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      <CompCurrentOfficersDirectors>
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        <ManagementAndGeneral>153934</ManagementAndGeneral>
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      <FeesForServicesLobbying>
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        <ManagementAndGeneral>31006</ManagementAndGeneral>
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        <ProgramServices>196995</ProgramServices>
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      </Travel>
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        <ProgramServices>1450487</ProgramServices>
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        <ProgramServices>9751033</ProgramServices>
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        <ManagementAndGeneral>1531228</ManagementAndGeneral>
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        <ProgramServices>4647382</ProgramServices>
      </OtherExpenses>
      <OtherExpenses>
        <Description>Pharmacy Supplies</Description>
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        <ProgramServices>2906703</ProgramServices>
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        <Total>995352</Total>
        <ProgramServices>995352</ProgramServices>
      </OtherExpenses>
      <OtherExpenses>
        <Description>Blood Bank Fees</Description>
        <Total>781464</Total>
        <ProgramServices>781464</ProgramServices>
      </OtherExpenses>
      <OtherExpenses>
        <Description>Collection Fees</Description>
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        <ProgramServices>3</ProgramServices>
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      <AllOtherExpenses>
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      </AllOtherExpenses>
      <TotalFunctionalExpenses>
        <Total>142496148</Total>
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        <Fundraising>0</Fundraising>
      </TotalFunctionalExpenses>
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      <TotalLiabilities>
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      <FollowSFAS117>X</FollowSFAS117>
      <UnrestrictedNetAssets>
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      <TotalNetAssetsFundBalances>
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      <TotalLiabNetAssetsFundBalances>
        <BOY>260856362</BOY>
        <EOY>275560202</EOY>
      </TotalLiabNetAssetsFundBalances>
      <MethodOfAccountingAccrual>X</MethodOfAccountingAccrual>
      <AccountantCompileOrReview>0</AccountantCompileOrReview>
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    </IRS990>
    <IRS990ScheduleA documentId="RetDoc1039100001">
      <Hospital170b1Aiii>X</Hospital170b1Aiii>
    </IRS990ScheduleA>
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      <ContributorInfo>
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        <ContributorNameBusiness>
          <BusinessNameLine1>RESTRICTED</BusinessNameLine1>
        </ContributorNameBusiness>
        <ContributorAddressUS>
          <AddressLine1>RESTRICTED</AddressLine1>
          <AddressLine2>RESTRICTED</AddressLine2>
          <City>RESTRICTED</City>
          <State>RESTRICTED</State>
          <ZIPCode>RESTRICTED</ZIPCode>
        </ContributorAddressUS>
        <AggregateContributions>RESTRICTED</AggregateContributions>
      </ContributorInfo>
    </IRS990ScheduleB>
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      <MediaAdvertisements>0</MediaAdvertisements>
      <MailingsMembers>0</MailingsMembers>
      <PublicationsOrBroadcast>0</PublicationsOrBroadcast>
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      <DirectContactLegislators>0</DirectContactLegislators>
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      <TotalLobbyingExpendituresIIB>31006</TotalLobbyingExpendituresIIB>
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      <Form990ScheduleCPartIV>
        <Identifier>Part II-B, Line 1i:</Identifier>
        <ReturnReference>Explanation of Other Lobbying Activities:</ReturnReference>
        <Explanation>Mercy Hospital, Iowa City, Iowa is a member of the Iowa Hospital Association (IHA). A percentage of membership dues paid to IHA relate to lobbying activities.</Explanation>
      </Form990ScheduleCPartIV>
    </IRS990ScheduleC>
    <IRS990ScheduleD documentId="RetDoc1040000001">
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      <TotalOfBookValueLandBuildings>69174323</TotalOfBookValueLandBuildings>
      <OtherAssets>
        <Description>Beneficial Interest-Foundation</Description>
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      </OtherAssets>
      <OtherAssets>
        <Description>Due From Affiliates</Description>
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      </OtherAssets>
      <OtherAssets>
        <Description>Cash Value Life Insurance</Description>
        <BookValue>627185</BookValue>
      </OtherAssets>
      <OtherAssets>
        <Description>Deferred Financing Cost Other Assets</Description>
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      </OtherAssets>
      <OtherAssets>
        <Description>Investment In Affiliates</Description>
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      </OtherAssets>
      <OtherAssets>
        <Description>Paid in Capital to Mercy Services</Description>
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      </OtherAssets>
      <TotalBookValueOtherAssets>38463654</TotalBookValueOtherAssets>
      <OtherLiabilities>
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      </OtherLiabilities>
      <OtherLiabilities>
        <Description>Fair Value of Interst Rate SWAP</Description>
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      </OtherLiabilities>
      <OtherLiabilities>
        <Description>Other LT Liabilities</Description>
        <Amount>6020</Amount>
      </OtherLiabilities>
      <TotalOfAmounts>61025519</TotalOfAmounts>
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      <OtherAmount>-3151335</OtherAmount>
      <TotalAdjustments>7839975</TotalAdjustments>
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      <NetUnrealizedGainsInvestments>11139341</NetUnrealizedGainsInvestments>
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      <RevenueSubtotal>139259251</RevenueSubtotal>
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      <RevenueNotRptdOnFinStmt>3533420</RevenueNotRptdOnFinStmt>
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      <ExpensesNotRptdOnFinStmt>151004</ExpensesNotRptdOnFinStmt>
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      <Form990ScheduleDPartXIV>
        <Identifier>Part V, Line 4:</Identifier>
        <ReturnReference>Description of Intended Use of Endowment Funds:</ReturnReference>
        <Explanation>All Restricted Endowed Funds are used for the benefit of Mercy Hospital Iowa City - capital equipment employee grants, scholarships, etc.</Explanation>
      </Form990ScheduleDPartXIV>
      <Form990ScheduleDPartXIV>
        <Identifier>Part XI, Line 8 - Other Adjustments:</Identifier>
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      </Form990ScheduleDPartXIV>
      <Form990ScheduleDPartXIV>
        <Identifier>Part XII, Line 2d - Other Adjustments:</Identifier>
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      </Form990ScheduleDPartXIV>
      <Form990ScheduleDPartXIV>
        <Identifier>Part XII, Line 4b - Other Adjustments:</Identifier>
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      </Form990ScheduleDPartXIV>
      <Form990ScheduleDPartXIV>
        <Identifier>Part XIII, Line 2d - Other Adjustments:</Identifier>
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      </Form990ScheduleDPartXIV>
      <Form990ScheduleDPartXIV>
        <Identifier>Part XIII, Line 4b - Other Adjustments:</Identifier>
        <Explanation>Misclassified expense in audit $144,860 Foundation contribution $6,144</Explanation>
      </Form990ScheduleDPartXIV>
      <Form990ScheduleDPartXIV>
        <Explanation>Mercy adopted the provisions of FIN No. 48 in fiscal 2008. As a result of the implementation of FIN No. 48, and as of June 30, 2010, Mercy recorded no liabilities for unrecognized tax benefits. Mercy is engaged in certain activities that result in unrelated business income.</Explanation>
      </Form990ScheduleDPartXIV>
    </IRS990ScheduleD>
    <IRS990ScheduleH documentId="RetDoc1041500001">
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      <WrittenPolicy>1</WrittenPolicy>
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      <FPGReferenceFreeCare>1</FPGReferenceFreeCare>
      <Pcent200>X</Pcent200>
      <FPGReferenceDiscountedCare>1</FPGReferenceDiscountedCare>
      <Pcent200D>X</Pcent200D>
      <FreeDiscCareMedicallyIndigent>1</FreeDiscCareMedicallyIndigent>
      <AmountsBudgetedForCharityCare>1</AmountsBudgetedForCharityCare>
      <ExpensesExceededBudget>0</ExpensesExceededBudget>
      <AnnualCommunityBenefitReport>1</AnnualCommunityBenefitReport>
      <ReportPublicallyAvailable>1</ReportPublicallyAvailable>
      <CharityCareAtCost>
        <TotalCommunityBenefitExpense>1148780</TotalCommunityBenefitExpense>
        <NetCommunityBenefitExpense>1148780</NetCommunityBenefitExpense>
        <PercentOfTotalExpense>0.00830</PercentOfTotalExpense>
      </CharityCareAtCost>
      <UnreimbursedMedicaid>
        <TotalCommunityBenefitExpense>4931448</TotalCommunityBenefitExpense>
        <DirectOffsettingRevenue>3327830</DirectOffsettingRevenue>
        <NetCommunityBenefitExpense>1603618</NetCommunityBenefitExpense>
        <PercentOfTotalExpense>0.01160</PercentOfTotalExpense>
      </UnreimbursedMedicaid>
      <UnreimbursedCosts>
        <TotalCommunityBenefitExpense>29628</TotalCommunityBenefitExpense>
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        <NetCommunityBenefitExpense>7363</NetCommunityBenefitExpense>
        <PercentOfTotalExpense>0.00010</PercentOfTotalExpense>
      </UnreimbursedCosts>
      <TotalCharityCare>
        <TotalCommunityBenefitExpense>6109856</TotalCommunityBenefitExpense>
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        <PercentOfTotalExpense>0.02000</PercentOfTotalExpense>
      </TotalCharityCare>
      <CommunityHealthServices>
        <TotalCommunityBenefitExpense>1105292</TotalCommunityBenefitExpense>
        <DirectOffsettingRevenue>125216</DirectOffsettingRevenue>
        <NetCommunityBenefitExpense>980076</NetCommunityBenefitExpense>
        <PercentOfTotalExpense>0.00710</PercentOfTotalExpense>
      </CommunityHealthServices>
      <HealthProfessionsEducation>
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        <DirectOffsettingRevenue>18581</DirectOffsettingRevenue>
        <NetCommunityBenefitExpense>48795</NetCommunityBenefitExpense>
        <PercentOfTotalExpense>0.00040</PercentOfTotalExpense>
      </HealthProfessionsEducation>
      <SubsidizedHealthServices>
        <TotalCommunityBenefitExpense>3258435</TotalCommunityBenefitExpense>
        <DirectOffsettingRevenue>2651440</DirectOffsettingRevenue>
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        <PercentOfTotalExpense>0.00440</PercentOfTotalExpense>
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        <TotalCommunityBenefitExpense>456368</TotalCommunityBenefitExpense>
        <NetCommunityBenefitExpense>456368</NetCommunityBenefitExpense>
        <PercentOfTotalExpense>0.00330</PercentOfTotalExpense>
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      <TotalOtherBenefits>
        <TotalCommunityBenefitExpense>4887471</TotalCommunityBenefitExpense>
        <DirectOffsettingRevenue>2795237</DirectOffsettingRevenue>
        <NetCommunityBenefitExpense>2092234</NetCommunityBenefitExpense>
        <PercentOfTotalExpense>0.01520</PercentOfTotalExpense>
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      <TotalCommunityBenefits>
        <TotalCommunityBenefitExpense>10997327</TotalCommunityBenefitExpense>
        <DirectOffsettingRevenue>6145332</DirectOffsettingRevenue>
        <NetCommunityBenefitExpense>4851995</NetCommunityBenefitExpense>
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        <TotalCommunityBuildingExpense>71523</TotalCommunityBuildingExpense>
        <NetCommunityBuildingExpense>71523</NetCommunityBuildingExpense>
        <PercentOfTotalExpense>0.00050</PercentOfTotalExpense>
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        <TotalCommunityBuildingExpense>71523</TotalCommunityBuildingExpense>
        <NetCommunityBuildingExpense>71523</NetCommunityBuildingExpense>
        <PercentOfTotalExpense>0.00050</PercentOfTotalExpense>
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      <BadDebtExpenseReported>0</BadDebtExpenseReported>
      <BadDebtExpenseAmount>1793889</BadDebtExpenseAmount>
      <AmountAttributableTo>290737</AmountAttributableTo>
      <AmountReimbursedByMedicare>39409335</AmountReimbursedByMedicare>
      <CostOfCareReimbursedByMedicare>56475207</CostOfCareReimbursedByMedicare>
      <MedicareSurplusOrShortfall>-17065872</MedicareSurplusOrShortfall>
      <CostingMethodologyUsed>
        <CostToChargeRatio>X</CostToChargeRatio>
      </CostingMethodologyUsed>
      <WrittenDebtCollectionPolicy>1</WrittenDebtCollectionPolicy>
      <ProvisionForCharityCare>1</ProvisionForCharityCare>
      <Form990ScheduleHPartIV>
        <NameOfEntity>
          <BusinessNameLine1>Iowa City Ambulatory Surgery Center</BusinessNameLine1>
        </NameOfEntity>
        <DescriptionEntPrimaryActivity>Outpatient Surgery Center</DescriptionEntPrimaryActivity>
        <OrganizationProfitOrOwnership>0.67500</OrganizationProfitOrOwnership>
        <PhysicansProfitOrOwnership>0.32500</PhysicansProfitOrOwnership>
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      <Form990ScheduleHPartV>
        <Name>
          <BusinessNameLine1>Mercy Hospital</BusinessNameLine1>
        </Name>
        <Address>
          <AddressLine1>500 East Market Street</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52245</ZIPCode>
        </Address>
        <LicensedHospital>X</LicensedHospital>
        <GeneralMedicalAndSurgical>X</GeneralMedicalAndSurgical>
        <Er24Hours>X</Er24Hours>
        <Other>Skilled Nursing and Lab Outreach</Other>
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      <Form990ScheduleHPartV>
        <Name>
          <BusinessNameLine1>Mercy Home Health Care</BusinessNameLine1>
        </Name>
        <Address>
          <AddressLine1>500 East Market Street</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52245</ZIPCode>
        </Address>
        <Other>Home Health and Private Duty Nursing</Other>
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      <Form990ScheduleHPartVI>
        <CostingMethodUsed>Part I, Line 7: Amounts in the table were derived using a cost accounting system that addresses all patient segments. A cost to charge ratio derived from completing IRS worksheet 2 was used to determine the amounts in Part I, Line 7a, 7b, 7c, and 7g.</CostingMethodUsed>
        <PercentOfTotalExpenseExpln>Part I, Line 7f: Bad debt expense of $4,647,382 was subtracted for purposes of calculating the percentage in Schedule H, Part I, Line 7, column (f).</PercentOfTotalExpenseExpln>
        <BadDebtFootnote>Part III, Line 4: We do not currently have a footnote to our financial statements that describes bad debt expense. The amount on line 2 was derived from taking actual bad debt write-offs and applying the cost to charge ratio of .386 to that amount. Mercy Hospital does not include bad debt amounts as part of community benefit.An estimate of bad debt attributable to patients eligible for charity care has been estimated to be $290,737. This estimate was derived by using the results of presumptive charity program implemented in FY 2011. The accounts recommended for presumptive charity as a percent of actual accounts written off to bad debt was 5.26%. This percentage was applied to the total of actual accounts written off to bad debt in FY 2010.</BadDebtFootnote>
        <ShortfallAsCommunityBenefit>Part III, Line 8: Mercy Hospital does not include Medicare shortfalls as part of it's community benefit. Total revenue was determined using charges per the CMS Provider Statistical Reimbursement System reports for Fee Reimbursed Services for the fiscal year ended 6/30/10. Costs calculated using the Cost to Charge Ratio for the appropriate services from the submitted Medicare Cost Report form 2552-96 for the fiscal year ended 6/30/10.</ShortfallAsCommunityBenefit>
        <DebtCollectionPolicy>Part III, Line 9b: Mercy Hospital has two policies related to debt collection. The Financial Assistance Policy provides guidelines for forgiving all or part of a patient's financial responsibility for healthcare services received at Mercy Hospital. Patients may be given a financial assistance application at the time of service, be offered financial assistance during the normal collection process or learn of the option on the Hospital website. All patients with no insurance are offered financial assistance via billing statements and follow up telephone calls. Any patient that is known to qualify for financial assistance is provided assistance. The Payment Plan Policy enables those who qualify for partial financial assistance to establish payment plans of the remaining balance of their bill.</DebtCollectionPolicy>
        <NumberOfFacilityTypeExpln>Part V: 1 Skilled nursing facility and 1 laboratory outreach clinic</NumberOfFacilityTypeExpln>
        <NeedsAssessment>Part VI, Line 2: Historically, a community health needs assessment is conducted every 5-10 years. The most recent assessment was conducted in 2008. The organization engaged Professional Research Consultants to conduct the assessment. The community health survey is a systematic, data-driven approach to determining the health status, behaviors and needs of residents in the communities the organization serves. The survey instrument used for the assessment is based largely on the Centers for Disease Control and Prevention (CDC) Behavioral Risk Factor Surveillance System (BRFSS), as well as various other public health surveys and customized questions addressing gaps in indicator data relative to national health promotion and disease prevention objectives and other recognized health issues. The results of the survey are used to improve health status, elevate overall quality of life, reduce health disparities, and increase accessibility to preventive services for all community residents. Examples of areas of opportunity for community health improvement included diabetes (an area where Mercy offers a support group), heart disease and stroke (support groups and education provided), nutrition and overweight (cooking demonstrations and public access televised cooking show), barriers to accessing healthcare services (Mercy provides support to the local Free Medical Clinic and Healthy Kids Community Care school-based clinics), and bicycle safety (Mercy provides much support to the Johnson County SAFE KIDS Coalition).</NeedsAssessment>
        <PatientEducationAssistance>Part VI, Line 3: Evaluation for Medicaid, disability, &amp; other types of coverage is provided for uninsured patients. This service is provided for inpatient stays as well as high dollar outpatient services. The evaluation is conducted during the patient stay or by a phone call to the patients home. Financial Assistance information &amp; applications are available at the point of registration in the hospital as well as at Mercy affiliated clinics. The first statement sent to patients with no insurance explains that financial assistance is available &amp; provides information about how to inquire about financial assistance. Subsequent statements also contain infomation about who to contact for financial assistance. Financial assistance is offered to all patients with no insurance on the first telephone contact. During the collection process for insured patients, if the patient expresses concern about payment they are offered financial assistance and/or payment plan options. Full or partial assistance is available. If partial assistance is received the balance may be set up on a payment plan if needed.</PatientEducationAssistance>
        <CommunityInformation>Part VI, Line 4: Mercy Hospital is located in the community of Iowa City, Iowa, in Johnson County in the east central part of the state. The county's population is approximately 128,000. From 2000 to 2008 Johnson County experienced strong population growth of 15.4 percent, compared to 2.6 percent for the entire state. Johnson County's population is projected to increase by another 9.5 percent by the year 2014.Mercy Hospital serves 10 counties in southeast Iowa, with the primary service area being Johnson County. The secondary service area includes Cedar, Iowa, Muscatine and Washington counties. The tertiary service area includes Henry, Jefferson, Keokuk, Lee and Louisa counties. The population of the service area is approximately 325,168.Iowa City is home to the University of Iowa, which has an enrollment of 30,825 for the 2010-2011 academic year. Johnson County is well-educated; of individuals 25 and older, 93.7 are high school graduates and 47.6 percent hold a bachelor's degree or higher.The University of Iowa also provides the foundation for an economy that has particular strengths in education, health care, services, technology, agribusiness, and manufacturing.University of Iowa Hospitals and Clinics and the Iowa City VA Medical Center are also located in Iowa City. UIHC is a 700-bed comprehensive academic medical center that draws patients from the entire region. ICVAMC cares for more than 40,000 military veterans in eastern Iowa and western Illinois. According to the U.S. Census Bureau, 15.5 percent of the Johnson County population lived below the poverty line in 2007.</CommunityInformation>
        <CommunityBuildingActivities>Part VI, Line 5: Mercy provides cash donations to area organizations at work in the areas of economic development, community support, environmental improvements, and leadership development and training for community members (community building activities). The majority of these amounts are listed in Part I, line 7i as cash and in-kind contributions.Economic developmentMercy works extensively with such groups at the Iowa City Area Chamber of Commerce and the Iowa City Area Development Group to support the business community, welcome innovation to the area, and develop the workforce. Mercy's own growth benefits the community as well, particularly when Mercy's recruiting efforts attract new professionals to the area.Community supportMercy has provided extensive support for many years to United Way of Johnson County. Mercy holds its own campaign for employees each autumn (typically raising more than $120,000) and provides much staff time and support to the local United Way organization. For example, in 2008 Mercy President and CEO Ronald R. Reed served as co-chair of the county-wide United Way campaign, which raised more than $2.6 million. Environmental improvementsMercy has been a good neighbor for its closest neighbors by maintaining its buildings and landscaping at a high level. Mercy also pursues recycling and programs that reduce energy consumption, primarily as cost saving measures, but these programs benefit the entire community.Leadership development and training for community membersMercy is involved on a regular basis with the Iowa City Area Chamber of Commerce annual Community Leadership Program. In this nine-month program, 24 members of the civic community receive an in-depth look at the workings of local government, public works, education system, health care, arts community, and more. This program gives participants a better understanding and appreciation of the entire community and develops fellowship among members from diverse backgrounds and settings.Mercy is also involved with the Chamber's similar Youth Leadership Program.Coalition buildingMercy is involved in many ways with local citizens and groups that are working to afford all members of our community a good quality of life and to improve the overall quality of life. Mercy is a cosponsor of and provides leadership for the 17-year-old Johnson County Safe Kids Coalition, a grass-roots effort to reduce unintentional injuries to children from birth to age 14. Since its inception, the coalition has been active in promoting bike helmet sales and bike safety and safety education events. The coalition is particularly active in providing free car seat check clinics to parents.Mercy staff members also participate in local coalitions Johnson County Liveable Communities and Johnson County Consortium on Successful Aging (focused on elderly living issues).Community health improvement advocacyHealthy Kids Community Care is a school-based clinic that provides health care to children who have no other access to it. Mercy made a large cash donation to this initiative and provided key leadership as the program developed. In 2010 the clinic served 271 unduplicated patients/students during the 2009-2010 school year.Mercy also provides financial support to the Free Medical Clinic, which saw 2,600 unduplicated patients in 2010. Those who seek care of the Free Medical Clinic typically have no other access to health care services. Workforce developmentKirkwood Foundation, Workplace Learning Connection</CommunityBuildingActivities>
        <OtherInformation>Part VI, Line 6: Mercy Iowa City is a faith-based institution that provides services based on the ethical and religious directives of the Catholic Church. An important part of Mercy's mission is to improve the health of the community. Mercy does so by: Ensuring that the medical staff is open to all qualified physicians; ensuring that the hospital is accredited and in good standing with The Joint Commission; ensuring that the board of directors is comprised of diverse, independent individuals, not employees of the hospital, representing the community and also providing necessary expertise; establishing and carrying out a conflict of interest policy; providing a site for clinical experience for a variety of health care professionals; providing charity care and financial assistance with medical bills as needed to community members; participating in such programs as Medicare, Medicaid, and hawk-i, an insurance program for needy Iowa children; absorbing unreimbursed costs for such government programs; ensuring that account collections are carried out in compliance with state and federal guidelines; providing emergency room services and working with local and state officials in community prepardness issues; treating emergency patients according to EMTALA guidelines and serving all patients regardless of their ability to pay; investing surplus funds in services, technology, and personnel that will further the benefit of the community.</OtherInformation>
        <ReportsFiledWithStates>IA</ReportsFiledWithStates>
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          <BusinessNameLine1>American Heart Association - Midwest Affiliate</BusinessNameLine1>
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        <AddressUS>
          <AddressLine1>PO Box 4002902</AddressLine1>
          <City>Des Moines</City>
          <State>IA</State>
          <ZIPCode>503402902</ZIPCode>
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        <EINOfRecipient>135613797</EINOfRecipient>
        <IRCSection>501(C)(3)</IRCSection>
        <AmountOfCashGrant>12000</AmountOfCashGrant>
        <PurposeOfGrant>Iowa City Events Sponsor 09-10</PurposeOfGrant>
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          <BusinessNameLine1>Community Foundation of Johnson County</BusinessNameLine1>
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          <AddressLine1>325 E Washington Street</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52240</ZIPCode>
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        <EINOfRecipient>421508117</EINOfRecipient>
        <IRCSection>501(C)(3)</IRCSection>
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        <PurposeOfGrant>Healthy Kids Funds</PurposeOfGrant>
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          <BusinessNameLine1>Iowa City Free Medical Clinic</BusinessNameLine1>
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          <AddressLine1>2440 Towncrest Drive</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52240</ZIPCode>
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        <PurposeOfGrant>General Support</PurposeOfGrant>
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          <BusinessNameLine1>Iowa City Area Development Group</BusinessNameLine1>
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          <AddressLine1>325 E Washington Street</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52240</ZIPCode>
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        <EINOfRecipient>421234837</EINOfRecipient>
        <IRCSection>501(C)(6)</IRCSection>
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        <PurposeOfGrant>Foster Local business development</PurposeOfGrant>
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        <TypeOfGrant>Temporary Assistance Program</TypeOfGrant>
        <NumberOfRecipients>24</NumberOfRecipients>
        <AmountOfCashGrant>14332</AmountOfCashGrant>
        <MethodOfValuation>Cost</MethodOfValuation>
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        <Identifier>Procedure for Monitoring Grants in the U.S.:</Identifier>
        <ReturnReference>Part I, Line 2:</ReturnReference>
        <Explanation>Schedule I, Part I, Line 2: All organizations Mercy provides assistance to are local organizations. Therefore, Mercy is in frequent contact with the organizations and is generally aware of their use of Mercy's assistance. However, there is no formal mechanism in place to track specific uses of the assistance. Mercy Hospital offers a Temporary Assistance Program (TAP) for emergency financial needs that employees may have. This confidential program offers crisis assistance and health benefit assistance.</Explanation>
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          <BusinessNameLine1>Ronald R Reed</BusinessNameLine1>
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        <DeferredCompFilingOrg>0</DeferredCompFilingOrg>
        <DeferredCompRelatedOrgs>0</DeferredCompRelatedOrgs>
        <NontaxableBenefitsFilingOrg>44980</NontaxableBenefitsFilingOrg>
        <NontaxableBenefitsRelatedOrgs>0</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationFilingOrg>342509</TotalCompensationFilingOrg>
        <TotalCompensationRelatedOrgs>0</TotalCompensationRelatedOrgs>
        <CompReportPrior990FilingOrg>0</CompReportPrior990FilingOrg>
        <CompReportPrior990RelatedOrgs>0</CompReportPrior990RelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartIII>
        <ReturnReference>Part I, Line 1a</ReturnReference>
        <Explanation>Health club membership dues were paid for Mercy's CEO, Ronald Reed in the amount of $1,089.67 and were included as taxable income on his W-2.</Explanation>
      </Form990ScheduleJPartIII>
      <Form990ScheduleJPartIII>
        <ReturnReference>Part I, Line 4a</ReturnReference>
        <Explanation>Mercy established an IRC Section 457 (f) plan as a way of retaining executives, officers and select groups of highly compensated employees with supplemental retirement benefits. The following individuals participated in and received payments from the plan. Peter Wallace $12,470.12, Michael Heinrich $21,591.16, Thomas Clancy $0, Catherine Abrams $0, Ronald Reed $0, Cindy Penney $0</Explanation>
      </Form990ScheduleJPartIII>
    </IRS990ScheduleJ>
    <IRS990ScheduleK documentId="RetDoc1053100001">
      <Form990ScheduleKPartI>
        <IssuerName>
          <BusinessNameLine1>City of Hills Iowa</BusinessNameLine1>
        </IssuerName>
        <IssuerEIN>420920947</IssuerEIN>
        <CUSIPNumber>431669AA8</CUSIPNumber>
        <DateIssued>2008-04-29</DateIssued>
        <IssuePrice>39235000</IssuePrice>
        <DescriptionOfPurpose>Refund 2005 Bonds &amp; Certain Issuance Costs (10/19/05)</DescriptionOfPurpose>
        <Defeased>0</Defeased>
        <OnBehalfOfIssuer>0</OnBehalfOfIssuer>
      </Form990ScheduleKPartI>
      <Form990ScheduleKPartII>
        <TotalProceeds>39235000</TotalProceeds>
        <IssuanceCostsFromProceeds>375139</IssuanceCostsFromProceeds>
        <YearOfSubstCompletion>2008</YearOfSubstCompletion>
        <CurrentRefunding>1</CurrentRefunding>
        <AdvanceRefunding>0</AdvanceRefunding>
        <FinalAllocationMade>1</FinalAllocationMade>
        <AdequateBooksAndRecdsMaintaind>1</AdequateBooksAndRecdsMaintaind>
      </Form990ScheduleKPartII>
      <Form990ScheduleKPartIII>
        <OwningBondFinancedProperty>0</OwningBondFinancedProperty>
        <AnyLeaseArrangements>0</AnyLeaseArrangements>
        <MngmentCntrctBondFinancdPrprty>0</MngmentCntrctBondFinancdPrprty>
        <AnyResearchAgreements>0</AnyResearchAgreements>
        <BondCounselRoutinelyEngaged>1</BondCounselRoutinelyEngaged>
        <PrcntgePrvtBusinessUseByOthers>0.00000</PrcntgePrvtBusinessUseByOthers>
        <PercentageOfPrvtBusinessReUBI>0.00000</PercentageOfPrvtBusinessReUBI>
        <TotalPrivateBusinessUse>0.00000</TotalPrivateBusinessUse>
        <PostIssuanceComplianceProcdrs>1</PostIssuanceComplianceProcdrs>
      </Form990ScheduleKPartIII>
      <Form990ScheduleKPartIV>
        <Form8038TFiled>0</Form8038TFiled>
        <VariableRateIssue>1</VariableRateIssue>
        <HedgeIdentifiedInBooksAndRecds>0</HedgeIdentifiedInBooksAndRecds>
        <GrossProceedsInvestedInGIC>0</GrossProceedsInvestedInGIC>
        <GrossProceedsInvested>0</GrossProceedsInvested>
        <ExceptionToRebate>1</ExceptionToRebate>
      </Form990ScheduleKPartIV>
    </IRS990ScheduleK>
    <IRS990ScheduleL documentId="RetDoc1042800001">
      <LoanTable>
        <NameBusiness>
          <BusinessNameLine1>Michael G Heinrich</BusinessNameLine1>
        </NameBusiness>
        <PurposeOfLoan>Split Dollar Life Insurance Policy</PurposeOfLoan>
        <LoanFromOrganization>X</LoanFromOrganization>
        <OriginalPrincipalAmount>13525</OriginalPrincipalAmount>
        <BalanceDue>13525</BalanceDue>
        <Default>0</Default>
        <ApprovedByBoard>0</ApprovedByBoard>
        <WrittenAgreement>0</WrittenAgreement>
      </LoanTable>
      <LoanTable>
        <NameBusiness>
          <BusinessNameLine1>Ronald R Reed</BusinessNameLine1>
        </NameBusiness>
        <PurposeOfLoan>Split Dollar Life Insurance Policy</PurposeOfLoan>
        <LoanFromOrganization>X</LoanFromOrganization>
        <OriginalPrincipalAmount>33973</OriginalPrincipalAmount>
        <BalanceDue>33973</BalanceDue>
        <Default>0</Default>
        <ApprovedByBoard>0</ApprovedByBoard>
        <WrittenAgreement>0</WrittenAgreement>
      </LoanTable>
      <TotalBalanceDue>47498</TotalBalanceDue>
    </IRS990ScheduleL>
    <IRS990ScheduleO documentId="RetDoc1044400001">
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Section A, line 2</Identifier>
        <Explanation>Sister Sharon Kerrigan, board member; Sister Patricia Murphy, board member; and Sister Margaret Wright, board member are all members of the Sisters of Mercy of the Americas West Midwest Community.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Section A, line 6</Identifier>
        <Explanation>Mercy's sole member is the Sisters of Mercy of the Americas West Midwest Community, Inc.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Section A, line 7b</Identifier>
        <Explanation>Mercy's sole member, Sisters of Mercy of the Americas West Midwest Community, Inc., maintains a number of "reserved powers" including but not limited to approval of annual budgets, approval of amendments to the articles of incorporation and bylaws, approval of real property transactions and approval of long term borrowing.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Section B, line 11</Identifier>
        <Explanation>The Form 990 is prepared and reviewed by Mercy Hospital management and is also reviewed by Deloitte Tax LLP. In addition, a board resolution was established that provides that each board member be (i) provided a copy of the Form 990 as it is intended to be filed, and (ii) given a reasonable opportunity before filing to provide to the Audit Committee any comments, corrections, concerns or other input on the proposed Form. The Audit Committee's review process shall be intended to reasonably verify that the Form 990 has been fully and accurately completed, including but not limited to, all inquiries therein relating to corporate governance. After completing its review, the Audit Committee, on the Board's behalf, shall have the authority to authorize the filing of the annual Form 990.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Section B, line 12c</Identifier>
        <Explanation>A conflict of interest statement is signed at the beginning of Board members term and on an annual basis there after. Any abstention from a vote is recorded in Board minutes. After the fiscal year end a "look back" questionnaire is distributed to all Board members to disclose any conflicts of interest that may have taken place in the previous year.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Section B, line 15</Identifier>
        <Explanation>Compensation for all executives and other key employees is determined based on national or regional market data for comparable positions at comparatively sized hospitals. The Executive Committee of the Board of Directors uses this market-based information to set the President and CEO's compensation. In turn, the CEO uses the same information to set compensation for officers and key employees, which is also approved by the board.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VI, Section C, line 19</Identifier>
        <Explanation>An annual statement of "Financial Highlights" is published in Mercy's annual report. It provides annual Funds Available and Funds Applied in the form of percentages of Mercy's total budget. The annual report is produced in print form and appears on Mercy's Website, www.mercyiowacity.org, as a PDF. Mercy's governing documents and conflict of interest policy are not available to the public.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>Form 990, Part VII:</Identifier>
        <Explanation>The following individuals held positions at both Mercy Hospital Self Insurance Plan and Trust and the Hospital. The hours listed on Part VII are the average hours per week these individuals devoted to the Hospital during the year. In addition, these individuals also devoted the following average hours per week to Mercy Hospital Self Insurance Plan and Trust. Ronald R. Reed 1.0 hour Michael Heinrich 1.0 hour The following individuals held positions at both Mercy Foundation and the Hospital. The hours listed on Part VII are the average hours per week these individuals devoted to the Hospital during the year. In addition, these individuals also devoted the following average hours per week to Mercy Foundation. Ronald R. Reed 2.0 hours Michael Heinrich 2.0 hours Jean M. Berge 1.0 hour Scott Fisher 1.0 hour</Explanation>
      </GeneralExplanation>
    </IRS990ScheduleO>
    <IRS990ScheduleR documentId="RetDoc1043400001">
      <Form990ScheduleRPartII>
        <NameOfDisregardedEntity>
          <BusinessNameLine1>Mercy Foundation</BusinessNameLine1>
        </NameOfDisregardedEntity>
        <AddressUS>
          <AddressLine1>500 East Market Street</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52245</ZIPCode>
        </AddressUS>
        <EIN>237040506</EIN>
        <PrimaryActivities>Foundation/Fundraising</PrimaryActivities>
        <LegalDomicileState>IA</LegalDomicileState>
        <ExemptCodeSection>501(C)(3)</ExemptCodeSection>
        <PublicCharityStatus>11-I</PublicCharityStatus>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartII>
      <Form990ScheduleRPartII>
        <NameOfDisregardedEntity>
          <BusinessNameLine1>Mercy Hospital Iowa City Iowa Self Insurance Plan and Trust</BusinessNameLine1>
        </NameOfDisregardedEntity>
        <AddressUS>
          <AddressLine1>500 East Market Street</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52245</ZIPCode>
        </AddressUS>
        <EIN>426591803</EIN>
        <PrimaryActivities>Self Insurance</PrimaryActivities>
        <LegalDomicileState>IA</LegalDomicileState>
        <ExemptCodeSection>501(C)(3)</ExemptCodeSection>
        <PublicCharityStatus>11-I</PublicCharityStatus>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartII>
      <Form990ScheduleRPartII>
        <NameOfDisregardedEntity>
          <BusinessNameLine1>Sisters of Mercy of the Americas West Midwest Community Inc</BusinessNameLine1>
        </NameOfDisregardedEntity>
        <AddressUS>
          <AddressLine1>7262 Mercy Road</AddressLine1>
          <City>Omaha</City>
          <State>NE</State>
          <ZIPCode>68124</ZIPCode>
        </AddressUS>
        <EIN>262400800</EIN>
        <PrimaryActivities>Religious Order</PrimaryActivities>
        <LegalDomicileState>NE</LegalDomicileState>
        <ExemptCodeSection>501(C)(3)</ExemptCodeSection>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartII>
      <Form990ScheduleRPartII>
        <NameOfDisregardedEntity>
          <BusinessNameLine1>Mercy Hospital Guild</BusinessNameLine1>
        </NameOfDisregardedEntity>
        <AddressUS>
          <AddressLine1>500 East Market Street</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52245</ZIPCode>
        </AddressUS>
        <EIN>426099912</EIN>
        <PrimaryActivities>Fundraising</PrimaryActivities>
        <LegalDomicileState>IA</LegalDomicileState>
        <ExemptCodeSection>501(C)(3)</ExemptCodeSection>
        <PublicCharityStatus>11-III-FI</PublicCharityStatus>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartII>
      <Form990ScheduleRPartIII>
        <NameOfRelatedOrg>
          <BusinessNameLine1>Cancer Care of Iowa City LLC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>613 E Bloomington Ste 100</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52245</ZIPCode>
        </AddressUS>
        <EIN>421460774</EIN>
        <PrimaryActivity>Oncology Services</PrimaryActivity>
        <LegalDomicileState>IA</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
        <PredominantIncomeType>Related</PredominantIncomeType>
        <ShareOfTotalIncome>218626</ShareOfTotalIncome>
        <ShareOfEOYAssets>1349013</ShareOfEOYAssets>
        <DisproportionateAllocations>0</DisproportionateAllocations>
        <GeneralOrManagingPartner>0</GeneralOrManagingPartner>
      </Form990ScheduleRPartIII>
      <Form990ScheduleRPartIII>
        <NameOfRelatedOrg>
          <BusinessNameLine1>Iowa City Ambulatory Surgical Center LLC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>2963 Northgate Drive</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52245</ZIPCode>
        </AddressUS>
        <EIN>208503424</EIN>
        <PrimaryActivity>Outpatient Surgery</PrimaryActivity>
        <LegalDomicileState>IA</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
        <PredominantIncomeType>Related</PredominantIncomeType>
        <ShareOfTotalIncome>2693786</ShareOfTotalIncome>
        <ShareOfEOYAssets>6587557</ShareOfEOYAssets>
        <DisproportionateAllocations>0</DisproportionateAllocations>
        <GeneralOrManagingPartner>1</GeneralOrManagingPartner>
      </Form990ScheduleRPartIII>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>Mercy Services Iowa City Inc</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>500 East Market Street</AddressLine1>
          <City>Iowa City</City>
          <State>IA</State>
          <ZIPCode>52245</ZIPCode>
        </AddressUS>
        <EIN>421241044</EIN>
        <PrimaryActivity>Medical Clinic Services</PrimaryActivity>
        <LegalDomicileState>IA</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
        <TypeOfEntity>C</TypeOfEntity>
        <ShareOfTotalIncome>-1570602</ShareOfTotalIncome>
        <ShareOfEOYAssets>6822011</ShareOfEOYAssets>
        <PercentageOwnership>1.00000</PercentageOwnership>
      </Form990ScheduleRPartIV>
      <ReceiptOfIntAnnRentsRoyalties>1</ReceiptOfIntAnnRentsRoyalties>
      <GiftGrantOrCapContrToOtherOrg>0</GiftGrantOrCapContrToOtherOrg>
      <GiftGrantOrCapContrFrOtherOrg>1</GiftGrantOrCapContrFrOtherOrg>
      <LoansOrGuaranteesToOtherOrg>0</LoansOrGuaranteesToOtherOrg>
      <LoansOrGuaranteesFromOtherOrg>0</LoansOrGuaranteesFromOtherOrg>
      <SaleOfAssetsToOtherOrg>0</SaleOfAssetsToOtherOrg>
      <PurchaseOfAssetsFromOtherOrg>0</PurchaseOfAssetsFromOtherOrg>
      <ExchangeOfAssets>0</ExchangeOfAssets>
      <RentalOfFacilitiesToOtherOrgs>0</RentalOfFacilitiesToOtherOrgs>
      <RentalOfFacilitiesFrOtherOrgs>0</RentalOfFacilitiesFrOtherOrgs>
      <PerformOfServicesForOtherOrgs>0</PerformOfServicesForOtherOrgs>
      <PerformOfServicesByOtherOrgs>1</PerformOfServicesByOtherOrgs>
      <SharingOfFacilities>0</SharingOfFacilities>
      <SharingOfPaidEmployees>0</SharingOfPaidEmployees>
      <ReimbursementPaidToOtherOrg>0</ReimbursementPaidToOtherOrg>
      <ReimbursementPaidByOtherOrg>1</ReimbursementPaidByOtherOrg>
      <OtherTransferToOtherOrg>0</OtherTransferToOtherOrg>
      <OtherTransferFromOtherOrg>0</OtherTransferFromOtherOrg>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Mercy Services Iowa City Inc</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>A</TransactionType>
        <AmountInvolved>573282</AmountInvolved>
      </TransactionsRelatedOrgsTable>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Cancer Care of Iowa City</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>A</TransactionType>
        <AmountInvolved>120146</AmountInvolved>
      </TransactionsRelatedOrgsTable>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Mercy Foundation</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>C</TransactionType>
        <AmountInvolved>571654</AmountInvolved>
      </TransactionsRelatedOrgsTable>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Mercy Services Iowa City Inc</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>P</TransactionType>
        <AmountInvolved>726720</AmountInvolved>
      </TransactionsRelatedOrgsTable>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Cancer Care of Iowa City</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>P</TransactionType>
        <AmountInvolved>597495</AmountInvolved>
      </TransactionsRelatedOrgsTable>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Mercy Foundation</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>P</TransactionType>
        <AmountInvolved>274902</AmountInvolved>
      </TransactionsRelatedOrgsTable>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Mercy Hospital Iowa Self-Insurance Plan and Trust</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>C</TransactionType>
        <AmountInvolved>694050</AmountInvolved>
      </TransactionsRelatedOrgsTable>
    </IRS990ScheduleR>
  </ReturnData>
</Return>