2012-05-09T11:00:30-05:00 2011-06-30 ANDREWS HOOPER PAVLIK PLC 3333 DEPOSIT DR NE STE 310 GRAND RAPIDS MI 49546 990 2010-07-01 381358164 SPECTRUM HEALTH PRIMARY CARE PARTNERS SPEC 6167747322 1840 Wealthy St SE Grand Rapids MI 49506 PAULINE KRYWANSKI 2012-01-18 true 6169426440 2010 2016-02-24 21:20:13Z SPECTRUM HEALTH MEDICAL GROUP PAULINE M KRYWANSKI 1840 Wealthy St SE Grand Rapids MI 49506 222046589 false X WWW.SHMG.ORG X 1982 MI TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. 18 0 1129 0 0 0 802 2012725 75746711 220029343 -59133 0 311 319 75688691 222042387 0 0 0 0 45154568 156999781 0 0 0 26964645 59679969 72119213 216679750 3569478 5362637 38535706 78958816 42064118 77124591 -3528412 1834225 TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE. false false 173256390 220029343 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. 173256390 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 true true true true true false true X 86 0 true 1129 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 X Mr Bruce Shively 6164866703 4100 Lake Drive SE Grand Rapids MI 49546 X STEVEN BLAU 50 X 428686 0 34293 RICHARD BREON 2 X 0 1118465 531406 DAVID DOBBIE 50 X 270468 0 39168 DAVID DUFFEY 50 X 213735 0 12281 JAMES FAHNER 50 X X 277198 0 40784 KENNETH FAWCETT JR 50 X 366955 0 53813 DOMENIC R FEDERICO 2 X 0 289588 32814 GREGORY P GADBOIS 2 X 0 193318 34263 MICHAEL HARRISON 2 X 0 443023 41614 PHILIP HENDERSON 50 X X 267396 0 40167 CALVIN LEAZENBY 50 X 267685 0 34267 M ASHRAF MANSOUR 50 X X 564978 0 25949 KEVIN MCCORMICK 50 X X 252613 0 28030 DAVID OTTENBAKER 2 X 0 628960 36909 KEITH J POSTMA 2 X 0 695408 35011 JAMES TUCCI 50 X X 578567 0 231814 DUDLEY WILEY 50 X 203365 0 35470 MADELINE CHADEHUMBE 50 X 205212 0 27854 MATHEW H CHUNG 2 X 0 695602 37477 LAURA ZUIDEMA 50 X 513688 0 29113 THOMAS MCGRAW 50 X 196928 0 49390 PAULINE KRYWANSKI 50 X 280883 0 114927 MARK KADLEC 50 X 340905 0 147390 DOMINIC SANFILIPPO 50 X 650663 0 60204 ROBERT CALI 50 X 596554 0 35926 ROBERT MANN 50 X 520170 0 48848 JEFFREY CASSIDY 50 X 504162 0 26380 NEAL HILLMAN 50 X 499325 0 32292 MATTHEW VAN VRANKEN 0 X 0 785269 305729 JOSEPH FIFER 0 X 0 370272 164445 JOHN BYRNES 0 X 0 412265 177690 MARC CHIRCOP 0 X 0 422621 178531 MARCUS BEVERSLUIS 50 X 193166 0 33269 8193302 6054791 2757518 189 true true false FIRST COMPANIES INC 4380 BROCKTON DR SE SUITE 1 GRAND RAPIDS MI 49512 CONSTRUCTION SERVICES 2382107 IMPACT ADVISORS 931 W 75TH STREET SUITE 137-304 NAPERVILLE IL 60565 IT CONSULTING 1898880 MCKINSEY & COMPANY INC PO BOX 7247-7255 PHILADELPHIA PA 191707255 CONSULTING 1444950 CAMBIA MANAGEMENT LLC PO BOX 2832 ORLAND PARK IL 60462 REVENUE CYCLE CONSULTING 669398 DEARBORN ADVISORS LLC PO BOX 66391 CHICAGO IL 606660391 IT CONSULTING 459709 19 1887370 125355 2012725 PATIENT SERVICE REVENUE 621110 118118304 118118304 CLINICAL, TEACHING & MGMT SERVICES 621110 41200000 41200000 MANAGEMENT FEE 621110 12440000 12440000 TECHNOLOGY SERVICE 621110 14102187 14102187 OTHER PROFESSIONAL SERVICES 621110 22773960 22773960 11394892 11394892 0 0 220029343 0 0 0 4521 4202 319 0 319 319 0 0 0 0 0 0 0 0 0 0 0 222042387 220029343 0 319 0 0 0 0 5229262 4523074 706188 193166 167080 26086 125163092 108260386 16902706 6751485 5839728 911757 12401863 10727048 1674815 7260913 6280360 980553 135966 135966 473450 473450 32406 1406 31000 0 0 0 4196025 4038694 157331 1869024 934512 934512 10839439 10244710 594729 420049 378044 42005 0 10606747 9556278 1050469 573008 310820 262188 0 778014 728929 49085 290061 290061 0 7135646 4994952 2140694 2252891 2218012 34879 BAD DEBTS 1262422 1262422 SHS-TIS & EPIC SHARED SERVICES 9418191 1183691 8234500 SHS-PBO SERVICES 4142994 520360 3622634 SHS-MGMT FEE 500000 62800 437200 SHH-SHARED SERVICES 4753636 597057 4156579 0 0 0 0 216679750 173256390 43423360 0 0 4339 265540 3309466 16397727 36483 95220 3336930 89023810 34000404 28698372 55023406 0 0 6428309 3898730 38535706 78958816 9007836 33382634 33056282 43741957 42064118 77124591 -3528412 1834225 -3528412 1834225 38535706 78958816 5362637 0 X false true false X false X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 1624722 1624722 11387857 2163544 9224313 16248288 7367092 8881196 19095870 12713354 6382516 40667073 11756414 28910659 55023406 0 DUE TO AFFILIATES 43741957 43741957 222046589 216683952 5362637 0 0 5362637 0 0 0 0 0 0 0 0 0 0 0 0 FIN 48 FOOTNOTE PART XIV SPECTRUM HEALTH SYSTEM & AFFILIATES' JUNE 30, 2011 AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS DOES NOT HAVE A FIN 48 FOOTNOTE. X X X true true X X X X X false true false false false false false false false STEVEN BLAU 422196 0 0 0 6490 0 12188 0 22105 0 462979 0 0 0 RICHARD BREON 0 951782 0 137608 0 29075 0 362394 0 169012 0 1649871 0 0 DAVID DOBBIE 266561 0 0 0 3907 0 19600 0 19568 0 309636 0 0 0 DAVID DUFFEY 208832 0 4109 0 794 0 7332 0 4949 0 226016 0 0 0 JAMES FAHNER 261725 0 11270 0 4203 0 19600 0 21184 0 317982 0 0 0 KENNETH FAWCETT JR 328531 0 33002 0 5422 0 33150 0 20663 0 420768 0 0 0 DOMENIC R FEDERICO 0 289248 0 0 0 340 0 20387 0 12427 0 322402 0 0 GREGORY P GADBOIS 0 193064 0 0 0 254 0 18129 0 16134 0 227581 0 0 MICHAEL HARRISON 0 442754 0 0 0 269 0 21187 0 20427 0 484637 0 0 PHILIP HENDERSON 256808 0 3233 0 7355 0 17150 0 23017 0 307563 0 0 0 CALVIN LEAZENBY 264676 0 633 0 2376 0 19600 0 14667 0 301952 0 0 0 M ASHRAF MANSOUR 546502 0 16410 0 2066 0 17150 0 8799 0 590927 0 0 0 KEVIN MCCORMICK 250000 0 1083 0 1530 0 12780 0 15250 0 280643 0 0 0 DAVID OTTENBAKER 0 628792 0 0 0 168 0 21187 0 15722 0 665869 0 0 KEITH J POSTMA 0 695105 0 0 0 303 0 20387 0 14624 0 730419 0 0 JAMES TUCCI 505332 0 63427 0 9808 0 154401 0 77413 0 810381 0 0 0 DUDLEY WILEY 198031 0 0 0 5334 0 20035 0 15435 0 238835 0 0 0 MADELINE CHADEHUMBE 199752 0 4178 0 1282 0 7975 0 19879 0 233066 0 0 0 MATHEW H CHUNG 0 695214 0 0 0 388 0 20387 0 17090 0 733079 0 0 LAURA ZUIDEMA 509717 0 0 0 3971 0 19600 0 9513 0 542801 0 0 0 THOMAS MCGRAW 149968 0 32077 0 14883 0 19326 0 30064 0 246318 0 0 0 PAULINE KRYWANSKI 252776 0 25002 0 3105 0 80104 0 34823 0 395810 0 0 0 MARK KADLEC 301641 0 30502 0 8762 0 91628 0 55762 0 488295 0 0 0 DOMINIC SANFILIPPO 451557 0 192451 0 6655 0 37184 0 23020 0 710867 0 0 0 ROBERT CALI 566134 0 23490 0 6930 0 22050 0 13876 0 632480 0 0 0 ROBERT MANN 504468 0 10200 0 5502 0 32921 0 15927 0 569018 0 0 0 JEFFREY CASSIDY 492422 0 10000 0 1740 0 9800 0 16580 0 530542 0 0 0 NEAL HILLMAN 487609 0 9929 0 1787 0 13475 0 18817 0 531617 0 0 0 MATTHEW VAN VRANKEN 0 688046 0 81165 0 16058 0 214976 0 90753 0 1090998 0 0 JOSEPH FIFER 0 334753 0 33382 0 2137 0 103779 0 60666 0 534717 0 0 JOHN BYRNES 0 351987 0 44307 0 15971 0 115666 0 62024 0 589955 0 0 MARC CHIRCOP 0 362934 0 45480 0 14207 0 124900 0 53631 0 601152 0 0 MARCUS BEVERSLUIS 191559 0 200 0 1407 0 16696 0 16573 0 226435 0 0 0 First-class or charter travel Schedule J, Part I, Line 1a THE TAXPAYER PROVIDED FIRST-CLASS TRAVEL FOR CERTAIN KEY EXECUTIVE EMPLOYEES. IN CERTAIN LIMITED SITUATIONS WHEN COMMERCIAL AIR TRAVEL WAS NOT AVAILABLE FOR A DESTINATION OR NOT EFFICIENT DUE TO SCHEDULES AND/OR CONNECTIONS, CHARTER AIR TRAVEL WAS UTILIZED BY CERTAIN KEY EXECUTIVE EMPLOYEES. Travel for companions Schedule J, Part I, Line 1a THE TAXPAYER PROVIDED COMPANION TRAVEL FOR CERTAIN EXECUTIVE EMPLOYEES. THE RELATED AMOUNTS WERE TREATED AS TAXABLE COMPENSATION TO THE EMPLOYEE AND INCLUDED IN FORM W-2. Health or social club dues or initiation fees Schedule J, Part I, Line 1a THE TAXPAYER PROVIDED HEALTH CLUB DUES FOR CERTAIN EXECUTIVE EMPLOYEES. THESE AMOUNTS WERE TREATED AS TAXABLE COMPENSATION AND INCLUDED IN FORM W-2. Supplemental nonqualified retirement plan Schedule J, Part I, Line 4b 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. HOWEVER, NONE OF THESE PARTICIPANTS "RECEIVED PAYMENT FROM" THESE PLANS DURING THE TAX YEAR. LDSC LLC BUSINESS 193968 REAL ESTATE LEASE false 3800 LAKE MICHIGAN LLC BUSINESS 154582 REAL ESTATE LEASE false 44K PARTNERS BUSINESS 151419 REAL ESTATE LEASE false BUSINESS TRANSACTIONS WITH INTERESTED PERSONS SCH L, PART IV DR. DOMENIC FEDERICO, A MEMBER OF THE TAXPAYER'S BOARD OF DIRECTORS, HAS A GREATER THAN 5% INTEREST IN A TAXABLE ORGANIZATION THAT LEASES OFFICE SPACE TO THE TAXPAYER. DR. M. ASHRAF MANSOUR, A MEMBER OF THE TAXPAYER'S BOARD OF DIRECTORS, HAS A GREATER THAN 5% INTEREST IN A TAXABLE ORGANIZATION THAT LEASES OFFICE SPACE TO THE TAXPAYER. DR. MARK BEVERSLUIS, A FORMER MEMBER OF THE TAXPAYER'S BOARD OF DIRECTORS, HAS A GREATER THAN 5% INTEREST IN A TAXABLE ORGANIZATION THAT LEASES OFFICE SPACE TO THE TAXPAYER. THROUGH OUR ANNUAL CONFLICT OF INTEREST AND TAX REPORTING PROCESSES, CERTAIN INDIVIDUALS LISTED IN SCH L HAVE REPORTED THAT THEY, OR COMPANIES THEY WORK FOR, HAVE BUSINESS RELATIONSHIPS WITH THE REPORTING ORGANIZATION THAT EXCEED THRESHHOLDS PROVIDED IN THE INSTRUCTIONS TO THE FORM 990. IF AN AMOUNT IS NOT LISTED IN SCH L, A STATEMENT IS PROVIDED ABOVE EXPLAINING THE NATURE OF THE TRANSACTIONS. IDENTIFICATION OF DISREGARDED ENTITIES FORM 990, PART IV, LINE 33 THE ORGANIZATION DOES NOT OWN A WHOLLY OWNED DISREGARDED ENTITY. HOWEVER, THE HEALTH SYSTEM HAS WHOLLY OWNED DISREGARDED ENTITIES. THE ORGANIZATION IS REPORTING INDIRECT CONTROL FOLLOWING THE CONSTRUCTIVE OWNERSHIP RULES UNDER SECTION 318 OF THE INTERNAL REVENUE CODE. OTHER ENTITIES REPORTED ON SCHEDULE R ARE REPORTED BASED ON THE SAME APPLICATION OF THE CONSTRUCTIVE OWNERSHIP RULES OF SECTION 318. INDIRECT EMPLOYEES FORM 990, PART I, LINE 5 & FORM 990, PART V, LINE 2A TAXPAYER MAY HAVE INDIRECT EMPLOYEES. COMPENSATION FOR THESE EMPLOYEES IS PAID BY A RELATED ORGANIZATION. AN ALLOCATION OF AMOUNTS PAID FOR INDIRECT EMPLOYEES IS PURSUANT TO A MANAGEMENT SERVICES CONTRACT AND IS INCLUDED ON LINES 5-10 OF PART IX. Significant changes to organizational documents Form 990, Part VI, Section A, Line 4 THE BYLAWS WERE AMENDED TO CREATE GOVERNANCE GROUPS WHICH APPLY TO ONE GENERAL AREA OF PRACTICE, SERVICE LINE, REGION OR OTHER COMMON ELEMENT AND WHICH REPRESENT ALL PHYSICIAN AND NON-PHYSICIAN PROVIDERS AFFILATED WITH THE TAXPAYER. THE NUMBER OF BOARD MEMBERS WAS PERMITTED TO BE INCREASED TO NINETEEN IN THE EVENT OF A STRATEGIC INTEGRATION. THIS TRANSITIONAL BOARD WOULD REMAIN IN PLACE AND FUNCTION AS THE TAXPAYER'S BOARD FOR A TRANSITIONAL PERIOD NOT TO EXCEED TWO YEARS. AN ARTICLE WAS ADDED TO THE END OF THE TAXPAYER'S BYLAWS ON PEER REVIEW. Classes of members or stockholders Form 990, Part VI, Section A, Line 6 THE TAXPAYER 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 TAXPAYER 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 TAXPAYER 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 TAXPAYER BOARD, PURSUANT TO THE NOMINATION, ELECTION AND REMOVAL PROCESSES SET FORTH IN THE BYLAWS; HIRING, DISCHARGE AND EVALUATION OF THE TAXPAYER'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 TAXPAYER; THE ADOPTION OF STRATEGIC PLANS FOR THE TAXPAYER; THE ADOPTION OF THE ANNUAL OPERATING AND CAPITAL BUDGETS OF THE TAXPAYER 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 TAXPAYER (OR ANY ENTITY CONTROLLED BY THE TAXPAYER)CAPITAL EXPENDITURES IN EXCESS OF CERTAIN PRESET SPENDING LIMITS; APPROVAL OF ALL BORROWING BY THE TAXPAYER (OR ANY ENTITY CONTROLLED BY THE TAXPAYER) FOR CAPITAL OR OPERATING PURPOSES, AND ALL GUARANTEES OF INDEBTEDNESS; APPROVAL OF ALL LOANS IN EXCESS OF CERTAIN PRESET LENDING AMOUNTS BY THE TAXPAYER (OR ANY ENTITY CONTROLLED BY THE TAXPAYER) TO PERSONS OTHER THAN SPECTRUM HEALTH OR AN ENTITY CONTROLLED BY SPECTRUM HEALTH; APPROVAL OF TAXPAYER INVESTMENTS OF CASH AND/OR RESERVES, WHETHER AT THE INDIVIDUAL TAXPAYER LEVEL OR AS PART OF A POOLED INVESTMENT STRATEGY; APPROVAL OF COMPENSATION PAID TO PHYSICIANS PRACTICING MEDICINE AS EMPLOYEES OR INDEPENDENT CONTRACTORS OF THE TAXPAYER, 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 TAXPAYER (OR ANY ENTITY CONTROLLED BY THE TAXPAYER), ANY OTHER CHANGE IN CONTROL, OWNERSHIP PERCENTAGES OR CAPITAL STRUCTURE OF THE TAXPAYER (OR ANY ENTITY CONTROLLED BY THE TAXPAYER), OR THE CREATION OR ACQUISITION OF ANY ENTITY CONTROLLED BY THE TAXPAYER; SALE OR TRANSFER OF MORE THAN TEN PERCENT (10%) OF THE ASSETS OF THE TAXPAYER (OR ANY ENTITY CONTROLLED BY THE TAXPAYER) TO ANY PERSON OR ENTITY NOT CONTROLLED BY THE MEMBER; DISSOLUTION OF THE TAXPAYER; THE SELECTION, RETENTION AND OVERSIGHT OF AUDITORS FOR THE TAXPAYER (OR ANY ENTITY CONTROLLED BY THE TAXPAYER); 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 11a A COPY OF THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO FILING. THE REVIEW PROCESS FOR THIS FORM 990 IS AS FOLLOWS: 1. PREPARATION OF THE RETURN IS SUPERVISED AND REVIEWED BY THE TAXPAYER'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 TAXPAYER'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 TAXPAYER'S VICE PRESIDENT OF FINANCE OR CHIEF FINANCIAL OFFICER REVIEWS COMMENTS OR QUESTIONS RECEIVED BY MEMBERS OF THE BOARD OF DIRECTORS, IF ANY, TO ADDRESS OR TO INCORPORATE, AS APPROPRIATE, INTO THE RETURN PRIOR TO FILING. Conflict of interest policy Form 990, Part VI, Section B, Line 12c BOARD OF DIRECTORS 1. CONFLICTS OF INTEREST MUST BE DISCLOSED, BOTH VIA A DISCLOSURE FORM PROCESS AS WELL AS VERBALLY AT A BOARD MEETING PRIOR TO DISCUSSION OF ANY AGENDA ITEM WITH REGARD TO WHICH A BOARD MEMBER HAS A CONFLICT. 2. A PERSON HAVING A FINANCIAL INTEREST IN A PROPOSED TRANSACTION OR ARRANGEMENT MAY MAKE A PRESENTATION AT A MEETING OF THE BOARD OF DIRECTORS OR COMMITTEE CONSIDERING THAT TRANSACTION OR ARRANGEMENT, BUT AFTER THAT PRESENTATION HE OR SHE 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 TAXPAYER'S LEGAL DEPARTMENT AND IS ALSO MAINTAINED BY HUMAN RESOURCES IN THAT PERSON'S PERSONNEL FILE. 2. ANNUALLY, EACH MEMBER OF MANAGEMENT COMPLETES AN ANNUAL CONFLICT OF INTEREST DISCLOSURE QUESTIONNAIRE ELECTRONICALLY. THE DISCLOSURE QUESTIONNAIRE IS REVIEWED BY THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS. 3. THERE IS AN ONGOING REQUIREMENT THAT MEMBERS OF MANAGEMENT COMPLETE ANOTHER DISCLOSURE QUESTIONNAIRE AT ANY POINT DURING HIS/HER EMPLOYMENT WHEN A NEW POTENTIAL CONFLICT OF INTEREST ARISES. IF A MEMBER OF MANAGEMENT COMPLETES A DISCLOSURE QUESTIONNAIRE AS A RESULT OF A NEW POTENTIAL CONFLICT OF INTEREST, THAT DISCLOSURE QUESTIONNAIRE IS SUBMITTED TO THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS FOR REVIEW. 4. THE LEGAL AND ORGANIZATIONAL INTEGRITY DEPARTMENTS, IN CONSULTATION WITH EXECUTIVE MANAGEMENT, DETERMINE HOW ANY REPORTED CONFLICTS SHOULD BE MANAGED. MANAGEMENT OF A CONFLICT MAY TAKE A VARIETY OF DIFFERENT FORMS FROM IMPLEMENTATION OF A MANAGEMENT PLAN TO REQUIRING THAT THE MEMBER OF MANAGEMENT CEASE THE ACTIVITY CREATING THE CONFLICT OR, IN EXTREME CASES, LEAVE TAXPAYER'S EMPLOYMENT. MANAGEMENT IS DETERMINED ON AN INDIVIDUAL BASIS BASED UPON THE FACTS AND CIRCUMSTANCES SURROUNDING THE DISCLOSURE. THE PURPOSE OF CONFLICT MANAGEMENT IS TO PROVIDE TRANSPARENCY WITHIN THE TAXPAYER AND TO ENSURE THAT TAXPAYER'S EMPLOYEES ARE ALWAYS ACTING IN THE BEST INTEREST OF TAXPAYER. Process used to establish compensation of top management official Form 990, Part VI, Section B, Line 15a PROCESS FOR ESTABLISHING EXECUTIVE COMPENSATION THE SPECTRUM HEALTH BOARD OF DIRECTORS (EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF EXECUTIVES AT ALL ENTITIES: *LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS(PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. *COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED IN ADVANCE OF EXECUTIVE COMMITTEE MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND, FOR FY 2011 (7/1/10-6/30/11), WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS: * SULLIVAN, COTTER AND ASSOCIATES, INC.: 2010 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * INTEGRATED HEALTHCARE STRATEGIES: 2010 HEALTHCARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2010 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * WATSON WYATT DATA SERVICES: 2010/2011 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT *THESE SOURCES ARE CONSISTENT WITH THOSE USED IN LAST YEAR'S ANALYSIS. *COMPENSATION ADJUSTMENTS ARE APPROVED BY INDEPENDENT EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. *MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE ARE NATIONAL 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). Process used to establish compensation of other officers/key employees Form 990, Part VI, Section B, Line 15b SEE EXPLANATION PROVIDED FOR FORM 990, PART VI, LINE 15A. Public Disclosure Form 990, Part VI, Section C, Line 19 THE ORGANIZATION'S ARTICLES OF INCORPORATION HAVE BEEN PROVIDED TO THE STATE OF MICHIGAN AND ARE AVAILABLE TO THE PUBLIC ON THE STATE'S WEBSITE. THE ORGANIZATION'S BYLAWS AND INTERNAL POLICIES ARE GENERALLY NOT MADE AVAILABLE TO THE PUBLIC. THE OVERALL SYSTEM CONSOLIDATED FINANCIAL STATEMENTS ARE PROVIDED AT WWW.SPECTRUMHEALTH.ORG IN THE SECTION TITLED "ABOUT US." FINANCIAL PERFORMANCE, IS DISCUSSED AT AN ANNUAL PUBLIC MEETING HELD AND POSTED TO WWW.SPECTRUMHEALTH.ORG ANNUALLY (UNDER THE SECTION TITLED "ABOUT US"). Average hours worked per week for related organization Form 990, Part VII, Section A, Column B STEVEN BLAU - 0 RICHARD BREON - 50 DAVID DOBBIE - 0 DAVID DUFFEY - 0 JAMES FAHNER - 0 KENNETH FAWCETT JR - 0 DOMENIC R FEDERICO - 50 GREGORY P GADBOIS - 50 MICHAEL HARRISON - 50 PHILIP HENDERSON - 0 CALVIN LEAZENBY - 0 M. ASHRAF MANSOUR - 0 KEVIN MCCORMICK - 0 DAVID OTTENBAKER - 50 KEITH J POSTMA - 50 JAMES TUCCI - 0 DUDLEY WILEY - 0 MADELINE CHADEHUMBE - 0 MATHEW H CHUNG - 50 LAURA ZUIDEMA - 0 THOMAS MCGRAW - 0 PAULINE KRYWANSKI - 0 MARK KADLEC - 0 DOMINIC SANFILIPPO - 0 ROBERT CALI - 0 ROBERT MANN - 0 JEFFREY CASSIDY - 0 NEAL HILLMAN - 0 MATTHEW VAN VRANKEN - 50 JOSEPH FIFER - 50 JOHN BYRNES - 50 MARC CHIRCOP - 50 MARCUS BEVERSLUIS - 0 PHMB PROPERTIES LLC 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382715520 PROP. MGMT MI 179821 29996933 PRIORITY HEALTH MMPC REAL ESTATE LLC 4100 LAKE DR SE STE 300 GRAND RAPIDS MI 49525 382851295 DORMANT MI MICHIGAN MEDICAL PATIENT CARE SPECTRUM HEALTH INNOVATIONS LLC 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 272868213 IP DEVELOP MI 6018 3146005 SPECTRUM HEALTH SYSTEM SPECTRUM HEALTH SYSTEM 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 383382353 MANAGEMENT MI 501(C)(3) 11 - Type III - FI NA false SPECTRUM HEALTH HOSPITALS 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 381360529 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true SPECTRUM HEALTH PRIMARY CARE PTNRS 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 381358164 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true WEST MICHIGAN REGIONAL LABORATORY 1726 KNOLLCREST CIRCLE SE GRAND RAPIDS MI 49546 383414862 TEACH/RSCH MI 501(C)(3) 9 SPECTRUM HEALTH HOSPITALS true SPECTRUM HEALTH FOUNDATION 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 382752328 PHILANTHRO MI 501(C)(3) 7 SPECTRUM HEALTH SYSTEM true SPECTRUM HEALTH CONTINUING CARE 750 FULLER AVE NE GRAND RAPIDS MI 49503 383242232 REHAB/CARE MI 501(C)(3) 11 - Type I SPECTRUM HEALTH SYSTEM true SH CONTINUING CARE CENTER 750 FULLER AVE NE GRAND RAPIDS MI 49503 382415333 REHAB/NRS MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE true SH KENT COMMUNITY CAMPUS 750 FULLER AVE NE GRAND RAPIDS MI 49503 383472677 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH CONTINUING CARE true SPECTRUM HEALTH WORTH SERVICES 750 FULLER AVE NE GRAND RAPIDS MI 49503 382786617 HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE true VISITING NURSE SERVICES OF WEST MI 750 FULLER AVE NE GRAND RAPIDS MI 49503 381359195 HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE true PRIORITY HEALTH 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382715520 HMO MI 501(C)(4) N/A SPECTRUM HEALTH SYSTEM true TRINITY HEALTH PLANS 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382663747 HMO MGMT MI 501(C)(4) N/A PRIORITY HEALTH true PH GOVERNMENT PROGRAMS INC 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 320016523 HMO MI 501(C)(3) 9 PRIORITY HEALTH true SPECTRUM HEALTH UNITED 615 S BOWER GREENVILLE MI 48838 381358412 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true SH UNITED MEMORIAL FOUNDATION 615 S BOWER GREENVILLE MI 48838 382990574 PHILANTHRO MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED true AMBULATORY UNITED 407 S NELSON GREENVILLE MI 48838 383170488 HEALTHCARE MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED true UNITED LIFESTYLES 615 S BOWER GREENVILLE MI 48838 383589727 WELLNESS MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED true SPECTRUM HEALTH KELSEY 615 S BOWER GREENVILLE MI 48838 381297435 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH UNITED true REED CITY HOSPITAL CORPORATION 300 N PATTERSON RD REED CITY MI 49677 382770076 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true WEST MICHIGAN IMAGING CENTER PO BOX 1009 JENISON MI 49428 382730326 HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH HOSPITALS true NEWAYGO COUNTY GENERAL HOSPITAL ASSOCIATION 212 S SULLIVAN AVENUE FREMONT MI 49412 381359517 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true MMPC FOUNDATION 4100 LAKE DR SE STE 300 GRAND RAPIDS MI 49546 201099059 PHILANTHRO MI 501(C)(3) N/A MICHIGAN MEDICAL PATIENT CARE true KENT COMMUNITY HEALTH FOUNDATION 750 FULLER AVE NE GRAND RAPIDS MI 49503 383607110 PHILANTHRO MI 501(C)(3) 11 - Type III - FI SPECTRUM HEALTH KENT COMMUNITY CAMPUS true ZEELAND COMMUNITY HOSPITAL 100 SOUTH PINE ZEELAND MI 49464 381411184 HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM true HELEN DEVOS WOMEN'S AND CHILDREN'S HEALTH PAVILION ASSOCIATION 1840 WEALTHY ST SE GRAND RAPIDS MI 49506 383264184 MGMT MI SPECTRUM HEALH HOSPITALS C CORPORATION 611739 462237 0.8696 PARTNERSHIP FOR CHILDREN'S HEALTH 1840 WEALTHY ST SE GRAND RAPIDS MI 49506 383364676 MGED CARE MI SPECTRUM HEALH HOSPITALS C CORPORATION 0 0 1 THE FRED AND LENA MEIJER HEART CENTER CONDOMINIUM ASSOCIATION 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 830464302 MGMT MI SPECTRUM HEALH HOSPITALS C CORPORATION 2205785 1454395 0.9827 HDVCH - CHC 100 MICHIGAN ST NE GRAND RAPIDS MI 49503 383417270 MED. SVCS MI SPECTRUM HEALH HOSPITALS C CORPORATION 1800 0 1 CAMPUS TOWNE CENTER CONDO ASSC 4868 LAKE MICHIGAN DRIVE ALLENDALE MI 49401 382910067 MGMT MI SPECTRUM HEALH HOSPITALS C CORPORATION 20826 24780 0.75 PRIORITY HEALTH INSURANCE COMPANY 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 201529553 INSURANCE MI PRIORITY HEALTH C CORPORATION 217156804 65878919 1 PRIORITY HEALTH MANAGED BENEFITS 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 383085182 ADMIN MI SPECTRUM HEALTH SYSTEM C CORPORATION 129683594 29767226 1 MONTCALM PRIMARY CARE PHYSICIANS 615 S BOWER GREENVILLE MI 48838 202544762 MED. SVCS MI SPECTRUM HEALTH UNITED C CORPORATION 0 0 1 BLODGETT ASSURANCE COMPANY 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 INSURANCE CJ SPECTRUM HEALTH SYSTEM C CORPORATION 0 0 1 MICHIGAN MEDICAL PATIENT CARE 4100 LAKE DR SE STE 300 GRAND RAPIDS MI 49546 382851295 MEDICAL MI SPECTRUM HEALTH SYSTEM C CORPORATION 0 0 1 WEST MICHIGAN HEART 2900 BRADFORD STREET NE GRAND RAPIDS MI 49525 382125186 PHYSICIANS MI SPECTRUM HEALTH SYSTEM C CORPORATION 0 0 1 MHEALTH INNOVATIONS INC DBAIDEOMED 648 MONROE NW SUITE 312C GRAND RAPIDS MI 49503 611613614 PROD DEVL MI SPECTRUM HEALTH INNOVATIONS LLC C CORPORATION 0 457129 1 false false true false false false true false false true true true false false false false false false PRIORITY HEALTH K 91943 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS J 8067840 GAAP, CASH, OR FMV PRIORITY HEALTH L 10587714 GAAP, CASH, OR FMV PRIORITY HEALTH K 32587478 GAAP, CASH, OR FMV WEST MICHIGAN HEART L 26400 GAAP, CASH, OR FMV PRIORITY HEALTH K 3114256 GAAP, CASH, OR FMV SPECTRUM HEALTH UNITED K 464292 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS K 21334738 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS K 1509072 GAAP, CASH, OR FMV SPECTRUM HEALTH CONTINUING CARE K 846605 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS K 67742184 GAAP, CASH, OR FMV SPECTRUM HEALTH FOUNDATION C 1556305 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS L 20731414 GAAP, CASH, OR FMV MICHIGAN MEDICAL PATIENT CARE G 15738604 GAAP, CASH, OR FMV SPECTRUM HEALTH HOSPITALS C 331065 GAAP, CASH, OR FMV PART II, COLUMN (G), SECTION 512(B)(13) CONTROLLED ENTITY? SCHEDULE R TAXPAYER IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, SPECTRUM HEALTH SYSTEM. FOR ENTITIES THAT ARE PART OF A CONSOLIDATED HEALTH SYSTEM (WITH COMMON CONTROL) THE ATTRIBUTION RULES OF IRC SECTION 318 APPLY; MEANING THAT ALL ORGANIZATIONS ARE DEEMED TO HAVE CONTROL OF THE ORGANIZATIONS OWNED BY THE CONTROLLING ORGANIZATION. AS SUCH, IN ANSWERING THIS QUESTION AND FOR REPORTING IN SCH. R, EACH RELATED ORGANIZATION WITHIN THE HEALTH SYSTEM IS CONSIDERED AND THE TRANSACTIONS DISCLOSED MAY BE BETWEEN DIRECTLY CONTROLLED SUBSIDIARIES OR BROTHER-SISTER ENTITIES (INDIRECTLY CONTROLLED) WITHIN THE HEALTH SYSTEM.