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        <Description>Please see annual report below for additional information on the activities of Lakewood and other System entities.A former British prime minister, David Lloyd George, once noted that "You can't cross a chasm in two small steps." His point is that we shouldn't be afraid to take a big step if one is indicated. For some, the EMHS decision to become one of the federally recognized Pioneer Accountable Care Organizations (ACO) in the nation might seem to be a very large step.The nation certainly has a large chasm to cross, as identified in the Institute of Medicine's 2011 report, "Crossing the Quality Chasm." As our nation's healthcare delivery system has become unsustainably expensive, it has exposed the dysfunctional incentives and inefficiencies that grew within the system over the last 50 years. It is important to note that there is no single part of the system at fault. It has been a natural evolution of a myriad of parties-private payers, governmental payers, hospitals, physicians, and consumers alike.For those reasons, EMHS is proud to be among a few bold health systems in the nation that are leading health reform. While the Pioneer ACO is driven by the federal Medicare program, EMHS is mobilizing the same strategies for multiple patient populations in the state of Maine and elsewhere in northern New England. Our decision to pursue these redesigned models of care delivery and reimbursement should not seem to be such a big step for our constituents who have read our two previous annual reports. In 2009, we described the need to redefine hospitals not as brick-and-mortar places but as a continuous loop of community-based services. The nation's epidemic of chronic disease is most effectively addressed in the community, saving our hospitals for the crises and acute issues that demand the most advanced technology.Likewise, in 2010, we described the building blocks EMHS has been putting in place to manage a reformed healthcare system. These building blocks include advanced information technology that enable care managers to identify and monitor chronically ill patients to assure their optimal health status. This approach to care management has been pivotal to the success of the Bangor Beacon Community project-and regional "Little Beacons" emulating it. Beacon projects are proving real value by linking together multiple providers-both within EMHS and among externally aligned collaborators-using the same care management philosophy regardless of the site of care.We recently heard a colleague in a Pennsylvania health system describe their approach to accountable care as one of "never discharging a patient." Their focus is to manage seamless transitions of care from site to site and provider to provider, assuring appropriate levels of support throughout a patient's life. That is a fair description of how EMHS is approaching a reformed, accountable, value-based healthcare delivery model, and we are proud to safely lead the way across the chasm.M. Michelle Hood, FACHEEMHS President and CEOP. James Nicholson, CPAEMHS Board Chair</Description>
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        <AnyLeaseArrangements>false</AnyLeaseArrangements>
        <MngmentCntrctBondFinancdPrprty>false</MngmentCntrctBondFinancdPrprty>
        <AnyResearchAgreements>false</AnyResearchAgreements>
        <BondCounselRoutinelyEngaged>false</BondCounselRoutinelyEngaged>
        <PostIssuanceComplianceProcdrs>true</PostIssuanceComplianceProcdrs>
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        <OwningBondFinancedProperty>false</OwningBondFinancedProperty>
        <AnyLeaseArrangements>false</AnyLeaseArrangements>
        <MngmentCntrctBondFinancdPrprty>false</MngmentCntrctBondFinancdPrprty>
        <AnyResearchAgreements>false</AnyResearchAgreements>
        <BondCounselRoutinelyEngaged>false</BondCounselRoutinelyEngaged>
        <PostIssuanceComplianceProcdrs>true</PostIssuanceComplianceProcdrs>
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      <Form990ScheduleKPartIV>
        <Form8038TFiled>true</Form8038TFiled>
        <VariableRateIssue>false</VariableRateIssue>
        <HedgeIdentifiedInBooksAndRecds>false</HedgeIdentifiedInBooksAndRecds>
        <NameOfHedgeProvider>
          <BusinessNameLine1>NA</BusinessNameLine1>
        </NameOfHedgeProvider>
        <GrossProceedsInvestedInGIC>true</GrossProceedsInvestedInGIC>
        <NameOfGICProvider>
          <BusinessNameLine1>FSA Cap Mgmt</BusinessNameLine1>
        </NameOfGICProvider>
        <TermOfGIC>19.0000</TermOfGIC>
        <RegulatorySafeHarborSatisfied>true</RegulatorySafeHarborSatisfied>
        <GrossProceedsInvested>false</GrossProceedsInvested>
        <ExceptionToRebate>false</ExceptionToRebate>
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      <Form990ScheduleKPartIV>
        <Form8038TFiled>false</Form8038TFiled>
        <VariableRateIssue>false</VariableRateIssue>
        <HedgeIdentifiedInBooksAndRecds>false</HedgeIdentifiedInBooksAndRecds>
        <NameOfHedgeProvider>
          <BusinessNameLine1>NA</BusinessNameLine1>
        </NameOfHedgeProvider>
        <GrossProceedsInvestedInGIC>true</GrossProceedsInvestedInGIC>
        <NameOfGICProvider>
          <BusinessNameLine1>FSA Cap Mgmt-Reserve Fund Transamerica-Const Fund</BusinessNameLine1>
        </NameOfGICProvider>
        <TermOfGIC>30.0000</TermOfGIC>
        <RegulatorySafeHarborSatisfied>true</RegulatorySafeHarborSatisfied>
        <GrossProceedsInvested>false</GrossProceedsInvested>
        <ExceptionToRebate>false</ExceptionToRebate>
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    </IRS990ScheduleK>
    <IRS990ScheduleL documentId="IRS990ScheduleL" softwareId="10000105" softwareVersion="2010v3.2">
      <Form990ScheduleLPartIV>
        <NameOfInterestedPerson>
          <NamePerson>John D Dalton</NamePerson>
        </NameOfInterestedPerson>
        <Relationship>officer=director</Relationship>
        <AmountOfTransaction>117905</AmountOfTransaction>
        <DescriptionOfTransaction>Eastern ME Workers Comp Tr</DescriptionOfTransaction>
        <SharingOfRevenues>false</SharingOfRevenues>
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    </IRS990ScheduleL>
    <IRS990ScheduleO documentId="IRS990ScheduleO" softwareId="10000105" softwareVersion="2010v3.2">
      <GeneralExplanation>
        <ReturnReference>Form 990, Part VI, Line 14 - Explanation of Written Document Retent</ReturnReference>
        <Explanation>Eastern Maine Healthcare Systems (EMHS) has had a written document retention and destruction policy since July 2007. The policy is a system-wide policy which applies to Lakewood, A Continuing Care Center, a related organization of EMHS.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Line 19</Identifier>
        <ReturnReference>Form 990, Part VI, Line 19: Other Organization Documents Publicly Available</ReturnReference>
        <Explanation>Lakewood, A Continuing Care Center makes its governing documents, conflict of interest policy and financial statements available to the public upon request.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Line 15b</Identifier>
        <ReturnReference>Form 990, Part VI, Line 15b: Compensation Review and Approval Process for Officers and Key Employees</ReturnReference>
        <Explanation>Compensation of other officers and key employees of the organization is established by the Human Resources department who utilize external market research to establish compensation ranges for specific positions. On an annual basis, the compensation ranges are compared to the updated survey information. The Human Resources department will determine where the employee will fall within the ranges established by the Human Resources department based on experience and credentials.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Line 12c</Identifier>
        <ReturnReference>Form 990, Part VI, Line 12c: Explanation of Monitoring and Enforcement of Conflicts</ReturnReference>
        <Explanation>The organization requests updates of potential conflicts and relationships from the officers and Board members on an annual basis. The request requires disclosure of all business relationships, board memberships, and family relationships. A database is maintained that is compared to payroll records and the accounts payable vendor list to identify any potential conflicts of interest. Transactions are reviewed for reasonableness as an arm's length transaction. The first agenda item for board meetings and board committee meetings is for members to declare any conflict of interest with upcoming agenda items or deliberations. At any point when consideration is being given to purchase/contract with a party in interest, the member with the conflict is either excused from the discussion and consideration process or abstains from voting on the matter. All transactions identified with parties in interest are disclosed within the Form 990. All are deemed to be arm's length transactions.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Line 11</Identifier>
        <ReturnReference>Form 990, Part VI, Line 11: Form 990 Review Process</ReturnReference>
        <Explanation>Form 990 is provided to each board member either electronically or in hard copy with an opportunity to ask questions prior to filing with the IRS.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Line 7a</Identifier>
        <ReturnReference>Form 990, Part VI, Line 7a: How Members or Shareholders Elect Governing Body</ReturnReference>
        <Explanation>The Member has authority to elect directors of the Corporation.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Line 6</Identifier>
        <ReturnReference>Form 990, Part VI, Line 6: Explanation of Classes of Members or Shareholder</ReturnReference>
        <Explanation>Lakewood, A Continuing Care Center (the "Corporation") is a Maine nonprofit corporation. Inland Hospital Corp (the "Member"), also a Maine nonprofit corporation, is the sole corporate member of the Corporation.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part III, Line 4d</Identifier>
        <ReturnReference>Form 990, Part III, Line 4d : Other Program Services Description</ReturnReference>
        <Explanation>OTHER PROGRAM SERVICES 4: EMHS (Systemwide)LEADERSHIP: M. Michelle Hood, FACHE, President and CEO and P. James Nicholson, CPA, Chair LOCATION: Brewer: EMPLOYEES: (Home Office) 438; DESCRIPTION: EMHS offers access to high quality healthcare, while striving for efficiencies to control costs. The Home Office of EMHS works in support of the nearly 8,000 employees throughout the system, including seven hospitals, emergency transport companies, home health agencies, and numerous long-term care and assisted living facilities.- EMHS was very pleased to be one of only 32 organizations across the United States invited to become a Pioneer Accountable Care Organization (ACO) through the Centers for Medicare and Medicaid Services (CMS). The up to five year demonstration project is intended to improve the coordination, efficiency, effectiveness, quality, and cost of healthcare.- EMHS conducted a dozen community meetings throughout central, eastern, and northern Maine to discuss the findings of the 2011 OneMaine Health Collaborative Community Health Needs Assessment with healthcare providers, citizens, business, legislative leaders and others. OneMaine Health is a collaborative between EMHS, MaineGeneral Health and MaineHealth.- EMHS and Guiding Stars, the world's first storewide nutrition navigation program, announced a partnership to implement the program throughout its system of hospitals. The partnership seeks to benefit the health of local communities by helping patients, visitors, and employees within EMHS hospitals identify more nutritious food choices.- In 2011, the EMHS Home Office celebrated its fifth consecutive year as a Best Workplace in Maine. EMHS placed seventh on the large company list (more than 250 employees) of many great Maine companies. We know one reason why is the great people who work here!- More than 1,100 patients are improving their health through care management as a result of the work being completed through Bangor Beacon Community. Beacon is comprised of 12 partners and led by EMHS. Beacon is supported by a three year, $12.7 million grant from the Office of the National Coordinator and ends in March 2013.EMHS (Home Office)- Beacon's successes include: updating state law to allow sharing of mental health information through electronic medical records; expanding connections to HealthInfoNet, Maine's statewide health information exchange; and improving primary care patient outcomes through Performance Improvement Committee activities.- EMHS and Husson University co-hosted a breakfast session with New York Times bestselling author, T.R. Reid. Reid's talk focused on his book, "Dispelling the Myth-How America Can Achieve High Quality, Lower Cost Healthcare."- All EMHS Home Office managers are completing leadership training called "EMHS University." The program is designed to ensure that all managers in the Home Office have received the appropriate information on policies, procedures, and skills necessary to be a great leader.- More than 40 Home Office employees were trained in basic Lean tools and skills. Lean is a process improvement program designed to reduce costs and duplications, and help improve quality. OTHER PROGRAM SERVICES 5: The Acadia HospitalLEADERSHIP: Daniel B. Coffey, President and CEO and Richard A. Lyons, Chair LOCATION: Bangor; EMPLOYEES: 609; DESCRIPTION: The Acadia Hospital is Maine's comprehensive resource for information and treatment of mental illness and chemical dependency.- In February, Acadia opened its Adult Evaluation Center in direct response to the community's need for increased access to outpatient services. This center allows people seeking outpatient treatment to receive an evaluation of services within 48 hours of any request.- In May, Acadia announced Daniel B. Coffey as its new president and CEO. Coffey came to Acadia from EMHS, where he had served as the executive vice president, treasurer and chief financial officer.- In May, Acadia started the Wellness Works program. This is an outcome-based employee health initiative that measures participants' gains as they lead healthier lifestyles.- In August, the Acadia Artisans project was launched to display patients' artwork. This display is in the main hallway of the hospital and illuminates the work of recovery.- In December, Acadia appointed Anthony Ng, MD, FAPA as its new vice president and chief medical officer.- In December, Acadia began providing telepsychiatry at Maine Coast Memorial Hospital in Ellsworth.- Acadia served as executive producer for a film about teen anxiety and depression titled "The Road Back." This youth-focused endeavor, created in partnership with Project AWARE, included dozens of area teens.The film was funded in part by the Davis Family Foundation, Bingham Program, and Spring Harbor Hospital.- The hospital unveiled a new community education series, An Open Mind, with one presentation on cyber bullying and the other on the aging brain.- Converted the hospital's inpatient units to one full child/adolescent/young adult floor of 32 beds and one adult floor with 36 beds. This has increased access for inpatient care for the state.- Acadia implemented Management of Aggressive Behavior (MOAB) training for direct-care staff. MOAB is a national program designed to decrease injury to patients and staff.- Acadia's executive leadership began a 12-month process improvement initiative.- Acadia participated in the local Pay it Forward program, which provides funds for staff to assist young patients and their families in improving their relationships and life interactions. This program is sponsored through the generous support of Acadia donors. Pay it Forward was also highlighted in the Bangor Daily News.- Advertising specialists selected the Backpack Program as their charity of choice in celebration of their twenty-fifth anniversary and donated 600 backpacks with supplies for children graduating from the partial hospitalization program and returning to school.- To better meet the needs of the hospital's pediatric patients and their families, Acadia created an Inpatient Parent Handbook. This allows parents to take a more active and informed role in the care of their children hospitalized at Acadia Hospital.- Acadia expanded the Pediatric Partial program with outreach to the community for a summer treatment program that provides counseling, education, and structure around coping skills, as well as providing application of these learned skills with structured activities in the community.- Acadia was a proactive partner in educating the public about the dangers of the drug known as bath salts, working closely with other community agencies on a variety of efforts.- The hospital was designated as a site for a sculpture from the Schoodic Symposium project. The sculpture will be placed at Acadia's campus on Stillwater Avenue in Bangor in the fall of 2012.- Many upgrades were made to the facility, including installation of new safe, energy-efficient LED lighting on the second floor inpatient unit corridors, 12 security cameras on all four inpatient units, and a call center with new phone equipment and software. OTHER PROGRAM SERVICES 6: Affiliated Healthcare SystemsLEADERSHIP: Miles Theeman, President and CEO and Richard I. Stone, Chair LOCATION: Bangor, Portland, and Rutland, Vermont; EMPLOYEES: 562; DESCRIPTION: A taxable company with a primary mission to enhance the clinical care delivery systems within EMHS by providing cost-effective, integrated support services for its member organizations, and pursuing profitable, sustainable growth opportunities.- AHS was one of four companies honored by the Maine State Chamber of Commerce with a 2011 "Maine Investor Award," which recognizes Maine businesses for their outstanding contributions to the growth of their companies and the state's economy.- Workforce Performance Solutions (WPS) achieved 35 percent revenue growth for its training services and secured 13 new contracts in the Employee Assistance Program.- The Affiliated Material Services (AMS) logistics division added two new hospital customers: Down East Community Hospital in Machias and Millinocket Regional Hospital.- Affiliated Collections Inc. (ACI) experienced another record-breaking year with placements of more than $44 million.The previous record was $39 million.- AHS provided more than $244,000 in donations to Healthcare Charities in support of EMHS hospitals and care providers, as well as more than $18,000 in charitable contributions and support to non-EMHS organizations.- Lighthouse Web Solutions (LWS) won an unprecedented nine awards at the fourteenth annual Healthcare Internet Conference in the following categories: Best Health/Healthcare Content, Best Care/Disease Management Site, Best Design Site, Best Overall Site, and Best Interactive Site.- Capital Ambulance (Capital) achieved record ambulance volume of more than 12,800 transports including 259 critical care trips. It also transitioned to a new electronic patient care</Explanation>
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          <City>Brewer</City>
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        </AddressUS>
        <EIN>010391038</EIN>
        <PrimaryActivities>Provide services to elderly</PrimaryActivities>
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        <ControlledOrg>true</ControlledOrg>
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          <AddressLine1>43 Whiting Hill Road</AddressLine1>
          <City>Brewer</City>
          <State>ME</State>
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        <EIN>010391036</EIN>
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          <AddressLine1>Po Box 404 489 State Street</AddressLine1>
          <City>Bangor</City>
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          <AddressLine1>57 Water Street</AddressLine1>
          <City>Blue Hill</City>
          <State>ME</State>
          <ZIPCode>046145231</ZIPCode>
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          <City>Brewer</City>
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          <AddressLine1>PO Box 688</AddressLine1>
          <City>Caribou</City>
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          <ZIPCode>04736</ZIPCode>
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          <City>Presque Isle</City>
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          <AddressLine1>PO Box 151 140 Academy Street</AddressLine1>
          <City>Presque Isle</City>
          <State>ME</State>
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          <BusinessNameLine1>The Aroostook Medical Center TAMC</BusinessNameLine1>
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          <AddressLine1>PO Box 151 140 Academy Street</AddressLine1>
          <City>Presque Isle</City>
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          <State>ME</State>
          <ZIPCode>04967</ZIPCode>
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          <City>Greenville</City>
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          <ZIPCode>044411129</ZIPCode>
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          <BusinessNameLine1>Norumbega Medical Specialists LTD</BusinessNameLine1>
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          <State>ME</State>
          <ZIPCode>04412</ZIPCode>
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        <PrimaryActivities>Provide patient care and education</PrimaryActivities>
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          <BusinessNameLine1>EMMC</BusinessNameLine1>
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          <AddressLine1>43 Whiting Hill Road</AddressLine1>
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          <BusinessNameLine1>EMHS</BusinessNameLine1>
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          <AddressLine1>43 Whiting Hill Road</AddressLine1>
          <City>Brewer</City>
          <State>ME</State>
          <ZIPCode>04412</ZIPCode>
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        <EIN>223183888</EIN>
        <PrimaryActivities>Provide healthcare services</PrimaryActivities>
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        <PublicCharityStatus>9</PublicCharityStatus>
        <DirectControllingEntityName>
          <BusinessNameLine1>AHC</BusinessNameLine1>
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          <BusinessNameLine1>Eastern Maine Medical Center Auxiliary</BusinessNameLine1>
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        <AddressUS>
          <AddressLine1>43 Whiting Hill Road</AddressLine1>
          <City>Brewer</City>
          <State>ME</State>
          <ZIPCode>04412</ZIPCode>
        </AddressUS>
        <EIN>010377901</EIN>
        <PrimaryActivities>Fund raising for exempt Eastern Maine Medical Center</PrimaryActivities>
        <LegalDomicileState>ME</LegalDomicileState>
        <ExemptCodeSection>501(c)(3)</ExemptCodeSection>
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        <DirectControllingEntityName>
          <BusinessNameLine1>EMMC</BusinessNameLine1>
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          <BusinessNameLine1>Acadia Hospital Corp AHC</BusinessNameLine1>
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        <AddressUS>
          <AddressLine1>43 Whiting Hill Road</AddressLine1>
          <City>Brewer</City>
          <State>ME</State>
          <ZIPCode>04412</ZIPCode>
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        <EIN>010459837</EIN>
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        <DirectControllingEntityName>
          <BusinessNameLine1>EMHS</BusinessNameLine1>
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          <BusinessNameLine1>Rosscare Nursing Homes Inc</BusinessNameLine1>
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        <AddressUS>
          <AddressLine1>43 Whiting Hill Road</AddressLine1>
          <City>Brewer</City>
          <State>ME</State>
          <ZIPCode>04412</ZIPCode>
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        <EIN>010430751</EIN>
        <PrimaryActivities>Operation of nursing homes</PrimaryActivities>
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        <DirectControllingEntityName>
          <BusinessNameLine1>Rosscare</BusinessNameLine1>
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        <ControlledOrg>true</ControlledOrg>
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          <BusinessNameLine1>Eastern Maine Healthcare Systems EMHS</BusinessNameLine1>
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          <AddressLine1>43 Whiting Hill Road</AddressLine1>
          <City>Brewer</City>
          <State>ME</State>
          <ZIPCode>04412</ZIPCode>
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          <AddressLine1>9 Alumni Drive</AddressLine1>
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          <ZIPCode>04473</ZIPCode>
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        <EIN>010537924</EIN>
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          <State>ME</State>
          <ZIPCode>04473</ZIPCode>
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          <AddressLine1>9 Alumni Drive</AddressLine1>
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          <BusinessNameLine1>AHS</BusinessNameLine1>
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        <NameOfRelatedOrg>
          <BusinessNameLine1>Maine Network for Health</BusinessNameLine1>
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          <AddressLine1>80 Exchange St 6th Floor Ste 3</AddressLine1>
          <City>Bangor</City>
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          <ZIPCode>04401</ZIPCode>
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          <AddressLine1>931 Union St PO Box 940</AddressLine1>
          <City>Bangor</City>
          <State>ME</State>
          <ZIPCode>044020940</ZIPCode>
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          <BusinessNameLine1>AHS</BusinessNameLine1>
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        <NameOfRelatedOrg>
          <BusinessNameLine1>DE Collections DBA Affil Collections Inc</BusinessNameLine1>
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        <AddressUS>
          <AddressLine1>PO Box 2759</AddressLine1>
          <City>Bangor</City>
          <State>ME</State>
          <ZIPCode>044022759</ZIPCode>
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        <EIN>010366209</EIN>
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          <City>Bangor</City>
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          <ZIPCode>04401</ZIPCode>
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</Return>