2013-05-05T21:00:16-05:00 2012-06-30 CROWE HORWATH LLP 70 West Madison Street Suite 700 Chicago IL 606024903 990 2011-07-01 381358164 SPECTRUM HEALTH PRIMARY CARE PARTNERS SPEC 6167747322 1840 Wealthy St SE Grand Rapids MI 49506 PAULINE KRYWANSKI 2012-12-15 false Geralyn R Hurd P00933422 3128997000 2011 2016-03-07 17:11:31Z SPECTRUM HEALTH MEDICAL GROUP DR JAMES TUCCI 1840 Wealthy St SE Grand Rapids MI 49506 335251101 false X WWW.SHMG.ORG X 1873 MI TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. 18 0 2159 0 0 0 2012725 1889296 220029343 332990481 0 -60876 319 0 222042387 334818901 0 0 0 0 156999781 228809592 0 0 0 59679969 95535909 216679750 324345501 5362637 10473400 78958816 100045449 77124591 87717653 1834225 12327796 TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. false false 267327252 332929605 SPECTRUM HEALTH PRIMARY CARE PARTNERS, D/B/A SPECTRUM HEALTH MEDICAL GROUP, PROVIDES CLINICAL, TEACHING, RESEARCH AND ADMINISTRATIVE PHYSICIAN SERVICES. THESE SERVICES ARE PROVIDED IN AMBULATORY PRACTICES, INPATIENT SETTINGS, AND TEACHING ENVIRONMENTS. THE SPECTRUM HEALTH MEDICAL GROUP (SHMG) BRINGS TOGETHER THE FINEST PHYSICIANS AND MEDICAL RESOURCES TO GIVE PATIENTS THE BEST HEALTH OUTCOMES AND THE HIGHEST LEVEL OF SERVICE. WITH NEARLY 600 PROVIDERS, 30 MEDICAL SPECIALTIES AND MORE THAN 70 SERVICE SITES, SHMG IS THE REGION'S LARGEST MULTISPECIALTY MEDICAL GROUP. FROM FAMILY MEDICINE TO SPECIALIZED CARE, FROM ANNUAL HEALTH CHECKUPS TO COMPLEX SURGERY AND MEDICAL MANAGEMENT, SHMG OFFERS PATIENTS A MEDICAL HOME FOR A LIFETIME OF CARE AND WELLNESS. THE GROUP HAS MADE CONVENIENCE AND ACCESS FOR PATIENTS IMPORTANT PARTS OF ITS HEALTH CARE DELIVERY. ADDITIONALLY, THE HIGH CALIBER MEDICAL PROFESSIONALS AT SHMG THRIVE ON COLLABORATIVE RESEARCH AND MEDICAL EDUCATION. SHMG IS DEEPLY COMMITTED TO ADVANCING PATIENT CARE AND BUILDING A SUSTAINABLE HEALTH CARE SYSTEM FOR CURRENT AND FUTURE GENERATIONS. 267327252 true true false false false false false false false true false false false true false false true false false false false false false false false false false false true false false false false false false false true false false false false false true false false true false true X 161 0 true 2159 true false false false false false false false false false false X 18 0 false false true false true true true true true false false true true true true true true true true false X Ms Polly Krywanski 6167747322 444 Michigan St NE MC 050 Grand Rapids MI 49503 X JAMES FAHNER 50.00 X X 286704 0 55681 JAMES TUCCI MD 50.00 X X 745599 0 233272 M ASHRAF MANSOUR 50.00 X X 748986 0 26548 PHILIP HENDERSON 50.00 X X 347045 0 37442 CALVIN LEAZENBY 50.00 X 299081 0 34448 DAVID DOBBIE 50.00 X 400232 0 40263 DAVID DUFFEY 50.00 X 236497 0 18573 DAVID OTTENBAKER 50.00 X 463687 59711 36552 DOMENIC FEDERICO 50.00 X 208950 101940 36791 DUDLEY WILEY 50.00 X 202004 0 35408 GREGORY GADBOIS 50.00 X 160297 14324 24083 KEITH POSTMA 50.00 X 590818 100865 35703 KEVIN MCCORMICK 50.00 X 335975 0 29577 LAURA ZUIDEMA 50.00 X 403026 0 27634 MADELINE CHADEHUMBE 50.00 X 215109 0 38970 MATHEW CHUNG 50.00 X 633750 119678 27592 MATTHEW VAN VRANKEN 2.00 X 0 1053788 314403 MICHAEL HARRISON 50.00 X 365395 53548 39007 RICHARD BREON 2.00 X 0 1599221 543543 MARK KADLEC 50.00 X 402913 0 154898 PAULINE KRYWANSKI 50.00 X 362214 0 116737 THOMAS MCGRAW 50.00 X 295252 0 72299 BRUCE FLETTER 50.00 X 622619 186200 28786 EDWARD INMAN 50.00 X 996903 0 118770 RANDALL MEISNER 50.00 X 687785 81593 29518 SUSAN DAY 50.00 X 795111 94685 34780 THOMAS RUPP 50.00 X 695577 95046 20907 JOHN BYRNES MD 0.00 X 0 547555 178024 JOSEPH FIFER 0.00 X 0 464605 165731 MARC CHIRCOP 0.00 X 0 496257 185237 MARCUS BEVERSLUIS 50.00 X 218481 0 35891 11720008 5069015 2777067 417 true true false ERDMAN COGDELL SPENCER BOX 88670 MILWAUKEE WI 53288 CONSULTING 2450236 IMPACT ADVISORS 931 W 75TH STREET SUITE 137-304 NAPERVILLE IL 60565 IT CONSULTING 1299398 VITALIZE CONSULTING 3740 COLLECTIONS DRIVE CHICAGO IL 60693 IT CONSULTING 1114730 INTEGRATED ARCHITECTURE LLC 4090 LAKE DRIVE SE GRAND RAPIDS MI 49546 ARCHITECTURE DESIGN SERVICES 622947 WEATHERBY LOCUMS INC PO BOX 972633 DALLAS TX 75397 STAFFING 516070 27 1889296 1889296 PATIENT SERVICE REVENUE 621110 194065551 194065551 CLINICAL, TEACHING & MANAGEMENT SERVICES 621110 51199000 51199000 MANAGEMENT FEE 621110 8131000 8131000 TECHNOLOGY SERVICE 621110 21350490 21350490 OTHER PROFESSIONAL SERVICES 621110 42435469 42435469 15808971 15808971 0 0 332990481 0 0 0 772 772 0 0 0 370552 431428 0 -60876 -60876 -60876 0 0 0 0 0 0 0 0 334818901 332929605 0 0 0 0 0 0 8825008 7931385 893623 254372 228614 25758 183494878 164914140 18580738 7971666 7164453 807213 18079557 16248816 1830741 10184111 9152865 1031246 0 403468 403468 35338 2738 32600 0 0 0 7303679 4961845 2341834 2136321 1068161 1068160 3635707 2596293 1039414 438313 112079 326234 0 16540824 14507489 2033335 792674 521625 271049 0 1457382 1140561 316821 707313 707313 0 12359958 8141456 4218502 3455763 3392166 63597 BAD DEBT EXPENSE 5659452 5659452 SHARED SVCS/MGMT FEES 22117056 401080 21715976 MEDICAL & OTHER SUPPLIES 15172443 15154503 17940 3320218 3320218 0 0 324345501 267327252 57018249 0 0 265540 142426 16397727 16711407 36483 23660 3336930 2935740 119762449 43073033 55023406 76689416 0 0 0 0 3898730 3542800 78958816 100045449 33382634 35470446 373663 43741957 51873544 77124591 87717653 1834225 12307625 20171 1834225 12327796 78958816 100045449 X 10473400 20171 X false true false X false X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 2665123 2665123 14186569 3099910 11086659 18824515 8273448 10551067 20066207 13571777 6494430 64020035 18127898 45892137 76689416 0 DUE TO AFFILIATES 51873544 51873544 FIN 48 (ASC 740) FOOTNOTE PART X, LINE 2 SPECTRUM HEALTH SYSTEM CONDUCTS AN ANALYSIS ANNUALLY TO DETERMINE THE ORGANIZATION'S LIABILITY WITH RESPECT TO UNCERTAIN TAX POSITIONS. FOR THE YEAR ENDED JUNE 30, 2012 IT WAS DETERMINED THAT THERE WERE NO MATERIAL UNCERTAIN TAX POSITIONS TO DISCLOSE. AS SUCH, THERE WAS NO FOOTNOTE ADDED TO THE CONSOLIDATED AUDITED FINANCIAL STATEMENTS. X X true true true true false false false false false false false BRUCE FLETTER 621523 186200 0 0 1096 0 9800 0 18986 0 651405 186200 0 0 CALVIN LEAZENBY 268079 0 28494 0 2508 0 19291 0 15157 0 333529 0 0 0 DAVID DOBBIE 319814 0 76375 0 4043 0 22050 0 18213 0 440494 0 0 0 DAVID DUFFEY 226699 0 9001 0 797 0 17072 0 1500 0 255070 0 0 0 DAVID OTTENBAKER 349730 59711 110911 0 3046 0 19600 0 16952 0 500239 59711 0 0 DOMENIC FEDERICO 153248 101940 50637 0 5065 0 20582 0 16209 0 245741 101940 0 0 DUDLEY WILEY 196411 0 0 0 5593 0 20003 0 15405 0 237412 0 0 0 EDWARD INMAN 267995 0 78790 0 650118 0 66643 0 52127 0 1115673 0 0 0 GREGORY GADBOIS 107344 14324 52552 0 402 0 8602 0 15480 0 184380 14324 0 0 JAMES FAHNER 273516 0 9016 0 4172 0 36100 0 19581 0 342385 0 0 0 JAMES TUCCI MD 524358 0 210448 0 10793 0 154214 0 79058 0 978871 0 57667 0 JOHN BYRNES MD 0 384593 0 146088 0 16874 0 115522 0 62502 0 725579 0 43560 JOSEPH FIFER 0 345996 0 116392 0 2217 0 103657 0 62074 0 630336 0 40380 KEITH POSTMA 217972 100865 371202 0 1644 0 17150 0 18553 0 626521 100865 0 0 KEVIN MCCORMICK 259540 0 74520 0 1914 0 13347 0 16230 0 365551 0 0 0 LAURA ZUIDEMA 398163 0 0 0 4862 0 19600 0 8034 0 430660 0 0 0 M ASHRAF MANSOUR 557923 0 186125 0 4938 0 17150 0 9398 0 775533 0 0 0 MADELINE CHADEHUMBE 206691 0 6408 0 2009 0 17229 0 21741 0 254079 0 0 0 MARC CHIRCOP 0 377526 0 102560 0 16170 0 124745 0 60492 0 681494 0 0 MARCUS BEVERSLUIS 161203 0 55307 0 1971 0 18816 0 17075 0 254372 0 0 0 MARK KADLEC 308995 0 88487 0 5430 0 96849 0 58049 0 557811 0 14658 0 MATHEW CHUNG 430968 119678 201138 0 1644 0 13475 0 14117 0 661342 119678 0 0 MATTHEW VAN VRANKEN 0 775095 0 261387 0 17306 0 214689 0 99714 0 1368191 0 56956 MICHAEL HARRISON 201745 53548 161230 0 2419 0 16973 0 22034 0 404402 53548 0 0 PAULINE KRYWANSKI 264588 0 94118 0 3508 0 80847 0 35890 0 478951 0 33599 0 PHILIP HENDERSON 261940 0 76496 0 8610 0 17012 0 20430 0 384487 0 0 0 RANDALL MEISNER 686798 81593 0 0 987 0 9800 0 19718 0 717303 81593 0 0 RICHARD BREON 0 1022977 0 544656 0 31588 0 362031 0 181512 0 2142764 0 166670 SUSAN DAY 791736 94685 0 0 3375 0 13475 0 21305 0 829891 94685 0 0 THOMAS MCGRAW 231962 0 54052 0 9238 0 27206 0 45093 0 367551 0 0 0 THOMAS RUPP 693933 95046 0 0 1644 0 13475 0 7432 0 716484 95046 0 0 First-class or charter travel Schedule J, Part I, Line 1a THE ORGANIZATION PROVIDED FIRST-CLASS TRAVEL FOR CERTAIN BOARD MEMBERS. Health or social club dues or initiation fees Schedule J, Part I, Line 1a THE ORGANIZATION PROVIDED HEALTH CLUB DUES FOR CERTAIN EXECUTIVE EMPLOYEES. THESE AMOUNTS WERE TREATED AS TAXABLE COMPENSATION AND INCLUDED IN FORM W-2. Arrangement used to establish the top management official's compensation Schedule J, Part I, Line 3 THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS (EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF EXECUTIVES AT ALL ENTITIES: *LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. *COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED IN ADVANCE OF EXECUTIVE COMMITTEE MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND, FOR FY 2012 (7/1/11-6/30/12), WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS: * SULLIVAN, COTTER AND ASSOCIATES, INC.: 2011 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * INTEGRATED HEALTHCARE STRATEGIES: 2011 HEALTHCARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2011 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * TOWERS WATSON DATA SERVICES: 2011/2012 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT *THESE SOURCES ARE CONSISTENT WITH THOSE USED IN LAST YEAR'S ANALYSIS. *COMPENSATION ADJUSTMENTS ARE APPROVED BY INDEPENDENT EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. *MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE ARE NATIONAL AND REFLECT THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFITS DATA REFLECT NATIONAL HEALTHCARE MARKET PRACTICES. GEOGRAPHIC PAY DIFFERENTIAL AND COST OF LIVING DATA INDICATE CONSISTENCY WITH NATIONAL DATA. THIS PROCESS IS INTENDED TO ASSIST SPECTRUM HEALTH IN QUALIFYING FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS (INTERMEDIATE SANCTIONS REGULATIONS) AND THE SPECTRUM HEALTH EXCESS BENEFIT TRANSACTION POLICY FOR THOSE INDIVIDUALS IN THE GROUP WHO ARE DISQUALIFIED PERSONS*. THE OPINION SUBMITTED FROM THE THIRD PARTY INDEPENDENT CONSULTING FIRM IS IN ACCORDANCE WITH THE PROVISIONS OF TREASURY REGULATIONS SECTION 53.4958-6(C)(2) AND IS ALSO INTENDED TO SATISFY THE PROFESSIONAL ADVICE REQUIREMENT OF TREASURY REGULATIONS SECTION 53.4958-1(D)(4)(III). Severance or change-of-control payment Schedule J, Part I, Line 4a $646,356 EDWARD INMAN Supplemental nonqualified retirement plan Schedule J, Part I, Line 4b $57,667 JAMES TUCCI, MD $14,658 MARK KADLEC $56,956 MATTHEW VANVRANKEN $33,599 PAULINE KRYWANSKI $40,380 JOSEPH FIFER $43,560 JOHN BYRNES $166,670 RICHARD BREON THIS QUESTION IS ANSWERED "YES" BECAUSE CERTAIN INDIVIDUALS, WHOSE SALARY AND BENEFITS ARE PAID BY THE REPORTING ORGANIZATION OR A RELATED ORGANIZATION, DO "PARTICIPATE IN" A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN. SOME INDIVIDUALS RECEIVED DISTRIBUTIONS DURING THE YEAR (AS REPORTED ON THIS LINE) WHEREAS OTHERS PARTICIPATED IN THE PLAN BUT DID NOT RECEIVE DISTRIBUTIONS. DISTRIBUTIONS REPORTED ON THIS LINE ARE ALSO INCLUDED IN SCHEDULE J, PART II, COLUMN F AS COMPENSATION REPORTED IN A PRIOR YEAR. 3800 LAKE MICHIGAN LLC BUSINESS 139207 REAL ESTATE LEASE false 44K PARTNERS BUSINESS 153817 REAL ESTATE LEASE false INDIRECT EMPLOYEES FORM 990, PART V, LINE 2A THE ORGANIZATION MAY HAVE INDIRECT EMPLOYEES. COMPENSATION FOR THESE EMPLOYEES IS PAID BY A RELATED ORGANIZATION. AN ALLOCATION OF AMOUNTS PAID FOR INDIRECT EMPLOYEES IS PURSUANT TO A MANAGEMENT SERVICES CONTRACT AND IS INCLUDED ON LINES 5-10 OF PART IX. Significant changes to organizational documents Form 990, Part VI, Section A, Line 4 THE ORGANIZATION'S BYLAWS WERE AMENDED TO CHANGE THE COMPOSITION AND QUALIFICATIONS OF THE GOVERNING BODY'S VOTING MEMBERS. Classes of members or stockholders Form 990, Part VI, Section A, Line 6 THE ORGANIZATION HAS ONE MEMBER(S)/STOCKHOLDER(S) AS FOLLOWS: SPECTRUM HEALTH SYSTEM ("SYSTEM") (EIN 38-3382353), A MICHIGAN NONPROFIT CORPORATION. Members or stockholders electing members of governing body Form 990, Part VI, Section A, Line 7a THE SOLE MEMBER (SEE FORM 990, PART VI, LINE 6) OF THE ORGANIZATION APPOINTS ALL MEMBERS OF THE BOARD OF DIRECTORS. Decisions requiring approval by members or stockholders Form 990, Part VI, Section A, Line 7b THE SOLE MEMBER (SEE FORM 990, PART VI, LINE 6) OF THE ORGANIZATION HAS THE RESERVED POWERS SET FORTH BELOW, AND SHALL NOT BE DEEMED AUTHORIZED UNLESS AND UNTIL APPROVED BY THE SOLE MEMBER(S): APPOINTMENT AND/OR REMOVAL OF THE DIRECTORS AND THE CHAIRPERSON OF THE ORGANIZATION'S BOARD, PURSUANT TO THE NOMINATION, ELECTION AND REMOVAL PROCESSES SET FORTH IN THE BYLAWS; HIRING, DISCHARGE AND EVALUATION OF THE ORGANIZATION'S PRESIDENT FOLLOWING CONSULTATION WITH THE BOARD OF DIRECTORS, AS DELEGATED BY THE SYSTEM BOARD TO THE MEMBER'S CHIEF EXECUTIVE OFFICER; THE ADOPTION OF AMENDMENTS TO THE ARTICLES OF INCORPORATION OR BYLAWS OF THE ORGANIZATION; THE ADOPTION OF STRATEGIC PLANS FOR THE ORGANIZATION; THE ADOPTION OF THE ANNUAL OPERATING AND CAPITAL BUDGETS OF THE ORGANIZATION AND ANY AMENDMENTS TO SUCH BUDGETS IN EXCESS OF THE AMOUNT SPECIFIED IN THE BUDGET ADOPTED BY THE MEMBER, AS AMENDED BY THE MEMBER FROM TIME TO TIME; APPROVAL OF ALL ORGANIZATION (OR ANY ENTITY CONTROLLED BY THE ORGANIZATION) CAPITAL EXPENDITURES IN EXCESS OF CERTAIN PRESET SPENDING LIMITS; APPROVAL OF ALL BORROWING BY THE ORGANIZATION (OR ANY ENTITY CONTROLLED BY THE ORGANIZATION) FOR CAPITAL OR OPERATING PURPOSES, AND ALL GUARANTEES OF INDEBTEDNESS; APPROVAL OF ALL LOANS IN EXCESS OF CERTAIN PRESET LENDING AMOUNTS BY THE ORGANIZATION (OR ANY ENTITY CONTROLLED BY THE ORGANIZATION) TO PERSONS OTHER THAN SPECTRUM HEALTH OR AN ENTITY CONTROLLED BY SPECTRUM HEALTH; APPROVAL OF ORGANIZATION INVESTMENTS OF CASH AND/OR RESERVES, WHETHER AT THE INDIVIDUAL ORGANIZATION LEVEL OR AS PART OF A POOLED INVESTMENT STRATEGY; APPROVAL OF COMPENSATION PAID TO PHYSICIANS PRACTICING MEDICINE AS EMPLOYEES OR INDEPENDENT CONTRACTORS OF THE ORGANIZATION, TO THE EXTENT SUCH APPROVAL IS DEEMED BY THE SYSTEM BOARD TO BE REQUIRED BY APPLICABLE TAX LAWS AND/OR REGULATIONS; MERGER OR CONSOLIDATION OF THE ORGANIZATION (OR ANY ENTITY CONTROLLED BY THE ORGANIZATION), ANY OTHER CHANGE IN CONTROL, OWNERSHIP PERCENTAGES OR CAPITAL STRUCTURE OF THE ORGANIZATION (OR ANY ENTITY CONTROLLED BY THE ORGANIZATION), OR THE CREATION OR ACQUISITION OF ANY ENTITY CONTROLLED BY THE ORGANIZATION; SALE OR TRANSFER OF MORE THAN TEN PERCENT (10%) OF THE ASSETS OF THE ORGANIZATION (OR ANY ENTITY CONTROLLED BY THE ORGANIZATION) TO ANY PERSON OR ENTITY NOT CONTROLLED BY THE MEMBER; DISSOLUTION OF THE ORGANIZATION; THE SELECTION, RETENTION AND OVERSIGHT OF AUDITORS FOR THE ORGANIZATION (OR ANY ENTITY CONTROLLED BY THE ORGANIZATION); ELIMINATION OF A DEPARTMENT; AND ANY OTHER APPROVAL REQUIRED BY LAW OR AS PROVIDED IN THE BYLAWS. Review of form 990 by governing body Form 990, Part VI, Section B, Line 11b A COPY OF THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO FILING. THE REVIEW PROCESS FOR THIS FORM 990 IS AS FOLLOWS: 1. PREPARATION OF THE RETURN IS SUPERVISED AND REVIEWED BY THE ORGANIZATION'S CORPORATE TAX MANAGER. 2. A SECOND REVIEW IS PERFORMED BY AN EXTERNAL CPA FIRM WITH EXPERTISE IN TAX-EXEMPT RETURN PREPARATION. 3. THE RETURN IS REVIEWED BY THE ORGANIZATION'S FINANCE AND LEGAL DEPARTMENTS (INCLUDING THE VICE PRESIDENT OF FINANCE OR CHIEF FINANCIAL OFFICER) AND SHARED WITH THE MEMBERS OF THE BOARD OF DIRECTORS. 4. THE ORGANIZATION'S VICE PRESIDENT OF FINANCE OR CHIEF FINANCIAL OFFICER REVIEWS COMMENTS OR QUESTIONS RECEIVED BY MEMBERS OF THE BOARD OF DIRECTORS, IF ANY, TO ADDRESS OR TO INCORPORATE, AS APPROPRIATE, INTO THE RETURN PRIOR TO FILING. Conflict of interest policy Form 990, Part VI, Section B, Line 12c BOARD OF DIRECTORS 1. CONFLICTS OF INTEREST MUST BE DISCLOSED, BOTH VIA AN ANNUAL ELECTRONIC DISCLOSURE PROCESS AS WELL AS VERBALLY AT A BOARD MEETING PRIOR TO DISCUSSION OF ANY AGENDA ITEM WITH REGARD TO WHICH A BOARD MEMBER HAS A CONFLICT. 2. A PERSON HAVING A FINANCIAL INTEREST IN A PROPOSED TRANSACTION OR ARRANGEMENT MAY MAKE A PRESENTATION AT A MEETING OF THE BOARD OF DIRECTORS OR COMMITTEE CONSIDERING THAT TRANSACTION OR ARRANGEMENT, BUT AFTER THAT PRESENTATION HE OR SHE SHALL LEAVE THE MEETING DURING DISCUSSION AND VOTING ON THAT PROPOSED TRANSACTION OR ARRANGEMENT. THE PERSON HAVING THE FINANCIAL INTEREST SHALL NOT BE COUNTED IN DETERMINING WHETHER A QUORUM IS PRESENT. 3. THE CHAIRPERSON OF THE BOARD OF DIRECTORS OR COMMITTEE SHALL, IF APPROPRIATE, APPOINT A DISINTERESTED PERSON OR COMMITTEE (INCLUDING OUTSIDE ADVISORS) TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT, AND TO ADVISE WHETHER THE PROPOSED TRANSACTION OR ARRANGEMENT IS IN SPECTRUM HEALTH'S BEST INTEREST. 4. THE BOARD OF DIRECTORS OR COMMITTEE SHALL EXERCISE DUE DILIGENCE TO DETERMINE WHETHER SPECTRUM HEALTH CAN, WITH REASONABLE EFFORTS, OBTAIN A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST. 5. IF A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT IS NOT REASONABLY ATTAINABLE UNDER CIRCUMSTANCES THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST, THE BOARD OF DIRECTORS OR COMMITTEE SHALL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS AND MEMBERS WHETHER THE PROPOSED TRANSACTION OR ARRANGEMENT IS IN SPECTRUM HEALTH'S BEST INTEREST AND FOR ITS OWN BENEFIT AND WHETHER THE TRANSACTION IS FAIR AND REASONABLE TO SPECTRUM HEALTH, AND SHALL MAKE ITS DECISION AS TO WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT IN CONFORMITY WITH SUCH DETERMINATION. 6. THE MINUTES OF THE MEETINGS OF THE BOARD OF DIRECTORS AND ALL SPECTRUM HEALTH COMMITTEES SHALL SET FORTH: A)THE NAMES OF THE PERSONS WHO DISCLOSED A FINANCIAL INTEREST IN A PROPOSED TRANSACTION OR ARRANGEMENT INVOLVING SPECTRUM HEALTH OR ANY OF ITS SUBSIDIARIES AND THE NATURE OF THE FINANCIAL INTEREST; AND B)THE NAMES OF THE PERSONS WHO WERE PRESENT FOR DISCUSSIONS AND VOTES RELATING TO SUCH TRANSACTION OR ARRANGEMENT, INCLUDING ANY DISCUSSION OF ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT, AND A RECORD OF ANY VOTES TAKEN IN CONNECTION WITH THAT MATTER. THE VOTES OF INDIVIDUAL MEMBERS NEED NOT BE RECORDED UNLESS OTHERWISE DIRECTED BY THE BOARD OF DIRECTORS OR COMMITTEE. MANAGEMENT 1. UPON ACCEPTANCE OF AN EMPLOYMENT OFFER, EACH MEMBER OF MANAGEMENT COMPLETES A CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRE. A COPY OF THE MEMBER OF MANAGEMENT'S DISCLOSURE QUESTIONNAIRE IS SENT TO THE ORGANIZATION'S LEGAL DEPARTMENT AND IS ALSO MAINTAINED BY HUMAN RESOURCES IN THAT PERSON'S PERSONNEL FILE. 2. ANNUALLY, EACH MEMBER OF MANAGEMENT COMPLETES AN ANNUAL CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRE ELECTRONICALLY. THE DISCLOSURE QUESTIONNAIRE IS REVIEWED BY THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS. 3. THERE IS AN ONGOING REQUIREMENT THAT MEMBERS OF MANAGEMENT COMPLETE ANOTHER DISCLOSURE QUESTIONNAIRE AT ANY POINT DURING HIS/HER EMPLOYMENT WHEN A NEW POTENTIAL CONFLICT OF INTEREST ARISES. IF A MEMBER OF MANAGEMENT COMPLETES A DISCLOSURE QUESTIONNAIRE AS A RESULT OF A NEW POTENTIAL CONFLICT OF INTEREST, THAT DISCLOSURE QUESTIONNAIRE IS SUBMITTED TO THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS FOR REVIEW. 4. THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS, IN CONSULTATION WITH EXECUTIVE MANAGEMENT, DETERMINE HOW ANY REPORTED CONFLICTS SHOULD BE MANAGED. MANAGEMENT OF A CONFLICT MAY TAKE A VARIETY OF DIFFERENT FORMS FROM IMPLEMENTATION OF A MANAGEMENT PLAN TO REQUIRING THAT THE MEMBER OF MANAGEMENT CEASE THE ACTIVITY CREATING THE CONFLICT OR, IN EXTREME CASES, LEAVE ORGANIZATION'S EMPLOYMENT. MANAGEMENT IS DETERMINED ON AN INDIVIDUAL BASIS BASED UPON THE FACTS AND CIRCUMSTANCES SURROUNDING THE DISCLOSURE. THE PURPOSE OF CONFLICT MANAGEMENT IS TO PROVIDE TRANSPARENCY WITHIN THE ORGANIZATION AND TO ENSURE THAT ORGANIZATION'S EMPLOYEES ARE ALWAYS ACTING IN THE BEST INTEREST OF ORGANIZATION. Process used to establish compensation of top management official Form 990, Part VI, Section B, Line 15a THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS (THROUGH ITS EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF THE TOP MANAGEMENT OFFICIAL, OTHER OFFICERS, AND KEY EMPLOYEES AT SPECTRUM HEALTH PRIMARY CARE PARTNERS. LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED TO THE EXECUTIVE COMMITTEE IN ADVANCE OF MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND, FOR FY 2012 (7/1/11-6/30/12), WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS: * SULLIVAN, COTTER AND ASSOCIATES, INC.: 2011 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * INTEGRATED HEALTHCARE STRATEGIES: 2011 HEALTHCARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2011 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * TOWERS WATSON DATA SERVICES: 2011/2012 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT THESE SOURCES ARE CONSISTENT WITH THOSE USED IN LAST YEAR'S ANALYSIS. COMPENSATION ADJUSTMENTS ARE APPROVED BY EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE IS NATIONAL AND REFLECTS THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFITS DATA REFLECT NATIONAL HEALTHCARE MARKET PRACTICES. GEOGRAPHIC PAY DIFFERENTIAL AND COST OF LIVING DATA INDICATE CONSISTENCY WITH NATIONAL DATA. THIS PROCESS IS INTENDED TO ASSIST SPECTRUM HEALTH IN QUALIFYING FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS (INTERMEDIATE SANCTIONS REGULATIONS) AND COMPLYING WITH THE POTENTIAL SPECTRUM HEALTH EXCESS BENEFIT TRANSACTION POLICY FOR THOSE INDIVIDUALS IN THE GROUP WHO ARE DISQUALIFIED PERSONS. THE OPINION SUBMITTED FROM THE THIRD PARTY INDEPENDENT CONSULTING FIRM IS IN ACCORDANCE WITH THE PROVISIONS OF TREASURY REGULATIONS SECTION 53.4958-6(C)(2) AND IS ALSO INTENDED TO SATISFY THE PROFESSIONAL ADVICE REQUIREMENT OF TREASURY REGULATIONS SECTION 53.4958-1(D)(4)(III). Process used to establish compensation of other officers/key employees Form 990, Part VI, Section B, Line 15b SEE EXPLANATION PROVIDED FOR FORM 990, PART VI, LINE 15A. Governing documents, conflict of interest policy and financial statements available to the public Form 990, Part VI, Section C, Line 19 THE ORGANIZATION'S ARTICLES OF INCORPORATION HAVE BEEN PROVIDED TO THE STATE OF MICHIGAN AND ARE AVAILABLE TO THE PUBLIC ON THE STATE'S WEBSITE. THE ORGANIZATION'S BYLAWS AND INTERNAL POLICIES ARE GENERALLY NOT MADE AVAILABLE TO THE PUBLIC. THE OVERALL SYSTEM CONSOLIDATED FINANCIAL STATEMENTS ARE PROVIDED AT WWW.SPECTRUMHEALTH.ORG IN THE SECTION TITLED "ABOUT US". FINANCIAL PERFORMANCE, IS DISCUSSED AT AN ANNUAL PUBLIC MEETING HELD AND POSTED TO WWW.SPECTRUMHEALTH.ORG ANNUALLY (UNDER THE SECTION TITLED "ABOUT US"). Average number of hours devoted per week to related organization Form 990, Part VII, Section A, Column B JAMES TUCCI, MD - 2 MATTHEW VAN VRANKEN - 48 RICHARD BREON - 50 JOHN BYRNES, MD - 50 JOSEPH FIFER - 52 MARC CHIRCOP - 52 FORMER OFFICER - HOURS WORKED FORM 990, PART VII, SECTION A, LINE 3 CERTAIN OFFICERS IDENTIFIED AS "FORMER" REFLECT 50 TOTAL HOURS WORKED AS THEY ARE STILL EMPLOYED AT THE ORGANIZATION. THEY ARE IDENTIFIED AS "FORMER" ONLY DUE TO THEIR ROLE OF THE OFFICER POSITION NOTED. Other changes in net assets or fund balances Form 990, Part XI, Line 5 FAS 136 ACTIVITY - 20171; REPORTED COMPENSATION AND HOURS FORM 990, PART VII, SECTION A, LINE 1A THE COMPENSATION REPORTED FOR EMPLOYEES OF THE ORGANIZATION IS NOT FOR SERVICES IN THEIR CAPACITY AS MEMBERS OF THE BOARD OF DIRECTORS BUT FOR SERVICES AS EMPLOYEES OF THE ORGANIZATION OR A RELATED ORGANIZATION. CERTAIN DIRECTORS WERE PAID REASONABLE COMPENSATION FOR THEIR SERVICES AS MEMBERS OF THE BOARD. CONSISTENT WITH PRIOR YEARS, COMPENSATION AND BENEFITS ARE REPORTED USING THE MOST RECENT CALENDAR YEAR COMPENSATION DATA. THE COMPENSATION FIGURES REPORTED IN THESE SECTIONS IS FOR THE YEAR ENDED DECEMBER 31, 2011. EMPLOYEES WITH COMPENSATION REPORTED IN PART VII WORK A COMBINED AVERAGE OF 50 HOURS PER WEEK FOR THE REPORTING ORGANIZATION AND/OR A RELATED TAX-EXEMPT ORGANIZATION. SPECTRUM HEALTH SYSTEM 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 383382353 MANAGEMENT MI 501(C)(3) 11 - Type III - FI NA false SPECTRUM HEALTH HOSPITALS 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 381360529 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false SPECTRUM HEALTH FOUNDATION 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 382752328 PHILANTHRO MI 501(C)(3) 7 SPECTRUM HEALTH SYSTEM false SPECTRUM HEALTH CONTINUING CARE 750 FULLER AVE NE GRAND RAPIDS MI 49503 383242232 REHAB/CARE MI 501(C)(3) 11 - Type I SPECTRUM HEALTH SYSTEM false PRIORITY HEALTH 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382715520 HMO MI 501(C)(4) N/A SPECTRUM HEALTH SYSTEM false REED CITY HOSPITAL CORPORATION 300 N PATTERSON RD REED CITY MI 49677 382770076 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false NEWAYGO COUNTY GENERAL HOSPITAL ASSOCIATION 212 S SULLIVAN AVENUE FREMONT MI 49412 381359517 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false ZEELAND COMMUNITY HOSPITAL 8333 FELCH STREET ZEELAND MI 49464 381411184 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false SPECTRUM HEALTH UNITED 615 S BOWER GREENVILLE MI 48838 381358412 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM false MICHIGAN MEDICAL PATIENT CARE 4100 LAKE DR SE STE 300 GRAND RAPIDS MI 49546 382851295 MEDICAL MI SPECTRUM HEALTH SYSTEM C CORPORATION 7455561 9794290 1 WEST MICHIGAN HEART 2900 BRADFORD STREET NE GRAND RAPIDS MI 49525 382125186 PHYSICIANS MI SPECTRUM HEALTH SYSTEM C CORPORATION 31682589 8715673 1 SPECTRUM HEALTH PHYSICIAN ALLIANCE 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 371655728 PHYSICIANS MI SPECTRUM HEALTH SYSTEM C CORPORATION 28 1708258 1 PRIORITY HEALTH MANAGED BENEFITS 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 383085182 ADMIN MI SPECTRUM HEALTH SYSTEM C CORPORATION 137858928 35117638 1 false false false false false false true false false true true true false false false false false false PRIORITY HEALTH K 55922281 CASH, GAAP, OR FMV PRIORITY HEALTH L 16469169 CASH, GAAP, OR FMV PART II, COLUMN (G), SECTION 512(B)(13) CONTROLLED ENTITY PART II, COLUMN (G) THE ORGANIZATION IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, SPECTRUM HEALTH SYSTEM.