2012-05-09T11:00:18-05:00 2011-06-30 ANDREWS HOOPER PAVLIK PLC 3333 DEPOSIT DR NE SUITE 310 GRAND RAPIDS MI 49456 990 2010-07-01 383382353 SPECTRUM HEALTH SYSTEM SPEC 6167747322 100 Michigan Ave NE MC 60 Grand Rapids MI 49503 MICHAEL FREED 2011-11-28 false 6169426440 2010 2016-02-24 21:20:13Z MICHAEL P FREED 100 Michigan Ave NE MC 60 Grand Rapids MI 49403 75933363 false X WWW.SPECTRUMHEALTH.ORG X 1997 MI TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE BY PROVIDING ADMINISTRATIVE AND SUPPORTING SERVICES TO THE HEALTHCARE SYSTEM AFFILIATED ENTITIES. 13 10 488 0 -5100 -353225 0 0 67327945 74636550 -190031 1124526 3521951 117280 70659865 75878356 0 0 0 0 35199632 43772292 0 0 0 49582055 60745635 84781687 104517927 -14121822 -28639571 841726685 840206700 898816518 825198660 -57089833 15008040 TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. false false 103785778 74584000 COMMON MANAGEMENT AND CENTRALIZED CONTROL OVER THE HEALTH SYSTEM ACTIVITIES CARRIED ON BY SUPPORTED ORGANIZATIONS. 103785778 true false false true false false false false false true true false false true false false true false false false false false false false false false false false true false false false false false false true true false false false false true true true true true false true X 93 0 true 488 true true true true CJ false false false false false false false false false X 13 10 true false true false false false false true true false false true true true true true true true true true true X X Ronald J Knaus 6167747771 1840 Wealthy St SE MC 498 Grand Rapids MI 49506 RICHARD BREON 50 X X 1118465 0 531406 RICHARD DEVOS SR 2 X 0 0 0 RICHARD DEVOS JR 2 X 0 0 0 DAN GAYDOU 4 X X 0 0 0 BRIAN HARRIS 2 X 16000 0 0 EARL HOLTON 4 X X 0 0 0 ROBERT HOOKER 2 X 12000 0 0 REX KILLIAN 2 X 5750 0 0 BIRGIT KLOHS 2 X 11000 0 0 MARK MURRAY 2 X 0 0 0 ELIZABETH NICKELS 2 X 13750 0 0 TIMOTHY O'DONOVAN 4 X 0 0 0 STEPHEN RECHNER MD 2 X 12500 0 0 ROBERT VAN TUINEN MD 2 X 12500 0 0 MICHAEL FREED 50 X 589579 0 229488 DAVID LEONARD 50 X 393775 0 158191 PATRICK OHARE 50 X 379986 0 152776 RONALD KNAUS 50 X 275916 0 146547 JOHN MACKEIGAN 50 X 621870 0 170419 JOHN BYRNES 50 X 412265 0 177690 JOHN MOSLEY 50 X 401577 0 161377 DANIEL OGLESBY 50 X 366946 0 140261 MICHAEL ROSENCRANCE 50 X 271725 0 118426 LOWELL BURSCH 0 X 426629 0 0 5342233 0 1986581 57 true true false SOFTWARE INFORMATION SYS LL PO BOX 890500 CHARLOTTE NC 282890500 IT CONSULTING 2163961 BEACON PARTNERS INC 97 LIBBEY PARKWAY SUITE 310 WEYMOUTH MA 02189 TEMPORARY STAFFING SERVICES 933146 IMPACT ADVISORS 931 W 75TH STREET SUITE 137-304 NAPERVILLE IL 60565 CONSULTING 768928 SENTILLION INC PO BOX 673894 DETROIT MI 482673894 IT CONSULTING 562888 DATA STRATEGY 4020 E BELTLINE NE SUITE 201 GRAND RAPIDS MI 49525 IT CONSULTING 389550 22 0 MANAGEMENT FEE REVENUE 561000 74401783 74401783 SHARED SERVICES REVENUE 561000 197856 197856 36911 1118 -5100 40893 74636550 1141283 1141283 0 0 0 0 0 38250 55007 0 -16757 -16757 -16757 0 0 0 MISCELLANEOUS INCOME 900099 117280 117280 0 0 0 0 117280 75878356 74584000 -5100 1299456 0 0 0 0 2841221 2835821 5400 426629 425818 811 30804465 30745916 58549 1397987 1397987 5566981 5547497 19484 2735009 2735009 0 853858 293471 560387 0 222124 222124 0 0 4951924 4918738 33186 876213 876213 3290759 3290524 235 11567001 11567001 0 4358980 4358980 875519 875169 350 0 101370 101370 151020 151020 0 6554374 6551752 2622 2203887 2203887 ADJUSTMENT TO INVESTMENT IN SUBSIDIARIES 23424266 23424266 MISCELLANEOUS 1314340 1263215 51125 0 0 0 0 104517927 103785778 732149 0 0 7870520 19245432 295399 179940 44539572 45189196 4658547 6775451 7148414 2105886 24507728 5042528 633271884 667656484 66777787 55498487 0 59805248 40619182 841726685 840206700 20282973 25051991 48500000 12500000 830033545 787646669 898816518 825198660 X -57089833 15008040 -57089833 15008040 841726685 840206700 X -28639571 100737444 X false true true X false X X X false false false SPECTRUM HEALTH HOSPITALS 381360529 3 true true true 54483019 NEWAYGO COUNTY GENERAL HOSPITAL ASSOCIATION 381359517 3 true true true 600 REED CITY HOSPITAL CORPORATION 382770076 3 true true true 276000 SPECTRUM HEALTH FOUNDATION 382752328 7 true true true 12000 SPECTRUM HEALTH PRIMARY CARE PARTNERS 381358164 3 true true true 12012336 SPECTRUM HEALTH UNITED 381358412 3 true true true 345127 ZEELAND COMMUNITY HOSPITAL 381411184 3 true true true 0 7 67129082 PART IV, SUPPLEMENTAL INFORMATION., FORM 990, SCHEDULE A, SPECTRUM HEALTH SYSTEM IS THE PARENT ORGANIZATION AND SUPPORTING ORGANIZATION TO THE HEALTH SYSTEM. THE PURPOSES OF THIS ORGANIZATION, AS DEFINED IN THE ARTICLES OF INCORPORATION, ARE AS FOLLOWS: PURPOSES 2.1. THE PURPOSES FOR WHICH THE CORPORATION IS ORGANIZED ARE TO OPERATE EXCLUSIVELY FOR THE BENEFIT OF, TO PERFORM THE FUNCTIONS OF, AND TO CARRY OUT ALL OF THE PURPOSES OF SPECTRUM HEALTH HOSPITALS, NEWAYGO COUNTY GENERAL HOSPITAL ASSOCIATION, REED CITY HOSPITAL CORPORATION, SPECTRUM HEALTH FOUNDATION, SPECTRUM HEALTH PRIMARY CARE PARTNERS, SPECTRUM HEALTH UNITED, AND ZEELAND COMMUNITY HOSPITAL (THE "SUPPORTED ORGANIZATIONS") ALL OF WHICH ARE DESCRIBED IN SECTION 501(C)(3) AND EITHER SECTION 509(A)(1) OR SECTION 509(A)(2) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED OR COMPARABLE PROVISIONS OF SUBSEQUENT LEGISLATION (THE "CODE"). SUBJECT TO AND IN FURTHERANCE OF THE FOREGOING, THE PURPOSES OF THE CORPORATION SHALL BE: 2.1.1. TO FORMULATE AND IMPLEMENT POLICIES AND PROGRAMS DESIGNED TO ENABLE AND/OR CAUSE THE SUPPORTED ORGANIZATIONS TO FUNCTION AS A COORDINATED HEALTH CARE DELIVERY SYSTEM , TO PROVIDE DIRECTION AND MANAGEMENT TO THE SUPPORTED ORGANIZATIONS, AND TO ACT AND/OR MAKE DECISIONS FOR THE BENEFIT OF SUCH SUPPORTED ORGANIZATIONS. 2.1.2. TO ESTABLISH AND MAINTAIN, EITHER DIRECTLY, THROUGH SUPPORTED ORGANIZATIONS OR IN COOPERATION WITH OTHER ORGANIZATIONS, SUCH FACILITIES AND SERVICES FOR THE CARE OF PERSONS SUFFERING FROM ILLNESS, INJURY OR DISABILITY, THE ELDERLY AND THE INDIGENT AND FOR THE PRESERVATION AND IMPROVEMENT OF HEALTH AS THE BOARD OF DIRECTORS MAY DETERMINE, INCLUDING, WITHOUT LIMITATION: 2.1.2.1. HOSPITALS FOR THE INPATIENT OR OUTPATIENT CARE OF PERSONS SUFFERING FROM ILLNESS, INJURY AND DISABILITY, FOR THE PREVENTION OF ILLNESS, INJURY AND DISABILITY AND FOR THE MAINTENANCE OF HEALTH. 2.1.2.2. FACILITIES PROVIDING AMBULATORY CARE, NURSING CARE, REHABILITATION AND OTHER SERVICES. 2.1.2.3. CLINICS THROUGH WHICH PHYSICIANS AND OTHER PROVIDERS RENDER PROFESSIONAL MEDICAL SERVICES. 2.1.2.4. OTHER ACTIVITIES AND PROGRAMS DESIGNED AND CARRIED ON TO PROMOTE THE GENERAL HEALTH OF THE COMMUNITY. 2.1.3. TO PROMOTE AND CARRY ON SUCH SCIENTIFIC RESEARCH AS THE BOARD OF DIRECTORS MAY DETERMINE WITH RESPECT TO THE CAUSE, TREATMENT AND PREVENTION OF ILLNESS AND INJURY, THE IMPROVEMENT OF PUBLIC HEALTH AND OTHER MATTERS. 2.1.4. TO PARTICIPATE IN AND TO CARRY ON SUCH ACTIVITIES AS THE BOARD OF DIRECTORS MAY DETERMINE FOR THE EDUCATION OF PHYSICIANS, NURSES, OTHER PROFESSIONAL AND PARAPROFESSIONAL PERSONNEL AND THE PUBLIC ABOUT RENDERING CARE TO THE SICK, INJURED AND DISABLED, ABOUT PREVENTION OF ILLNESS AND INJURY AND ABOUT THE PROMOTION OF HEALTH. 2.1.5. TO CONDUCT ACTIVITIES, EITHER DIRECTLY, THROUGH RELATED ORGANIZATIONS OR IN COOPERATION WITH ORGANIZATIONS EXEMPT FROM TAX UNDER SECTION 501 (C)(3) OF THE CODE OR COMPARABLE PROVISIONS OF SUBSEQUENT LEGISLATION IN ORDER TO RAISE FUNDS TO FURTHER THE PURPOSES OF THE CORPORATION, SUBJECT, HOWEVER, TO ALL LIMITATIONS ON THE NATURE OR EXTENT OF SUCH ACTIVITIES APPLICABLE, FROM TIME TO TIME, TO ORGANIZATIONS DESCRIBED IN SECTIONS 501(C)(3) AND 509(A)(3) OF THE CODE. 2.1.6. TO ACQUIRE, TO OWN, TO DISPOSE OF AND TO DEAL WITH REAL AND PERSONAL PROPERTY AND INTERESTS THEREIN AND TO APPLY GIFTS, GRANTS, BEQUESTS AND DEVISES AND THE PROCEEDS THEREOF IN FURTHERANCE OF THE PURPOSES OF THE CORPORATION. 2.1.7. TO DEAL WITH AND DISTRIBUTE THE CORPORATION'S INCOME AND ASSETS IN SUCH MANNER AS IN THE JUDGMENT OF THE BOARD OF DIRECTORS WILL BEST PROMOTE ITS OBJECTIVES AND PURPOSES, WITHOUT LIMITATION EXCEPT SUCH, IF ANY, AS MAY BE CONTAINED IN INSTRUMENTS UNDER WHICH SUCH PROPERTY IS CONVEYED TO THE CORPORATION. 2.1.8. TO DO SUCH THINGS AND TO PERFORM SUCH ACTS TO ACCOMPLISH ITS PURPOSES AS ARE PERMITTED BY SECTIONS 501(C)(3) AND 509(A)(3) OF THE CODE, WITH ALL THE POWERS CONFERRED ON NONPROFIT CORPORATIONS BY THE LAWS OF THE STATE OF MICHIGAN. THE AMOUNTS REPORTED IN SCHEDULE A, PART I, LINE 11H, COLUMN (VII) RELATE TO EXPENSES INCURRED BY THE ORGANIZATION ON BEHALF OF THE SUPPORTED ENTITIES (REIMBURSED IN WHOLE OR IN PART THROUGH MANAGEMENT FEES)., false true false false false false true 52534 false true 292258 344792 false Description of other lobbying activities Schedule C, Part II-B, Line 1i SPECTRUM HEALTH SYSTEM EMPLOYED AS PAID MANAGEMENT A GENERAL COUNSEL AND DIRECTOR OF GOVERNMENT AFFAIRS, WHO ARE CHIEFLY RESPONSIBLE FOR GOVERNMENT AFFAIRS ACTIVITIES. ADDITIONALLY THE TAXPAYER EMPLOYED A SENIOR VICE PRESIDENT, COMMUNITY RELATIONS TO OVERSEE THESE TWO ROLES. OTHER EXECUTIVE STAFF WERE ENGAGED ON A VERY LIMITED BASIS FOR LOBBYING PURPOSES. SPECTRUM HEALTH SYSTEM RETAINED FEDERAL AND STATE LEVEL MULTI-CLIENT LOBBY FIRMS. THE FUNCTION OF THEIR RESPECTIVE DUTIES INVOLVED DIRECT CONTACT WITH LEGISLATORS, THEIR STAFF, GOVERNMENT OFFICIALS, OR A LEGISLATIVE BODY ON NUMEROUS LEGISLATIVE AND REGULATORY ISSUES OF INTEREST TO THE TAXPAYER. THIS AMOUNT IS REPORTED IN LINE 1I, "OTHER ACTIVITIES." DIRECT CONTACT WITH QUALIFYING INDIVIDUALS INCLUDED SENDING LETTERS, PUBLICATIONS, MAKING PHONE CALLS OR MEETING WITH GOVERNMENT OFFICIALS, THEIR STAFF OR LEGISLATORS. 0 122675 30926 91749 1370992 14013 1356979 5654747 2060947 3593800 0 5042528 0 0 INVESTMENT IN AFFILIATES 45316334 C MI PROFESSIONAL INSURANCE EXCHANGE 9093599 C INVESTMENT IN MVP FITNESS 1088554 C 55498487 0 DUE TO AFFILIATES 668833594 SWAP MARKET VALUE 67521266 INSURANCE 33900557 OTHER LIABILITIES 17391252 787646669 75878356 104517927 -28639571 0 0 -28639571 0 0 0 0 0 0 0 0 0 0 0 0 X X X true true X X X X X true true false false false false false false false RICHARD BREON 951782 0 137608 0 29075 0 362394 0 169012 0 1649871 0 0 0 MICHAEL FREED 514864 0 60383 0 14332 0 160873 0 68615 0 819067 0 0 0 DAVID LEONARD 339564 0 40693 0 13518 0 96628 0 61563 0 551966 0 0 0 PATRICK OHARE 326569 0 40144 0 13273 0 98373 0 54403 0 532762 0 0 0 RONALD KNAUS 247212 0 25002 0 3702 0 92370 0 54177 0 422463 0 0 0 JOHN MACKEIGAN 464453 0 137550 0 19867 0 94628 0 75791 0 792289 0 80048 0 JOHN BYRNES 351987 0 44307 0 15971 0 115666 0 62024 0 589955 0 0 0 JOHN MOSLEY 343969 0 41645 0 15963 0 109037 0 52340 0 562954 0 0 0 DANIEL OGLESBY 293283 0 63104 0 10559 0 87147 0 53114 0 507207 0 26844 0 MICHAEL ROSENCRANCE 244531 0 24501 0 2693 0 69222 0 49204 0 390151 0 0 0 LOWELL BURSCH 0 0 0 0 426629 0 0 0 0 0 426629 0 0 0 First-class or charter travel Schedule J, Part I, Line 1a THE TAXPAYER PROVIDED FIRST-CLASS TRAVEL FOR CERTAIN KEY EXECUTIVE EMPLOYEES. IN CERTAIN LIMITED SITUATIONS WHEN COMMERCIAL AIR TRAVEL WAS NOT AVAILABLE FOR A DESTINATION OR NOT EFFICIENT DUE TO SCHEDULES AND/OR CONNECTIONS, CHARTER AIR TRAVEL WAS UTILIZED BY CERTAIN KEY EXECUTIVE EMPLOYEES. Travel for companions Schedule J, Part I, Line 1a THE TAXPAYER PROVIDED COMPANION TRAVEL FOR CERTAIN EXECUTIVE EMPLOYEES. THE RELATED AMOUNTS WERE TREATED AS TAXABLE COMPENSATION TO THE EMPLOYEE AND INCLUDED IN FORM W-2. Health or social club dues or initiation fees Schedule J, Part I, Line 1a THE TAXPAYER PROVIDED HEALTH CLUB DUES FOR CERTAIN EXECUTIVE EMPLOYEES. THESE AMOUNTS WERE TREATED AS TAXABLE COMPENSATION AND INCLUDED IN FORM W-2. Severance or change-of-control payment Schedule J, Part I, Line 4a LOWELL BURSCH $426,629 Supplemental nonqualified retirement plan Schedule J, Part I, Line 4b JOHN MACKEIGAN 80,048 DANIEL OGLESBY 26,844 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. MS ALLYSON BREON FAMILY 59085 SEE SCHEDULE L, PART V false MR RICHARD DEVOS SR FAMILY ON BOD SEE SCHEDULE L, PART V false MR RICHARD DEVOS JR FAMILY ON BOD SEE SCHEDULE L, PART V false DTE ENERGY BUSINESS 1118426 SEE SCHEDULE L, PART V false MS CHERYL FREED FAMILY 45885 SEE SCHEDULE L, PART V false MHEALTH INNOVATIONS INC BUSINESS 9129 SEE SCHEDULE L, PART V false FAMILY & BUSINESS RELATIONSHIPS AND BUSINESS TRANSACTIONS WITH INTERESTED PERSONS PART VI, SEC A, LINE 2 & SCH L, PART IV MR. RICHARD BREON, CEO, HAS A DAUGHTER-IN-LAW WHO IS EMPLOYED BY THE TAXPAYER. MR. RICHARD DEVOS, SR. HAS A SON THAT SERVES ON THE BOARD OF DIRECTORS FOR THE TAXPAYER. MR. RICHARD DEVOS, JR. HAS A FATHER THAT SERVES ON THE BOARD OF DIRECTORS FOR THIS ORGANIZATION. MR. DAVID LEONARD, A NON-VOTING OFFICER OF TAXPAYER'S BOARD OF DIRECTORS, SERVES AS SECRETARY ON THE BOARD OF DIRECTORS FOR A TAXABLE SUBSIDIARY WHICH HAS A BUSINESS RELATIONSHIP WITH THE TAXPAYER. MR. MARK MURRAY SERVES ON THE BOARD OF DIRECTORS FOR A UTILITY COMPANY THAT PROVIDES SERVICES TO TAXPAYER AND AFFILIATES. THE AMOUNT REPORTED ON SCH L REPRESENTS AMOUNTS PAID FOR UTILITIES FROM THE TAXPAYER AND RELATED ORGANIZATIONS. MR. MICHAEL FREED, CFO, HAS A DAUGHTER WHO IS EMPLOYED BY THE TAXPAYER. MR. PATRICK O'HARE, A KEY EMPLOYEE OF THE TAXPAYER, SERVES ON THE BOARD OF DIRECTORS FOR A TAXABLE SUBSIDIARY WHICH HAS A BUSINESS RELATIONSHIP WITH THE TAXPAYER. THROUGH OUR ANNUAL CONFLICT OF INTEREST AND TAX REPORTING PROCESSES, CERTAIN INDIVIDUALS LISTED IN SCH L HAVE REPORTED THAT THEY, OR COMPANIES THEY WORK FOR, HAVE BUSINESS OR FAMILY RELATIONSHIPS WITH THE REPORTING ORGANIZATION THAT EXCEED THRESHHOLDS PROVIDED IN THE INSTRUCTIONS TO THE FORM 990. IF AN AMOUNT IS NOT LISTED IN SCH L, A STATEMENT IS PROVIDED ABOVE EXPLAINING THE NATURE OF THE TRANSACTION(S). INDIRECT EMPLOYEES FORM 990, PART I, LINE 5 & FORM 990, PART V, LINE 2A TAXPAYER MAY HAVE INDIRECT EMPLOYEES. COMPENSATION FOR THESE EMPLOYEES IS PAID BY A RELATED ORGANIZATION. AN ALLOCATION OF AMOUNTS PAID FOR INDIRECT EMPLOYEES IS PURSUANT TO A MANAGEMENT SERVICES CONTRACT AND IS INCLUDED ON LINES 5-10 OF PART IX. Family/business relationships amongst interested persons Form 990, Part VI, Section A, Line 2 RICHARD DEVOS, SR. - FAMILY RELATIONSHIP, RICHARD DEVOS, JR. - FAMILY RELATIONSHIP Significant changes to organizational documents Form 990, Part VI, Section A, Line 4 THE TAXPAYER'S ARTICLES OF INCORPORATION WERE RESTATED TO UPDATE THE NAMES OF ALL THE SUPPORTED TAXPAYERS. THE TAXPAYER'S BYLAWS WERE UPDATED TO RENAME THE AUDIT COMMITTEE THE AUDIT & COMPLIANCE COMMITTEE AND TO GIVE THAT COMMITTEE RESPONSIBILITY FOR COMPLIANCE AT THE TAXPAYER. THE BYLAWS WERE ALSO AMENDED TO INCLUDE THE ADDITION OF A GOVERNANCE COMMITTEE WHICH IS RESPONSIBLE FOR THE GOVERNANCE NEEDS OF THE TAXPAYER. APPROVAL LIMITS FOR THE AMOUNT OF CAPITAL EXPENDITURES OR LOANS TO UNRELATED ENTITIES WERE INCREASED FOR THE TAXPAYER'S CEO/PRESIDENT. Review of form 990 by governing body Form 990, Part VI, Section B, Line 11a 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 A DISCLOSURE FORM 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 WILL LEAVE THE MEETING DURING DISCUSSION AND VOTING ON THAT PROPOSED TRANSACTION OR ARRANGEMENT. THE PERSON HAVING THE FINANCIAL INTEREST WILL NOT BE COUNTED IN DETERMINING WHETHER A QUORUM IS PRESENT. 3.THE CHAIRPERSON OF THE BOARD OF DIRECTORS OR COMMITTEE WILL, 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 TAXPAYERS'S BEST INTEREST. 4.THE BOARD OF DIRECTORS OR COMMITTEE WILL EXERCISE DUE DILIGENCE TO DETERMINE WHETHER TAXPAYER 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 WILL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS AND MEMBERS WHETHER THE PROPOSED TRANSACTION OR ARRANGEMENT IS IN TAXPAYERS'S BEST INTEREST AND FOR ITS OWN BENEFIT AND WHETHER THE TRANSACTION IS FAIR AND REASONABLE TO TAXPAYER, AND WILL 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 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 COMPLETES A CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRE. A COPY OF THE MEMBER OF MANAGEMENT'S DISCLOSURE QUESTIONNAIRE IS SENT TO THE TAXPAYER'S LEGAL DEPARTMENT AND IS ALSO MAINTAINED BY HUMAN RESOURCES IN THAT PERSON'S PERSONNEL FILE. 2. ANNUALLY, EACH MEMBER OF MANAGEMENT COMPLETES 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 TAXPAYER'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 TAXPAYER AND TO ENSURE THAT TAXPAYER'S EMPLOYEES ARE ALWAYS ACTING IN THE BEST INTEREST OF TAXPAYER. Process used to establish compensation of top management official Form 990, Part VI, Section B, Line 15a SPECTRUM HEALTH SYSTEM PROCESS FOR ESTABLISHING EXECUTIVE COMPENSATION THE SPECTRUM HEALTH BOARD OF DIRECTORS (EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF EXECUTIVES AT ALL ENTITIES: *LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. *COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED IN ADVANCE OF EXECUTIVE COMMITTEE MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND, FOR FY 2011 (7/1/10-6/30/11), WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS: * SULLIVAN, COTTER AND ASSOCIATES, INC.: 2010 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * INTEGRATED HEALTHCARE STRATEGIES: 2010 HEALTHCARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2010 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * WATSON WYATT DATA SERVICES: 2010/2011 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT *THESE SOURCES ARE CONSISTENT WITH THOSE USED IN LAST YEAR'S ANALYSIS. *COMPENSATION ADJUSTMENTS ARE APPROVED BY INDEPENDENT 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 ARE NATIONAL BENCHMARKS AND REFLECT THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFIT DATA REFLECTS 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 THE SPECTRUM HEALTH POTENTIAL 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. Public Disclosure 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 AND POSTED TO WWW.SPECTRUMHEALTH.ORG ANNUALLY (UNDER THE SECTION TITLED "ABOUT US"). CLASSES OF MEMBERS OR STOCKHOLDERS FORM 990, PART VI, SECTION A, LINE 6 THE TAXPAYER IS ORGANIZED ON A NON-STOCK DIRECTORSHIP BASIS WITH NO MEMBERS. ELECTION OF MEMBERS AND THEIR RIGHTS FORM 990, PART VI, SECTION A, LINE 7A THE SOLE MEMBER(S) (SEE FORM 990, PART VI, LINE 6) OF THE TAXPAYER APPOINTS ALL MEMBERS OF THE BOARD OF DIRECTORS. DECISIONS SUBJECT TO APPROVAL OF MEMBERS FORM 990, PART VI, SECTION A, LINE 7B THE TAXPAYER IS ORGANIZED ON A NON-STOCK DIRECTORSHIP BASIS WITH NO MEMBERS. Other changes in net assets or fund balances Form 990, Part XI, Line 5 NET UNREALIZED GAINS (LOSSES) ON INVESTMENTS - 62439252; SH HOSPITALS (EIN 38-1360529)-FUND BALANCE TRANSFER - 29614730; BAC-FUND BALANCE TRANSFER - 8683462; PHMB PROPERTIES LLC 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382715520 PROP. MGMT MI 179821 29996933 PRIORITY HEALTH MMPC REAL ESTATE LLC 4100 LAKE DR SE STE 300 GRAND RAPIDS MI 49525 382851295 DORMANT MI MICHIGAN MEDICAL PATIENT CARE SPECTRUM HEALTH INNOVATIONS LLC 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 272868213 IP DEVELOP MI 6018 3146005 SPECTRUM HEALTH SYSTEM SPECTRUM HEALTH SYSTEM 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 383382353 MANAGEMENT MI 501(C)(3) 11 - Type III - FI NA false SPECTRUM HEALTH HOSPITALS 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 381360529 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true SPECTRUM HEALTH PRIMARY CARE PTNRS 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 381358164 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true WEST MICHIGAN REGIONAL LABORATORY 1726 KNOLLCREST CIRCLE SE GRAND RAPIDS MI 49546 383414862 TEACH/RSCH MI 501(C)(3) 9 SPECTRUM HEALTH HOSPITALS true SPECTRUM HEALTH FOUNDATION 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 382752328 PHILANTHRO MI 501(C)(3) 7 SPECTRUM HEALTH SYSTEM true 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 true SH CONTINUING CARE CENTER 750 FULLER AVE NE GRAND RAPIDS MI 49503 382415333 REHAB/NRS MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE true SH KENT COMMUNITY CAMPUS 750 FULLER AVE NE GRAND RAPIDS MI 49503 383472677 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH CONTINUING CARE true SPECTRUM HEALTH WORTH SERVICES 750 FULLER AVE NE GRAND RAPIDS MI 49503 382786617 HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE true VISITING NURSE SERVICES OF WEST MI 750 FULLER AVE NE GRAND RAPIDS MI 49503 381359195 HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE true PRIORITY HEALTH 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382715520 HMO MI 501(C)(4) N/A SPECTRUM HEALTH SYSTEM true TRINITY HEALTH PLANS 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382663747 HMO MGMT MI 501(C)(4) N/A PRIORITY HEALTH true PH GOVERNMENT PROGRAMS INC 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 320016523 HMO MI 501(C)(3) 9 PRIORITY HEALTH true SPECTRUM HEALTH UNITED 615 S BOWER GREENVILLE MI 48838 381358412 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true SH UNITED MEMORIAL FOUNDATION 615 S BOWER GREENVILLE MI 48838 382990574 PHILANTHRO MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED true AMBULATORY UNITED 407 S NELSON 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 true WEST MICHIGAN IMAGING CENTER PO BOX 1009 JENISON MI 49428 382730326 HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH HOSPITALS true NEWAYGO COUNTY GENERAL HOSPITAL ASSOCIATION 212 S SULLIVAN AVENUE FREMONT MI 49412 381359517 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true MMPC FOUNDATION 4100 LAKE DR SE STE 300 GRAND RAPIDS MI 49546 201099059 PHILANTHRO MI 501(C)(3) N/A MICHIGAN MEDICAL PATIENT CARE true KENT COMMUNITY HEALTH FOUNDATION 750 FULLER AVE NE GRAND RAPIDS MI 49503 383607110 PHILANTHRO MI 501(C)(3) 11 - Type III - FI SPECTRUM HEALTH KENT COMMUNITY CAMPUS true ZEELAND COMMUNITY HOSPITAL 100 SOUTH PINE ZEELAND MI 49464 381411184 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true HELEN DEVOS WOMEN'S AND CHILDREN'S HEALTH PAVILION ASSOCIATION 1840 WEALTHY ST SE GRAND RAPIDS MI 49506 383264184 MGMT MI SPECTRUM HEALH HOSPITALS C CORPORATION 611739 462237 0.8696 PARTNERSHIP FOR CHILDREN'S HEALTH 1840 WEALTHY ST SE GRAND RAPIDS MI 49506 383364676 MGED CARE MI SPECTRUM HEALH HOSPITALS C CORPORATION 0 0 1 THE FRED AND LENA MEIJER HEART CENTER CONDOMINIUM ASSOCIATION 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 830464302 MGMT MI SPECTRUM HEALH HOSPITALS C CORPORATION 2205785 1454395 0.9827 HDVCH - CHC 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 383417270 MED. SVCS MI SPECTRUM HEALH HOSPITALS C CORPORATION 1800 0 1 CAMPUS TOWNE CENTER CONDO ASSC 4868 LAKE MICHIGAN DRIVE ALLENDALE MI 49401 382910067 MGMT MI SPECTRUM HEALH HOSPITALS C CORPORATION 20826 24780 0.75 PRIORITY HEALTH INSURANCE COMPANY 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 201529553 INSURANCE MI PRIORITY HEALTH C CORPORATION 217156804 65878919 1 PRIORITY HEALTH MANAGED BENEFITS 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 383085182 ADMIN MI SPECTRUM HEALTH SYSTEM C CORPORATION 129683594 29767226 1 MONTCALM PRIMARY CARE PHYSICIANS 615 S BOWER GREENVILLE MI 48838 202544762 MED. SVCS MI SPECTRUM HEALTH UNITED C CORPORATION 0 0 1 BLODGETT ASSURANCE COMPANY 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 INSURANCE CJ SPECTRUM HEALTH SYSTEM C CORPORATION 0 0 1 MICHIGAN MEDICAL PATIENT CARE 4100 LAKE DR SE STE 300 GRAND RAPIDS MI 49546 382851295 MEDICAL MI SPECTRUM HEALTH SYSTEM C CORPORATION 0 0 1 WEST MICHIGAN HEART 2900 BRADFORD STREET NE GRAND RAPIDS MI 49525 382125186 PHYSICIANS MI SPECTRUM HEALTH SYSTEM C CORPORATION 0 0 1 MHEALTH INNOVATIONS INC 425 NORTH MAIN STREET ANN ARBOR MI 48104 611613614 PROD DEVL MI SPECTRUM HEALTH INNOVATIONS LLC C CORPORATION 0 457129 1 true true false true false false false false false false true true false true false true true true SPECTRUM HEALTH HOSPITALS K 54483019 GAAP, CASH, OR FMV REED CITY HOSPITAL CORPORATION K 276000 GAAP, CASH, OR FMV SPECTRUM HEALTH CONTIUING CARE K 662000 GAAP, CASH, OR FMV SPECTRUM HEALTH UNITED K 345127 GAAP, CASH, OR FMV SPECTRUM HEALTH KELSEY K 83790 GAAP, CASH, OR FMV AMBULATORY UNITED K 12083 GAAP, CASH, OR FMV SPECTRUM HEALTH FOUNDATION K 12000 GAAP, CASH, OR FMV SPECTRUM HEALTH PRIMARY CARE PARTNERS K 12012336 GAAP, CASH, OR FMV PRIORITY HEALTH K 628384 GAAP, CASH, OR FMV WEST MICHIGAN HEART K 83249 GAAP, CASH, OR FMV MHEALTH K 9129 GAAP, CASH, OR FMV MICHIGAN MEDICAL PC K 5794666 GAAP, CASH, OR FMV PRIORITY HEALTH D 1802376 GAAP, CASH, OR FMV ZEELAND COMMUNITY HOSPITAL N 12063 GAAP, CASH, OR FMV PRIORITY HEALTH L 3726110 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS A 6625 GAAP, CASH, OR FMV SPECTRUM HEALTH PRIMARY CARE PARTNERS A 290061 GAAP, CASH, OR FMV MICHIGAN MEDICAL PC A 44254 GAAP, CASH, OR FMV SPECTRUM HEALTH UNITED MEMORIAL K 10000 GAAP, CASH, OR FMV REED CITY HOSPITAL CORPORATION K 5000 GAAP, CASH, OR FMV SPECTRUM HEALTH GERBER MEMORIAL HOSPITAL K 600 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS Q 36368423 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS R 54376906 GAAP, CASH, OR FMV ZEELAND COMMUNITY HOSPITAL P 489446 GAAP, CASH, OR FMV MICHIGAN MEDICAL PC B 8829500 GAAP, CASH, OR FMV PART II, COLUMN (G), SECTION 512(B)(13) CONTROLLED ENTITY? SCHEDULE R THE TAXPAYER IS THE COMMON PARENT ORGANIZATION OF A CONSOLIDATED HEALTH SYSTEM, SPECTRUM HEALTH SYSTEM. FOR ENTITIES THAT ARE PART OF A CONSOLIDATED HEALTH SYSTEM (WITH COMMON CONTROL) THE ATTRIBUTION RULES OF IRC SECTION 318 APPLY; MEANING THAT ALL ORGANIZATIONS ARE DEEMED TO HAVE CONTROL OF THE ORGANIZATIONS OWNED BY THE CONTROLLING ORGANIZATION. AS SUCH, IN ANSWERING THIS QUESTION AND FOR REPORTING IN SCH. R, EACH RELATED ORGANIZATION WITHIN THE HEALTH SYSTEM IS CONSIDERED AND THE TRANSACTIONS DISCLOSED MAY BE BETWEEN DIRECTLY CONTROLLED SUBSIDIARIES OR BROTHER-SISTER ENTITIES (INDIRECTLY CONTROLLED) WITHIN THE HEALTH SYSTEM.