANIZATION INVESTS ITS NET EARNINGS TO IMPROVE PATIENT CARE, BUILD AND RENOVATE FACILITIES, PURCHASE NEW TECHNOLOGY, PROVIDE HEALTH EDUCATION AND FUND LOCAL COMMUNITY PROGRAMS. OVER THE YEARS, OUR MISSION HAS REMAINED THE SAME-TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. WE TAKE OUR MISSION SERIOUSLY. IT IS CENTRAL TO OUR STRATEGIC DISCUSSIONS AND GUIDES OUR INVESTMENTS AND THE ALLOCATION OF OUR RESOURCES. SPECTRUM HEALTH IS COMMITTED TO PROVIDING VALUE TO THE PEOPLE WE SERVE. "VALUE" MEANS ACCESS TO HIGH-QUALITY HEALTH CARE AT AFFORDABLE COSTS, AS WELL AS ACCESS TO THE FULL CONTINUUM OF HEALTH CARE SERVICES, FROM HEALTH INSURANCE TO OUTPATIENT CARE TO INPATIENT AND HOME CARE, AND EVERYTHING IN BETWEEN. SPECTRUM HEALTH HAS HUNDREDS OF PROGRAMS THAT SUPPORT ITS MISSION "TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE." THESE PROGRAMS ARE BROUGHT TOGETHER UNDER NINE KEY AREAS: HEALTHIER COMMUNITIES, EDUCATION, COMMUNITY ENGAGEMENT, RESEARCH, INNOVATION, EMPLOYEE ENGAGEMENT, SUSTAINABILITY, REGIONAL RELATIONSHIPS AND COMMUNITY BENEFIT. true true false false false false false false false BENNETT WALSTATTER 0 290566 0 5000 0 8402 0 9800 0 25836 0 339604 0 0 BRIAN BRASSER 0 139680 0 24528 0 1667 0 5852 0 17158 0 188886 0 0 CHRISTINA FREESE-DECKER 0 217429 0 76813 0 2027 0 57363 0 41354 0 394985 0 31125 DAVID DULL 0 346489 0 106463 0 25873 0 86165 0 50355 0 615345 0 39891 DAVID OEHRING 0 140961 0 25223 0 2905 0 10615 0 19694 0 199398 0 0 GREGORY PAGE MD PHD 0 100896 0 64247 0 835 0 7834 0 15606 0 189418 0 0 LORY READ 155746 0 28824 0 1266 0 7342 0 17668 0 210847 0 0 0 MARC CHIRCOP 0 377526 0 102560 0 16170 0 124745 0 60492 0 681494 0 0 MARY ANNE JONES 0 175712 0 0 0 7400 0 8964 0 18752 0 210828 0 0 MICHAEL BORGELD 174476 0 300 0 33031 0 1680 0 18972 0 228461 0 0 0 PAUL BONIS 0 264136 0 105006 0 3771 0 67313 0 46865 0 487092 0 26824 PHILIP SCHUMACHER 221328 0 150 0 2860 0 0 0 20713 0 245051 0 0 0 PRISCILLA MAHAR 0 132940 0 23651 0 2730 0 5658 0 20146 0 185126 0 0 STEVEN FAHLEN 262268 0 3175 0 1683 0 9800 0 22779 0 299704 0 0 0 TODD PRYOR 273679 0 150 0 407 0 0 0 18316 0 292552 0 0 0 VICKI JENSEN 0 126857 0 22611 0 2360 0 5407 0 19395 0 176630 0 0 Arrangement used to establish the top management official's compensation Schedule J, Part I, Line 3 THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS (THROUGH ITS EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF THE TOP MANAGEMENT OFFICIAL, OTHER OFFICERS, AND KEY EMPLOYEES AT SPECTRUM HEALTH KELSEY. LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED TO THE EXECUTIVE COMMITTEE IN ADVANCE OF MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND, FOR FY 2012 (7/1/11-6/30/12), WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS: * SULLIVAN, COTTER AND ASSOCIATES, INC.: 2011 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * INTEGRATED HEALTHCARE STRATEGIES: 2011 HEALTHCARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2011 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * TOWERS WATSON DATA SERVICES: 2011/2012 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT THESE SOURCES ARE CONSISTENT WITH THOSE USED IN LAST YEAR'S ANALYSIS. COMPENSATION ADJUSTMENTS ARE APPROVED BY EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE IS NATIONAL AND REFLECTS THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFITS DATA REFLECT NATIONAL HEALTHCARE MARKET PRACTICES. GEOGRAPHIC PAY DIFFERENTIAL AND COST OF LIVING DATA INDICATE CONSISTENCY WITH NATIONAL DATA. THIS PROCESS IS INTENDED TO ASSIST SPECTRUM HEALTH IN QUALIFYING FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS (INTERMEDIATE SANCTIONS REGULATIONS) AND COMPLYING WITH THE POTENTIAL SPECTRUM HEALTH EXCESS BENEFIT TRANSACTION POLICY FOR THOSE INDIVIDUALS IN THE GROUP WHO ARE DISQUALIFIED PERSONS. THE OPINION SUBMITTED FROM THE THIRD PARTY INDEPENDENT CONSULTING FIRM IS IN ACCORDANCE WITH THE PROVISIONS OF TREASURY REGULATIONS SECTION 53.4958-6(C)(2) AND IS ALSO INTENDED TO SATISFY THE PROFESSIONAL ADVICE REQUIREMENT OF TREASURY REGULATIONS SECTION 53.4958-1(D)(4)(III). Severance or change-of-control payment Schedule J, Part I, Line 4a $24,674 DAVID DULL Supplemental nonqualified retirement plan Schedule J, Part I, Line 4b $ 31,125 CHRISTINA FREESE-DECKER $ 39,891 DAVID DULL $ 26,824 PAUL BONIS THIS QUESTION IS ANSWERED "YES" BECAUSE CERTAIN INDIVIDUALS, WHOSE SALARY AND BENEFITS ARE PAID BY THE REPORTING ORGANIZATION OR A RELATED ORGANIZATION, DO "PARTICIPATE IN" A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN. SOME INDIVIDUALS RECEIVED DISTRIBUTIONS DURING THE YEAR (AS REPORTED ON THIS LINE) WHEREAS OTHERS PARTICIPATED IN THE PLAN BUT DID NOT RECEIVE DISTRIBUTIONS. DISTRIBUTIONS REPORTED ON THIS LINE ARE ALSO INCLUDED IN SCHEDULE J, PART II, COLUMN F AS COMPENSATION REPORTED IN A PRIOR YEAR. ENDOWMENT FUNDS FORM 990, PART IV, LINE 10 SPECTRUM HEALTH UNITED MEMORIAL FOUNDATION (38-2990574) HOLDS AN UNRESTRICTED, BOARD DESIGNATED ENDOWMENT TO BE USED FOR THE BENEFIT OF SPECTRUM HEALTH UNITED (38-1358412), SPECTRUM HEALTH KELSEY (38-1297435), AMBULATORY UNITED (38-3170488), AND UNITED LIFESTYLES (38-3589727). THE ENDOWMENT FUND IS PROPERLY REPORTED ON SCHEDULE D, PART V OF SPECTRUM HEALTH UNITED MEMORIAL FOUNDATIONS FORM 990. Significant changes to organizational documents Form 990, Part VI, Section A, Line 4 THE BYLAWS OF SPECTRUM HEALTH KELSEY WERE AMENDED TO ESTABLISH THE CREDENTIALING COMMITTEE, A STANDING COMMITTEE OF THE BOARD. THE CREDENTIALING COMMITTEE WAS ESTABLISHED TO CONSIDER AND ACT ON ALL REQUESTS FOR APPOINTMENT OR REAPPOINTMENT TO THE MEDICAL STAFF AND REQUESTS FOR CLINICAL PRIVILEDGES. THE AMENDED BYLAWS ALSO CLARIFIES THE DUTIES AND RESPONSIBILITIES OF THE CHAIRPERSON OF THE BOARD COMMITTEES. Classes of members or stockholders Form 990, Part VI, Section A, Line 6 THE ORGANIZATION HAS ONE MEMBER(S)/STOCKHOLDER(S) AS FOLLOWS: - SPECTRUM HEALTH UNITED (F/K/A UNITED MEMORIAL HOSPITAL ASSOCIATION) (EIN 38-1358412), A MICHIGAN NONPROFIT CORPORATION. Members or stockholders electing members of governing body Form 990, Part VI, Section A, Line 7a THE SOLE MEMBER(S) (SEE FORM 990, PART VI, LINE 6) OF THE ORGANIZATION APPOINTS ALL MEMBERS OF THE BOARD OF DIRECTORS. Decisions requiring approval by members or stockholders Form 990, Part VI, Section A, Line 7b UNLESS OTHERWISE NOTED BELOW, THE SOLE MEMBER(S) (SEE FORM 990, PART VI, LINE 6) OF THE ORGANIZATION HAS THE RESERVED POWERS SET FORTH BELOW, AND SHALL NOT BE DEEMED AUTHORIZED UNLESS AND UNTIL APPROVED BY THE SOLE MEMBER(S): -THE ADOPTION OF OR AMENDMENTS TO THE ARTICLES OF INCORPORATION AND/OR THE BYLAWS OF THE ORGANIZATION (THE "GOVERNING DOCUMENTS") OR ANY SUBSIDIARY OF THE ORGANIZATION; -THE ADOPTION OF OR AMENDMENT OF STRATEGIC PLANS, VISIONS, BUSINESS PLANS, JOINT VENTURES AND FACILITY MASTER PLANS; -THE ADOPTION OF OR AMENDMENT OF THE ANNUAL OPERATING AND CAPITAL BUDGETS; -APPROVAL OF CAPITAL EXPENDITURES PURSUANT TO GUIDELINES AS ADOPTED AND/OR REVISED BY UNITED FROM TIME TO TIME; -APPROVAL OF ALL BORROWING FOR CAPITAL OR OPERATING PURPOSES, ALL GUARANTEES OF INDEBTEDNESS, AND ALL MORTGAGES OF REAL ESTATE; -APPROVAL OF ALL PROJECTS REQUIRING A CERTIFICATE OF NEED UNDER MICHIGAN LAW; -APPROVAL OF THE SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF PROPERTY PURSUANT TO GUIDELINES AS ADOPTED AND/OR REVISED BY UNITED FROM TIME TO TIME; -APPROVAL OF THE SALE, TRANSFER OR SUBSTANTIAL CHANGE IN USE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE ORGANIZATION, OR THE DIVESTITURE, DISSOLUTION, CLOSURE, MERGER, CONSOLIDATION OR CHANGE IN CORPORATE MEMBERSHIP OF THE ORGANIZATION OR ANY SUBSIDIARY OF THE ORGANIZATION; OR -ANY OTHER APPROVAL OF UNITED REQUIRED BY LAW OR BY THE GOVERNING DOCUMENTS. Review of form 990 by governing body Form 990, Part VI, Section B, Line 11b A COPY OF THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO FILING. THE REVIEW PROCESS FOR THIS FORM 990 IS AS FOLLOWS: 1. PREPARATION OF THE RETURN IS SUPERVISED AND REVIEWED BY THE ORGANIZATION'S CORPORATE TAX MANAGER. 2. A SECOND REVIEW IS PERFORMED BY AN EXTERNAL CPA FIRM WITH EXPERTISE IN TAX-EXEMPT RETURN PREPARATION. 3. THE RETURN IS REVIEWED BY THE ORGANIZATION'S FINANCE AND LEGAL DEPARTMENTS (INCLUDING THE VICE PRESIDENT OF FINANCE OR CHIEF FINANCIAL OFFICER) AND SHARED WITH THE MEMBERS OF THE BOARD OF DIRECTORS. 4. THE ORGANIZATION'S VICE PRESIDENT OF FINANCE OR CHIEF FINANCIAL OFFICER REVIEWS COMMENTS OR QUESTIONS RECEIVED BY MEMBERS OF THE BOARD OF DIRECTORS, IF ANY, TO ADDRESS OR TO INCORPORATE, AS APPROPRIATE, INTO THE RETURN PRIOR TO FILING. Conflict of interest policy Form 990, Part VI, Section B, Line 12c BOARD OF DIRECTORS 1.CONFLICTS OF INTEREST MUST BE DISCLOSED, BOTH VIA AN ANNUAL DISCLOSURE PROCESS AS WELL AS VERBALLY AT A BOARD MEETING PRIOR TO DISCUSSION OF ANY AGENDA ITEM WITH REGARD TO WHICH A BOARD MEMBER HAS A CONFLICT. 2.A PERSON HAVING A FINANCIAL INTEREST IN A PROPOSED TRANSACTION OR ARRANGEMENT MAY MAKE A PRESENTATION AT A MEETING OF THE BOARD OF DIRECTORS OR COMMITTEE CONSIDERING THAT TRANSACTION OR ARRANGEMENT, BUT AFTER THAT PRESENTATION HE OR SHE SHALL LEAVE THE MEETING DURING DISCUSSION AND VOTING ON THAT PROPOSED TRANSACTION OR ARRANGEMENT. THE PERSON HAVING THE FINANCIAL INTEREST SHALL NOT BE COUNTED IN DETERMINING WHETHER A QUORUM IS PRESENT. 3.THE CHAIRPERSON OF THE BOARD OF DIRECTORS OR COMMITTEE SHALL, IF APPROPRIATE, APPOINT A DISINTERESTED PERSON OR COMMITTEE (INCLUDING OUTSIDE ADVISORS) TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT, AND TO ADVISE WHETHER THE PROPOSED TRANSACTION OR ARRANGEMENT IS IN SPECTRUM HEALTH'S BEST INTEREST. 4.THE BOARD OF DIRECTORS OR COMMITTEE SHALL EXERCISE DUE DILIGENCE TO DETERMINE WHETHER SPECTRUM HEALTH CAN, WITH REASONABLE EFFORTS, OBTAIN A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST. 5.IF A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT IS NOT REASONABLY ATTAINABLE UNDER CIRCUMSTANCES THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST, THE BOARD OF DIRECTORS OR COMMITTEE SHALL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS AND MEMBERS WHETHER THE PROPOSED TRANSACTION OR ARRANGEMENT IS IN SPECTRUM HEALTH'S BEST INTEREST AND FOR ITS OWN BENEFIT AND WHETHER THE TRANSACTION IS FAIR AND REASONABLE TO SPECTRUM HEALTH, AND SHALL MAKE ITS DECISION AS TO WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT IN CONFORMITY WITH SUCH DETERMINATION. 6.THE MINUTES OF THE MEETINGS OF THE BOARD OF DIRECTORS AND ALL SPECTRUM HEALTH COMMITTEES SHALL SET FORTH: A)THE NAMES OF THE PERSONS WHO DISCLOSED A FINANCIAL INTEREST IN A PROPOSED TRANSACTION OR ARRANGEMENT INVOLVING SPECTRUM HEALTH OR ANY OF ITS SUBSIDIARIES AND THE NATURE OF THE FINANCIAL INTEREST; AND B)THE NAMES OF THE PERSONS WHO WERE PRESENT FOR DISCUSSIONS AND VOTES RELATING TO SUCH TRANSACTION OR ARRANGEMENT, INCLUDING ANY DISCUSSION OF ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT, AND A RECORD OF ANY VOTES TAKEN IN CONNECTION WITH THAT MATTER. THE VOTES OF INDIVIDUAL MEMBERS NEED NOT BE RECORDED UNLESS OTHERWISE DIRECTED BY THE BOARD OF DIRECTORS OR COMMITTEE. MANAGEMENT 1. UPON ACCEPTANCE OF AN EMPLOYMENT OFFER, EACH MEMBER OF MANAGEMENT WILL COMPLETE A CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRE. A COPY OF THE MEMBER OF MANAGEMENT'S DISCLOSURE QUESTIONNAIRE IS SENT TO THE ORGANIZATION'S LEGAL DEPARTMENT AND IS ALSO MAINTAINED BY HUMAN RESOURCES IN THAT PERSON'S PERSONNEL FILE. 2. ANNUALLY, EACH MEMBER OF MANAGEMENT WILL COMPLETE AN ANNUAL CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRE ELECTRONICALLY. THE DISCLOSURE QUESTIONNAIRE IS REVIEWED BY THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS. 3. THERE IS AN ONGOING REQUIREMENT THAT MEMBERS OF MANAGEMENT COMPLETE ANOTHER DISCLOSURE QUESTIONNAIRE AT ANY POINT DURING HIS/HER EMPLOYMENT WHEN A NEW POTENTIAL CONFLICT OF INTEREST ARISES. IF A MEMBER OF MANAGEMENT COMPLETES A DISCLOSURE QUESTIONNAIRE AS A RESULT OF A NEW POTENTIAL CONFLICT OF INTEREST, THAT DISCLOSURE QUESTIONNAIRE IS SUBMITTED TO THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS FOR REVIEW. 4. THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS, IN CONSULTATION WITH EXECUTIVE MANAGEMENT, DETERMINE HOW ANY REPORTED CONFLICTS SHOULD BE MANAGED. MANAGEMENT OF A CONFLICT MAY TAKE A VARIETY OF DIFFERENT FORMS FROM IMPLEMENTATION OF A MANAGEMENT PLAN TO REQUIRING THAT THE MEMBER OF MANAGEMENT CEASE THE ACTIVITY CREATING THE CONFLICT OR, IN EXTREME CASES, LEAVE THE ORGANIZATION'S EMPLOYMENT. MANAGEMENT IS DETERMINED ON AN INDIVIDUAL BASIS BASED UPON THE FACTS AND CIRCUMSTANCES SURROUNDING THE DISCLOSURE. THE PURPOSE OF CONFLICT MANAGEMENT IS TO PROVIDE TRANSPARENCY WITHIN THE ORGANIZATION AND TO ENSURE THAT ORGANIZATION'S EMPLOYEES ARE ALWAYS ACTING IN THE BEST INTEREST OF ORGANIZATION. Process used to establish compensation of top management official Form 990, Part VI, Section B, Line 15a THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS (THROUGH ITS EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF THE TOP MANAGEMENT OFFICIAL, OTHER OFFICERS, AND KEY EMPLOYEES AT SPECTRUM HEALTH KELSEY. LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED TO THE EXECUTIVE COMMITTEE IN ADVANCE OF MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND, FOR FY 2012 (7/1/11-6/30/12), WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS: * SULLIVAN, COTTER AND ASSOCIATES, INC.: 2011 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * INTEGRATED HEALTHCARE STRATEGIES: 2011 HEALTHCARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2011 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * TOWERS WATSON DATA SERVICES: 2011/2012 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT THESE SOURCES ARE CONSISTENT WITH THOSE USED IN LAST YEAR'S ANALYSIS. COMPENSATION ADJUSTMENTS ARE APPROVED BY EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE IS NATIONAL AND REFLECTS THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFITS DATA REFLECT NATIONAL HEALTHCARE MARKET PRACTICES. GEOGRAPHIC PAY DIFFERENTIAL AND COST OF LIVING DATA INDICATE CONSISTENCY WITH NATIONAL DATA. THIS PROCESS IS INTENDED TO ASSIST SPECTRUM HEALTH IN QUALIFYING FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS (INTERMEDIATE SANCTIONS REGULATIONS) AND COMPLYING WITH THE POTENTIAL SPECTRUM HEALTH EXCESS BENEFIT TRANSACTION POLICY FOR THOSE INDIVIDUALS IN THE GROUP WHO ARE DISQUALIFIED PERSONS. THE OPINION SUBMITTED FROM THE THIRD PARTY INDEPENDENT CONSULTING FIRM IS IN ACCORDANCE WITH THE PROVISIONS OF TREASURY REGULATIONS SECTION 53.4958-6(C)(2) AND IS ALSO INTENDED TO SATISFY THE PROFESSIONAL ADVICE REQUIREMENT OF TREASURY REGULATIONS SECTION 53.4958-1(D)(4)(III). Process used to establish compensation of other officers/key employees Form 990, Part VI, Section B, Line 15b SEE EXPLANATION PROVIDED FOR FORM 990, PART VI, LINE 15A. Governing documents, conflict of interest policy and financial statements available to the public Form 990, Part VI, Section C, Line 19 THE ORGANIZATION'S ARTICLES OF INCORPORATION HAVE BEEN PROVIDED TO THE STATE OF MICHIGAN AND ARE AVAILABLE TO THE PUBLIC ON THE STATE'S WEBSITE. THE ORGANIZATION'S BYLAWS AND INTERNAL POLICIES ARE GENERALLY NOT MADE AVAILABLE TO THE PUBLIC. THE OVERALL SYSTEM CONSOLIDATED FINANCIAL STATEMENTS ARE PROVIDED AT WWW.SPECTRUMHEALTH.ORG IN THE SECTION TITLED "ABOUT US." FINANCIAL PERFORMANCE IS DISCUSSED AT AN ANNUAL PUBLIC MEETING HELD AND POSTED TO WWW.SPECTRUMHEALTH.ORG ANNUALLY (UNDER THE SECTION TITLED "ABOUT US"). Average number of hours devoted per week to related organization Form 990, Part VII, Section A, Column B CHRISTINA FREESE-DECKER - 48 DAVID MACK - 4 LINDA BLANCHARD - 2 WILLIAM HAM - 4 BENNETT WALSTATTER - 48 DAVID DULL - 48 DOMENICO AUSIELLO, MD - 4 FRANZ MOGDIS - 4 GREGORY PAGE, MD, PHD - 48 KEVIN O'CONNOR - 2 MARC CHIRCOP - 50 PETER HAINES - 4 STEVE BOWSER - 2 TAD (CHARLES) SIMON - 2 DAVID OEHRING - 48 RYAN JOHNSON - 48 BRIAN BRASSER - 48 PRISCILLA MAHAR - 48 VICKI JENSEN - 48 MARY ANNE JONES - 50 PAUL BONIS - 50 COMPENSATION FORM 990, PART VII, SECTION A, LINE 1A CONSISTENT WITH PRIOR YEARS, THE COMPENSATION REPORTED FOR THESE INDIVIDUALS IS NOT FOR SERVICES IN THEIR CAPACITY AS MEMBERS OF THE BOARD OF DIRECTORS BUT FOR SERVICES AS EMPLOYEES OF THE ORGANIZATION OR A RELATED ORGANIZATION. CONSISTENT WITH PRIOR YEARS, COMPENSATION AND BENEFITS ARE REPORTED USING THE MOST RECENT CALENDAR YEAR COMPENSATION DATA. THE COMPENSATION FIGURES REPORTED IN THESE SECTIONS IS FOR THE YEAR ENDED DECEMBER 31, 2011. INDIVIDUALS WITH COMPENSATION REPORTED IN PART VII WORK A COMBINED AVERAGE OF 50 HOURS PER WEEK FOR THE REPORTING ORGANIZATION AND/OR A RELATED TAX-EXEMPT ORGANIZATION. Other changes in net assets or fund balances Form 990, Part XI, Line 5 FAS 136 ACTIVITY - 55895; OVERSIGHT OF THE AUDIT FORM 990, PART XII, LINE 2C THE FINANCIAL STATEMENTS OF THE FILING ORGANIZATION WERE AUDITED BY AN INDEPENDENT AUDITOR AS PART OF THE CONSOLIDATED AUDIT OF SPECTRUM HEALTH SYSTEM (EIN 38-3382353). THE OVERSIGHT OF THAT AUDIT IS BEING ASSUMED BY SPECTRUM HEALTH SYSTEM. IRS TAX FILLINGS FORM 990, PART V, LINE 1A, 2A, AND PART VII, SECTION B, LINE 2 SPECTRUM HEALTH UNITED (38-1358412), THE SOLE MEMBER OF SPECTRUM HEALTH KELSEY, FILES ALL APPLICABLE IRS TAX FILINGS, INCLUDING FORMS 1099, 1096, W-2, AND W-3 ON BEHALF OF SPECTRUM HEALTH KELSEY. FOR PURPOSES OF COMPLETING FORM 990, PART V, LINE 1A AND 2A REPRESENTS THE THE 1099'S AND W-2'S ALLOCABLE TO THE ACTIVITIES OF SPECTRUM HEALTH KELSEY. SPECTRUM HEALTH SYSTEM 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 383382353 MANAGEMENT MI 501(C)(3) 11 - Type III - FI NA false SH UNITED MEMORIAL FOUNDATION 615 S BOWER GREENVILLE MI 48838 382990574 PHILANTHRO MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED false AMBULATORY UNITED 615 S BOWER GREENVILLE MI 48838 383170488 HEALTHCARE MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED false UNITED LIFESTYLES 615 S BOWER GREENVILLE MI 48838 383589727 WELLNESS MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED false SPECTRUM HEALTH UNITED 615 S BOWER GREENVILLE MI 48838 381358412 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false MONTCALM PRIMARY CARE PHYSICIANS 615 S BOWER GREENVILLE MI 48838 202544762 MED. SVCS MI SPECTRUM HEALTH UNITED C CORPORATION 1 false false false false false false false false false false true true false false false false false false SECTION 512(B)(13) CONTROLLED ENTITY? PART II, COLUMN (G) THE ORGANIZATION IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, SPECTRUM HEALTH SYSTEM.