2012-05-11T13:39:59-05:00 2011-06-30 Ernst & Young US LLP 41 South High Street Columbus OH 43215 990 2010-07-01 382027689 WA Foote Memorial Hospital WAFO 5177884800 205 N East Avenue Jackson MI 49201 Georgia Fojtasek 5177884800 2012-05-09 1 6142245678 2010 2016-02-24 21:20:13Z Allegiance Health Georgia Fojtasek 205 N East Avenue Jackson MI 49201 425672065 0 X www.allegiancehealth.org X 1970 MI We lead our community to better health and well-being at every stage of life. 14 6 3893 1003 4417478 -83783 329296 834666 398700557 388344564 6581716 5560340 5781789 6853959 411393358 401593529 630000 665000 0 0 196367464 204451189 0 0 0 203579989 198925461 400577453 404041650 10815905 -2448121 431509319 471756796 277912504 270066283 153596815 201690513 X Our MissionWe lead our community to better health and well-being at every stage of life.Our ValuesCompetence: expertise in carrying out responsibilities and inspiring others to have confidence in you.Integrity: behavior that is honest, fair, trustworthy and sincere, strength of character and respect for others.Teamwork: working together in an environment of mutual respect.Diversity: respect for individual beliefs, uniqueness, and differences.Quality: committment to excellence in care.Compassion: acknowledging the feelings of others with empathy, support, encouragement, and sensitivity. Listening and responding to individual needs in a patient and caring manner.Customer Service: taking pride in providing service beyond expectations.Healing Environment: providing an environment that promotes an atmosphere of trust, comfort, healing and security. 0 0 322528308 665000 388746698 The Hospital devotes substantial efforts and resources to providing health services to people in its communities. The Hospital is engaged in the following activities to ensure that our mission is accomplished:Unreimbursed Services Provided to the Elderly and the Poor:The Hospital provides a substantial portion of its services to the elderly and poor. During the fiscal year ended June 30, 2011, approximately 43% of the value of services rendered were to elderly patients under the Medicare program, and approximately 18% of the services were provided to patients who were deemed indigent under state, county, or Medicaid Center guidelines.In the spirit of our mission and values, the Hospital has taken proactive steps to address those issues that will affect accessibility, the financing, and the delivery of healthcare services to all persons. During the fiscal year ended June 30, 2011, the estimated unreimbursed cost of services provided to the elderly, uninsured, and the underinsured totaled $21.4 million. In addition, the Hospital provided charity care of $37.2 million and recorded a provision for bad debts of $31.7 million. Consistent with Schedule H reporting at cost bad debt and charity care at cost for fiscal year 2011 was $10.1 million and $11.7 million respectively.Patient Services:The Hospital serves seven counties with a medical staff of more than 400 physicians. A complete listing of services is available on the internet at AllegianceHealth.org.The Hospital supports unprofitable/subsidized health services including inpatient and outpatient mental health and substance abuse services, obstetrics, emergency and trauma services, general medicine, family/general practice, senior services, cardiac and pulmonary rehabilitation, palliative care, wound care, pain clinic and diabetes clinic.Community Benefit Activities:The Hospital is engaged in community programs and services that address identified community health needs regardless of source or availability of payment and provide measurable improvement in health access, health status, and the use of healthcare resources. These programs address one of the six criteria:Supports the Hospitals community based missionTargets the problems of the poor or medically underservedImpacts the health status of the identified communityReduces community health costsIs accessible to the entire target community regardless of ability to payStimulates external community partnershipsThe Health Improvement Organization (HIO) was created by Allegiance Health in 2001 to promote a culture of continuous health improvement in our community and integrate wellness and prevention throughout our services. The Allegiance Department of Prevention and Community Health provides staff and infrastructure to facilitate the coordination of local health improvement activities. The HIO Coordinating Council (HIO CC) is a multi-disciplinary stakeholders group led by Allegiance Health with representation from local government, public health, health care, health and human service agencies and nonprofits, school districts, health plans, mental health, employers and the faith community. The HIO CC coordinates efforts across community leaders in health to create unprecedented alignment of goals and resources, as well as a strong community platform for advocacy. The work of the HIO CC has culminated in the completion of a Community Action Plan including Goals, Objectives and Strategies to address physical activity, nutrition, tobacco, and depression in Jackson County based on assessment and data-driven processes, as well as input from over 30 representatives from local health and human service agencies, and over 100 community stakeholders. The overarching tactics that the Community Action Plan relies upon include evidence-based activities to:Enhance media attention and public recognition of healthy lifestyle practices;Improve access to healthy foods and safe, attractive, affordable places for activity through supportive policies and physical environment changes; Provide social support and services that promote consistent screening, referral and supportive relationships for physical activity, nutrition, mental health and smoking behavior change.Health Improvement Organization: The HIO builds upon existing community strengths and infrastructure to support implementation of health initiatives that have been prioritized as part of a community wide plan with significant community engagement and an established infrastructure to support longevity. In addition to operational support for the HIO CC, the Allegiance Health Department of Prevention and Community Health provides subject matter expertise on wellness and prevention at the Board, Service Line and community level, and direct service delivery (including employer-based health management, tobacco treatment services, weight management, faith community nursing, etc.) to a broad base of community members to support the health improvement priorities identified by the HIO. The Department of Prevention and Community Health has an annual budget of around $1.5 million. Since 2001, the Hospital has committed over $19.6 million of funding to this program.Other Community Benefit Activities:Through Community Education and Outreach, the Hospital provided educational sessions and clinics that reached 145,808 individuals at a cost of $216,788 in fiscal year 2011. The sessions/clinics included education on asthma, AIDS/HIV, diabetes, family planning, fitness/exercise, health, heart, nutrition and weight management, pulmonary, smoking cessation, and womens health. These educational offerings were located at the Hospital, community fairs, parishes, schools, work sites and by phone. Free Medical Screenings for high blood pressure, diabetes, mental health/depression, vascular disease and womens health served 1,288 community members at a cost of $12,455 in fiscal year 2011.The hospital funded a 24 hour nurse call center providing health information to the community. The cost of the center in fiscal year 2011 was $320,779.Support Groups for asthma/COPD/breathing, bereavement/grief, cancer, diabetes and stroke, among others, served 1,970 community members in fiscal year 2011 at a cost of $8,787.Counseling services for families and smoking cessation were provided to 3,751 community members at a cost of $45,237 in fiscal year 2011.Free and discounted prescription drug and medical supplies were provided to 46,959 community members at a cost of $361,689 during fiscal year 2011. Through Meals on Wheels and other food donation programs, the Hospital served 24,478 individuals at a cost of $34,391.Transportation Assistance, including wheelchair van, ambulance, transport to and from cancer centers and cab service served 4,003 community members in fiscal year 2011 at a cost of $89,898.Partnerships:The Hospital played a leadership role in the establishment of the Center for Family Health, a Federally Qualified Health Center, providing $635,000 in fiscal year 2011 support for the uninsured.The Hospital played a leadership role in the establishment of the Jackson County Health Plan, whose mission is to improve healthcare coverage in Jackson County for the underserved.The Hospital partnered with the medical staff and community to establish the Project Access Program which provides free physician and hospital care for 500 community members that do not qualify for federal or state financial assistance and are uninsured. The Hospital provides free care for medically necessary hospital based services. The $2,126,690 cost of this care is included in the reported charity care total above.Hospital executive staff sit on a number of governance boards of non-profit organizations in our community, such as Center for Family Health, Ella Sharp Museum, Jackson Community Foundation, Fitness Council of Jackson, Allegiance Hospice, Allegiance Health Foundation, Carelink, Healthlink, Jackson Community Ambulance, Huron Valley Ambulance, Jackson Community Medical Record, Michigan Health Information Network, United Way of Jackson, Jackson Health Network, Junior Achievement of the Michigan Edge, Jackson Symphony Orchestra Guild, Michigan Association of Health Care Philanthropy, Gift of Life and the nursing advisory boards for Jackson Community College, Spring Arbor University and the University of Michigan.The Hospital is also represented on public and private organizations including the Greater Jackson Chamber of Commerce, The Enterprise Group of Jackson, Inc. (Economic Development), Jackson Citizens For Economic Growth and South Central Michigan Works. The Hospital donates office space to two area non-profit organizations. These organizations are the Enterprise Group of Jackson, Inc. and Birthline of Jackson. 322528308 1 1 0 1 0 0 0 0 1 1 0 0 0 1 0 0 1 0 1 1 0 0 0 0 0 1 1 1 0 1 1 0 0 0 0 0 1 0 1 1 1 0 0 0 0 0 1 1 1 0 0 1 275 0 1 3893 1 1 1 1 CJ 0 0 0 0 0 0 0 0 X 14 6 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 X X X Jeanne Wickens 5177884800 205 N East Avenue Jackson MI 49201 X Georgia Fojtasek 60.00 X X 1331928 0 136510 Aaron Boatin 2.00 X 0 0 0 Neeta Delaney 2.00 X 0 0 0 Doug Finch 2.00 X 0 0 0 David Halsey 2.00 X 31697 0 0 Steven Hogwood 2.00 X 0 0 0 Nitin Ambani 5.00 X 20081 0 0 Mohan Kulkarni 5.00 X 139228 0 0 Richard LaFlamme 2.00 X 0 0 0 Tim Levy 2.00 X 0 0 0 John Nally 2.00 X X 0 0 0 Harish Rawal 2.00 X 7103 0 0 Larry Schultz 5.00 X 0 0 0 Michael Shirkey 2.00 X 0 0 0 Lynn VanWagnen 2.00 X 0 0 0 Mark Zande 2.00 X 0 0 0 Michael Shore 2.00 X 0 0 0 Karen Chaprnka 60.00 X 462426 0 68199 Jeanne Wickens 60.00 X 404493 0 71139 Richard Warren 60.00 X 318797 0 77285 Jacalyn Liebowitz 60.00 X 314894 0 60316 Kenneth Empey 60.00 X 262707 0 34174 Cheryl Lamborn 60.00 X 122775 0 19852 Anthony Gardner 60.00 X 221809 0 40954 William Kiel 60.00 X 187205 0 47387 Ray King 60.00 X 365027 0 68255 Timothy Keener 60.00 X 268219 0 46274 Max Hutton 50.00 X 669967 0 64157 Ryan Beekman 50.00 X 742501 0 73437 Stanley Lee 50.00 X 622728 0 72276 Joann Hirth 50.00 X 552981 0 46557 Malcolm Trimble 50.00 X 546992 0 61439 Janet Blair 60.00 X 160394 0 5492 7753952 0 993703 188 1 1 0 Huron Consulting 550 W Van Buren Chicago IL 60607 Consulting Services 4091356 McKesson Information Solutions One Post Street San Francisco CA 94104 Medical Information Services 3565129 Pulmonary Clinic of Southern Michigan 900 East Michigan Avenue Jackson MI 49201 Medical Services 2302945 University of Michigan 1500 E Medical Center Dr Ann Arbor MI 48109 Medical & Educational Services 1831382 Independent Emergency Physicians PC PO Box 100 Royal Oak MI 48068 Emergency Room Services 1632884 190 834666 834666 Patient Service Revenu 621990 388067191 384690807 3376384 FHC Associates & JCA 621910 277373 277373 388344564 5247812 5247812 1553471 1257431 296040 296040 296040 22365404 768229 22043186 777919 322218 -9690 312528 312528 Services to Affiliates 561000 3633788 2953243 680545 Cafeteria 722210 1738307 1738307 Vendor Rebates 621990 493887 493887 691937 331388 360549 6557919 401593529 388746698 4417478 7594687 665000 665000 5289347 5289347 297850 297850 162648569 134293763 28354806 12490539 9970540 2519999 12194872 9734525 2460347 11530012 9203802 2326210 3345768 3345768 547231 436826 110405 257700 257700 195636 195636 262754 262754 36004487 28740488 7263999 1702075 1358677 343398 16268256 12986093 3282163 9727270 7764768 1962502 6576238 5249465 1326773 395680 315851 79829 395680 315851 79829 7161755 5716852 1444903 24367537 19451323 4916214 4802508 3833590 968918 Pharmaceuticals 32880459 32880459 Medical supplies 32878735 32878735 Swap Loss Transaction 12441000 12441000 Food 2154323 2154323 Bond Loss Transaction 1982992 1982992 4577377 4577377 404041650 322528308 81513342 0 4819088 10694871 22894310 9144349 51390158 53695026 47120 42685 15263 60000 2035406 1889563 6393449 6525464 6986127 7684889 329782290 169574994 164861287 160207296 165242839 215114646 6824272 6698007 431509319 471756796 26773338 33438347 159835000 173518633 91304166 63109303 277912504 270066283 X 153596815 201690513 153596815 201690513 431509319 471756796 X -2448121 50541819 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 1 195636 0 0 195636 0 Part IV, Supplemental Information: Part II-B, Line 1(g) Description of Lobbying Activities: Health care is a highly-regulated field, requiring frequent and high-level communication with regulators and elected officials. A small investment in lobbying enables us to remain in contact with legislators and government agencies, maximize the resources with which we are entrusted and assure that we provide the best care to our community. Allegiance enlists the services of several lobbying consultants, attorneys and healthcare trade associations. 642729 2045207 -5012 849502 709305 1124117 42176 946077 345524 642729 1.00000 0 1 1 9630527 9630527 175606490 76518774 99087716 130802238 90377047 40425191 13743035 2679173 11063862 160207296 Accrued Payroll and Payroll Taxes 17462913 Retirement Plan Liability 31702583 Accrued Interest Payable 630106 Other Liabilities 13313701 63109303 Description of Intended Use of Endowment Funds: Part V, Line 4: The organization's endowment funds are used for various charitable hospital programs including treatment of uninsured patients and community preventative health education. Cayman Islands 0 1 Program Services Self & Malpractice Insurance 3597932 1 0 1 3597932 0 3597932 1 0 1 0 0 0 1 1 1 X 1 X 1 1 1 0 1 1 11740838 32725 11708113 0.02900 64092833 51980711 12112122 0.03000 75833671 52013436 23820235 0.05900 1021626 1021626 0.00250 1301712 36651 1265061 0.00310 2323338 36651 2286687 0.00560 78157009 52050087 26106922 0.06460 602 602 0.00000 26029 26029 0.00010 212999 212999 0.00050 54112 54112 0.00010 19338 19338 0.00000 52175 52175 0.00010 365255 365255 0.00080 0 10009926 2164790 147119868 163794080 -16674212 X 1 1 1 Foote Health Center Associates Entity leases medical office space 0.54430 0.00000 0.45570 2 Jackson Community Medical Records Entity provides electronic medical records to hospital & community doctors. 0.51000 0.00000 0.49000 1 1 WA Foote Memorial Hospital

205 N East Avenue Jackson MI 49201

X X X Not Required 1 36 Allegiance Hematology Oncology

1100 E Michigan Avenue Jackson MI 49201

Cancer Treatment Allegiance Vascular Health

300 W Washington Avenue Jackson MI 49201

Vascular Health Allegiance Orthopedics

1201 E Michgan Avenue Jackson MI 49201

Orthopedics Allegiance Gastroenterology

1100 E Michigan Avenue Ste 310 Jackson MI 49201

Gastroenterology Allegiance General Surgery

300 W Washington Avenue Jackson MI 49201

Surgery Center Allegiance Hospitalist Service

205 N East Avenue Jackson MI 49201

Hospitalists Group Allegiance Express Care

110 N Elm Jackson MI 49202

Emergency Care Allegiance Family Medicine - Townsend

400 Hinckley Blvd Jackson MI 49203

Family Medicine Allegiance Cardio Surgery

1125 E Michigan Avenue Jackson MI 49201

Surgery Center Allegiance Family Medicine - Leslie

130 N Sherman Leslie MI 49251

Family Medicine Allegiance Intensivist Services

205 N East Avenue Jackson MI 49201

Internal Medicine Allegiance Behavioral Health

205 N East Avenue Jackson MI 49201

Behavioral Health Allegiance Rheumatology

1201 E Michgan Avenue Ste 100 Jackson MI 49201

Rheumatology Allegiance Family Medicine - Summit Wood

2585 Spring Arbor Road Jackson MI 49203

Family Medicine Allegiance Family Medicine - Spring Arbo

7845 Spring Arbor Road Spring Arbor MI 49283

Family Medicine Allegiance EKG

205 N East Avenue Jackson MI 49201

Pulmonary Medicine Allegiance Family Medicine - Mason

810 Hogsback Road Mason MI 48854

Family Medicine Allegiance Hearing Center

1111 Teneyck Jackson MI 49201

Hearing Loss Treatment Allegiance Family Medicine - Albion

27931 C Drive North Albion MI 49224

Family Medicine Express Care Kids

110 N Elm Jackson MI 49202

Emergency Care Allegiance Neuropsychiatry

205 N East Avenue Jackson MI 49201

Neuropsychiatry Allegiance Internal Medicine

900 E Michigan Avenue Jackson MI 49201

Cancer Treatment Allegiance Family Medicine - Brookyln

153 Wamplers Lake Road Brooklyn MI 49230

Family Medicine Allegiance Family Medicine - Grass Lake

12369 E Michigan Avenue Grass Lake MI 49240

Family Medicine Allegiance Family Medicine - Cascade Rid

3333 Spring Arbor Road Ste 100 Jackson MI 49203

Family Medicine Allegiance Family Medicine - MI CTR

4304 Page Avenue Michigan Center MI 49254

Family Medicine Allegiance Senior Health Center

205 N East Avenue Jackson MI 49201

Geriatric Services Allegiance Palliative Care

205 N East Avenue Jackson MI 49201

Palliative Care Allegiance Neurology

1201 E Michgan Avenue Jackson MI 49201

Neurology Allegiance Diabetes Center

817 W High Street Jackson MI 49203

Diabetes Allegiance EEG

205 N East Avenue Jackson MI 49201

Brain Diagnostics Allegiance Occupational Health Urgent Ca

One Jackson Square Jackson MI 49201

Urgent Care Allegiance Family Medicine - North Stree

1401 W North Street Jackson MI 49202

Family Medicine Allegiance Family Medicine - East Michig

3235 E Michigan Avenue Jackson MI 49202

Family Medicine Allegiance Family Medicine - Onsted

8958 West M-50 Onsted MI 49265

Family Medicine Allegiance Family Medicine - Springport

2282 Springport Road Ste B Jackson MI 49202

Family Medicine Part I, Line 6a: The Hospital prepares an annual community benefit report, which can be accessed at allegiancehealth.org/givingback and is also mailed to over 113,000 households in our community. Part I, Line 7: The Hospital used a cost-to-charge ratio to calculate the cost of charity care and Medicaid shortfall. Community Health Improvement Services and Cash and In-Kind Contributions are actual amounts. Part I, L7 Col(f): Our total expense from Form 990, Part IX, line 25, column (A) was $404,041,650. This expense is used as the denominator for purposes of calculating Part I, Line 7, column(f). The denominator does not include bad debt expense. Part II: The Hospital is involved in numerous community building activities.We believe these activities, such as supporting affordable housing, working in partnership with the local community college to develop skilled nurses and supporting economic development programs directly improve the general health and wellness of the community. Also, staff at every level of the organization are encouraged to serve community groups that promote education, health and economic advocacy for the less fortunate. Part III, Line 4: Allegiance Health and Subsidiaries Audited Financial Statements Footnote 1: Basis of Organization and Significant Accounting Policies. Accounts receivable are reduced by an allowance for uncollectible accounts. In evaluating the collectibility of accounts receivable, the Hospital analyzes its historical experience and identifies trends for each of its major payor sources to estimate the appropriate allowance for uncollectible accounts and the provision for bad debts. Management regularly reviews data about these major payor sources in evaluating the sufficiency of the allowance for uncollectible accounts. For receivables associated with services provided to patients who have third-party health care coverage, the Hospital analyzes contractually due amounts and provides an allowance for uncollectible accounts and provision for bad debts. For receivables associated with self-pay accounts (which includes both patients without insurance and patients with deductible and copayment balances due for which third-party coverage exists for part of the bill), the Hospital records a significant provision for bad debts in the period of service on the basis of its past experience, which indicates that many patients are unable or unwilling to pay the portion of their bill for which they are financially responsible. The difference between the standard rates and the amounts actually collected after all reasonable collection efforts have been exhausted is charged off against the allowance for uncollectible accounts. The provision for bad debts has been reported as a deduction from net patient service revenue. Costing methodology used in determining the organization's bad debt expense at cost: Costing for line 2 follows the directions provided on the IRS Schedule H optional worksheet A, utilizing the cost to charge ratio generated on worksheet 2. The organization's cost-to-charge ratio was used to calculate bad debt expense at cost. The amount of bad debt reported in the fiscal year 2011 audited financial statements was $31,734,583. The bad expense reported at cost based on the cost-to-charge ratio was $10,009,926. Part III, Line 8: The organization believes the entire Medicare shortfall reported on Line 7 should be treated as Community Benefit. Allegiance Health is nationally recognized by Healthgrades as being in the top five percent nationally for clinical excellence and patient safety. Allegiance Health also benchmarks favorably on overall cost per case and is deemed to be an efficient provider. The organization is subsidizing a government program and sustaining significant losses in providing health care to Medicare receipients. By continuing to treat patients eligible for Medicare, hospitals alleviate the federal government's burden for directly providing medical services. The IRS recently acknowledged that lessening the government burden associated with providing Medicare benefits is a charitable purpose. Part III, Line 9b: The Hospital does not collect from patients known to qualify for charity care or other financial assistance. Patients having difficulty paying their bills are directed to financial counselors. These counselors review the patients information in order to see if they qualify for assistance. In addition, bills sent to patients include a number to call for help in providing the required financial information to qualify for charity care.All attempts at debt collection are halted if a patient fills out a financial aid application and is determined to qualify for financial aid assistance. Part VI, Line 7 State Filing of Community Benefit Report - Not Applicable Part VI, Line 2: Allegiance Health conducts a telephone survey every three years in order to gather information on the health status of Jackson County. We collect responses from over 1,000 Jackson County residents age 18 and older to a 180 question survey about their health status, insurance coverage, personal health habits and health care experiences. The specific steps involve collecting and analyzing health information for our County (including subpopulations within our County);measuring our health status against other communities, the state and the nation; prioritizing health issues within the community; creating a system for sharing this data with community organizations and residents; initiating strategic planning to address these issues through collaborative activities; and monitoring impact of health initiatives on community health outcomes. Part VI, Line 3: Uninsured inpatients and observation patients are referred to a financial counselor (contracted agent/partner) for assistance with Medicaid, SSI, and Allegiance Health program applications. Many outpatients needing or having received hospital services are also referred to the agent/partner for assistance. ER patients are provided with a packet of information at discharge from the department. This packet includes information about how assistance may be obtained through the local Medicaid office and about how to apply for our income structured payment plan and uncompensated care programs. When patients are billed for balances they owe, we solicit them to call the Business Office with any questions or for assistance. Additionally, a series of letters are sent to patients to apprise them of payment and assistance options. Allegiance has a printed brochure that is available through Registration that includes information regarding Medicaid application assistance and our internal programs. The Allegiance Health website includes a series of web pages related to transparency, quality, pricing, and our financial policies, procedures, and programs. Uninsured patients needing mental health services are screened for eligibility through our partnership with the Jackson Community Mental Health Agency, which funds care for indigent, dual diagnosis, and Medicaid patients. Patients seeking substance abuse care are linked with the Mid-South Substance Abuse Commission. Registration and Business Office team members receive direct training on our programs and scripting for ensuring information is provided to the patients and families with whom our staff interact. Education is provided to organizational leaders to ensure that team members outside of Finance are aware of our programs and where to direct patients and families who may need or who are seeking assistance. Part VI, Line 4: Allegiance Health is the only hospital system located in Jackson County, although residents also access various other unrelated health systems in neighboring counties. The county ranked 65 out of 82 Michigan counties in overall health, and 53 out of 82 counties in factors contributing to health, including social and economic factors, according to a study released by the University of Wisconsin Population Health Institute. Access to health care is also considerably lower than national and state figures, and statistics related to contributing behavioral factors in Jackson among certain geographic and demographic subpopulations are particularly concerning. According to 2009 census estimates, the population of Jackson County was at nearly 160,000, with less than 35,000 people living in the city of Jackson. The county is primarily rural with some urban and suburban sections. The median income in Jackson County is $47,424 and 13.2% of residents live below the federal poverty line. Data from the 2008 Community Health Assessment shows that 37% of Jackson County residents are covered by Medicaid and Medicare, while an additional 17% of residents have no health care coverage at all. During the 2011 fiscal year, Allegiance Health had 9,351 Medicare discharges and 5,088 Medicaid discharges from inpatient services. Outpatient services saw 151,185 Medicare visits and 74,375 Medicaid visits. Physician practice visits totaled 153,645 during fiscal year 2011, with 99,208 primary care visits and 54,437 visits to specialists. Approximately 41% of these patients were covered under Medicare, while 11% were on Medicaid and 3% were uninsured. There are 12 different census tracts within Jackson County that are considered as medically underserved areas. Allegiance Health also provides financial and leadership support of primary care services for the underserved, regardless of their ability to pay, through the Center for Family Health (CFH), a federally qualified health center. In fiscal 2011, CFH saw 26,620 patients, of which 55% were on Medicaid, 5% were on Medicare and 27% were uninsured. Part VI, Line 6: Allegiance Health is honored to have received several awards in recent years, including the American Hospital Associations 2010 Foster G. McGaw Prize for excellence in community service, which is presented to only one hospital in the United States each year. This award is the ultimate recognition of Allegiance Health's commitment to community health improvement and partnership..The health system also continues to earn national recognition for clinical quality and patient safety. Among the honors was being chosen as 1 of only 23 large community hospitals in the United States to win the new Thomson Reuters 100 Top Hospitals: Everest Award for National Benchmarks 2009, which recognizes hospitals that are setting national standards for quality at an accelerated rate of improvement. For the fifth time, Thomson Reuters also ranked Allegiance Health as one of the 100 Top Hospitals for National Benchmarks, based on demonstrated delivery of quality care and excellent financial management. A 2009 Premier Award for Quality, from the Premier Health Care Alliance, placed Allegiance Health in the top one percent of U.S. hospitals for quality.As a recipient of the HealthGrades Distinguished Hospital Award for Clinical Excellence, Allegiance Health ranks among the top five percent in the nation for clinical excellence. For the second year in a row, Allegiance Health also won the HealthGrades Patient Safety Excellence Award, which places it among the top five percent of hospitals in the nation for patient safety. Allegiance is 1 of only 3 hospitals in the state of Michigan and 79 hospitals in the entire country to earn both the Clinical Excellence and Patient Safety Awards. In addition, HealthGrades rated Allegiance Health among the Top 10 percent of hospitals in the United States for the treatment of stroke and overall pulmonary services. The Health Improvement Organization (HIO) was created by Allegiance Health in 2001 to promote a culture of continuous health improvement in our community and integrate wellness and prevention throughout our services. The Allegiance Department of Prevention and Community Health provides staff and infrastructure to facilitate the coordination of local health improvement activities. The HIO Coordinating Council (HIO CC) is a multi-disciplinary stakeholders group led by Allegiance Health with representation from local government, public health, health care, health and human service agencies and nonprofits, school districts, health plans, mental health, employers and the faith community. The HIO CC coordinates efforts across community leaders in health to create unprecedented alignment of goals and resources, as well as a strong community platform for advocacy. The work of the HIO CC has culminated in the completion of a Community Action Plan including Goals, Objectives and Strategies to address physical activity, nutrition, tobacco, and depression in Jackson County based on assessment and data-driven processes, as well as input from over 30 representatives from local health and human service agencies, and over 100 community stakeholders. The overarching tactics that the Community Action Plan relies upon include evidence-based activities to:Enhance media attention and public recognition of healthy lifestyle practices.Improve access to healthy foods and safe, attractive, affordable places for activity through supportive policies and physical environment changes. Provide social support and services that promote consistent screening, referral and supportive relationships for physical activity, nutrition, mental health and smoking behavior change.See Form 990, Schedule O, Program Service Accomplishments for more detail. Part VI, Line 7: The Hospital's sole corporate member is Allegiance Health Services, a 501(c)(3) organization. Other affiliates include a Foundation, a Hospice, a Long Term Acute Care Hospital (LTACH), a Volunteer Organization and a Home Health Care company, all 501(c)(3) organizations.The Hospital, Hospice, LTACH and Home Health Care organization work together to provide necessary medical services to the Jackson Community. The Foundation and the Volunteer Organization work closely with the Parent and the Hospital in raising funds for projects and services that would benefit the overall well-being of the community. The most recent campaign successfully raised funds to expand and improve our cancer care service line. Prior campaigns have provided funds for a Hospice Home Residence and monies to subsidize medical care for indigent patients. See Form 990, Schedule 0, Program Service Accomplishments for more detail. 0 Center for Family Health 2298 Springport Road Jackson MI 49202 383251354 501(c)(3) 635000 0 N/A The Center for Family Health grant provides operational support for medically underserved populations. Healthlink 205 N East Avenue Jackson MI 49201 382756425 501(c)(3) 30000 0 N/A The Helping Hands Home Care grant supports respite care for families without the financial means to support needed assistance. 2 0 Other Information: Part IV: Schedule I, Part I, Line 2: The organization sends out an award letter to all grantee recipents. The letter outlines what the funding may be used for and requests a final report detailing the year's activities. Further funding is contingent upon satisfactory completion of this report. X X 1 1 X X X X X 1 1 0 0 0 0 0 1 0 Georgia Fojtasek 505152 0 195030 0 631746 0 116995 0 19515 0 1468438 0 463651 0 Karen Chaprnka 290378 0 82261 0 89787 0 53598 0 14601 0 530625 0 45965 0 Jeanne Wickens 276764 0 76069 0 51660 0 51517 0 19622 0 475632 0 14084 0 Richard Warren 192546 0 57310 0 68941 0 57640 0 19645 0 396082 0 32644 0 Jacalyn Liebowitz 190342 0 57024 0 67528 0 43006 0 17310 0 375210 0 29884 0 Kenneth Empey 197273 0 17768 0 47666 0 30019 0 4155 0 296881 0 27611 0 Anthony Gardner 154529 0 39576 0 27704 0 30934 0 10020 0 262763 0 13354 0 William Kiel 156875 0 17973 0 12357 0 27072 0 20315 0 234592 0 0 0 Ray King 270922 0 70111 0 23994 0 43451 0 24804 0 433282 0 0 0 Timothy Keener 233317 0 20949 0 13953 0 19269 0 27005 0 314493 0 0 0 Max Hutton 166801 0 498323 0 4843 0 36250 0 27907 0 734124 0 0 0 Ryan Beekman 43511 0 673496 0 25494 0 55164 0 18273 0 815938 0 0 0 Stanley Lee 505152 0 100030 0 17546 0 45275 0 27001 0 695004 0 0 0 Joann Hirth 528050 0 30 0 24901 0 45250 0 1307 0 599538 0 0 0 Malcolm Trimble 539166 0 30 0 7796 0 45250 0 16189 0 608431 0 0 0 Janet Blair 0 0 0 0 160394 0 565 0 4927 0 165886 0 60542 0 Part I, Line 1a Georgia Fojtasek flew on a charter plane with a delegation of Michigan hospital delegates to a Regional Policy Board meeting. The hospital paid Georgia's proportionate charter flight cost. Allegiance Health provides a country club membership to several executives. The executives are Georgia Fojtasek, Karen Chaprnka and William Kiel. Any personal use expense by the executives is taxed as ordinary income. Part I, Lines 4a-b Janet Blair the organization's former Human Resources Senior Vice President received a severance payment in the amount of $165,886. Allegiance Health's officers and highest compensated employees participated in a non-qualified deferred compensation plan. The plan which began in 2005 partially vested for several executives in 2010. Payout of vested amounts resulted in an increase of salary for several executives. Georgia Fojtasek received a payout of her entire vested 457(f) plan due to IRS and Plan requirements relative to age. The calendar year 2010 contribution and payout amounts are as follows: 457(f) Contributions Georgia Fojtasek $93,720, Karen Chaprnka $35,223, Jeanne Wickens $33,142, Ray King $30,563, Timothy Keener $6,250, Richard Warren $24,565, Jacalyn Liebowitz $24,631, Kenneth Empey $10,774, William Kiel $16,745, Anthony Gardner $17,527, Cheryl Lamborn $4,804, Max Hutton $36,250. Ryan Beekman $53,939, Stanley Lee $44,050, Joann Hirth $45,250, Malcolm Trimble $45,250 457(f) Payouts Georgia Fojtasek $463,651, Karen Chaprnka $45,965, Jeanne Wickens $14,084, Richard Warren $32,644, Jacalyn Liebowitz $29,844, Kenneth Empey $27,611, Anthony Gardner $13,354, Jan Blair $60,542 Part I, Line 7 Column B(ii) of Part II, Schedule J includes non-fixed payments to certain physicians based on their productivity. County of Jackson Hospital Finance Authority 386004845 467148EH1 2011-04-21 65375000 See Part V - Supplemental Information 0 0 0 County of Jackson Hospital Finance Authority 386004845 467148DC3 2010-11-02 140238036 See Part V - Supplemental Information 0 0 0 65375000 540128 18425 64816447 2011 1 0 1 1 64816447 75421589 2141483 840059 495263 136761231 2010 1 0 1 1 0 0 1 1 1 0.00000 0.00000 0.00000 1 0 0 1 1 1 0.00000 0.00000 0.00000 1 0 1 1 RBC 25.000000000000 1 0 0 NA 0 0 0 0 0 NA 0 Part I, Line A, Column (f) Description of Bond Purpose Primarily to add marketability to underlying variable rates and refund Bonds. The Bonds refunded are as follows: $36,500,000 County of Jackson Hospital Finance Authority Variable Rate Hospital Revenue Refunding Bonds (Allegiance Health, Jackson, Michigan), Series 2011A were issued to refund the Series 2006A bonds. $28,875,000 County of Jackson Hospital Finance Authority Hospital Revenue Refunding Bonds (Allegiance Health, Jackson, Michigan), Series 2011B were issued to refund the Series 2006B bonds. Part I, Line B, column (f) Description of Bond Purpose Primarily to obtain traditional fixed interest on bond debt at a time of low prevailing rates and to reissue and refund bonds. The bonds reissued and refunded are as follows: $29,925,000 County of Jackson Hospital Finance Authority Hospital Variable Rate Demand Revenue Refunding Bonds (W.A. Foote Memorial Hospital, Jackson, Michigan), Series 2006B-1, reissued for tax purposes on 11/02/2010 $8,940,000 County of Jackson Hospital Finance Authority Hospital Revenue Refunding Bonds (W.A. Foote Memorial Hospital, Jackson, Michigan) Series 2006B-2, reissued for tax purposes on 11/02/2010 $47,400,000 County of Jackson Hospital Finance Authority Hospital Revenue Refunding Bonds (W.A. Foote Memorial Hospital, Jackson, Michigan) Series 2006C, reissued for tax purposes on 11/02/2010 $51,655,000 County of Jackson Hospital Finance Authority Hospital Revenue Refunding Bonds (Allegiance Health, Jackson, Michigan), Series 2010A were issued to refund the Series 2007A and Series 1997A bonds. Patrick Nally Employee Recruitment Loan X 60000 60000 0 1 1 Dr Jon Lake Physician Recruitment Loan X 11594 2902 0 1 1 Dr Ray King Physician Recruitment Loan X 11594 2902 0 1 1 Dr Brian Daly Physician Recruitment Loan X 78019 16219 0 1 1 Dr Malcolm Trimble Physician Recruitment Loan X 18876 10331 0 1 1 Dr Joann Hirth Physician Recruitment Loan X 18876 10331 0 1 1 102685 Amy Schultz Trustee Daughter 191409 Employee 0 Patrick Nally Trustee Son 19155 Employee 0 Crista Ulteig Officer Daughter 14682 Employee 0 Jackson Physicians Alliance JCMR Partnership 1388867 Reported amount is for payments by Jackson Community Medical Record (JCMR) to Allegiance Health for leased employees, accounting services, information support and other miscellaneous services provided by the hospital. Lynn VanWagnen is an officer of Jackson Physicians Alliance (JPA). (JPA) holds a 49% ownership stake in JCMR. Allegiance Health holds a 51% JCMR ownership stake. 0 VanWagnen Real Estate LLC Leasing Services Provider 10632 Reported amount is for lease payments Allegiance Health makes to VanWagnen Real Estate LLC for medical diagnostic space. VanWagnen Real Estate LLC is owned by Trustee Lynn VanWagnen. 0 Clark & King Investments LLC Leasing Services Provider 399915 Reported amount is for lease payments made by Allegiance Health to Clark & King Investments LLC for a medical office building. Ray King an Allegiance Health officer is a partner in Clark & King Investments LLC. 0 Jackson Physicians Alliance JCMR Partnership 2209897 Reported amount is for payments by Allegiance Health to Jackson Community Medical Record(JCMR) to lease an electronic medical records license. Lynn VanWagnen is an officer of Jackson Physicians Alliance (JPA). (JPA) holds a 49% stake in JCMR. Allegiance Health holds a 51% ownership stake. 0 Great Lakes Brain & Spine Institute Medical Services Provider 180433 Reported amount is for services provided to Allegiance Health patients by Great Lakes Brain & Spine Institute. Harish Rawal an Allegiance Health Trustee is an owner of Great Lakes Brain & Spine Institute. 0 Michigan Heart Medical Services Provider 267716 Reported amount is for payments by Allegiance Health to Michigan Heart for medical director services and clinical reads for cardiac diagnostic tests. Mark Zande an Allegiance Health Trustee during part of fiscal year 2011 is a shareholder in Michigan Heart. 0 Ambs Call Center Call Center Services 78014 Reported amount is for call center/messaging payments Allegiance Health makes to Ambs Call Center. Aaron Boatin an Allegiance Health Trustee is an Ambs Call Center Officer. 0 Form 990, Part VI, Section A, line 6 The Corporation is organized on a membership basis. The sole corporate member of the Corporation is Allegiance Health Services. Form 990, Part VI, Section A, line 7a The sole Member of the organization may elect and remove, with or without cause, the Corporation's Trustees. Form 990, Part VI, Section A, line 7b The following powers are reserved for the sole corporate Member of the hospital. Approve any change in the Articles of Incorporation, purposes or philosophy of the Corporation; Approve changes in those provisions of the Corporation's Bylaws which affect the size, composition, and method of selection of the Board of Trustees, or which affect this Article; Approve plans of merger, consolidation or dissolution of the Corporation; Elect and remove, with or without cause, the Corporation's Trustees, upon a simple majority vote of the Directors then serving on the Board of the Member present at a meeting at which a quorum is present; Approve guarantees by the Corporation of the debt of others in excess of maximum limits established by the Member, upon a simple majority vote of the Directors then serving on the Board of the Member present at a meeting at which a quorum is present; Authorize the sale, lease, mortgage or other disposition of all or substantially all of the assets owned, held or leased by or to the Corporation, approve any decision by the Corporation which would have the net effect of diminution of governance control of the Member, and any decision by the Corporation which would have the net effect of diminution in the Corporations governance control over its own subsidiary; and Ratify or reject operating and capital budgets developed by the Board and any non-budgetary expenditures or creations of debt in excess of an amount designated by the Member from time to time, upon a simple majority vote of the Directors then serving on the Board of the Member present at a meeting at which a quorum is present. Authorize the formation or acquisition of new subsidiaries of the Corporation or the sale or other disposition of existing subsidiaries. Form 990, Part VI, Section B, line 11 Form 990 is reviewed by the organization's Director of Finance, Chief Executive Officer, Chief Financial Officer, General Counsel, Compliance Officer and its public accounting firm. Final copies of the return are distributed to the hospital's Board of Trustees before the return is e-filed. Form 990, Part VI, Section B, line 12c The Board Finance Committee has ultimate responsibility over the enforcement of the Hospital's Conflict of Interest Policy. When a potential conflict of interest is identified, the Finance Committee is responsible for review of the conflict of interest for compliance with the policy. Also, General Counsel routinely reviews upcoming Board and Committee meeting agendas to assess potential conflict situations. All employees and Trustees of the organization are required to fill out an annual conflict of interest questionnaire. Board Trustees identified as having a conflict of interest are permitted to discuss the potential transaction. They are not allowed to deliberate in the decision or vote on the matter. Form 990, Part VI, Section B, line 15 The organization performs an annual review and assessment of the compensation of the Chief Executive Officer and each of the executives listed in Part VII of the Form 990. This review includes an independent compensation committee and the engagement of an independent compensation consultant. The Executive Compensation Committee, an independent committee of the Board of Trustees, is responsible for the executive compensation program. This committee performs an annual review of the competitiveness, reasonablenes and effectiveness of all executive cash compensation and benefit programs. The committee also leads the Board in evaluating the performance of the Chief Executive Officer and recommends all aspects of the Chief Executive Officer's compensation. The committee reviews the Chief Executive Officer's recommendations regarding the compensation of all other members of executive leadership. The Executive Compensation Committee engages an independent compensation consulting firm to conduct a comprehensive market analysis of total compensation for executive leadership. This firm uses data representing compensation levels and practices from national not-for-profit healthcare markets as Allegiance typically competes in the the national healthcare marketplace for executive talent. National data also provides more comparable information for size and operational characteristics so that comparisons are made to organizations with similiar scope and complexity. Form 990, Part VI, Section C, line 19 The organization's governing documents are available to the public upon request and also on the State of Michigan website. Annual operating results are communicated to the public through local media. In addition, Forms 990 and 990-T are available upon request. The Form 990 is also available on Allegiance Health's website and the free website www.guidestar.org. The organization's conflict of interest policy is not available to the public. Form 990, Part VII, Section A, Line 1a Allegiance Health Trustees are not paid to serve on the Board. Compensation listed for Dr. David Halsey, Dr. Nitin Ambani, Dr. Mohan Kulkarni and Dr. Harish Rawal in Part VII of the Form 990 is pay for on call medical services and or medical director fees. W.A. Foote Memorial Hospital dba Allegiance Health Board of Trustees mirrors the Board of the parent organization Allegiance Health Services. Many of the Board Members that serve Allegiance Health also serve on the Boards of related tax exempt entities. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized gains on investments: 24,876,094. Transfer to Parent -593,400. Change in Fair Value of Swap 11,407,357. Change in Accounting for Pensions SFAS 158 14,851,768. Total to Form 990, Part XI, Line 5: 50,541,819. PCN LLC 205 N East Avenue Jackson MI 49201 Physician rental network MI -24799 0 WA Foote Memorial Hospital Allegiance Health Services 205 N East Avenue Jackson MI 49201 382756428 Exempt Health System MI 501(c)(3) Line 11b, II N/A 0 Allegiance Health Foundation 205 N East Avenue Jackson MI 49201 383607833 Supports Allegiance Health MI 501(c)(3) Line 11a, I Allegiance Health Services 1 Hospice of Jackson dba Allegiance Hospice 205 N East Avenue Jackson MI 49201 382336367 Hospice care MI 501(c)(3) Line 7 Healthlink 1 The Hospice of Jackson Endowment Fund One Jackson Square Jackson MI 49201 383422146 Supports Allegiance Hospice MI 501(c)(3) Line 11c, III-FI Allegiance Hospice 1 Healthlink 205 N East Avenue Jackson MI 49201 382756425 Home health care MI 501(c)(3) Line 11a, I Allegiance Health Services 1 Physicians Health Plan of South Michigan One Jackson Square Jackson MI 49201 383311905 Exempt HMO MI 501(c)(4) Allegiance Health Services 1 Michigan Imaging Services 205 N East Avenue Jackson MI 49201 382895225 Medical imaging MI 501(c)(3) Line 11a, I Allegiance Health Services 1 South Central Practice Association 205 N East Avenue Jackson MI 49201 383309805 Idle organization MI 501(c)(3) Line 11a, I Allegiance Health Services 1 CareLink of Jackson 110 North Elm Avenue Jackson MI 49202 381218485 Long Term Acute Care Hospital MI 501(c)(3) Line 3 Allegiance Health Services 1 Allegiance Health Volunteers 205 N East Avenue Jackson MI 49201 386082835 Exempt Association MI 501(c)(3) Line 11d, III-O Allegiance Health Services 1 Jackson Community Medical Records 205 N East Avenue Jackson MI 49201 371502443 Electronic medical records MI WA Foote Memorial Hospital Unrelated -152227 1409472 0 0 0.51000 Foote Health Center Associates 1100 E Michigan Avenue Jackson MI 49201 383017711 Medical space condos MI WA Foote Memorial Hospital Related 69697 1182485 0 0 0.54430 Physicians Choice Network Inc 205 N East Avenue Jackson MI 49201 382594857 Physician rental network MI WA Foote Memorial Hospital C -8303 116243 1.00000 Viking Health System Inc 205 N East Avenue Jackson MI 49201 382756161 Idle healthcare administration corporation MI WA Foote Memorial Hospital C 1.00000 Cascades Insurance Company LTD 205 N East Avenue Jackson MI 49201 382027689 Malpractice insurance captive CJ WA Foote Memorial Hospital C 5777277 17035060 1.00000 Cascades Professional Staffing Corporation 205 N East Avenue Jackson MI 49201 383370242 Idle staffing corporation MI WA Foote Memorial Hospital C 1.00000 1 1 1 1 0 0 0 0 0 1 1 1 0 1 0 1 1 0 Foote Health Center Associates D 2024000 FMV Foote Health Center Associates A 125000 FMV Allegiance Health Services Q 593400 FMV Hospice of Jackson dba Allegiance Hospice K 848555 FMV Hospice of Jackson dba Allegiance Hospice N 955106 FMV Hospice of Jackson dba Allegiance Hospice A 402553 FMV Cascades Insurance Company LTD A 3774316 FMV Cascades Insurance Company LTD L 3066252 FMV Jackson Community Medical Records A 38529 FMV Jackson Community Medical Records N 1388867 FMV Jackson Community Medical Records J 2209897 FMV Jackson Community Medical Records D 1312060 FMV Allegiance Health Foundation C 834666 FMV Healthlink K 776537 FMV CareLink of Jackson K 4470000 FMV CareLink of Jackson J 287743 FMV