2013-05-05T19:00:31-05:00 2012-06-30 CROWE HORWATH LLP 70 West Madison Street Suite 700 Chicago IL 606024903 990 2011-07-01 381358412 SPECTRUM HEALTH UNITED SPEC 6167747322 615 S Bower Greenville MI 488382628 RYAN K JOHNSON 2013-04-25 true Geralyn R Hurd P00933422 3128997000 2011 2016-03-07 17:11:31Z CHRISTINA FREESE-DECKER 615 S Bower Greenville MI 488382628 69394282 false X HTTP://WWW.SPECTRUMHEALTH.ORG/UNITED X 1911 MI TO IMPROVE THE HEALTH OF THE COMMUNITY WE SERVE. 11 8 559 65 0 0 87278 1824429 60442660 67314122 -118215 -70433 -428638 -289956 59983085 68778162 0 0 0 0 24205350 27984554 0 0 0 29774805 32762073 53980155 60746627 6002930 8031535 56249469 65227192 35390703 42311078 20858766 22916114 TO IMPROVE THE HEALTH OF THE COMMUNITY WE SERVE. false false 50970677 0 67251863 SPECTRUM HEALTH UNITED PROVIDES HEALTHCARE RELATED SERVICES TO THE GREATER MONTCALM COMMUNITY REGARDLESS OF ABILITY TO PAY. OUR MORE THAN 180 PROFESSIONAL STAFF, 270 CLINICAL STAFF, AND 200 MEDICAL STAFF PROVIDE QUALITY CARE TO PATIENTS AND FAMILIES. OUR COMMUNITY HOSPITAL HAS 61 ACUTE CARE-BEDS AND 39 LONG-TERM BEDS. IT ALSO INCLUDES SPECIALTY CRITICAL CARE UNITS, OUTPATIENT SERVICES, AND LONG TERM SKILLED NURSING. THERE WERE 2,533 INPATIENT ADMISSIONS, 8,820 INPATIENT DAYS, 144 REHAB & NURSING CENTER ADMISSIONS, 13,491 REHAB & NURSING CENTER PATIENT DAYS, AND 28,987 EMERGENCY ROOM VISITS IN FISCAL YEAR 2012. SPECTRUM HEALTH UNITED WAS NAMED ONE OF THOMSON REUTERS 100 TOP HOSPITALS IN THE COUNTRY IN AN ANNUAL STUDY WHERE HOSPITAL RANKINGS ARE BASED ON MEASURES OF OVERALL ORGANIZATION PERFORMANCE, INCLUDING PATIENT CARE, OPERATIONAL EFFICIENCY AND FINANCIAL STABILITY. ADDITIONALLY, THEY WERE ALSO NAMED ONE OF THE NATION'S TOP PERFORMERS ON KEY QUALITY MEASURES BY THE JOINT COMMISSION, THE LEADING ACCREDITOR OF HEALTH CARE ORGANIZATIONS IN AMERICA. 50970677 true true false false false false false false false true false false false true false false true false false false false false false false false true true false false true true false false false false false false false false true true false false false false false true true true true false true 90 0 true 559 true false false false false false false false false false false X 11 8 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 42.00 X X 296269 0 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 42.00 X 169089 0 30309 RYAN JOHNSON 46.00 X 120560 0 25520 BRIAN BRASSER 46.00 X 165875 0 23011 PRISCILLA MAHAR 46.00 X 159321 0 25804 VICKI JENSEN 48.00 X 151829 0 24802 AMY MACNICOL 50.00 X 100407 0 18472 ANN DECKER 50.00 X 101717 0 26428 GEORGE ANCIL 50.00 X 100685 0 6941 HEATHER CHRISTENSEN 50.00 X 116110 0 17441 JENNIFER DEEWAARD 50.00 X 101246 0 21092 MARY ANNE JONES 0.00 X 0 183112 27716 PAUL BONIS 0.00 X 0 372913 114178 1583108 2001053 841264 10 true true false ANESTHESIA MEDICAL CONSULTANTS 3333 EVERGREEN NE GRAND RAPIDS MI 49525 MEDICAL 1200000 INCREMEDICAL LLC 8259 WICKER AVE ST JOHN IN 46373 REHAB SERVICES 871219 VELTING CONTRACTORS INC 3060 BRETON ROAD SE KENTWOOD MI 49512 EXCAVATING 246621 WEST MICHIGAN SHARED HOSPITAL PO BOX 1134 GRAND RAPIDS MI 495011134 LAUNDRY 177523 EMERGENCY CARE SPECIALISTS PC 4100 EMBASSY DR SE SUITE 400 KENTWOOD MI 49546 EMERGENCY PHYSICIANS 166044 7 1780333 13000 31096 1824429 PATIENT SERVICE REVENUE 622110 66777791 66777791 CAFETERIA REVENUE 722212 185805 185805 OTHER OPERATING INCOME 900099 185070 185070 165456 165456 0 0 67314122 -8174 -8174 0 0 263905 553861 -289956 0 -289956 -289956 62259 0 -62259 -62259 -62259 0 0 0 0 0 0 0 0 68778162 67066058 0 -112325 0 0 0 0 1265585 1037158 228427 82997 68017 14980 20597615 16879926 3717689 891186 730335 160851 3531277 2893912 637365 1615894 1324239 291655 0 108202 108202 0 0 0 0 2996918 2477711 519207 402503 12177 390326 1431093 1235311 195782 66610 65732 878 0 2599620 2507030 92590 214050 176938 37112 0 125500 87861 37639 1207907 1207907 0 2612406 2338103 274303 530981 475228 55753 BAD DEBTS 4252101 4252101 SHARED SERVICES / MANAGEMENT FEES 5517974 3369504 2148470 MEDICAL SUPPLIES 8567188 8537131 30057 PROPERTY TAXES 12823 12786 37 2116197 1281570 834627 0 60746627 50970677 9775950 0 0 1070 10682494 16630113 5115121 6398085 785372 903504 537398 819147 59982170 23217666 32275576 36764504 1969487 0 0 0 85000 6852438 1657352 56249469 65227192 5352824 6756542 19230 24896608 24455337 5141271 11079969 35390703 42311078 18466686 21632285 2392080 1283829 20858766 22916114 56249469 65227192 X 8031535 -5974187 X X false true true X true true X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 1113853 1113853 37762181 13725379 24036802 340298 203156 137142 14306580 9264337 5042243 6459258 24794 6434464 36764504 0 DUE TO AFFILIATES 6435334 THIRD PARTY PAYABLE 4644635 11079969 FIN 48 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 976981 976981 0.01730 11969327 11270295 699032 0.01240 0 0.00000 0 0 12946308 11270295 1676013 0.02970 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0.00000 0 0 0 0 0 0.00000 0 0 12946308 11270295 1676013 0.02970 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 4252101 0 24133406 24632814 -499408 X true true 1 1 SPECTRUM HEALTH UNITED

615 S BOWER GREENVILLE MI 488382628

X X X 1 SPECTRUM HEALTH REHAB AND NURSING CENTER

615 SOUTH BOWER ST GREENVILLE MI 48838

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) 4,252,101 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 RECORDED 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 UNITED - 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 UNITED - 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 UNITED - 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 UNITED - 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 HAS IDENTIFIED A PRIMARY SERVICE AREA COMPRISED OF 19 ZIP CODES SURROUNDING GREENVILLE, WHERE UNITED HOSPITAL IS LOCATED. THE OVERALL SERVICE AREA INCLUDES MONTCALM AND PORTIONS OF ADJACENT COUNTIES THAT IN TOTAL SUPPORTS A POPULATION OF OVER 100,000 RESIDENTS. Promotion of community health Schedule H, Part VI, Line 5 SPECTRUM HEALTH UNITED'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 UNITED'S PRIMARY SERVICE AREA. SPECTRUM HEALTH UNITED ALSO EXTENDS MEDICAL STAFF PRIVILEGES TO ALL QUALIFIED PHYSICIANS IN THE COMMUNITY. PEOPLE THROUGHOUT THE COMMUNITY CAN COUNT ON SPECTRUM HEALTH UNITED 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 UNITED 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. X X X X X 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 139680 0 24528 0 1667 0 5852 0 17158 0 188886 0 0 0 CHRISTINA FREESE-DECKER 217429 0 76813 0 2027 0 57363 0 41354 0 394985 0 31125 0 DAVID DULL 0 346489 0 106463 0 25873 0 86165 0 50355 0 615345 0 39891 DAVID OEHRING 140961 0 25223 0 2905 0 10615 0 19694 0 199398 0 0 0 GREGORY PAGE MD PHD 0 100896 0 64247 0 835 0 7834 0 15606 0 189418 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 PAUL BONIS 0 264136 0 105006 0 3771 0 67313 0 46865 0 487092 0 26824 PRISCILLA MAHAR 132940 0 23651 0 2730 0 5658 0 20146 0 185126 0 0 0 VICKI JENSEN 126857 0 22611 0 2360 0 5407 0 19395 0 176630 0 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 UNITED. 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 SCHEDULE J, PART I, LINE 4B 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. HOWEVER, NOT ALL OF THESE PARTICIPANTS "RECEIVED PAYMENT FROM" THESE PLANS DURING THE TAX YEAR. MICHIGAN STATE HOSPITAL FINANCE AUTHORITY 382889417 59465HHD1 2008-03-27 7500000 CAPITAL FUNDING false false true KENT HOSPITAL FINANCING AUTHORITY (2011C) 382350002 490580ED5 2011-11-09 75511075 2008B2 REVENUE REFUNDING BONDS false false true MICHIGAN STATE HOSPITAL FINANCE AUTHORITY 382889417 59465HHD1 2008-03-27 7500000 CAPITAL FUNDING false false true 1115596 0 2000000 0 0 0 23778 0 0 1976222 0 0 2008 false false true true 0 0 23241041 0 0 0 257183 0 0 0 22983858 0 2011 true false true true 1627675 0 1953210 0 0 0 23222 0 0 1929988 0 0 2008 false false true true false false false false 0.0000 0.0000 0.0000 true false false false false 0.0000 0.0000 0.0000 true false false false false 0.0000 0.0000 0.0000 true false true false false false false false false false false false false false true false 0.0 false 0.0 false false TAX EXEMPT BONDS PART I BONDS ARE ISSUED ON BEHALF OF AN OBLIGATED GROUP UNDER 1989 MTI AND OBLIGATED GROUP AND DESIGNATED AFFILIATES UNDER 1998 MTI. ALL OBLIGATED GROUP MEMBERS AND OR DESIGNATED AFFILIATES ARE PART OF THE SAME HEALTH SYSTEM AND ARE TAX-EXEMPT 501(C)(3) CHARITABLE ORGANIZATIONS. THE 2008B BOND IS ATTRIBUTABLE TO TWO LEGAL ENTITIES WITHIN THE OBLIGATED GROUP (SEE ALSO FORM 990, PART X, LINE 20): * SPECTRUM HEALTH HOSPITALS (EIN 38-1360529) AND * SPECTRUM HEALTH UNITED (EIN 38-1358412) AS IT RELATES TO THIS BOND, THE INFORMATION REPORTED IN SCHEDULE K, PART I IS REPEATED FOR EACH MEMBER OF THE OBLIGATED GROUP. THE INFORMATION REPORTED IN PART II IS REPRESENTATIVE OF THE REPORTING ENTITIES PORTION OF THE TAX-EXEMPT BOND. ANESTHESIA MEDICAL CONSULTANTS BUSINESS 1200000 SEE SCHEDULE L, PART V false HATHAWAY PROPERTIES LLC BUSINESS 510985 SEE SCHEDULE L, PART V false MARGARET MAHAR FAMILY 49045 SEE SCHEDULE L, PART V false KELLY JOHNSON FAMILY 33952 SEE SCHEDULE L, PART V false WEST MICHIGAN SHARED HOSPITAL LAUNDRY BUSINESS 177523 SEE SCHEDULE L, PART V false 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 ORGANIZATION'S BYLAWS WERE AMENDED TO REFLECT THE INCLUSION OF THE PERSONS HOLDING THE FOLLOWING POSITIONS AS EX-OFFICIO MEMBERS OF THE ORGANIZATION'S BOARD OF DIRECTORS (WITH FULL VOTING POWER): THE PRESIDENT OF THE ORGANIZATION, THE CHIEF OF STAFF OF THE CORPORATION'S MEDICAL STAFF, AND THE CHAIRPERSON OF THE FOUNDATION COMMITTEE. THE AMENDED BYLAWS ESTABLISH AND LIST THE DUTIES OF THE CREDENTIALING COMMITTEE AND THE FOUNDATION COMMITTEE. THE AMENDED BYLAWS FUTHER DETAIL THE DUTIES AND RESPONSIBILITIES OF THE CHAIRPERSON OF ALL COMMITTEES. THE RESEVE POWER TO APPROVE THE ORGANIZATIONS INVESTMENTS OF CASH AND/OR RESERVES WAS ASSIGNED TO SPECTRUM HEALTH SYSTEM. Classes of members or stockholders Form 990, Part VI, Section A, Line 6 THE ORGANIZATION HAS ONE MEMBER/STOCKHOLDER AS FOLLOWS: - SPECTRUM HEALTH SYSTEM (EIN 38-3382353), A MICHIGAN NONPROFIT CORPORATION. Members or stockholders electing members of governing body Form 990, Part VI, Section A, Line 7a THE SOLE MEMBER OF THE ORGANZIATION (SEE FORM 990, PART VI, LINE 6) APPOINTS ALL MEMBERS OF THE ORGANIZATION'S BOARD OF DIRECTORS. Decisions requiring approval by members or stockholders Form 990, Part VI, Section A, Line 7b THE SOLE MEMBER OF THE ORGANIZATION (SEE FORM 990, PART VI, LINE 6) HAS RETAINED CERTAIN RESERVED POWERS IN ORGANIZATION EXCLUSIVELY, WHICH SHALL NOT BE DEEMED AUTHORIZED UNLESS AND UNTIL APPROVED BY THE SOLE MEMBER OF ORGANIZATION: - ELECTION AND/OR REMOVAL OF THE MEMBERS OF THE ORGANIZATION'S BOARD OF DIRECTORS AND THE ORGANIZATION'S CHAIR OF THE BOARD; - APPROVAL OF ALL ORGANIZATION'S (OR AN ENTITY DIRECTLY OR INDIRECTLY CONTROLLED BY THE ORGANIZATION ("SUBSIDIARY") CAPITAL EXPENDITURES IN EXCESS OF THE AMOUNT SPECIFIED IN THE AUTHORITY MATRIX, ADOPTED BY THE SOLE MEMBER OF ORGANIZATION AND AS AMENDED BY THE SOLE MEMBER OF ORGANIZATION FROM TIME TO TIME ("AUTHORITY MATRIX AMOUNT"); - APPROVAL OF ALL BORROWING BY THE ORGANIZATION OR A SUBSIDIARY FOR CAPITAL OR OPERATING PURPOSES, AND ALL GUARANTEES OF INDEBTEDNESS, INCLUDING ANY OPERATING LEASE IN AN AMOUNT GREATER THAN ONE MILLION DOLLARS ($1,000,000) DURING THE INITIAL LEASE TERM, NOT INCLUDING RENEWALS AND/OR EXTENSIONS; - APPROVAL OF ALL LOANS IN EXCESS OF THE AUTHORITY MATRIX AMOUNT BY THE ORGANIZATION OR A SUBSIDIARY TO PERSONS OR ENTITIES OTHER THAN THE SOLE MEMBER OF ORGANIZATION OR AN ENTITY CONTROLLED BY THE SOLE MEMBER OF ORGANIZATION; - THE CREATION OF ANY ENTITY CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE ORGANIZATION; AND - THE ORGANIZATION'S OR ANY SUBSIDIARY'S INVESTMENTS OF CASH AND/OR RESERVES, WHETHER ON AN INDIVIDUAL BASIS OR AS PART OF A POOLED INVESTMENT STRATEGY. IN ADDITION TO THE RESERVED POWERS RETAINED EXCLUSIVELY BY THE SOLE MEMBER OF ORGANIZATION ABOVE, THE SOLE MEMBER OF ORGANIZATION HAS DELEGATED CERTAIN RESERVED POWERS IN ORGANIZATION REGARDING MANAGEMENT AND GOVERNANCE TO SPECTRUM HEALTH HOSPITALS D/B/A SPECTRUM HEALTH HOSPITAL GROUP ("SHHG"), THE BOARD OF WHICH OVERSEES ALL OF THE HOSPITAL OPERATIONS OF THE SOLE MEMBER OF ORGANIZATION. THE SOLE MEMBER OF ORGANIZATION ALSO RETAINS THE UNILATERAL AUTHORITY TO EXERCISE ANY OF THE RESERVED POWERS BELOW. THE ACTIONS LISTED BELOW MAY BE UNILATERALLY CAUSED AND OR TAKEN BY SHHG, WITHIN ITS SOLE AND EXCLUSIVE POWER AND DISCRETION AND SHALL NOT BE DEEMED AUTHORIZED UNLESS AND UNTIL APPROVED BY SHHG: - HIRING, DISCHARGE, AND EVALUATION OF THE ORGANIZATION'S PRESIDENT AND/OR CEO AS DELEGATED BY THE SOLE MEMBER OF ORGANIZATION'S BOARD OF DIRECTORS TO THE SOLE MEMBER OF ORGANIZATION'S CHIEF EXECUTIVE OFFICER (OR DESIGNEE) OR SHHG'S PRESIDENT; - THE ADOPTION OF THE ANNUAL OPERATING AND CAPITAL BUDGETS OF THE ORGANIZATION, AND ANY AMENDMENTS TO SUCH BUDGETS IN EXCESS OF THE AUTHORITY MATRIX AMOUNT; - THE ADOPTION OF THE ORGANIZATION'S STRATEGIC PLANS; - THE ADOPTION OF AMENDMENTS TO THE ARTICLES OF INCORPORATION OR BYLAWS OF THE ORGANIZATION; - MERGER OR CONSOLIDATION OF THE ORGANIZATION OR A SUBSIDIARY, ANY OTHER CHANGE IN CONTROL, OWNERSHIP PERCENTAGES OR CAPITAL STRUCTURE OF THE ORGANIZATION OR A SUBSIDIARY; - SALE OR TRANSFER OF MORE THAN TEN PERCENT (10%) OF THE ASSETS OF THE ORGANIZATION OR A SUBSIDIARY TO ANY PERSON OR ENTITY NOT CONTROLLED BY THE SOLE MEMBER OF ORGANIZATION; - DISSOLUTION OF THE ORGANIZATION; - THE SELECTION AND RETENTION OF AUDITORS FOR THE ORGANIZATION OR A SUBSIDIARY; AND - ANY OTHER APPROVAL FOR WHICH THE SOLE MEMBER OF ORGANIZATION'S APPROVAL IS REQUIRED BY LAW. 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 ELECTRONIC 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 UNITED. 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 - 8 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 - 8 RYAN JOHNSON - 4 BRIAN BRASSER - 4 PRISCILLA MAHAR - 4 VICKI JENSEN - 2 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. Other changes in net assets or fund balances Form 990, Part XI, Line 5 FUND BALANCE TRANSFER FROM AMBULATORY UNITED (EIN 38-3170488) - -4172655; FUND BALANCE TRANSFER FROM UNITED LIFESTYLES (EIN 38-3589727) - -693282; FAS 136 ACTIVITY - -1108250; 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, THE SOLE MEMBER OF AMBULATORY UNITED (38-3170488), SPECTRUM HEALTH KELSEY (38-1297435), UNITED LIFESTYLES (38-3589727), AND SPECTRUM HEALTH UNITED MEMORIAL FOUNDATION (38-2990574), FILES ALL APPLICABLE IRS TAX FILINGS, INCLUDING FORMS 1099, 1096, W-2, & W-3 ON BEHALF OF AMBULATORY UNITED, SPECTRUM HEALTH KELSEY, UNITED LIFESTYLES, AND SPECTRUM HEALTH UNITED MEMORIAL FOUNDATION. FORM 990, PART V, LINE 1A AND 2A REPRESENTS THE 1099'S AND W-2'S ALLOCABLE TO THE ACTIVITIES OF SPECTRUM HEALTH UNITED. THE 1099'S AND W-2'S ALLOCABLE TO AMBULATORY UNITED, SPECTRUM HEALTH KELSEY, UNITED LIFESTYLES, AND SPECTRUM HEALTH UNITED MEMORIAL FOUNDATION ARE REPORTED ON THEIR RESPECTIVE FORM 990. SPECTRUM HEALTH SYSTEM 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 383382353 MANAGEMENT MI 501(C)(3) 11 - Type III - FI NA false SPECTRUM HEALTH HOSPITALS 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 381360529 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false SPECTRUM HEALTH PRIMARY CARE PTNRS 1840 WEALTHY ST SE GRAND RAPIDS MI 49506 381358164 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false SPECTRUM HEALTH FOUNDATION 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 382752328 PHILANTHRO MI 501(C)(3) 7 SPECTRUM HEALTH SYSTEM false SPECTRUM HEALTH CONTINUING CARE 750 FULLER AVE NE GRAND RAPIDS MI 49503 383242232 REHAB/CARE MI 501(C)(3) 11 - Type I SPECTRUM HEALTH SYSTEM false PRIORITY HEALTH 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382715520 HMO MI 501(C)(4) N/A SPECTRUM HEALTH SYSTEM false AMBULATORY UNITED 615 S BOWER GREENVILLE MI 48838 383170488 HEALTHCARE MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED true UNITED LIFESTYLES 615 S BOWER GREENVILLE MI 48838 383589727 WELLNESS MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED true SPECTRUM HEALTH KELSEY 615 S BOWER GREENVILLE MI 48838 381297435 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH UNITED true REED CITY HOSPITAL CORPORATION 300 N PATTERSON RD REED CITY MI 49677 382770076 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false NEWAYGO COUNTY GENERAL HOSPITAL ASSOCIATION 212 S SULLIVAN AVENUE FREMONT MI 49412 381359517 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false ZEELAND COMMUNITY HOSPITAL 8333 FELCH STREET ZEELAND MI 49464 381411184 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false SH UNITED MEMORIAL FOUNDATION 615 S BOWER GREENVILLE MI 48838 382990574 PHILANTHRO MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED true PRIORITY HEALTH MANAGED BENEFITS 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 383085182 ADMIN MI SPECTRUM HEALTH SYSTEM C CORPORATION 137858928 35117638 1 MONTCALM PRIMARY CARE PHYSICIANS 615 S BOWER GREENVILLE MI 48838 202544762 MED. SVCS MI SPECTRUM HEALTH UNITED C CORPORATION 1 BLODGETT ASSURANCE COMPANY 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 INSURANCE CJ SPECTRUM HEALTH SYSTEM C CORPORATION 1 MICHIGAN MEDICAL PATIENT CARE 4100 LAKE DR SE STE 300 GRAND RAPIDS MI 49546 382851295 MEDICAL MI SPECTRUM HEALTH SYSTEM C CORPORATION 7455561 9794290 1 WEST MICHIGAN HEART 2900 BRADFORD STREET NE GRAND RAPIDS MI 49525 382125186 PHYSICIANS MI SPECTRUM HEALTH SYSTEM C CORPORATION 31682589 8715673 1 IDEOMED INC 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 611613614 PROD DEVL MI SPECTRUM HEALTH INNOVATIONS LLC C CORPORATION 133 285985 1 SPECTRUM HEALTH PHYSICIAN ALLIANCE 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 371655728 PHYSICIANS MI SPECTRUM HEALTH SYSTEM C CORPORATION 28 1708258 1 false false true false false false false false true true true true true true false false true false PRIORITY HEALTH K 8016137 GAAP, CASH, OR FMV PRIORITY HEALTH L 3515004 GAAP, CASH, OR FMV AMBULATORY UNITED R 4172655 GAAP, CASH, OR FMV UNITED LIFESTYLES R 693282 GAAP, CASH, OR FMV SPECTRUM HEALTH UNITED MEMORIAL FOUNDATION C 1780333 GAAP, CASH, OR FMV 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.