2012-11-14T08:17:21-06:00 2011-12-31 381357951 PLANTE & MORAN PLLC 2601 CAMBRIDGE CT SUITE 500 AUBURN HILLS MI 48326 990 2011-01-01 381359087 BRONSON METHODIST HOSPITAL BRON 2693416000 601 JOHN STREET KALAMAZOO MI 49007 MARY MEITZ 2693416000 2012-11-08 0 P00053811 2483757100 2011 2016-02-24 21:20:13Z FRANK SARDONE 301 JOHN STREET KALAMAZOO MI 49007 560734201 0 X WWW.BRONSONHEALTH.COM X 1920 MI PROVIDE EXCELLENT HEALTHCARE SERVICES 21 16 3970 542 9784185 2694714 21600 155303 523230224 540180351 7332176 6602048 12957556 11640886 543541556 558578588 0 10500000 0 0 262621860 277099046 0 0 0 234850186 250133589 497472046 537732635 46069510 20845953 692930720 734395619 345226759 369765291 347703961 364630328 X PROVIDE EXCELLENT HEALTHCARE SERVICES 0 0 364893908 453453867 BRONSON METHODIST HOSPITAL (BMH) IS THE FLAGSHIP OF BRONSON HEALTHCARE GROUP, A NOT-FOR-PROFIT HEALTHCARE SYSTEM SERVING ALL OF SOUTHWEST MICHIGAN. BMH PROVIDES CARE IN VIRTUALLY EVERY SPECIALTY WITH ADVANCED CAPABILITIES IN BURN TREATMENT AND CRITICAL CARE AS A LEVEL I TRAUMA CENTER; IN NEUROLOGICAL CARE AS A JOINT COMMISSION CERTIFIED PRIMARY STROKE CENTER; IN CARDIAC CARE AS THE REGION'S FIRST ACCREDITED CHEST PAIN EMERGENCY CENTER; IN OBSTETRICS AS THE LEADING BIRTHPLACE AND ONLY HIGH-RISK PREGNANCY CENTER IN SOUTHWEST MICHIGAN, AND IN PEDIATRICS AS ONE OF ONLY SIX CHILDREN'S HOSPITALS IN THE STATE AND THE ONLY INPATIENT PEDIATRIC CARE PROVIDER IN THE AREA. THE BMH EMERGENCY DEPARTMENT, WHICH IS OPEN 24 HOURS PER DAY, HANDLES OVER 85,000 VISITS PER YEAR. BMH TREATS ALL PATIENTS REGARDLESS OF THEIR ABILITY TO PAY.BMH WAS THE RECIPIENT OF THE 2005 MALCOLM BALDRIGE NATIONAL QUALITY AWARD, THE NATION'S HIGHEST PRESIDENTIAL HONOR FOR QUALITY AND ORGANIZATIONAL PERFORMANCE EXCELLENCE. IN 2009, THE HOSPITAL RECEIVED THE AHA MCKESSON QUEST FOR QUALITY PRIZE AWARDED ANNUALLY TO ONLY ONE U.S. HOSPITAL, AND JOINED THE TOP FIVE PERCENT OF HOSPITALS IN THE NATION TO BE DESIGNATED A MAGNET HOSPITAL FOR NURSING EXCELLENCE. BMH PROVIDES A DISPROPORTIONATE AMOUNT OF CARE TO THE SEGMENT OF THE POPULATION USING MEDICAID. BMH IS THE LARGEST MEDICAID PROVIDER OF ANY LARGE HOSPITAL IN MICHIGAN OUTSIDE OF THE DETROIT AREA (ON A PERCENTAGE BASIS). IN 2011, APPROXIMATELY 21% OF BMH'S PATIENTS WERE MEDICAID RECIPIENTS. WE HAVE THREE MEDICAID ENROLLERS ON SITE TO HELP THOSE WITHOUT INSURANCE ENROLL IN MEDICAID, OR REFER THEM TO COMMUNITY RESOURCES.EXPENDITURES RELATED TO THE OPERATION OF THE HOSPITAL.IN 2011 IN FURTHERANCE OF ITS MISSION, BMH PROVIDED $24,752,932 IN CHARITY CARE EXPENSE. 91345797 82535000 IN 2011, BMH'S MEDICAID COST WAS $91,345,797 AND MEDICAID NET REVENUE WAS $82,535,000. 22540246 IN 2011, IN FURTHERANCE OF ITS MISSION, BMH INCURRED $22,540,246 IN BAD DEBT TO PROVIDE CARE TO ITS PATIENTS. 478779951 1 1 0 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 1 175 0 1 3970 1 1 1 0 0 0 0 0 0 0 0 0 X 21 16 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 X MARY MEITZ 2693416000 301 JOHN STREET KALAMAZOO MI 49007 X JAMES BARBARA L 1.00 X 0 3147 0 EBERTS RANDALL W PHD 1.00 X 0 2560 0 WARDWELL GEOFFREY A MD 1.00 X 0 1196 0 PARKS FLOYD L 1.00 X 0 2394 0 SARDONE FRANK J 14.00 X X 0 1146066 31090 GIBSON SCOTT C MD 1.00 X 0 2435 0 GREENE JAMES E JR 1.00 X 0 3452 0 GUNDERSON JAMES S 1.00 X 0 2231 0 HUNT BRENDA L 1.00 X 0 0 0 JOHNSTON WILLIAM D 1.00 X 0 0 0 KARAMCHANDANI MAHESH C MD 1.00 X 0 0 0 KARRE NELSON 1.00 X 0 0 0 KLEIN MARIAN G 1.00 X 0 986 0 LINS STEVEN J MD 1.00 X 0 0 0 MONTGOMERY TABRON LA JUNE 1.00 X 0 0 0 NYBERG NEIL 1.00 X 0 0 0 PARFET DONALD R 1.00 X 0 0 0 RICHARDSON WILLIAM C PHD 1.00 X 0 1267 0 ROEHR BERNARD A MD 1.00 X 14485 2532 0 WILSON-OYELARAN EILEEN B PHD 1.00 X 0 0 0 ZELLER CHARLES L JR MD 1.00 X 0 1236 0 JOHN M DUNN 1.00 X 0 0 0 DANIEL R SMITH 1.00 X 0 0 0 KENNETH TAFT 2.00 X 0 621301 33486 JAMES FALAHEE 10.00 X 0 414621 35801 SCOTT LARSON MD 24.00 X 0 489885 20519 JOHN HAYDEN 26.00 X 0 345615 24809 MARY MEITZ 15.60 X 0 335556 31737 KATIE HARRELSON 34.00 X 0 326445 24880 JOHN JONES 12.00 X 0 285238 32367 MIKE WAY 6.00 X 0 234791 22112 GREGORY WIGGINS 40.00 X 1566678 0 31583 ALPHONSE DELUCIA III 40.00 X 775557 0 32917 MICHAEL LEINWAND 40.00 X 748485 0 24634 CHRIS SLOFFER 40.00 X 712297 0 27070 ALAIN FABI 40.00 X 2427834 0 32416 6245336 4222954 405421 160 0 1 0 HEALTHCARE MIDWEST 4341 S WESTNEDGE AVE STE 2205 KALAMAZOO MI 49008 MEDICAL SERVICES 13143164 KALAMAZOO ANESTHESIOLOGY 900 PEELER STREET KALAMAZOO MI 49003 MEDICAL SERVICES 2256348 IME PHYSICIANS 40240 BLUE STAR HWY COVERT MI 49043 MEDICAL SERVICES 1229137 CCS PA LLC 31330 SCHOOLCRAFT ROAD LIVONIA MI 48150 MEDICAL SERVICES 1173194 WEATHERBY LOCUMS INC PO BOX 972633 DALLAS TX 75397 MEDICAL SERVICES 637333 16 68991 86312 155303 NET PATIENT REVENUE 621500 530398928 530398928 PHARMACY REVENUE 446110 5360066 5360066 LABORATORY REVENUE 541380 4421357 4421357 540180351 6602048 6602048 2787364 2155613 631751 631751 631751 CAFETERIA 722210 4091275 2762 4088513 OUTSIDE SERVICE REVENU 900099 3417092 3417092 MEANINGFUL USE REVENUE 900099 2172847 2172847 1327921 1327921 11009135 558578588 535988867 9784185 12650233 10500000 10500000 14485 14485 217990200 193620876 24369324 8859422 7869019 990403 37315137 33143644 4171493 12919802 11475486 1444316 1130092 1003758 126334 54548593 48450556 6098037 49352 43835 5517 67904947 60313791 7591156 9348 8303 1045 9342333 8297945 1044388 582159 517079 65080 1405145 1248062 157083 13423443 11922824 1500619 27073273 24046727 3026546 3998402 3551417 446985 DRUGS & PHARMACEUTICALS 24742774 21976757 2766017 BAD DEBT EXPENSE 22540246 20020451 2519795 BHG SERVICE ALLOCATION 16066746 14270630 1796116 EQUIPMENT MAINT/REPAIR 5865538 5209824 655714 1451198 1288967 162231 537732635 478779951 58952684 0 13504 9562 290098502 302806032 73187157 89899180 8019231 8648180 859320 714660 605947624 317475794 271567591 288471830 44294855 37894853 4890560 5951322 692930720 734395619 38156798 41128141 277485300 271847775 29584661 56789375 345226759 369765291 X 347703961 364630328 347703961 364630328 692930720 734395619 X 20845953 -3919586 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 5755033 5755033 337632739 124008593 213624146 227994814 193467201 34527613 34565038 34565038 288471830 RESTRICTED ASSETS HELD IN TRUST 24901967 F INVESTMENT IN CAYMICH 52264 F WEST MICHIGAN CANCER CENTER 9496885 F KALAMAZOO CENTER FOR MEDICAL STUDIES 3443737 F 37894853 DEFERRED COMPENSATION 2526729 SWAP LIABILITY 17800529 THIRD PARTY CONTRACTUAL SETTLEMENTS 36462117 56789375 558578588 537732635 20845953 -3919586 -3919586 16926367 562472610 0 562472610 -3894022 -3894022 558578588 527652682 0 527652682 10079953 10079953 537732635 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: THE GROUP ADOPTED ACCOUNTING STANDARDS RELATED TO UNCERTAIN TAX POSITIONS AND, ACCORDINGLY, REVIEWED ALL TAX POSITIONS. THE EVALUATED POTENTIAL EXPOSURE RELATED TO UNCERTAIN TAX POSITIONS WAS FOUND TO BE IMMATERIAL. PART XI, LINE 8 - OTHER ADJUSTMENTS: CHANGE IN FAIR VALUE OF SWAP AGREEMENTS -8,685,681. TRANSFER FROM AFFILIATE 1,292,118. GAIN/(LOSS) ON JOINT VENTURES 3,473,977. TOTAL TO SCHEDULE D, PART XI, LINE 8: -3,919,586. PART XII, LINE 4B - OTHER ADJUSTMENTS: INTEREST RATE SWAP -1,806,375. RENTAL EXPENSES -2,155,613. RELATED PARTY CONTRIBUTION 67,966. PART XIII, LINE 4B - OTHER ADJUSTMENTS: INTEREST RATE SWAP -1,806,375. JOINT VENTURES GAIN/(LOSS) 3,473,975. RENTAL EXPENSES -2,155,613. RELATED PARTY CONTRIBUTION 67,966. GRANT TO SUBSIDIARY 10,500,000. 1 1 X 1 X 1 X 0.0 1 1 0 1 1 9437205 9437205 0.01830 90145838 82535000 7610838 0.01480 99583043 82535000 17048043 0.03310 752100 752100 0.00150 15081852 7349939 7731913 0.01500 6815984 4475716 2340268 0.00450 700792 700792 0.00140 23350728 11825655 11525073 0.02240 122933771 94360655 28573116 0.05550 1 22540246 0 122569229 132027012 -9457783 X 1 0 1 1 BRONSON METHODIST HOSPITAL

601 JOHN STREET KALAMAZOO MI 49001

X X X X X BRONSON METHODIST HOSPITAL 1 0 1 1 200.000000000000 1 300.000000000000 1 X X X 1 1 X X 1 0 1 X 0 0 1 BRONSON VICKSBURG OUTPATIENT CENTER

601 JOHN STREET KALAMAZOO MI 49007

24-HOUR ER, THERAPIES, LAB, AND RADIOLOGY PART I, LINE 7: COSTING METHODOLOGY IS A COST TO CHARGE RATIO AS DEFINED BY THE IRS INSTRUCTIONS. THE AMOUNT OF BAD DEBT EXCLUDED IS EQUAL TO THE AMOUNT LISTED ON PAGE 2, PART III, LINE 4 RELATING TO BAD DEBT EXPENSE. PART I, LINE 7, COLUMN (F): THE BAD DEBT EXPENSE INCLUDED ON FORM 990, PART IX, LINE 25, COLUMN (A), BUT SUBTRACTED FOR PURPOSES OF CALCULATING THE PERCENTAGE IN THIS COLUMN IS $ 22540246. PART I, LINE 3B: THE ORGANIZATION USES THE FOLLOWING FPG TO DETERMINE ELIGIBILITY FOR PROVIDING DISCOUNTED CARE TO LOW INCOME INDIVIDUALS.225% OF FPL IS ENTITLED TO AN 80% REDUCTION250% OF FPL IS ENTITLED TO A 60% REDUCTION275% OF FPL IS ENTITLED TO A 40% REDUCTION300% OF FPL IS ENTITLED TO A 20% REDUCTION PART II: BRONSON METHODIST HOSPITAL'S COMMUNITY BUILDING ACTIVITIES GENERALLY FALL WITHIN ONE OF THE THREE AREAS: COMMUNITY SUPPORT, COALITION BUILDING, OR COMMUNITY HEALTH IMPROVEMENT. IN COMMUNITY SUPPORT, BRONSON SUPPORTED EARLY CHILDHOOD LITERACY BY PROVIDING THE FAMILIES OF EVERY NEWBORN A BOOK TO PROMOTE READING; BY TRAINING AREA CLERGY IN PASTORAL CARE FOR ILL AND END-OF-LIFE PATIENTS; BY STAFFING THE COUNTY SAFE KIDS COALITION AND BY OFFERING HEALTH-RELATED EDUCATIONAL SEMINARS THROUGHOUT THE COMMUNITY. BRONSON'S COALITION BUILDING ACTIVITIES INCLUDE SUPPORTING A YOUTH RESIDENT READING PROGRAM AT THE KALAMAZOO COUNTY JUVENILE HOME. COMMUNITY HEALTH IMPROVEMENT HAS PRIMARILY INVOLVED PATIENT ADVOCACY THROUGH CASE MANAGEMENT. IN ADDITION, BRONSON FINANCIALLY SUPPORTS THE COUNTY MEDICAL CONTROL AUTHORITY AND SITS ON THE WEST MICHIGAN CANCER CENTER INSTITUTIONAL REVIEW BOARD EVALUATING CANCER RESEARCH PROTOCOLS INVOLVING PATIENTS. PART III, LINE 4: AN ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS IS ESTABLISHED ON AN AGGREGATE BASIS BY USING HISTORICAL WRITE-OFF RATE FACTORS APPLIED TO UNPAID ACCOUNTS BASED ON AGING. LOSS RATE FACTORS ARE BASED ON HISTORICAL LOSS EXPERIENCE AND ADJUSTED FOR ECONOMIC CONDITIONS AND OTHER TRENDS AFFECTING THE HOSPITAL'S ABILITY TO COLLECT OUTSTANDING AMOUNTS. UNCOLLECTIBLE AMOUNTS ARE WRITTEN OFF AGAINST THE ALLOWANCE FOR DOUBTFUL ACCOUNTS IN THE PERIOD THEY ARE DETERMINED TO BE UNCOLLECTIBLE. AN ALLOWANCE FOR CONTRACTUAL ADJUSTMENTS AND INTERIM PAYMENT ADVANCES IS BASED ON EXPECTED PAYMENT RATES FROM PAYORS BASED ON CURRENT REIMBURSEMENT METHODOLOGIES. THIS AMOUNT ALSO INCLUDES AMOUNTS RECEIVED FOR INTERIM PAYMENTS AGAINST UNPAID CLAIMS BY CERTAIN PAYORS.LINE 2 & 3 ARE REPORTED AS EXPENSE, NOT COST. FOR LINE 3, BAD DEBT WRITEOFFS SUPPORT THE COMMUNITY BY PROVIDING A PORTION OF SERVICES WITHOUT PAYMENT. THE REQUESTED INFORMATION IS NOT AVAILABLE IN THE SYSTEM AND A REASONABLE ESTIMATE CANNOT BE MADE BASED ON THE INFORMATION CURRENTLY AVAILABLE. WE ARE WORKING TOWARDS BEING ABLE TO PULL THIS INFORMATION FROM THE SYSTEM FOR FUTURE REQUESTS. A PORTION OF BAD DEBT IS CONSIDERED COMMUNITY BENEFIT AS IT REPRESENTS SERVICES RENDERED TO UNINSURED AND UNDERINSURED PATIENTS. PART III, LINE 8: COSTING METHODOLOGY IS A COST TO CHARGE RATIO AS DEFINED BY THE IRS 990 INSTRUCTIONS. SHORTFALL SHOULD BE CONSIDERED A COMMUNITY BENEFIT DUE TO ITS REPRESENTATION OF COST OF A PORTION OF SERVICES PROVIDED TO THE COMMUNITY WITHOUT PAYMENT. PART VI, LINE 2: BRONSON METHODIST HOSPITAL UTILIZES A STRATEGIC MANAGEMENT MODEL TO DEVELOP BOTH A LONG TERM (3 YEAR) AND ANNUAL STRATEGIC PLAN. INPUTS INTO THE PLAN ARE DOCUMENTED IN OUR STRATEGIC INPUT DOCUMENT. ONE OF THE IMPORTANT INPUTS INTO THIS PLAN IS THE HEALTH OF OUR COMMUNITY. SEVERAL SOURCES ARE UTILIZED TO PERFORM THIS ASSESSMENT. THE SOURCES FOR THE LATEST STRATEGIC INPUT DOCUMENT ARE LISTED BELOW. SOURCES FOR DETERMINING COMMUNITY HEALTH NEEDS- MICHIGAN BEHAVIORAL RISK FACTORS SURVEY 2002-2006 COMBINED BUREAU OF EPIDEMIOLOGY AND MICHIGAN DEPARTMENT OF COMMUNITY HEALTH- 2004 MICHIGAN SURGEON GENERAL'S HEALTH STATUS REPORT (HEALTH MICHIGAN 2010)- F AS IN FAT: HOW OBESITY IS FAILING IN AMERICA 2009 - TRUST FOR AMERICA'S HEALTH AND ROBERT WOOD JOHNSON FOUNDATION- MICHIGAN DEPARTMENT OF COMMUNITY HEALTH INFANT MORTALITY RATES, 2006THE STRATEGIC INPUT DOCUMENT IS REVIEWED BY THE ENTIRE EXECUTIVE TEAM AND UTILIZED TO DEVELOP OUR COMMUNITY ASSESSMENT AS WELL AS OUR STRATEGIC ADVANTAGES AND DISADVANTAGES.THE COMMUNITY ASSESSMENT IS SHARED WITH THE BOARD EVERY THREE YEARS USING OUR COMMUNITY LEADERSHIP MODEL AS SHOWN BELOW. THREE YEAR PRIORITIES ARE THEN SET FOR OUR COMMUNITY HEALTH.BRONSON METHODIST HOSPITAL ALSO COLLABORATES WITH TWO KEY COMMUNITY AGENCIES FOR THE GATHERING OF HEALTH STATISTICS: THE GREATER KALAMAZOO UNITED WAY AND KALAMAZOO COUNTY HEALTH ANDHUMAN SERVICES. IN ADDITION, BRONSON HAS BEEN A LEADER IN THE FOLLOWING COMMUNITY HEALTH COLLABORATIVES: HEALTHY FUTURES, IMMUNIZE-BY-TWO, HEALTHY BABIES/HEALTHY START, READY TO READ, AFRICAN-AMERICAN HEALTH INITIATIVE, YOUTH VIOLENCE COALITION, HEALTH CONNECT AND EMERGENCY PRESCRIPTION PROGRAM. PART VI, LINE 3: SELF PAY INPATIENTS ARE REFERRED TO AN AGENCY FOR SCREENING FOR MEDICAID, MEDICARE, AND OTHER ELIGIBILITY. A SOFTWARE PROGRAM ALSO HELPS DETERMINE ELIGIBILITY FOR CHARITY CARE. PART VI, LINE 4: BRONSON METHODIST HOSPITAL SERVES A TEN COUNTY REGION IN SOUTHWEST MICHIGAN. ABOUT 60% OF PATIENTS SERVED COME FROM WITHIN KALAMAZOO COUNTY AND THE OTHER 40% COME FROM THE REGIONAL COUNTIES OF: ALLEGAN, BARRY, BERRIEN, BRANCH, CASS, VAN BUREN, CALHOUN, EATON AND ST. JOSEPH.PATIENT DEMOGRAPHICS 25.71% <21 YEARS OF AGE 19.77% 21-39 YEARS OF AGE25.82% 40-64 YEARS OF AGE 28.70% 65 YEARS OF AGE AND OLDER PATIENT DIVERSITY DEMOGRAPHICS 80.37% CAUCASIAN11.14% AFRICAN-AMERICAN5.51% OTHER2.43% LATINO/HISPANIC 0.55% ASIAN PATIENT INSURANCE DEMOGRAPHICS 38.8% PRIVATE INSURANCE 28.8% MEDICARE21.4% MEDICAID OR OTHER PUBLIC ASSISTANCE 8.0% MEDICARE AND SUPPLEMENTAL INSURANCE 3.0% NO COVERAGE PART VI, LINE 5: BRONSON METHODIST HOSPITAL (BMH) IS A COMMUNITY-OWNED AND GOVERNED NOT FOR PROFIT HOSPITAL WITH 405 LICENSED BEDS AND AN OPEN MEDICAL STAFF. IT IS GOVERNED BY THE BRONSON HEALTHCARE GROUP BOARD COMPRISED OF 21 MEMBERS OF THE COMMUNITY. FOUNDED IN 1900, BMH HAS AS ONE OF ITS FIVE CORE VALUES, "COMMITMENT TO OUR COMMUNITY" AND HAS HISTORICALLY DEMONSTRATED THIS VALUE BY CONTINUING TO DELIVER THE FULL CONTINUUM OF NEEDED MEDICAL SERVICES AND WORKING WITHIN COMMUNITY COLLABORATIVES TO ADDRESS COMMUNITY NEEDS. BMH PROVIDES A DISAPROPORTIONATE AMOUNT OF CARE TO THE SEGMENT OF THE POPULATION USING MEDICAID. WE ARE THE LARGEST MEDICAID PROVIDER OF ANY LARGE HOSPITAL IN MICHIGAN OUTSIDE OF THE DETROIT AREA (ON A PERCENTAGE BASIS). IN 2011, APPROXIMATELY 21% OF BMH'S PATIENTS WERE MEDICAID RECIPIENTS. WE HAVE THREE MEDICAID ENROLLERS ON SITE TO HELP THOSE WITHOUT INSURANCE ENROLL IN MEDICAID, OR REFER THEM TO COMMUNITY RESOURCES. MUCH OF BMH'S SERVICE TO THE COMMUNITY IS DIRECTED AT WOMEN'S AND CHILDREN'S NEEDS. BRONSON IS THE ONLY CHILDREN'S HOSPITAL IN SOUTHWEST MICHIGAN AND, THEREFORE, THE SOLE PROVIDER OF INPATIENT PEDIATRICS INCLUDING PEDIATRIC INTENSIVE CARE AND NEONATAL INTENSIVE CARE. IN FACT, OVER HALF THE PATIENTS IN THE CHILDREN'S HOSPITAL ARE MEDICAID RECEPIENTS. AS A REGIONAL PERINATAL CENTER, BMH IS ALSO THE REGIONAL DESTINATION FOR HIGH-RISK PREGNANCY CARE. BMH'S LEVEL 1 TRAUMA CENTER AND BURN CENTER, ALONG WITH ADVANCED CAPABILITIES IN NEUROVASCULAR AND CARDIOVASCULAR CARE, SERVE ALL PATIENT POPULATIONS REGARDLESS OF ABILITY TO PAY. SERVICE TO COMMUNITYIN RECENT YEARS, BMH COLLABORATIVES HAVE INCLUDED HEALTHY FUTURES (BROAD COMMUNITY INITATIVE TO ADDRESS HEALTH AND ECONOMIC ISSUES), HEALTHY BABY/HEALTHY START (REDUCE INFANT MORTALITY), IMMUNIZE-BY-TWO, HEALTH CONNECT (PROVIDE COMMUNITY-WIDE PRIMARY CARE ACCESS) AND THE AFRICAN-AMERICAN HEALTH INITIATIVE (HEALTH PROMOTION AND SCREENING PROGRAM OFFERED THROUGH KALAMAZOO'S AFRICAN-AMERICAN FAITH COMMUNITY). IN 2011, BMH DOCUMENTED IN EXCESS OF 22,000 EVENTS IN PROVIDING COMMUNITY BENEFIT ACTIVITIES WITH NET VALUE OF APPROXIMATELY $55,000,000 IN COMMUNITY BENEFIT ACTIVITES. ADDRESSING DISPARITIESBMH IS LOCATED IN THE HEART OF DOWNTOWN KALAMAZOO, MICHIGAN AND IS THE CITY'S LARGEST EMPLOYER. BMH OPENED A NEW REPLACEMENT HOSPITAL IN DECEMBER OF 2000 ACROSS THE STREET FROM ITS PREVIOUS FACILITY. THIS LOCATION WAS CHOSEN BECAUSE OF ANOTHER OF BRONSON'S CORE VALUES, "CARE AND RESPECT FOR ALL PEOPLE." BMH IS LOCATED WHERE PEOPLE MOST IN NEED CAN UTILIZE OUR SERVICES AND ACCESS US THROUGH PUBLIC TRANSPORTATION. THE ALIGNMENT OF OUR MISSION, VISION AND VALUES CREATES AN ENVIRONMENT WHERE ALL PERSONS ARE WELCOME AND PATIENTS ARE TREATED REGARDLESS OF THEIR ABILITY TO PAY. FOR EXAMPLE, BRONSON'S TRAUMA AND EMERGENCY DEPARTMENT SEES OVER 95,000 PATIENT VISITS PER YEAR. IN ADDITION, BMH'S OUTREACH SERVICES WITH THE FEDERALLY QUALIFIED FAMILY HEALTH CENTER PROVIDE FOR AN IMPROVED CONTINUUM OF CARE FOR PATIENTS WHO ARE ON MEDICAID OR ARE UNDER-INSURED. COMMUNITY HEALTH STATUSBMH COLLABORATES WITH TWO KEY COMMUNITY PARTNERS FOR THE GATHERING OF HEALTH STATISTICS: THE GREATER KALAMAZOO UNITED WAY AND KALAMAZOO COUNTY HEALTH AND HUMAN SERVICES. THESE TWO ORGANIZATIONS, ALONG WITH BMH, AND THE FAMILY HEALTH CENTER REGULARLY DISCUSS HEALTH NEEDS AND EMERGING HEALTH TRENDS. THIS COLLABORATIVE, AN OFF-SHOOT OF HEALTHY FUTURES, MONITORS KALAMAZOO COUNTY'S PERFORMANCE AGAINST HEALTHY PEOPLE 2010 GOALS. IT WAS THESE COMMUNITY HEALTH INDICATORS THAT INITIATED HEALTHY BABY/HEALTHY START, IMMUNIZE-BY-TWO AND THE AFRICAN-AMERICAN HEALTH INITIATIVE.COLLABORATION WITH COMMUNITY STAKEHOLDERSAS PREVIOUSLY MENTIONED, BMH SEEKS COMMUNITY COLLABORATORS AND STAKEHOLDERS AS PARTNERS IN MEETING COMMUNITY HEALTH NEEDS. TOWARDS THIS END, BMH ADMINISTRATORS SERVE ON SEVERAL COMMUNITY BOARDS INCLUDING: THE FAMILY HEALTH CENTER, UNITED WAY, SALVATION ARMY, MINISTRY WITH COMMUNITY, NEIGHBORHOOD ASSOCIATIONS, GREATER KALAMAZOO UNITED WAY, FAMILY AND CHILDREN'S SERVICES, HOSPICE CARE OF SOUTHWEST MICHIGAN, DOUGLAS COMMUNITY ASSOCIATION AND THE SAFE KIDS COLLABORATIVE, (WHICH BMH STAFFS). BMH HAS A THREE-PRONG APPROACH FOR COMMMUNITY LEADERSHIP FOCUSING ON COMMUNITY HEALTH, COMMUNITY SERVICE AND ECONOMIC DEVELOPMENT.COMMUNITY HEALTH INITIATIVES- IMPROVING ACCESS TO HEALTHCARE- IMPROVING OVERALL COMMUNITY HEALTH- CITIZEN-BASED EDUCATION AND RESEARCH ON HEALTH OUTCOMES- REDUCE DISPARITIES IN HEALTH OUTCOMES - THE RECENT FOCUS WAS ON CHILDHOOD SAFETY AND PREVENTION AND ACCESS/SCREENING/EDUCATION- COLLABORATE WITH SOCIAL SERVICES AGENCIES. AN EXAMPLE OF IMPROVING ACCESS: BMH HAS WORKED WITH COMMUNITY AGENCIES TO REDUCE BARRIERS AND IMPROVE ACCESS FOR UNDERSERVED POPULATIONS. THE HOSPITAL CO-FUNDS A GRADUATE MEDICAL RESIDENCY PROGRAM WITH NINE SUBSPECIALTIES AND AN AMBULATORY CLINIC WITH 70,000 PATIENT VISITS ANNUALLY. IN ADDITION, BMH HAS A LEADERSHIP ROLE AT KALAMAZOO FAMILY HEALTH CENTER THAT HAS 35,000 PATIENT VISITS PER YEAR. COMMUNITY SERVICE: - PARTICIATE IN PUBLIC AND NOT-FOR-PROFIT COMMITTEES AND BOARDS- PARTICIPATE IN IMPORTANT COMMUNITY ISSUES- LEAD DISASTER/EMERGENCY EFFORTS- PROVIDE FINANCIAL SUPPORT AND SPONSORSHIPS FOR ARTS AND HUMAN SERVICES ORGANIZATIONSAN EXAMPLE OF AN EMPLOYEE-DRIVEN EFFORT REFLECTIVE OF OUR VALUES, BMH EMPLOYEES DONATE THOUSANDS OF POUNDS OF FOOD TO THE ANNUAL HARVEST GATHERING FOOD DRIVE, WHICH REPLENISHES LOCAL FOOD PANTRIES. IN 2011, THE BRONSON FOOD DRIVE IN KALAMAZOO COUNTY RAISED $22,792 AND 3,835 POUNDS OF FOOD. TRANSLATING THE DOLLARS INTO POUNDS MEANS MORE THAN 94,000 POUNDS WERE PROVIDED TO STOCK THE 26 GROCERY PANTRIES SUPPLIED BY KALAMAZOO LOAVES AND FISHES. ECONOMIC DEVELOPMENT: - SUPPORT GRASSROOT NEIGHBORHOOD DEVELOPMENT- STIMULATE ECONOMIC VITALITY- INVEST IN EDUCATIONAL INSTITUTIONS TO ENSURE ACCESS TO HEALTHCARE CURRICULUM (WMU BRONSON SCHOOL OF NURSING)- COMMIT TO LOCAL VENDORS AND BUSINESSES AN ECONOMIC DEVELOPMENT EXAMPLE WOULD BE OUR BRONSON HOME OWNERSHIP PROGRAM (BHOP). SINCE 1998, BRONSON HAS INVESTED $357,525 TO HELP EMPLOYEES PURCHASE HOMES DOWNTOWN, CLOSE TO THE BRONSON CAMPUS. OUR PROGRAM IS A LOAN, EMPLOYEES START PAYING US BACK IN YEAR SIX, AT NO INTEREST. WHAT IS COLLECTED AND THEN RE-LOANED. THUS FAR, OUR $357,525 HAS RESULTED IN $387,793 BEING LOANED TO 46 EMPLOYEES. THIS IS ECONOMIC DEVELOPMENT AT THE NEIGHBORHOOD LEVEL. BMH IDENTIFIES WAYS TO TREAT THE DISEASES FACED BY THOSE WE SERVE, AND ALSO SEEK WAYS TO FOSTER AN ENVIRONMENT IN WHICH WE CAN CREATE HEALTH AND PREVENTION MEASURES. THIS INCLUDES LOOKING AT OUR COMMUNITIES' ECONOMIC ISSUES, SUCH AS PEOPLE WITHOUT HEALTH INSURANCE, AND ENVIRONMENTAL ISSUES, SUCH AS CLEAN AIR AND WATER. BMH HAS BEEN ACKNOWLEDGED BY PRACTICE GREENHEALTH (FORMERLY HOSPITALS FOR A HEALTHY ENVIRONMENT) AWARDS FOR 10 YEARS IN A ROW, IN RECOGNITION OF SIGNIFICANT PROGRESS IN REDUCING WASTE, PREVENTING POLLUTION AND ELIMINATING MERCURY. BMH ALSO HOLDS THE ENERGY STAR LABEL FOR ENERGY EFFICIENCY FROM THE ENVIRONMENTAL PROTECTION AGENCY, AND HAS BEEN NAMED ONE OF AMERICA'S TOP 10 HOSPITALS BY THE "GREEN GUIDE" PUBLICATION. BECAUSE OF THIS, WE ALSO PLAY A SIGNIFICANT ROLE IN MANY COMMUNITY ORGANIZATIONS THAT HAVE A BROADER FOCUS THAN HEALTHCARE.REPORTING TO THE COMMUNITY BMH CONDUCTS AN ANNUAL COMMUNITY BENEFIT INVENTORY TO AGGREGATE THE NON-MISSION MANDATED SERVICES WE PROVIDE TO THE COMMUNITY. THIS INVENTORY IS SHARED WITH BRONSON STAKEHOLDERS AND REPORTED TO THE COMMUNITY. INFORMATION IS ALSO AVAILABLE THROUGH BRONSONHEALTH.COM. EXAMPLES INCLUDE QUALITY REPORT, NURSING OUTCOMES, PATIENT SATISFACTION DATA, AND LINKS TO PUBLIC REPORTING WEBSITES. PART VI, LINE 6: BRONSON METHODIST HOSPITAL IS PART OF AN AFFILIATED SYSTEM THAT INCLUDES TWO OTHER HOSPITALS, BRONSON BATTLE CREEK HOSPITAL AND BRONSON LAKEVIEW HOSPITAL. ALL OF THESE HOSPITALS ARE CONTROLLED BY BRONSON HEALTHCARE GROUP, WHICH IS A COMMUNITY-OWNED AND GOVERNED NOT-FOR-PROFIT HOLDING COMPANY. THE BRONSON HEALTHCARE GROUP(BHG) BOARD IS COMPRISED OF 21 MEMBERS OF THE COMMUNITY.EACH OF THE THREE HOSPITALS IN THE BHG SYSTEM ADMITS PATIENTS REGARDLESS OF ABILITY TO PAY AND PROVIDES OUTREACH SERVICES TO THEIR RESPECIVE COMMUNITIES. BRONSON METHODIST HOSPITAL IS THE LARGEST OF THE THREE HOSPITALS IN THE BHG SYSTEM. AS SUCH, IT HAS A LARGER ROLE IN PROVIDING SERVICES AND PROMOTING THE HEALTH OF THE MANY COMMUNITIES IT SERVES. THE HEALTH PROMOTION ACTIVITIES OF BRONSON METHODIST HOSPITAL ARE DESCRIBED IN LINE #6 ABOVE.IN ADDITION TO THE THREE HOSPITALS, THE BHG SYSTEM INCLUDES SEVERAL SMALLER ENTITIES WHOSE EFFECTS SUPPORT THE HOSPITALS AND THEIR MISSION OF PROVIDING EXCELLENT HEALTHCARE TO THEIR COMMUNITIES. THESE ENTITIES INCLUDE: BRONSON MEDICAL GROUP, BRONSON NURSING AND REHABILITATION CENTER, BRONSON STAFFING SERVICES, BRONSON LIFESTYLE IMPROVEMENT & RESEARCH CENTER, BRONSON HEALTH FOUNDATION, LIFESPAN, AND BRONSON PROPERTIES CORP. REPORTS FILED WITH STATES PART VI, LINE 7 MI 1 BRONSON HEALTHCARE GROUP 601 JOHN STREET KALAMAZOO MI 49007 382418383 501(C)(3) 10500000 EQUITY TRANSFER 1 1 0 1 0 1 0 0 0 0 0 SARDONE FRANK J 0 658699 0 306911 0 180456 0 10731 0 20359 0 1177156 0 0 KENNETH TAFT 0 398945 0 131306 0 91050 0 10731 0 22755 0 654787 0 0 JAMES FALAHEE 0 260574 0 81331 0 72716 0 10731 0 25070 0 450422 0 0 SCOTT LARSON MD 0 326146 0 100547 0 63192 0 3381 0 17138 0 510404 0 0 JOHN HAYDEN 0 229044 0 70775 0 45796 0 10544 0 14265 0 370424 0 0 MARY MEITZ 0 258867 0 62939 0 13750 0 10731 0 21006 0 367293 0 0 KATIE HARRELSON 0 248731 0 60067 0 17647 0 10731 0 14149 0 351325 0 0 JOHN JONES 0 217073 0 47725 0 20440 0 10009 0 22358 0 317605 0 0 MIKE WAY 0 180078 0 34931 0 19782 0 8789 0 13323 0 256903 0 0 GREGORY WIGGINS 787407 0 778261 0 1010 0 10731 0 20852 0 1598261 0 0 0 ALPHONSE DELUCIA III 700695 0 68750 0 6112 0 10731 0 22186 0 808474 0 0 0 MICHAEL LEINWAND 559179 0 145620 0 43686 0 10731 0 13903 0 773119 0 0 0 CHRIS SLOFFER 711014 0 0 0 1283 0 10731 0 16339 0 739367 0 0 0 ALAIN FABI 994083 0 1432086 0 1665 0 10731 0 21685 0 2460250 0 0 0 PART I, LINE 1A HEALTH CLUB DUES AND/OR SPOUSAL TRAVEL TO BOARD RETREAT ARE AVAILABLE FOR BOARD OF DIRECTORS (EBERTS, GIBSON, GREENE, GUNDERSON, JAMES, KLEIN, PARKS, RICHARDSON, ROEHR, WARDWELL, AND ZELLER). ALL TREATED AS TAXABLE FRINGE BENEFITS - 1099'S SENT. PART I, LINE 4B PARTICIPATED IN, OR RECEIVED PAYMENT FROM, A SUPPLEMENTAL NON-QUALIFIED RETIREMENT PLAN FROM RELATED ENTITY BRONSON HEALTHCARE GROUP: FRANK SARDONE - $158,549 SERP CONTRIBUTION FRANK SARDONE - $545,493 SERP DISTRIBUTION KEN TAFT - $70,852 SERP CONTRIBUTION KEN TAFT - $143,012 SERP DISTRIBUTION JOHN HAYDEN - $30,096 SERP CONTRIBUTION JOHN HAYDEN - $19,057 SERP DISTRIBUTION JAMES FALAHEE - $51,291 SERP CONTRIBUTION JAMES FALAHEE - $123,717 SERP DISTRIBUTION SCOTT LARSON - $59,713 SERP CONTRIBUTION SCOTT LARSON - $50,997 SERP DISTRIBUTION PART I, LINE 5 A HIGHEST COMPENSATED PHYSICIAN RECEIVED INCENTIVE PAY FOR REVENUES OVER A SPECIFIED DOLLAR AMOUNT. SUPPLEMENTAL INFORMATION PART III SCHEDULE J, PART II, COLUMN(B)(III) AND F ARE AMOUNTS THAT WERE PAID TO THE EXECUTIVE UNDER THE BRONSON HEALTHCARE GROUP, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN("SERP"). THESE AMOUNTS WERE CREDITED TO AN ACCOUNT FOR THE EXECUTIVE IN PRIOR YEARS AND WERE PREVIOUSLY REPORTED IN COLUMN C IN THE PRIOR YEAR, BUT THE EXECUTIVE WAS REQUIRED TO REMAIN EMPLOYED UNTIL THE YEAR FOR WHICH THIS FORM IS BEING FILED IN ORDER TO BECOME VESTED IN HIS OR HER ACCOUNT. AMOUNTS HAVE BEEN CREDITED TO THESE EXECUTIVES' ACCOUNTS EACH YEAR SINCE THE SERP WAS ADOPTED IN 1994, AND THE ACCOUNTS HAVE ALSO BEEN ADJUSTED FOR GAINS AND LOSSES SINCE THAT TIME. THEREFORE, THESE AMOUNTS SHOULD BE VIEWED AS HAVING BEEN EARNED OVER THE EXECUTIVE'S ENTIRE PERIOD OF EMPLOYMENT AS AN EXECUTIVE OF BRONSON. THE AMOUNT CREDITED TO EACH EXECUTIVE'S ACCOUNT IN THE SERP EACH YEAR AND EACH EXECUTIVE'S TOTAL COMPENSATION PACKAGE WAS APPROVED BY AN INDEPENDENT CONSULTANT TO ENSURE THAT THESE AMOUNTS ARE COMPARABLE TO OR LESS THAN THE AMOUNTS AWARDED TO EXECUTIVES OF COMPARABLE HEALTH CARE ORGANIZATIONS. FOR THE CURRENT REPORTING YEAR NO AMOUNTS THAT ARE REPORTED IN COLUMN B(III) WERE REPORTED IN A PREVIOUS YEAR RETURN; THEREFORE NO AMOUNTS ARE REPORTED IN COLUMN (F). SUPPLEMENTAL INFORMATION PART III SCHEDULE J PART I, LINE 3: BRONSON HEALTHCARE GROUP, A RELATED ORGANIZATION, USES A COMPENSATION COMMITTEE, INDEPENDENT COMPENSATION CONSULTANT, COMPENSATION SURVEY OR STUDY AND/OR APPROVAL BY BOARD AND/OR COMPENSATION COMMITTEE TO ESTABLISH THE COMPENSATION OF THE ORGANIZATION'S CEO/EXECUTIVE DIRECTOR. CITY OF KALAMAZOO HOSPITAL FINANCE AUTHORITY 386004627 483233LQ3 2008-04-30 93622103 SEE SUPPLEMENTAL INFORMATION 0 0 0 CITY OF KALAMAZOO HOSPITAL FINANCE AUTHORITY 386004627 483233MA7 2010-09-28 192508168 SEE SUPPLEMENTAL INFORMATION 0 0 0 12400000 93622103 718703 92903400 2003 1 0 1 1 70195000 192867202 2389449 14359034 176118719 2010 1 0 1 1 0 0 0 0 0.00000 0.00000 0.00000 0 0 1 0 0 0.00990 0.00990 0 0 0 0 0 0 1 0 0 0 0 0 0 BOND ISSUE A, PART I, LINE (F) - DESCRIPTION OF PURPOSE BOND ISSUE A WAS ISSUED TO CURRENTLY REFUND A PRIOR ISSUE WITH AN ORIGINAL ISSUE DATE OF 11/13/03. THE BONDS ISSUED ON 11/13/03 WERE ISSUED TO REFUND A PRIOR ISSUE THAT WAS ISSUED BEFORE 1/1/03. BOND ISSUE A, PART I, LINE (D) DATE ISSUED BOND ISSUE A WAS ORIGINALLY ISSUED ON 11/13/2003, AND WAS RESISSUED FOR FEDERAL INCOME TAX PURPOSES ON 4/30/08. THE INFORMATION REPORTED IN SCHEDULE K FOR BOND ISSUE A IS FOR THE BONDS AS REISSUED ON 4/30/2008. BOND ISSUE B, PART I, LINE (F) - DESCRIPTION OF PURPOSE PROCEEDS OF BOND ISSUE B WERE USED TO CURRENTLY REFUND PRIOR ISSUES ORIGINALLY ISSUED ON 5/13/98, 6/14/06, AND 3/25/09. ADDITIONAL PROCEEDS OF BOND ISSUE B WERE USED FOR BUILDING RENOVATIONS, AND OTHER MEDICAL TECHNOLOGY EQUIPMENT. BOND ISSUE B, PART I, LINE (D) DATE ISSUED BOND ISSUE B CONSISTS OF TWO SERIES OF BONDS: SERIES 2006 AND SERIES 2010. THE SERIES 2006 BONDS WERE ORIGINALLY ISSUED ON 6/14/06 AND WERE REISSUED FOR FEDERAL INCOME TAX PURPOSES ON 9/28/10. THE INFORMATION REPORTED ON SCHEDULE K FOR BOND ISSUE B IS FOR THE SERIES 2006 BONDS AS REISSUED ON 9/28/10 AND THE SERIES 2010 BONDS AS ORIGINALLY ISSUED ON 9/28/10. BOND ISSUE B PART II, LINE 3 TOTAL PROCEEDS OF BOND ISSUE B INCLUDE INVESTMENT EARNINGS IN THE AMOUNT OF $359,034. SCHEDULE K PART V - WE HAVE GENERAL WRITTEN PROCEDURES THAT WE WILL COMPLY WITH ALL TAX LAWS. SCHEDULE K, PART III, LINE 7 - DEVELOPMENT OF A FORMAL PROCEDURE IS IN PROCESS. FORM 990, PART VI, SECTION A, LINE 2 JAMES GUNDERSON, JOHN M. DUNN, DANIEL R. SMITH, KENNETH TAFT, FRANK SARDONE, STEVEN J. LINS, M.D., AND SCOTT C. GIBSON, M.D. HAVE A BUSINESS RELATIONSHIP. FORM 990, PART VI, SECTION A, LINE 6 BRONSON HEALTHCARE GROUP IS THE SOLE MEMBER OF BRONSON METHODIST HOSPITAL. FORM 990, PART VI, SECTION A, LINE 7A BRONSON HEALTHCARE GROUP (BHG) IS THE SOLE MEMBER OF BRONSON METHODIST HOSPITAL (BMH) AND AS SUCH MEMBER IT ELECTS 12 OF THE TOTAL 21 MEMBERS OF THE BMH BOARD. COMMUNITY PARTNERS SHALL, AFTER CONSULTING WITH AND SEEKING INPUT FROM THE NOMINATING COMMITTEE OF BHG, APPOINT 6 MEMBERS TO THE BOARD. THE REMAINING 3 MEMBERS OF THE BOARD SHALL BE EX OFFICIO, WITH VOTE, AND SHALL CONSIST OF THE PRESIDENT, THE CHIEF OF STAFF, AND IMMEDIATE PAST CHIEF OF THE MEDICAL STAFF OF THE HOSPITAL. FORM 990, PART VI, SECTION A, LINE 7B BRONSON HEALTHCARE GROUP (BHG) IS THE SOLE MEMBER OF BRONSON METHODIST HOSPITAL (BMH) HAS CERTAIN RESERVED POWERS OVER THE ACTIONS OF BMH. THE BOARD OF DIRECTORS HAS THE POWER TO: -AMENDMENT, RESTATEMENT OR REPEAL THE HOSPITAL'S ARTICLES OF INCORPORATION OR BYLAWS -ADOPTION, EXECUTION, REVOCATION, OR ABANDONMENT OF A PLAN OF DISSOLUTION, MERGER, CONSOLIDATION, REORGANIZATION, OR OTHER MAJOR CHANGE IN CORPORATE STRUCTURE INVOLVING THE HOSPITAL -SALE, LEASE, EXCHANGE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE HOSPITAL'S PROPERTY AND ASSETS. -ACQUISITION OF ANY OTHER ENTITY OR THE ESTABLISHMENT OF ANY SUBSIDIARY OR AFFILIATE. -ADOPTION OF ALL OPERATING AND CAPITAL EXPENDITURE BUDGETS -INCUR OPERATING OR CAPITAL EXPENDITURES WHICH CAUSE AGGREGATE OPERATING OR CAPITAL EXPENDITURES TO EXCEED BUDGETED AGGREGATES AND/OR THE DOLLAR AMOUNT SPECIFIED BY BHG -SECURE BORROWINGS, WITH THE EXCEPTION OF EQUIPMENT LEASES AND PURCHASE MONEY SECURITY INTERESTS APPROVED AS A PART OF A BUDGET. -CHANGE THE MISSION STATEMENT, PURPOSES, OR STRATEGIC GOALS OF THE HOSPITAL. -ANY SIGNIFICANT CHANGE IN THE SCOPE OF SERVICES OR PROGRAMS. -APPOINTMENT, REMOVAL OR COMPENSATION OF THE PRESIDENT OR ANY DIRECTOR OR OFFICER. FORM 990, PART VI, SECTION B, LINE 11 THE SR. VP OF FINANCE/CFO AND CONTROLLER REVIEWED THE 990'S. MANAGEMENT REPRESENTATIVES (COO, CFO AND CONTROLLER) MET WITH THE CHAIR OF THE BOARD ON OCTOBER 2, 2012 TO REVIEW THE PREPARED FORM 990 AND SCHEDULES. THE FINANCE COMMITTEE OF THE BOARD THOROUGHLY REVIEWED THE PREPARED FORM 990 AT ITS REGULARLY SCHEDULED MEETING ON OCTOBER 15, 2012. THE REVIEW WAS LED BY THE SR. V.P. OF FINANCE/CFO, THE CONTROLLER AND PLANTE & MORAN. THE MEMBERS OF THE ORGANIZATION'S GOVERNING BODY WERE PROVIDED THE PREPARED FORM 990 FOR REVIEW. FORM 990, PART VI, SECTION B, LINE 12C THE ORGANIZATION REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY. THE CONFLICT OF INTEREST POLICY AND ITS ACCOMPANYING QUESTIONNAIRE ARE REVIEWED, AND REVISED, IF NECESSARY, ON AN ANNUAL BASIS BY THE ORGANIZATION'S GENERAL COUNSEL/CORPORATE COMPLIANCE OFFICER AND THE BOARD'S EXECUTIVE COMMITTEE. ALL BOARD MEMBERS AND ALL EMPLOYEES HOLDING THE TITLE OF VICE PRESIDENT AND ABOVE ARE COVERED BY THE CONFLICT OF INTEREST POLICY AND ANNUALLY COMPLETE THE CONFLICT OF INTEREST QUESTIONNAIRE. ALL COMPLETED CONFLICT OF INTEREST QUESTIONNAIRES ARE REVIEWED BY THE ORGANIZATION'S GENERAL COUNSEL/CORPORATE COMPLIANCE OFFICER AND THE EXECUTIVE COMMITTEE. DETERMINATIONS AS TO WHETHER A CONFLICT EXISTS ARE MADE BY THE GENERAL COUNSEL/CORPORATE COMPLIANCE OFFICER AND THE EXECUTIVE COMMITTEE. ACTUAL CONFLICTS ARE REVIEWED BY THE GENERAL COUNSEL/CORPORATE COMPLIANCE OFFICER AND THE EXECUTIVE COMMITTEE. PERSONS WITH A CONFLICT ARE PROHIBITED FROM PARTICIPATING IN THE GOVERNING BODY'S DELIBERATIONS AND DECISIONS ON THE TRANSACTION IN QUESTION. FORM 990, PART VI, SECTION B, LINE 15 FOR THE CEO, OFFICERS AND OTHER KEY EMPLOYEES, THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS, WHICH FUNCTIONS AS THE COMPENSATION COMMITTEE, RETAINS THE SERVICES OF AN EXTERNAL EXECUTIVE COMPENSATION CONSULTANT (SULLIVAN, COTTER AND ASSOCIATES) WHO CONDUCTS A THOROUGH COMPENSATION AND BENEFIT SURVEY PROCESS THAT IS USED TO DETERMINE THE APPROPRIATE ADJUSTMENT IN CASH COMPENSATION AND BENEFITS PROVIDED. THIS PROCESS WAS UNDER TAKEN IN 2011. THE CONSULTANT USES THREE TO FIVE NATIONAL HEALTHCARE-BASED SERVICES FOR COMPARABILITY DATA, EACH ONE OF LIKE REVENUE SIZED HEALTHCARE SYSTEMS TO THE BRONSON HEALTHCARE GROUP. THE CONSULTANT PREPARES A DETAILED REPORT WITH RECOMMENDATIONS FOR PAY AND/OR BENEFIT ADJUSTMENTS, AND PRESENTS THE INFORMATION TO THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS (WHEN THE CEO'S SURVEY DATA AND RECOMMENDATIONS ARE PRESENTED, THE CEO AND STAFF ARE EXCUSED FROM THE DELIBERATIONS). AFTER ALL QUESTIONS OF THE BOARD MEMBERS ARE ANSWERED, FORMAL MOTIONS ARE PROPOSED, SECONDED AND VOTED ON (FOR ANY PAY ADJUSTMENTS AND FOR RECEIPT OF THE CONSULTANT'S REPORT). AT THE SUBSEQUENT MEETING OF THE FULL BOARD OF DIRECTORS, THE CHAIR PRESENTS RECOMMENDATIONS OF THE EXECUTIVE COMMITTEE, AND THE FULL BOARD ACTS ON A FORMAL MOTION THAT IS SECONDED AND VOTED ON. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY AVAILABLE TO THE PUBLIC BY POSTING THEM ON THE ORGANIZATION'S WEBSITE AND PROVIDING COPIES ON REQUEST. THE ORGANIZATION'S FINANCIAL STATEMENTS ARE ATTACHED TO THE FORM 990 AND ARE MADE AVAILABLE TO THE PUBLIC AS REQUIRED. PART VII- THESE INDIVIDUALS WERE COMPENSATED BY BRONSON HEALTHCARE GROUP (BHG) AND WORKED THE FOLLOWING HOURS PER WEEK FOR BHG: RANDALL EBERTS (BOARD MEMBER) 1.0 HOUR BARBARA JAMES (BOARD MEMBER) 1.0 HOUR GEOFFREY WARDWELL (BOARD MEMBER ) 1.0 HOUR FLOYD PARKS (BOARD MEMBER) 1.0 HOUR FRANK SARDONE (BOARD MEMBER & OFFICER) 16.0 HOUR SCOTT GIBSON (BOARD MEMBER) 1.0 HOUR JAMES GREENE (BOARD MEMBER) 1.0 HOUR JAMES GUNDERSON (BOARD MEMBER) 1.0 HOUR MARIAN KLEIN (BOARD MEMBER) 1.0 HOUR WILLIAM RICHARDSON (BOARD MEMBER) 1.0 HOUR BERNARD ROEHR (BOARD MEMBER) 1.0 HOUR CHARLES ZELLER (BOARD MEMBER) 1.0 HOUR KENNETH TAFT (OFFICER) 32.0 HOUR JAMES FALAHEE (OFFICER) 12.0 HOUR SCOTT LARSON (OFFICER) 6.0 HOUR JOHN HAYDEN (OFFICER) 10.0 HOUR MARY MEITZ (KEY EMPLOYEE) 4.0 HOUR KATIE HARRELSON (KEY EMPLOYEE) 4.0 HOUR JOHN JONES (KEY EMPLOYEE) 12.0 HOUR SALLY BERGLIN (KEY EMPLOYEE) 0.0 HOURS MIKE WAY (KEY EMPLOYEE) 8.0 HOURS PART VII- THESE INDIVIDUALS WERE COMPENSATED BY BRONSON METHODIST HOSPITAL (BMH) AND WORKED THE FOLLOWING HOURS PER WEEK FOR BMH: BERNARD ROEHR, MD (BOARD MEMBER) 1.0 HOUR BOARD MEMBERS ARE NOT COMPENSATED FOR THEIR TIME AND ANY REPORTABLE COMPENSATION LISTED IN PART VII REPRESENTS BOARD MEETING TRAVEL FOR SPOUSE AND/OR HEALTH CLUB DUES. PART VII: DR. KARAMCHANDANI'S COMPENSATION WAS PAID BY AN OUTSOURCED ORGANIZATION AND AT THE TIME THIS FORM 990 WAS SUBMITTED, THE COMPENSATION INFORMATION WAS NOT READILY AVAILABLE; THEREFORE IT HAS NOT BEEN INCLUDED IN THE FORM 990 DISCLOSURES. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: CHANGE IN FAIR VALUE OF SWAP AGREEMENTS -8,685,681. TRANSFER FROM AFFILIATE 1,292,118. GAIN/(LOSS) ON JOINT VENTURES 3,473,977. TOTAL TO FORM 990, PART XI, LINE 5: -3,919,586. FORM 990, PART XI, LINE 5 IN JANUARY 2011, LESS THAN ONE MONTH INTO BRONSON VICKSBURG HOSPITALS (BVH) FISCAL YEAR, BVH ASSETS AND LIABILITIES WERE TRANSFERRED TO BRONSON METHODIST HOSPITAL. THE NET ASSET TRANSFER WAS $1,292,118. BRONSON HEALTHCARE GROUP 601 JOHN STREET KALAMAZOO MI 49007 382418383 PROVIDE SUPPORT SERVICES FOR HEALTHCARE SUBSIDIARIES MI 501(C)(3) 11C N/A 0 BRONSON HEALTH FOUNDATION 601 JOHN STREET KALAMAZOO MI 49007 382415081 SUPPORTS HEALTHCARE ORGANIZATION MI 501(C)(3) 7 BRONSON HEALTHCARE GROUP 1 BRONSON LAKEVIEW HOSPITAL 601 JOHN STREET KALAMAZOO MI 49007 381359218 HOSPITAL MI 501(C)(3) 3 BRONSON HEALTHCARE GROUP 1 BRONSON NURSING AND REHABILITATION CENTER 601 JOHN STREET KALAMAZOO MI 49007 382842451 SKILLED NURSING FACILITY MI 501(C)(3) 9 BRONSON HEALTHCARE GROUP 1 VBEMS 601 JOHN STREET KALAMAZOO MI 49007 382745910 AMBULANCE SERVICE MI 501(C)(3) 9 BRONSON HEALTHCARE GROUP 1 BRONSON PROPERTIES CORPORATION 601 JOHN STREET BOX 26 KALAMAZOO MI 49007 386052573 PROVIDE SUPPORT SERVICES FOR HEALTHCARE SUBSIDIARIES MI 501(C)(3) 11B BRONSON HEALTHCARE GROUP 1 BRONSON VICKSBURG HOSPITAL 601 JOHN STREET KALAMAZOO MI 49007 382610349 HOSPITAL MI 501(C)(3) 3 BRONSON HEALTHCARE GROUP 1 BRONSON BATTLE CREEK HOSPITAL 300 NORTH AVENUE BATTLE CREEK MI 49016 382776791 HOSPITAL MI 501(C)(3) 3 BRONSON HEALTHCARE GROUP 1 LIFESPAN 166 GOODDALE BATTLE CREEK MI 49037 383298476 NURSING, HOSPICE AND EQUIP SALES MI 501(C)(3) 9 BRONSON HEALTHCARE GROUP 1 HOSPITAL NETWORK INC LEASING 6212 AMERICAN AVENUE PORTAGE MI 49002 383638430 SUPPORT SERVICES MI BRONSON HEALTHCARE GROUP RELATED 7687 259403 0 0 0.16600 HOSPITAL NETWORK SUPPORT SERVICES 6212 AMERICAN AVENUE PORTAGE MI 49002 383627704 SUPPORT SERVICES MI BRONSON HEALTHCARE GROUP RELATED 0 0 0.16600 HOSPITAL NETWORK VENTURES LLC 6212 AMERICAN AVENUE PORTAGE MI 49002 263302979 SUPPORT SERVICES MI BRONSON HEALTHCARE GROUP RELATED 270058 1849693 0 0 0.16600 BRONSON MANAGEMENT SERVICES CORPORATION 601 JOHN STREET KALAMAZOO MI 49007 382415032 OTHER MEDICAL SERVICES MI BRONSON HEALTHCARE GROUP C BRONSON LIFESTYLE IMPROVEMENT AND RESEARCH 601 JOHN STREET KALAMAZOO MI 49007 383552556 REHABILITATION SERVICES MI BRONSON HEALTHCARE GROUP C BRONSON STAFFING SERVICE 601 JOHN STREET KALAMAZOO MI 49007 383277697 HOME HEALTH CARE MI BRONSON HEALTHCARE GROUP C BRONSON PRACTICE MANAGEMENT 601 JOHN STREET KALAMAZOO MI 49007 382511179 OTHER MEDICAL SERVICES MI BRONSON HEALTHCARE GROUP C 0 1 1 0 0 1 0 0 0 0 1 1 0 1 1 0 0 1 BRONSON HEALTHCARE GROUP K 12438217 METHOD BASED ON ACTUAL COST BRONSON HEALTHCARE GROUP L 99044650 METHOD BASED ON ACTUAL COST BRONSON HEALTHCARE GROUP N 555350 METHOD BASED ON ACTUAL COST BRONSON HEALTHCARE GROUP B 10500000 METHOD BASED ON ACTUAL COST BRONSON HEALTHCARE GROUP N 285936 METHOD BASED ON ACTUAL COST BRONSON LAKEVIEW HOSPITAL F 235343 METHOD BASED ON ACTUAL COST BRONSON LAKEVIEW HOSPITAL K 289733 METHOD BASED ON ACTUAL COST BRONSON LAKEVIEW HOSPITAL N 302835 METHOD BASED ON ACTUAL COST BRONSON LAKEVIEW HOSPITAL L 183832 METHOD BASED ON ACTUAL COST BRONSON LAKEVIEW HOSPITAL N 106163 METHOD BASED ON ACTUAL COST BRONSON HEALTH FOUNDATION K 162918 METHOD BASED ON ACTUAL COST BRONSON HEALTH FOUNDATION C 67966 METHOD BASED ON ACTUAL COST BRONSON BATTLE CREEK HOSPITAL K 696970 METHOD BASED ON ACTUAL COST BRONSON PRACTICE MANAGEMENT K 673710 METHOD BASED ON ACTUAL COST BRONSON LIFESTYLE IMPROVEMENT AND RESEARCH CENTER K 40718 METHOD BASED ON ACTUAL COST BRONSON PROPERTY CORPORATION L 4546876 METHOD BASED ON ACTUAL COST BRONSON PROPERTY CORPORATION K 2807853 METHOD BASED ON ACTUAL COST BRONSON PRACTICE MANAGEMENT L 246477 METHOD BASED ON ACTUAL COST BRONSON LIFESTYLE IMPROVEMENT AND RESEARCH CENTER L 2593457 METHOD BASED ON ACTUAL COST BRONSON VICKSBURG HOSPITAL O 54999 METHOD BASED ON ACTUAL COST BRONSON VICKSBURG HOSPITAL R 1292118 METHOD BASED ON ACTUAL COST BRONSON VICKSBURG HOSPITAL N 90047 METHOD BASED ON ACTUAL COST BRONSON PRACTICE MANAGEMENT N 101315 METHOD BASED ON ACTUAL COST BRONSON STAFFING SERVICES N 80525 METHOD BASED ON ACTUAL COST BRONSON LAKEVIEW HOSPITAL N 104163 METHOD BASED ON ACTUAL COST BRONSON PRACTICE MANAGEMENT N 7478126 METHOD BASED ON ACTUAL COST BRONSON STAFFING SERVICES N 4391898 METHOD BASED ON ACTUAL COST