2011-11-08T15:08:09-06:00 2010-12-31 990 2010-01-01 421019872 NORTHWEST IOWA HOSPITAL CORPORATION NORT 7122793500 2720 STONE PARK BLVD SIOUX CITY IA 51104 MARK A JOHNSON 7122793201 2011-10-18 2010 2016-03-07 17:11:31Z ST LUKE'S REGIONAL MEDICAL CENTER PETER THOREEN 2720 STONE PARK BLVD SIOUX CITY IA 51104 162027535 0 X WWW.STLUKES.ORG X 1974 IA TO IMPROVE THE HEALTH OF THE PEOPLE OF SIOUXLAND. 7 6 1408 300 42496 12514 1146899 758491 124408184 122941528 985344 3479577 1535602 1617097 128076029 128796693 1279286 1234456 0 0 55906788 59534825 0 0 0 55491979 61431793 112678053 122201074 15397976 6595619 161998662 174653461 66941276 67884003 95057386 106769458 X THE MISSION OF NORTHWEST IOWA HOSPITAL CORPORATION, D/B/A ST. LUKE'S REGIONAL MEDICAL CENTER, IS TO IMPROVE THE HEALTH OF THE PEOPLE OF SIOUXLAND. 0 0 94599959 119333 123496796 HEALTH-CARE SERVICESNORTHWEST IOWA HOSPITAL CORPORATION D/B/A ST. LUKE'S REGIONAL MEDICAL CENTER IS AN IMPORTANT ELEMENT OF THE HEALTH-CARE DELIVERY SYSTEM THAT SIOUXLAND COMMUNITIES RELY ON EVERY DAY. IT IS COMMITTED TO PROVIDING QUALITY HEALTH CARE AND TO USING ITS RESOURCES TO THE GREATEST COMMUNITY BENEFIT. NORTHWEST IOWA HOSPITAL CORPORATION PROVIDES INPATIENT AND OUTPATIENT MEDICAL SERVICES TO TREAT INDIVIDUALS WITH DISEASES, ILLNESS AND INJURIES WITH VARYING COMPLEXITIES. IT PROVIDES SERVICES TO IMPROVE THE HEALTH OF PATIENTS AND TO BETTER THEIR QUALITY OF LIFE. ALL SERVICES ARE PROVIDED REGARDLESS OF AN INDIVIDUAL'S RACE, CREED, SEX, NATIONALITY, HANDICAP, AGE OR ABILITY TO COMPENSATE FOR SERVICES RENDERED. THESE INCLUDE, BUT ARE NOT LIMITED TO, GENERAL ACUTE CARE, SURGERIES, HOME HEALTH, INTENSIVE CARE AND CRITICAL CARE, MENTAL HEALTH CARE, CARDIOLOGY, ONCOLOGY, REHABILITATION, SKILLED NURSING, BEHAVIORAL DISORDER PROGRAMS, MATERNAL/CHILD CARE, LABORATORY, PALLIATIVE CARE, PHARMACEUTICAL DRUGS, EMERGENCY SERVICES, OUTPATIENT CLINICS, CHECK-UPS AND RADIOLOGY. SOME OF THE SERVICES PROVIDED DO NOT GENERATE ENOUGH INCOME TO OFFSET THEIR COST. IN THE FISCAL PERIOD ENDING DECEMBER 31, 2010, NORTHWEST IOWA HOSPITAL CORPORATION ADMITTED 10,731 PATIENTS. THE HOSPITAL HAD A TOTAL NUMBER OF 41,297 PATIENT DAYS. OUTPATIENT VISITS TOTALED 64,273 AND TOTAL OUTPATIENT SURGERY REGISTRATIONS FOR THE SAME PERIOD WERE 1,463. THERE WERE ALSO 28,315 EMERGENCY ROOM VISITS AND 2,043 BABIES DELIVERED. 10292867 1115123 COMMUNITY BENEFIT, INCLUDING CHARITY CARECHARITY CARE AND MEANS-TESTED PROGRAMS: NORTHWEST IOWA HOSPITAL CORPORATION PROVIDES CHARITY CARE AND OTHER MEANS-TESTED PROGRAMS WITH THE GOAL TO IMPROVE THE COMMUNITY'S OVERALL HEALTH AND ACCESS TO CARE. THIS INCLUDES HEALTH-CARE SERVICES REGARDLESS OF THE PATIENT'S INSURANCE COVERAGE OR FINANCIAL STATUS. CHARITY CARE AND PARTIAL TO FULL FINANCIAL ASSISTANCE IS PROVIDED TO PATIENTS ON A CASE-BY-CASE BASIS. CHARITY CARE WAS MADE AVAILABLE TO 2,181 PEOPLE AT A VALUE OF $2,756,516 IN 2010. OFTENTIMES, NORTHWEST IOWA HOSPITAL CORPORATION RECEIVES PAYMENTS FROM PAYORS OR PATIENTS THAT ARE LESS THAN IT CHARGES FOR SERVICES. NORTHWEST IOWA HOSPITAL CORPORATION PARTICIPATES IN MEDICAID AND OTHER GOVERNMENT-SPONSORED HEALTH-CARE PROGRAMS. NORTHWEST IOWA HOSPITAL CORPORATION'S NET COST OF PROVIDING CARE FOR WHICH IT RECEIVES PAYMENT BELOW ITS COST IS $4,612,886 FOR 2010. TOTAL CHARITY CARE AND MEANS-TESTED PROGRAMS REPORTED VALUE WAS $7,369,402.OTHER BENEFITS: NORTHWEST IOWA HOSPITAL CORPORATION PROVIDES SEVERAL OTHER BENEFITS THAT ASSIST THE COMMUNITY. PROGRAMS MAY INCLUDE, BUT ARE NOT LIMITED TO, COMMUNITY HEALTH IMPROVEMENT SERVICES AND COMMUNITY BENEFIT OPERATIONS SUCH AS PREVENTION AND HEALTH SCREENINGS; CONTINUING EDUCATION FOR HEALTH PROFESSIONALS; SUBSIDIZED HEALTH SERVICES; RESEARCH; AND CASH AND IN-KIND CONTRIBUTIONS TO COMMUNITY GROUPS. NORTHWEST IOWA HOSPITAL CORPORATION COLLABORATES WITH OTHER HOSPITALS, CHURCHES, SCHOOLS, CHAMBERS OF COMMERCE AND DAYCARE CENTERS TO IMPROVE COMMUNITY HEALTH AND EXPAND ACCESS TO HEALTH CARE. NORTHWEST IOWA HOSPITAL CORPORATION HAS DEDICATED STAFF TO ASSIST COMMUNITY BENEFIT EFFORTS. APPROXIMATELY 17,232 PERSONS WERE SERVED THROUGH THESE PROGRAMS. TOTAL OTHER BENEFITS REPORTED VALUE WAS $2,923,465. 104892826 1 1 0 0 0 0 0 0 1 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 0 1 0 1 0 0 0 0 0 0 1 1 0 0 0 0 0 1 0 0 0 0 1 205 0 1 1408 1 1 1 0 0 0 0 0 0 0 0 0 X 7 6 0 0 0 0 1 0 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 IA X X MARK JOHNSON VPCFO 7122793201 2720 STONE PARK BLVD SIOUX CITY IA 51104 JAMES JENSEN 1.00 X 0 0 0 ELLEN KAPLAN 1.00 X X 0 0 0 TODD MOSS 1.00 X X 0 0 0 JON PEACOCK 1.00 X 0 0 0 KG SKIP PERLEY 1.00 X X 0 0 0 CAROL ROGE MD 1.00 X 0 0 0 CHIC WOLFE 1.00 X 0 0 0 CHARESE YANNEY 1.00 X X 0 0 0 RICHARD HILDEBRAND MD 40.00 X 356311 0 109214 MARK JOHNSON 40.00 X 313342 0 109429 CHAD MARKHAM 40.00 X 107134 0 26859 PRISCILLA STOKES 40.00 X 181992 0 22365 PETER THOREEN 40.00 X 496715 0 188734 SUSAN UNGER 40.00 X 136604 0 8425 LYNN WOLD 40.00 X 200085 0 61597 CRAIG BAINBRIDGE MD 40.00 X 456231 750 23070 JITENDRAKUMAR GUPTA MD 40.00 X 425347 0 35543 LUIS LEBREDO MD 40.00 X 608917 0 29935 REBECCA ROSE MD 40.00 X 513525 0 26999 DAVID WAGNER MD 40.00 X 693687 0 49909 4489890 750 692079 50 0 1 0 WA KLINGER LLC 2015 E SEVENTH ST SIOUX CITY IA 511028800 CONSTRUCTION/RENOVATION 2862315 ARAMARK MANAGMENT SERVICES 24863 NETWORK PLACE CHICAGO IL 606731248 CONTRACTED SERVICES 2139420 CASSLING 13808 F STREET OMAHA NE 68137 CONTRACTED SERVICES 563206 MAYO COLLABORATIVE SERVICES PO BOX 9146 MINNEAPOLIS MN 554809146 LAB SERVICES 516634 LAWRENCE & SCHILLER INC 3932 SOUTH WILLOW AVE SIOUX FALLS SD 571056293 CONTRACTED SERVICES 399403 26 1665 756826 758491 NET PATIENT REVENUE 900099 115975004 115975004 SUBS & JOINT VENTURES 900099 2502679 2502679 EDUCATION & RESEARCH 900099 2327950 2327950 RENTAL REVENUE 531110 1880194 1880194 PUBLIC HEALTH PROGRAMS 923120 229901 229901 25800 6600 19200 122941528 1193955 1193955 35351530 15696 32898089 183515 2453441 -167819 2285622 2285622 307555 149238 158317 158317 CAFETERIA/FOOD SVCS 722210 941640 38128 903512 MISCELLANEOUS REVENUE 900099 512189 474644 37545 MGMT & SUPPORT SVCS 561000 4951 4951 1458780 128796693 123435100 42496 4560606 1230969 1230969 3487 3487 2039784 2039784 43483226 40057313 3425913 4888102 4502983 385119 6101004 5465300 635704 3022709 2802548 220161 2436012 18100 2417912 287270 24964 262306 3000 3000 259803 7017 252786 6172554 5102167 1070387 1095844 284496 811348 21819273 21610384 208889 6492718 5639884 852834 4379995 3020327 1359668 297733 197489 100244 279245 236354 42891 2307641 2307641 5297702 2200544 3097158 -800724 67007 -867731 PATIENT BAD DEBT 10075762 10075762 MISCELLANEOUS EXPENSES 1022022 35090 986932 INCOME TAXES 5943 5943 122201074 104892826 17308248 0 3753631 2947095 4752477 8806025 15596752 16990063 37245517 39977117 2894624 2844642 858247 1524030 156750600 106864614 50035696 49885986 39558272 44844059 318603 233382 5824992 6601062 1159851 161998662 174653461 8696975 8896556 103042 101175 2963628 2402223 55177631 56484049 66941276 67884003 X 91624445 103018004 1806009 2255199 1626932 1496255 95057386 106769458 161998662 174653461 X 6595619 5116453 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 28918805 715 4247623 137978 34029165 28560952 150000 6779399 2006244 132361 33351746 38652656 1802921 -9229015 2572634 92976 28560952 0.90070 0.03960 0.05970 0 1 1 4645346 4645346 85600479 55130190 30470289 5256425 2945091 2311334 58132748 48396216 9736532 3115602 393117 2722485 49885986 DUE TO AFFILIATES 645744 ASBESTOS REMOVAL LIABILITY 2185274 SELF-INSURANCE RESERVE 5060601 LONG-TERM RETENTION INCENTIVES 1117430 IOWA HEALTH SYSTEM NOTE PAYABLE 47475000 56484049 128796693 122201074 6595619 1806699 3309754 5116453 11712072 135793000 1806699 5989399 7796098 127996902 137978 661813 799791 128796693 125378000 4846993 4846993 120531007 137978 1532089 1670067 122201074 DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: THE ORGANIZATION RETAINS FUNDS FOR INTENDED FUTURE USES, INCLUDING PURCHASE OF EQUIPMENT, INDIGENT CARE, FUNDING OF MISSION RELATED OPERATIONS, AND HEALTH EDUCATION. IN ADDITION, SOME FUNDS ARE HELD FOR INVESTMENT IN PERPETUITY. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: IOWA HEALTH SYSTEM AND MOST OF ITS SUBSIDIARIES ARE CLASSIFIED AS TAX-EXEMPT ORGANIZATIONS AS DESCRIBED IN SECTIONS 501(C)(3) AND 501(C)(2) OF THE INTERNAL REVENUE CODE (THE CODE). TAX-EXEMPT ORGANIZATIONS ARE NOT SUBJECT TO FEDERAL AND STATE INCOME TAXES ON RELATED INCOME, PURSUANT TO SECTION 501(A) OF THE CODE. THESE ORGANIZATIONS ARE SUBJECT TO FEDERAL AND STATE INCOME TAXES TO THE EXTENT THEY HAVE UNRELATED BUSINESS INCOME AS DESCRIBED UNDER PROVISIONS OF SECTION 511 OF THE CODE. THE HEALTH SYSTEM FILES FORM 990 FOR SUBSTANTIALLY ALL OF ITS OPERATING ENTITIES IN THE U.S. FEDERAL JURISDICTION AND IS NO LONGER SUBJECT TO EXAMINATION BY TAX AUTHORITIES FOR THE YEARS BEFORE 2007. THE HEALTH SYSTEM HAS NO MATERIAL UNCERTAIN TAX POSITIONS. CERTAIN SUBSIDIARIES ARE SUBJECT TO FEDERAL AND STATE INCOME TAXES. SOME OF THESE CORPORATIONS HAVE ACCUMULATED NET OPERATING LOSS CARRYFORWARDS THAT ARE AVAILABLE TO OFFSET FUTURE TAXABLE INCOME DURING THE CARRYFORWARD PERIOD. NO INCOME TAX BENEFIT HAS BEEN RECOGNIZED FOR THE NET OPERATING LOSS CARRYFORWARDS OR OTHER POTENTIAL DEFERRED TAX ASSETS IN THE CONSOLIDATED FINANCIAL STATEMENTS BECAUSE THE HEALTH SYSTEM BELIEVES REALIZATION OF THESE BENEFITS IS UNLIKELY. PART XI, LINE 8 - OTHER ADJUSTMENTS: CHANGE IN BENEFICIAL INTEREST OF ST. LUKE'S HEALTH FOUNDATION 314,930. CHANGE IN PENSION LIABILITY 2,994,824. PART XII, LINE 2D - OTHER ADJUSTMENTS: SUBSIDIARY ELIMINATING ENTRIES 5,840,085. COST OF GOODS SOLD 149,238. ROUNDING 76. PART XII, LINE 4B - OTHER ADJUSTMENTS: REVENUES IN UNRESTRICTED FUND BALANCE 218,347. REVENUES IN TEMPORARILY RESTRICTED FUND BALANCE 4,000. IOWA HEALTH SYSTEM CONTRACTING SERVICES, LC PURCHASE REBATES 439,466. PART XIII, LINE 2D - OTHER ADJUSTMENTS: SUBSIDIARY ELIMINATING ENTRIES 4,697,715. COST OF GOODS SOLD 149,238. ROUNDING 40. PART XIII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES IN TEMPORARILY RESTRICTED FUND BALANCE 417. IOWA HEALTH SYSTEM CONTRACTING SERVICES, LC PURCHASE REBATES 439,466. EXPENSES IN UNRESTRICTED FUND BALANCE 1,092,206. 1 1 X 1 X 1 X 1000.000000000000 1 1 0 1 1 2181 2756516 2756516 0.02460 10414 19197931 14585045 4612886 0.04110 12595 21954447 14585045 7369402 0.06570 30 13326 95372 6069 89303 0.00080 5 806 2110409 1367567 742842 0.00660 1 1563 4731989 3934590 797399 0.00710 0 12 1537 1414187 120266 1293921 0.01150 48 17232 8351957 5428492 2923465 0.02600 48 29827 30306404 20013537 10292867 0.09170 2 4487 4487 0.00000 2 719 719 0.00000 4 5206 5206 1 4016417 0 26064365 23659407 2404958 X 1 1 1 PIERCE STREET SAME DAY SURGERY LC AMBULATORY SURGERY CENTER 0.50000 0.05500 0.44500 1 1 ST LUKE'S REGIONAL MEDICAL CENTER

2720 STONEPARK BLVD SIOUX CITY IA 51104

X X X NA 1 1 PIERCE STREET SAME DAY SURGERY

2730 PIERCE STREET SIOUX CITY IA 51104

FREESTANDING OUTPATIENT SURGERY CENTER (JOINT VENTURE) PART I, LINE 6A: NORTHWEST IOWA HOSPITAL CORPORATION'S D/B/A/ ST. LUKE'S REGIONAL MEDICAL CENTER'S COMMUNITY BENEFIT REPORT IS CONTAINED WITHIN THE IOWA HEALTH SYSTEM COMMUNITY BENEFIT REPORT WHICH CAN BE LOCATED AT WWW.IHS.ORG. THIS SYSTEM-WIDE REPORT IS COMPLETED IN ADDITION TO THE COMMUNITY BENEFIT REPORT FOR THE HOSPITAL AND ITS REGIONAL AFFILIATES. PART I, LINE 7: A COST-TO-CHARGE RATIO (FROM WORKSHEET 2) IS USED TO CALCULATE THE AMOUNTS ON LINE 7A. THE AMOUNTS ON LINES 7B-7C (UNREIMBURSED MEDICAID AND OTHER MEANS-TESTED GOVERNMENT PROGRAMS) ARE OBTAINED FROM A COST ACCOUNTING SYSTEM OF APPLICABLE PATIENT SEGMENTS. SEGMENTS NOT PASSED TO COST ACCOUNTING SYSTEM USE COST-TO-CHARGE RATIO. THE AMOUNTS FOR LINES 7E, F, H, AND I WOULD COME FROM THE BOOKS AND RECORDS OF SPECIFIC SEGMENTS OF THE ORGANIZATION AND ARE BASED ON COST. THE AMOUNTS ON 7G ARE DERIVED FROM A COST ACCOUNTING SYSTEM OF APPLICABLE PATIENT SEGMENTS. SEGMENTS NOT PASSED TO A COST ACCOUNTING SYSTEM USE THE COST-TO-CHARGE RATIO. PART I, LINE 7, COLUMN (F): THE BAD DEBT EXPENSE INCLUDED ON FORM 990, PART IX, LINE 25, COLUMN (A), BUT SUBTRACTED FOR PURPOSES OF CALCULATING THE PERCENTAGE IN THIS COLUMN IS $ 10075762. PART II: COMMUNITY BUILDING ACTIVITIES ARE ESSENTIAL FOR HEALTHCARE ORGANIZATIONS LIKE ST. LUKE'S BECAUSE THEY HELP ADDRESS MANY OF THE UNDERLYING DETERMINANTS OF HEALTH. OFTEN THE MOST EFFECTIVE WAY TO HELP IMPACT AND IMPROVE THE COMMUNITY HEALTH STATUS IS TO SUPPORT OTHER AGENCIES AND ORGANIZATIONS IN A VARIETY OF WAYS OUTSIDE OF HEALTH SERVICES. ST. LUKE'S CONTRIBUTES FINANCIALLY TO SIOUXLAND ORGANIZATIONS THAT ADDRESS THE BROADER NEEDS OF THE COMMUNITY. ST. LUKE'S EMPLOYEES ALSO PARTICIPATE IN NON-PROFIT ORGANIZATIONS WHO SHARE SIMILAR MISSIONS TO ST. LUKE'S. IN IMPROVING THE QUALITY OF LIFE IN SIOUXLAND BUT MAY NOT SPECIFICALLY BE DEDICATED SOLELY TO HEALTHCARE. BY SUPPORTING AND VOLUNTEERING WITH OTHER NON-PROFIT ORGANIZATIONS, ST. LUKE'S IS ABLE TO EDUCATE THE PEOPLE WE SERVE THROUGH PARTICIPATION ON PERTINENT COMMITTEES, INVOLVEMENT IN COMMUNITY EVENTS AND OTHER PROGRAMS SPONSORED BY THE NON-PROFIT ORGANIZATIONS OUR EMPLOYEES SERVE. FOR EXAMPLE, OUR EMPLOYEES ARE INVOLVED IN UNITED WAY THROUGH SPECIAL COMMITTEES THAT HELP SUPPORT THE COMMUNITY THROUGH WELLNESS. IN ADDITION, PARTICIPATION IN THE WELCOME HOME PROJECT, AN INITIATIVE THAT COMBINES TRANSITIONAL HOUSING AND OUTREACH SERVICES TO HELP HOMELESS FAMILIES OVERCOME BARRIERS THAT MAY INCLUDE MENTAL HEALTH, SUBSTANCE ABUSE ISSUES, DISABILITIES, TRANSPORTATION, OR LACK OF KNOWLEDGE ABOUT AVAILABLE SERVICES. THIS PROJECT ALSO COLLABORATES WITH OTHER AGENCIES AND SERVICES IN SIOUXLAND. OTHER EXAMPLES INCLUDE OUR EMPLOYEES PARTICIPATION IN SIOUX CITY KIWANIS, A SERVICE BASED ORGANIZATION THAT SEEKS WAYS OF IMPROVING LIVE FOR CHILDREN AND YOUNG ADULTS IN OUR COMMUNITY. ST. LUKE'S ALSO PARTICIPATES IN THE LOCAL PRESS CLUB, A NETWORK OF COMMUNITY MEDIA, PUBLIC RELATIONS AND COMMUNICATIONS PERSONNEL WHO STRIVE TO IMPROVE SIOUXLANDERS' ACCESS TO PERTINENT COMMUNITY INFORMATION AND NEWS AND EDUCATIONAL OPPORTUNITIES. IN ADDITION TO OUR INVOLVEMENT IN COMMUNITY ORGANIZATIONS, ST. LUKE'S OWN WEBSITE AT WWW.STLUKES.ORG ALSO CONTAINS AN UP-TO-DATE LISTING OF PROGRAMS AND SCREENS AS WELL AS PERTINENT HEALTH INFORMATION TO EDUCATE CONSUMERS ABOUT SYMPTOMS, TREATMENT AND HEALTHCARE OPTIONS AVAILABLE IN SIOUXLAND. PART III, LINE 4: THE HEALTH SYSTEM PROVIDES AN ALLOWANCE FOR DOUBTFUL ACCOUNTS BASED UPON A REVIEW OF OUTSTANDING RECEIVABLES, HISTORICAL COLLECTION INFORMATION AND EXISTING ECONOMIC CONDITIONS. AS A SERVICE TO THE PATIENT, THE HEALTH SYSTEM BILLS THIRD-PARTY PAYERS DIRECTLY AND BILLS THE PATIENT WHEN THE PATIENT'S LIABILITY IS DETERMINED. PATIENT ACCOUNTS RECEIVABLE ARE DUE IN FULL WHEN BILLED. ACCOUNTS ARE CONSIDERED DELINQUENT AND SUBSEQUENTLY WRITTEN OFF AS BAD DEBTS BASED ON INDIVIDUAL CREDIT EVALUATION AND SPECIFIC CIRCUMSTANCES OF THE ACCOUNT.THE AMOUNT REPORTED ON LINE 2 WAS CALCULATED USING IRS WORKSHEET 2 'RATIO OF PATIENT CARE COST TO CHARGES' TO CALCULATE THE COST TO CHARGE RATIO FOR ST. LUKE'S REGIONAL MEDICAL CENTER. THIS RATIO WAS THEN APPLIED AGAINST THE BAD DEBT ATTRIBUTABLE TO PATIENT ACCOUNTS USING IRS WORKSHEET A TO ARRIVE AT THE BAD DEBT EXPENSE AT COST REPORTED ON LINE 2. PART III, LINE 8: AMOUNTS ON LINE 6 WERE CALCULATED USING IRS WORKSHEET B 'TOTAL MEDICARE ALLOWABLE COSTS.' THE MEDICARE ALLOWABLE COSTS WERE OBTAINED FROM THE MEDICARE COST REPORTS AND THEN REDUCED BY ANY AMOUNTS ALREADY CAPTURED IN COMMUNITY BENEFIT EXPENSE IN PART I ABOVE.THE METHODOLOGY DESCRIBED IN THE INSTRUCTIONS TO SCHEDULE H, PART III, SECTION B, LINE 6 DOES NOT TAKE INTO ACCOUNT ALL COSTS INCURRED BY THE HOSPITAL AND DOES NOT REPRESENT THE TOTAL COMMUNITY BENEFIT CONFERRED IN THIS AREA. THE MEDICARE SURPLUS REFLECTED ON SCHEDULE H, PART III, SECTION B WAS DETERMINED USING INFORMATION FROM THE ORGANIZATION'S MEDICARE COST REPORT. HOWEVER THE MEDICARE COST REPORT DISALLOWS CERTAIN ITEMS THAT WE BELIEVE ARE LEGITIMATE EXPENSES INCURRED IN THE PROCESS OF CARING FOR OUR MEDICARE PATIENTS. EXAMPLES OF THESE ITEMS INCLUDE PROVIDER BASED PHYSICIAN EXPENSE, SELF INSURANCE EXPENSE, AND THE SHORTFALL FROM FEE SCHEDULE PAYMENTS. THE ORGANIZATIONS COST ACCOUNTING SYSTEM CALCULATES A MEDICARE SHORTFALL OF $3,747,090. IN ADDITION TO THESE ITEMS THE MEDICARE COST REPORT AND THE COST ACCOUNTING SYSTEM DO NOT INCLUDE MEDICARE PHYSICIAN FEE SCHEDULE EXPENSE OF $1,014,656 AND REVENUE OF $895,955. AFTER TAKING THESE ITEMS INTO ACCOUNT WE CALCULATE AN ACTUAL MEDICARE SHORTFALL OF $3,865,791.THE HOSPITAL BELIEVES THE ENTIRE AMOUNT OF THE MEDICARE SHORTFALL SHOULD BE TREATED AS COMMUNITY BENEFIT, MORE SPECIFICALLY, AS CHARITY CARE. THE ELDERLY CONSTITUTE A CLEARLY-RECOGNIZED CHARITABLE CLASS, AND MANY MEDICARE BENEFICIARIES, LIKE THEIR MEDICAID COUNTERPARTS, ARE POOR AND THUS WOULD HAVE QUALIFIED FOR THE HOSPITAL'S CHARITY CARE PROGRAM, MEDICAID OR OTHER NEEDS-BASED GOVERNMENT PROGRAMS ABSENT THE MEDICARE PROGRAM. BY ACCEPTING PAYMENT BELOW COST TO TREAT THESE INDIVIDUALS, THE BURDENS OF GOVERNMENT ARE RELIEVED WITH RESPECT TO THESE INDIVIDUALS. ADDITIONALLY, THERE IS A SIGNIFICANT POSSIBILITY THAT CONTINUED REDUCTION IN REIMBURSEMENT MAY ACTUALLY CREATE DIFFICULTIES IN ACCESS FOR THESE INDIVIDUALS. FINALLY, THE AMOUNT SPENT TO COVER THE MEDICARE SHORTFALL IS MONEY NOT AVAILABLE TO COVER CHARITY CARE AND OTHER COMMUNITY BENEFIT NEEDS. PART III, LINE 9B: AFTER THE PATIENT MEETS THE QUALIFICATIONS FOR FINANCIAL ASSISTANCE, THE ACCOUNT BALANCE IS PARTIALLY OR ENTIRELY WRITTEN OFF, AS APPROPRIATE. ANY REMAINING BALANCE, IF ANY, WOULD BE COLLECTED UNDER THE NORMAL DEBT COLLECTION POLICY. PART VI, LINE 2: NORTHWEST IOWA HOSPITAL CORPORATION D/B/A ST. LUKE'S REGIONAL MEDICAL CENTER (ST. LUKE'S) CONTINUALLY WORKS WITH COMMUNITY PARTNERS IN NORTHWESTERN IOWA TO ASSESS THE HEALTH NEEDS OF THE COMMUNITY. SIOUXLAND DISTRICT HEALTH, LOCATED IN SIOUX CITY, ASSESSES THE COMMUNITY'S HEALTHCARE NEEDS AT LEAST EVERY FIVE YEARS. THROUGH A PLANNED AND ORGANIZED EFFORT, SIOUX DISTRICT HEALTH DEVELOPS A HEALTH AGENDA BY IDENTIFYING SPECIFIC HEALTH PRIORITIES THAT ARE RELEVANT TO THE COMMUNITY. IN COLLABORATION WITH THIS AGENCY, ST. LUKE'S UTILIZES THIS INFORMATION TO MONITOR LOCAL HEALTH ISSUES AND PLAN AND MATCH THE HOSPITAL'S PROGRAMS, SERVICES AND HEALTH EDUCATION ACCORDINGLY TO HEALTH INFORMATION COLLECTED BY SIOUXLAND DISTRICT HEALTH. ST. LUKE'S ALSO PARTICIPATES IN HEALTHY SIOUXLAND INITIATIVE, A COLLECTION OF PUBLIC HEALTH PARTNERS THAT CONVENES MONTHLY, AND OTHER COMMUNITY HEALTH COLLABORATIONS, DESIGNED TO BUILD PARTNERSHIPS AMONG COMMUNITY HEALTHCARE ORGANIZATIONS TO BUILD A HEALTHY AND SAFE COMMUNITY. IN ADDITION TO THESE EFFORTS, ST. LUKE'S CONTINUALLY MONITORS COMMUNITY NEEDS SPECIFIC TO ITS SERVICE LINES AND THE RESOURCES IT CAN LEVERAGE TO ADDRESS THEM. INDIVIDUAL DEPARTMENTS ALSO WORK TO IDENTIFY SPECIFIC NEEDS RELATED TO THEIR SERVICES AND THE POPULATIONS THEY IMPACT. PART VI, LINE 3: NORTHWEST IOWA HOSPITAL CORPORATION D/B/A ST. LUKE'S REGIONAL MEDICAL CENTER (ST. LUKE'S) COMMUNICATES THE AVAILABILITY OF CHARITY CARE AND FINANCIAL ASSISTANCE TO ALL PATIENTS BY PLACING SIGNAGE AND EDUCATIONAL INFORMATION IN HIGH TRAFFIC AREAS OF THE HOSPITAL AND ITS CAMPUS INCLUDING ADMITTING, EMERGENCY AND OUTPATIENT AREAS AND PROVIDER OFFICES. IN ADDITION, DETAILED INFORMATION ABOUT ST. LUKES FINANCIAL ASSISTANCE PROGRAMS INCLUDING CHARITY CARE AND HOW TO OBTAIN MORE INFORMATION IS AVAILABLE ON THE HOSPITALS WEBSITE AT WWW.STLUKES.ORG. ST. LUKE'S ALSO PROVIDES INFORMATION ABOUT FINANCIAL ASSISTANCE AT REGISTRATION, AND AGAIN, ON THE PATIENT'S HEALTHCARE BILLING STATEMENT. STAFF HAS BEEN EDUCATED TO DIRECT INPATIENTS TO APPROPRIATE CONTACTS UPON ADMISSION IF FINANCIAL ASSISTANCE IS NEEDED. DESIGNATED INDIVIDUALS ARE AVAILABLE TO ANSWER QUESTIONS REGARDING ST. LUKE'S CHARITY CARE AND FINANCIAL ASSISTANCE PROGRAMS. PART VI, LINE 4: NORTHWEST IOWA HOSPITAL CORPORATION D/B/A ST. LUKE'S REGIONAL MEDICAL CENTER (ST. LUKE'S) IS CONSIDERED A FULL-SERVICE COMMUNITY HOSPITAL LICENSED FOR 346 BEDS AND STAFFED FOR 154 BEDS SERVING NORTHWEST IOWA. ST. LUKE'S IS NONDENOMINATIONAL AND SERVES ALL WHO COME HERE, REGARDLESS OF REASON OR CIRCUMSTANCE.80% OF ST. LUKE'S MARKET RESIDENTS LIVE WITHIN THE IOWA COUNTIES OF PLYMOUTH AND WOODBURY IN IOWA AND DAKOTA COUNTY IN NEBRASKA. DAKOTA AND WOODBURY COUNTIES HAVE SIGNIFICANT MINORITY POPULATIONS. DAKOTA COUNTY IS 32.2% HISPANIC AND 3.7% ASIAN. WOODBURY COUNTY IS 12.3% HISPANIC, 2.9% AFRICAN AMERICAN AND 2.5% ASIAN. WOODBURY AND DAKOTA COUNTIES HAD AVERAGE POVERTY LEVELS OF 13.7% AND AVERAGE HOUSEHOLD INCOME OF $43,700. PLYMOUTH COUNTY POVERTY RATE IS 7.3% AND AVERAGE HOUSEHOLD INCOME IS $54,013.ST. LUKE'S ADMITS APPROXIMATELY 8,900 INPATIENTS AND CARES FOR 64,300 OUTPATIENTS PER YEAR INCLUDING EMERGENCY PATIENTS. THERE ARE FOUR OTHER HOSPITALS WITHING THE THREE-COUNTY SERVICE AREA. 59% OF ST. LUKE'S INPATIENTS ARE ELIGIBLE FOR MEDICARE OR MEDICAID. PART VI, LINE 6: NORTHWEST IOWA HOSPITAL CORPORATION D/B/A ST. LUKE'S REGIONAL MEDICAL CENTER (ST. LUKE'S) IS ORGANIZED AND OPERATED EXCLUSIVELY FOR CHARITABLE PURPOSES WITH THE GOAL OF PROMOTING THE HEALTH OF THE COMMUNITIES IT SERVES. ST. LUKE'S SUPPORTS THIS MISSION WITH A COMMUNITY BOARD, OPEN MEDICAL STAFF, AND AN EMERGENCY ROOM AVAILABLE TO PATIENTS REGARDLESS OF ABILITY TO PAY. THE BOARD OF DIRECTORS OF ST. LUKE'S IS COMPOSED OF CIVIC LEADERS WHO RESIDE IN THE SERVICE AREA OF THE HOSPITAL. THE BOARD ACTIVELY DEBATES AND SETS POLICY AND STRATEGIC DIRECTION FOR THE HOSPITAL BUT DOES NOT GET INVOLVED IN ISSUES RELATED TO THE DIRECT OPERATIONS OF THE HOSPITAL. THE BOARD TAKES A BALANCED APPROACH WHEN ADDRESSING COMMUNITY AND BUSINESS/FINANCIAL CONCERNS. THE BOARD IS ALSO THE PRIMARY GROUP FOR DETERMINING THE USE OF HOSPITAL SURPLUS FUNDS, WHICH ARE ALL USED TO FURTHER OUR CHARITABLE PURPOSE. PART VI, LINE 7: THE HOSPITAL IS PART OF IOWA HEALTH SYSTEM. INITIALLY FORMED IN 1995, IOWA HEALTH SYSTEM IS THE STATE'S FIRST AND LARGEST INTEGRATED HEALTH SYSTEM, SERVING NEARLY ONE OF EVERY THREE PATIENTS IN IOWA. THROUGH RELATIONSHIPS WITH 25 HOSPITALS IN METROPOLITAN AND RURAL COMMUNITIES AND MORE THAN 140 PHYSICIAN CLINICS, IOWA HEALTH SYSTEM PROVIDES CARE THROUGHOUT IOWA AND WESTERN ILLINOIS.IOWA HEALTH SYSTEM ENTITIES EMPLOY THE STATE'S LARGEST NONPROFIT WORKFORCE, WITH NEARLY 20,000 EMPLOYEES WORKING TOWARD INNOVATIVE ADVANCEMENTS TO DELIVER THE BEST OUTCOME FOR EVERY PATIENT EVERY TIME. EACH YEAR, THROUGH MORE THAN 2.5 MILLION PATIENT VISITS, IOWA HEALTH SYSTEM HOSPITALS AND CLINICS PROVIDE A FULL RANGE OF CARE TO PATIENTS AND FAMILIES. WITH ANNUAL REVENUES OF $2.3 BILLION, IOWA HEALTH SYSTEM IS THE SIXTH LARGEST NONDENOMINATIONAL HEALTH SYSTEM IN AMERICA AND PROVIDES COMMUNITY BENEFIT PROGRAMS AND SERVICES TO IMPROVE THE HEALTH OF PEOPLE IN ITS COMMUNITIES. IOWA HEALTH SYSTEM AND ITS AFFILIATES ENGAGE IN COMMUNITY HEALTH PROGRAMS AND SERVICES THROUGHOUT IOWA, AND WORK WITH VOLUNTEER AND CIVIC ORGANIZATIONS, SCHOOLS, BUSINESSES, INSURERS AND INDIVIDUALS TO SUPPORT ACTIVITIES THAT BENEFIT PEOPLE THROUGHOUT THE STATE. IN 2010, IOWA HEALTH SYSTEM AND ITS AFFILIATES PROVIDED MORE THAN $152 MILLION OF COMMUNITY BENEFIT. THE CONTRIBUTIONS TO THEIR COMMUNITIES BY IOWA HEALTH SYSTEM AND ITS AFFILIATES ARE REPORTED IN DETAIL IN STATEMENT OF PROGRAM SERVICE ACCOMPLISHMENTS (PART III) OF THE IRS FORM 990 OF THOSE AFFILIATES. REPORTS FILED WITH STATES PART VI, LINE 7 IA 1 SIOUX CITY SYMPHONY ORCHESTRA 375 ORPHEUM ELECTRIC BUILDING SIOUX CITY IA 51102 426006580 501(C)(3) 10000 EVENT SPONSOR COMMUNITY ACTION AGENCY OF 2700 LEECH AVE SIOUX CITY IA 51106 420989589 501(C)(3) 10000 PROGRAM SUPPORT SIOUXLAND MEDICAL EDUCATION FOUNDATION 2501 PIERCE STREET SIOUX CITY IA 51104 421036971 501(C)(3) 1139000 PROGRAM SUPPORT BOYS AND GIRLS HOME PO BOX 1197 SIOUX CITY IA 51102 421321099 501(C)(3) 5500 PROGRAM SUPPORT UNITED WAY OF SIOUXLAND 701 STEUBEN STREET SIOUX CITY IA 51101 420680395 501(C)(3) 16000 PROGRAM SUPPORT ST LUKE'S HEALTH FOUNDATION 2720 STONE PARK BLVD SIOUX CITY IA 51104 421301885 501(C)(3) 10200 PROGRAM SUPPORT 6 0 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: NORTHWEST IOWA HOSPITAL CORPORATION REQUIRES EACH RECIPIENT OF THE GRANTS MENTIONED IN PART II (OTHER THAN ASSISTANCE TO RELATED ORGANIZATIONS IN THE FORM OF WORKING CAPITAL) TO APPLY FOR THE GRANT AND OUTLINE A SERIES OF ELIGIBILITY STANDARDS THAT ARE REQUIRED TO BE MET. NORTHWEST IOWA HOSPITAL CORPORATION THEN REVIEWS THESE APPLICATIONS, AND BASED ON NEED & ELIGIBILITY, MANAGEMENT MAKES THE FINAL DECISION ON ALL GRANT RECIPIENTS. NORTHWEST IOWA HOSPITAL CORPORATION MINIMIZES THE THREAT OF DIVERSION FOR INTENDED PURPOSE BY SENDING THE FUNDS DIRECTLY TO THE ORGANIZATION, WHERE POSSIBLE, ETC. X X 1 1 X X X X X 0 1 0 0 0 0 0 0 0 RICHARD HILDEBRAND MD 250937 0 86602 0 18772 0 76972 0 32242 0 465525 0 0 0 MARK JOHNSON 210792 0 92261 0 10289 0 86283 0 23146 0 422771 0 0 0 PRISCILLA STOKES 121499 0 42300 0 18193 0 8900 0 13465 0 204357 0 0 0 PETER THOREEN 306349 0 134399 0 55967 0 172869 0 15865 0 685449 0 0 0 LYNN WOLD 144025 0 44308 0 11752 0 39458 0 22139 0 261682 0 0 0 CRAIG BAINBRIDGE MD 454991 750 0 0 1240 0 12250 0 10820 0 479301 750 0 0 JITENDRAKUMAR GUPTA MD 424207 0 0 0 1140 0 12250 0 23293 0 460890 0 0 0 LUIS LEBREDO MD 579079 0 0 0 29838 0 15604 0 14331 0 638852 0 0 0 REBECCA ROSE MD 487327 0 0 0 26198 0 12250 0 14749 0 540524 0 0 0 DAVID WAGNER MD 686326 0 0 0 7361 0 27434 0 22475 0 743596 0 0 0 PART I, LINE 1A FIRST-CLASS OR CHARTER TRAVEL: CEO AND BOARD MEMBERS USE PRIVATE CHARTER FOR BUSINESS TRAVEL BETWEEN AFFILIATE CITIES AND FOR BOARD OF DIRECTOR MEETINGS. THIS TRAVEL IS FOR BUSINESS PURPOSES ONLY. NO FIRST CLASS COMMERCIAL TRAVEL IS REIMBURSED. TRAVEL FOR COMPANIONS: SPOUSES SOMETIMES ACCOMPANY BOARD MEMBERS AND/OR OFFICERS ON ORGANIZATIONAL ACTIVITIES, INCLUDING BOARD RELATED TRAVEL. THE ADDITIONAL COST ATTRIBUTABLE TO THE SPOUSE IS TREATED AS TAXABLE COMPENSATION TO THE BOARD MEMBER OR OFFICER AND REPORTED AS APPROPRIATE TO THE IRS. PART I, LINE 4B THE FOLLOWING INDIVIDUALS PARTICIPATED IN A NON-QUALIFIED RETIREMENT PLAN WITH THE FOLLOWING CHANGES TO THEIR ACCOUNTS: RICHARD HILDEBRAND $64,722, MARK JOHNSON $72,650, PETER THOREEN $160,619, AND LYNN WOLD $29,621. CANNON MOSS BRYGGER & ASSOCIATES COMMON BOARD MEMBER/OFFICER 218000 ARCHITECT/DESIGN SERVICES PURCHASED 0 PIERCE STREET SAME DAY SURGERY CENTER LC COMMON BOARD MEMBER/OFFICER/KEY EMPLOYEE 3776198 LEASE STAFF, RENT SPACE AND EQUIPMENT, AND DIVIDENDS 0 RHONDA HILDEBRAND FAMILY MEMBER OF OFFICER RICHARD HILDEBRAND, M.D. 34175 EMPLOYMENT 0 FORM 990, PART VI, SECTION A, LINE 6 IOWA HEALTH SYSTEM, A TAX-EXEMPT IOWA NOT-FOR-PROFIT CORPORATION, IS THE SOLE MEMBER. FORM 990, PART VI, SECTION A, LINE 7B IOWA HEALTH SYSTEM, AS SOLE MEMBER, APPROVES AMENDMENTS TO ARTICLES AND BYLAWS, APPOINTS AND REMOVES CEO, APPROVES LIQUIDATION OR DISSOLUTION, AND APPROVES INDEBTEDNESS. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS PREPARED INTERNALLY BY THE TAX DEPARTMENT USING INFORMATION GATHERED FROM VARIOUS FUNCTIONAL AREAS OF THE ORGANIZATION. EACH SECTION OF THE RETURN IS REVIEWED BY FUNCTIONAL AREA WITH RESPONSIBILITY ALONG WITH THE TAX DEPARTMENT. A DRAFT COPY OF THE RETURN IS PROVIDED TO THE CFO FOR REVIEW. A FULL COPY OF THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO FILING WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C THE ORGANIZATION HAS A CONFLICT OF INTEREST POLICY. ANNUALLY ALL OFFICERS, DIRECTORS, KEY EMPLOYEES AND REPORTING PHYSICIANS ARE REQUESTED TO COMPLETE A QUESTIONNAIRE TO REPORT POTENTIAL CONFLICTS OF INTEREST. PERSONS WHO HAVE NOT RETURNED QUESTIONNAIRES ARE CONTACTED ADDITIONAL TIMES IN AN EFFORT TO RECEIVE COMPLETE AND ACCURATE RESPONSES FROM ALL PERSONS. THE ANNUAL QUESTIONNAIRES INCLUDE AN ACKNOWLEDGEMENT THAT THE OFFICER, DIRECTOR, KEY EMPLOYEE OR REPORTING PHYSICIAN: 1) HAS ACCESS TO A COPY OF THE CONFLICT OF INTEREST POLICY; 2) HAS READ AND UNDERSTANDS THE POLICY; 3) AGREES TO COMPLY WITH THE POLICY; 4) UNDERSTANDS THAT THE POLICY APPLIES TO ALL COMMITTEES AND SUBCOMMITTEES HAVING BOARD-DELEGATED POWERS; AND 5) UNDERSTANDS THAT THE ORGANIZATION IS A CHARITABLE ORGANIZATION AND THAT IN ORDER TO MAINTAIN ITS TAX-EXEMPT STATUS, IT MUST CONTINUOUSLY ENGAGE PRIMARILY IN ACTIVITIES WHICH ACCOMPLISH ONE OR MORE OF ITS TAX-EXEMPT PURPOSES. SENIOR ADMINISTRATIVE STAFF AT ALL RELATED ORGANIZATIONS PROVIDE INFORMATION TO A CENTRAL COORDINATOR RELATED TO THE IDENTIFICATION OF WHICH INDIVIDUALS SHOULD RECEIVE THE QUESTIONNAIRE FOR COMPLETION. THE RESULTS ARE COMPILED CENTRALLY AND REVIEWED BY THE IOWA HEALTH SYSTEM COMPLIANCE OFFICER AND DIRECTOR OF INTERNAL AUDIT. THE DETAIL RESULTS ARE REPORTED TO A COMMITTEE OF THE SYSTEM BOARD. THE RESULTS RELATED TO SPECIFIC REGIONAL PARENT COMPANIES, THEIR HOSPITALS AND RELATED ORGANIZATIONS, ARE DISTRIBUTED IN DETAIL TO THE CHAIRPERSON OF THE REGIONAL PARENT ORGANIZATION, THE CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND COMPLIANCE MANAGER. THESE INDIVIDUALS ARE ALSO REMINDED OF THE APPROPRIATE PROCESS TO BE FOLLOWED DURING THE YEAR TO ADDRESS POTENTIAL CONFLICTS OF INTEREST THAT RELATE TO MATTERS THAT ARE BROUGHT TO THE BOARD OF DIRECTORS FOR ACTION. THE INFORMATION DISCLOSED IS USED TO IDENTIFY POTENTIAL CONFLICTS OF INTEREST AND TO ASSIST IN COMPLETING IRS AND MEDICAID QUESTIONNAIRES. ANY DUALITY OF INTEREST OR POSSIBLE CONFLICT OF INTEREST ON THE PART OF ANY ORGANIZATIONAL OFFICER, DIRECTOR, KEY EMPLOYEE OR REPORTING PHYSICIAN TOGETHER WITH ALL MATERIAL FACTS, SHOULD BE DISCLOSED TO THE BOARD OF DIRECTORS AND MADE A MATTER OF RECORD, EITHER THROUGH AN ANNUAL PROCEDURE OR WHEN THE INTEREST OCCURS OR BECOMES A MATTER OF BOARD ACTION. ANY ORGANIZATIONAL OFFICER, DIRECTOR, KEY EMPLOYEE OR REPORTING PHYSICIAN HAVING A CONFLICT OF INTEREST IN ANY MATTER SHOULD NOT BE PRESENT DURING GENERAL DISCUSSION NOR VOTE OR USE HIS OR HER PERSONAL INFLUENCE ON THE MATTER, AND HE OR SHE SHOULD NOT BE COUNTED IN DETERMINING THE EXISTENCE OF A QUORUM FOR PURPOSES OF THE MATTER OR ITEM AS TO WHICH A CONFLICT EXISTS. THE BOARD SHOULD EXCLUDE THE INDIVIDUAL FROM ANY DISCUSSION OR VOTE IN WHICH THE BOARD DECIDES WHETHER OR NOT A CONFLICT OF INTEREST EXISTS. IN CASES IN WHICH AN OFFICER, DIRECTOR, KEY EMPLOYEE, REPORTING PHYSICIAN OR THE INDIVIDUAL'S HOUSEHOLD MEMBER HAS A CONFLICT OF INTEREST IN AN ARRANGEMENT OR TRANSACTION, THE FOLLOWING ADDITIONAL STEPS MAY BE TAKEN AT THE DIRECTION OF THE BOARD OF DIRECTORS: 1) AFTER DISCLOSURE OF THE FINANCIAL INTEREST AND ALL MATERIAL FACTS, AND AFTER ANY DISCUSSION WITH THE INTERESTED PERSON, HE OR SHE SHALL LEAVE THE BOARD OR COMMITTEE MEETING WHILE THE DETERMINATION OF A CONFLICT OF INTEREST IS DISCUSSED AND VOTED UPON. THE REMAINING BOARD OR COMMITTEE MEMBERS SHALL 1) DECIDE IF A CONFLICT OF INTEREST EXISTS, 2) A DISINTERESTED PERSON OR COMMITTEE MAY BE APPOINTED TO INVESTIGATE ALTERNATIVES TO THE PROPOSED ARRANGEMENT OR TRANSACTION; 3) IN ORDER TO APPROVE THE ARRANGEMENT OR TRANSACTION, THE BOARD MUST FIRST FIND, BY MAJORITY VOTE OF DISINTERESTED MEMBERS, THAT THE ARRANGEMENT OR TRANSACTION IS IN THE ORGANIZATION'S BEST INTEREST, IS FAIR AND REASONABLE TO THE ORGANIZATION, AND, AFTER REASONABLE INVESTIGATION, THE DISINTERESTED MEMBERS HAVE DETERMINED THAT A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT CANNOT BE OBTAINED WITH REASONABLE EFFORTS UNDER THE CIRCUMSTANCES; THE MINUTES OF THE BOARD AND ALL COMMITTEES WITH BOARD-DELEGATED POWERS SHALL CONTAIN: 1) THE NAMES OF THE PERSONS WHO DISCLOSED OR OTHERWISE WERE FOUND TO HAVE A FINANCIAL INTEREST IN CONNECTION WITH AN ACTUAL OR POSSIBLE CONFLICT OF INTEREST, THE NATURE OF THE FINANCIAL INTEREST, ANY ACTION TAKEN TO DETERMINE WHETHER A CONFLICT OF INTEREST WAS PRESENT, AND THE BOARD'S OR COMMITTEE'S DECISION AS TO WHETHER A CONFLICT OF INTEREST IN FACT EXISTED; 2) THE NAMES OF THE PERSONS WHO WERE PRESENT FOR DISCUSSIONS AND VOTES RELATING TO THE TRANSACTION OR ARRANGEMENT, THE CONTENT OF THE DISCUSSION, INCLUDING ANY ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT, AND A RECORD OF ANY VOTES TAKEN IN CONNECTION THEREWITH; IN ORDER TO PROTECT THE ORGANIZATION'S BEST INTERESTS, APPROPRIATE DISCIPLINARY ACTION MAY BE TAKEN WITH RESPECT TO AN OFFICER, DIRECTOR, KEY EMPLOYEE OR REPORTING PHYSICIAN WHO VIOLATES THE CONFLICT OF INTEREST POLICY. FORM 990, PART VI, SECTION B, LINE 15 THE EXECUTIVE COMMITTEE OF THE IOWA HEALTH SYSTEM BOARD OF DIRECTORS ("COMMITTEE") CONDUCTS A COMPREHENSIVE ANNUAL REVIEW OF ALL COMPENSATION AND BENEFITS PROVIDED TO THE ORGANIZATION'S OFFICERS AND KEY EMPLOYEES, INCLUDING THE IHS CHIEF EXECUTIVE OFFICER (THE "CEO"). THIS ANNUAL REVIEW COMPARES THE TOTAL COMPENSATION AND VALUE OF BENEFITS PROVIDED TO EACH EXECUTIVE, ON A POSITION BY POSITION BASIS, TO THAT PROVIDED TO FUNCTIONALLY SIMILAR POSITIONS IN SIMILARLY SITUATED ORGANIZATIONS. THIS REVIEW IS CONDUCTED BY THE COMMITTEE WITH THE ASSISTANCE OF A NATIONAL, INDEPENDENT COMPENSATION CONSULTANT REPORTING DIRECTLY TO THE COMMITTEE. THE COMMITTEE HAS BEEN DELEGATED THE RESPONSIBILITY FOR OVERSIGHT OF EXECUTIVE COMPENSATION AND IS MADE UP ENTIRELY OF INDEPENDENT DIRECTORS WITHIN THE MEANING OF THE "REBUTTABLE PRESUMPTION OF REASONABLENESS" UNDER THE FEDERAL INCOME TAX INTERMEDIATE SANCTIONS RULES. THE COMPENSATION CONSULTANT HOLDS ITSELF OUT TO THE PUBLIC AS A COMPENSATION CONSULTANT, PERFORMS THESE VALUATIONS ON A REGULAR BASIS, IS QUALIFIED TO MAKE THE VALUATIONS OF THE SERVICES INVOLVED, AND HAS SO INDICATED IN A WRITTEN CERTIFICATION TO THE COMMITTEE. BASED UPON THE ADVICE OF THE COMPENSATION CONSULTANT, AND APPLYING THE BOARD'S COMPENSATION PHILOSOPHY, THE COMMITTEE ESTABLISHES THE OVERALL ADJUSTMENT IN COMPENSATION AND BENEFITS FOR APPROXIMATELY THE TOP FIFTY EXECUTIVES IN THE ENTIRE HEALTH SYSTEM (SEVERAL OF WHICH ARE EMPLOYEES OF THE FILING ORGANIZATION) AND DELEGATES TO THE CEO THE AUTHORITY TO MAKE ADJUSTMENTS, CONSISTENT WITH THE COMMITTEE'S DIRECTION, FOR THE OTHER EXECUTIVES. THE COMMITTEE DETERMINES ALL ASPECTS OF THE COMPENSATION AND BENEFITS OF THE CEO. THE COMMITTEE INTENTIONALLY TAKES ALL THE STEPS NECESSARY TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE FEDERAL INCOME TAX LAW INTERMEDIATE SANCTIONS RULES, INCLUDING CONTEMPORANEOUS SUBSTANTIATION OF ALL COMMITTEE MEETINGS AND ACTIONS. THE ORGANIZATION BELIEVES IT IS IN FULL COMPLIANCE WITH SECTION 4958 OF THE IRC, PROVIDES NO MORE THAN REASONABLE AND FAIR MARKET VALUE COMPENSATION AND BENEFITS FOR ITS EMPLOYEES AND DOES NOT PROVIDE ANY EXCESS COMPENSATION OR BENEFITS AS PROHIBITED BY SECTION 4958. THE ANNUAL REVIEW OF COMPENSATION AND BENEFITS WAS LAST PERFORMED IN NOVEMBER 2010 FOR THE FOLLOWING INDIVIDUALS: RICHARD HILDEBRAND, MARK JOHNSON, PETER THOREEN, AND LYNN WOLD. THE COMPENSATION AND BENEFITS OF THE OTHER PERSONS LISTED ON FORM 990, PART VII WAS ESTABLISHED BY AN INDEPENDENT PERSON/COMMITTEE USING AN INDEPENDENT COMPENSATION CONSULTANT AND/OR COMPENSATION SURVEY OR STUDY FOR SIMILARLY QUALIFED PERSONS IN FUNCTIONALLY COMPARABLE POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS. COMPENSATION AND BENEFITS ARE BASED ON THE FAIR MARKET VALUE OF THE SERVICES PROVIDED TO THE ORGANIZATION. FORM 990, PART VI, SECTION C, LINE 19 IOWA HEALTH SYSTEM, OUR PARENT ORGANIZATION, HAS VOLUNTARILY ADOPTED MANY OF OUR INDUSTRY'S GOVERNANCE "BEST PRACTICES." IOWA HEALTH SYSTEM HAS DONE SO TO FURTHER ASSURE OUR STAKEHOLDERS THAT OUR GOVERNANCE AND MANAGEMENT IS CONDUCTED RESPONSIBLY AND WARRANTS THE TRUST YOU PLACE IN US. IN SEPTEMBER 2003, THE IOWA HEALTH SYSTEM BOARD OF DIRECTORS VOLUNTARILY ADOPTED OVER 40 CHANGES TO ITS GOVERNANCE STRUCTURE TO BETTER COMPLY WITH GOVERNANCE BEST PRACTICES AND THE INTENT AND APPLICABLE REQUIREMENTS OF THE SARBANES-OXLEY ACT OF 2003. IN ADDITION, GOVERNANCE POLICIES AND RELATED INFORMATION HAS BEEN ADDED TO THE IOWA HEALTH SYSTEM WEBSITE, WWW.IHS.ORG, INCLUDING BUT NOT LIMITED TO: OVER 130 CORPORATE COMPLIANCE POLICIES, INCLUDING CHARITY CARE AND CONFLICTS OF INTEREST POLICIES; GOVERNANCE BEST PRACTICE POLICIES; THE IDENTIFICATION OF BOARD MEMBERS AND BOARD COMMITTEES; COMPENSATION FOR HOSPITAL CEOS; AND FINANCIAL INFORMATION FOR THE PAST SEVEN YEARS. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED GAINS ON INVESTMENTS: 1,806,699. CHANGE IN BENEFICIAL INTEREST OF ST. LUKE'S HEALTH FOUNDATION 314,930. CHANGE IN PENSION LIABILITY 2,994,824. TOTAL TO FORM 990, PART XI, LINE 5: 5,116,453. ALLEN COLLEGE 1825 LOGAN AVENUE WATERLOO IA 50703 421351526 EDUCATE AND DEVELOP HEALTHCARE PROFESSIONALS IA 501(C)(3) 170(B)(1) (A)(II) ALLEN HEALTH SYSTEMS INC 1 ALLEN HEALTH SYSTEMS INC 1825 LOGAN AVENUE WATERLOO IA 50703 421201924 SUPPORT AFFILIATES' MISSION TO IMPROVE HEALTH CARE IA 501(C)(3) 509(A)(3), TYPE II IOWA HEALTH SYSTEM 1 ALLEN MEMORIAL HOSPITAL CORPORATION 1825 LOGAN AVENUE WATERLOO IA 50703 420698265 HOSPITAL IA 501(C)(3) 170(B)(1) (A)(III) ALLEN HEALTH SYSTEMS INC 1 ANAMOSA AREA AMBULANCE SERVICE 101 GRANT WOOD DRIVE ANAMOSA IA 52205 421466284 PROVIDE AMBULANCE SERVICES IA 501(C)(3) 509(A)(2) ST LUKE'SJONES REGIONAL MEDICAL CENTER 1 CENTRAL IOWA HEALTH PROPERTIES CORPORATION 1200 PLEASANT STREET DES MOINES IA 50309 421233759 PROPERTY HOLDING COMPANY IA 501(C)(2) CENTRAL IOWA HEALTH SYSTEM 1 CENTRAL IOWA HEALTH SYSTEM 1200 PLEASANT STREET DES MOINES IA 50309 421189791 SUPPORT AFFILIATES' MISSION TO IMPROVE HEALTH CARE IA 501(C)(3) 509(A)(3), TYPE II IOWA HEALTH SYSTEM 1 CENTRAL IOWA HOSPITAL CORPORATION 1200 PLEASANT STREET DES MOINES IA 50309 420680452 HOSPITAL IA 501(C)(3) 170(B)(1) (A)(III) CENTRAL IOWA HEALTH SYSTEM 1 FINLEY HEALTH FOUNDATION INC 350 NORTH GRANDVIEW AVENUE DUBUQUE IA 52001 421286953 CHARITABLE FUNDRAISING IA 501(C)(3) 170(B)(1) (A)(VI) THE FINLEY HOSPITAL AND THE DUBUQUE VISITING NURSE ASSOCIATION 1 FINLEY TRI-STATES HEALTH GROUP INC 350 NORTH GRANDVIEW AVENUE DUBUQUE IA 52001 421307495 SUPPORT AFFILIATES' MISSION TO IMPROVE HEALTH CARE IA 501(C)(3) 509(A)(3), TYPE II IOWA HEALTH SYSTEM 1 HNC SERVICES 1200 PLEASANT STREET DES MOINES IA 50309 270987243 SUPPORT AFFILIATES' MISSION TO IMPROVE HEALTH CARE IA 501(C)(3) 509(A)(2) IOWA HEALTH SYSTEM 1 INTRUST 11333 AURORA AVENUE URBANDALE IA 50322 421477471 HOME HEALTH CARE IA 501(C)(3) 509(A)(2) IOWA HEALTH SYSTEM 1 IOWA HEALTH FOUNDATION 1440 INGERSOLL AVENUE DES MOINES IA 50309 421467682 CHARITABLE FUNDRAISING IA 501(C)(3) 509(A)(3), TYPE III CENTRAL IOWA HEALTH SYSTEM 1 IOWA HEALTH SYSTEM 1200 PLEASANT STREET DES MOINES IA 50309 421435199 SUPPORT AFFILIATES' MISSION TO IMPROVE HEALTH CARE IA 501(C)(3) 509(A)(3), TYPE III 1 IOWA LUTHERAN HOSPITAL AUXILIARY 1440 INGERSOLL AVENUE DES MOINES IA 50309 426059539 SUPPORT IOWA LUTHERAN HOSPITAL MISSION TO IMPROVE HEALTHCARE IA 501(C)(3) 509(A)(3), TYPE III 1 IOWA PHYSICIANS CLINIC MEDICAL FOUNDATION 8101 BIRCHWOOD COURT JOHNSTON IA 50131 421411630 PRIMARY HEALTH CARE SERVICES IA 501(C)(3) 170(B)(1) (A)(III) IOWA HEALTH SYSTEM 1 JONES REGIONAL MEDICAL CENTER FOUNDATION 104 BROADWAY PLACE ANAMOSA IA 52205 421429225 CHARITABLE FUNDRAISING IA 501(C)(3) 170(B)(1) (A)(VI) ST LUKE'SJONES REGIONAL MEDICAL CENTER 1 MEMORIAL FOUNDATION OF ALLEN HOSPITAL 1825 LOGAN AVENUE WATERLOO IA 50703 421201138 CHARITABLE FUNDRAISING IA 501(C)(3) 170(B)(1) (A)(VI) ALLEN HEALTH SYSTEMS INC 1 NELLIE R SHERWOOD TRUST 1026 A AVENUE NE CEDAR RAPIDS IA 52402 426061621 PAY MEDICAL BILLS OF RETIRED TEACHERS UNABLE TO PAY IA 501(C)(3) 509(A)(3), TYPE I ST LUKE'S METHODIST HOSPITAL 1 NORTH CENTRAL IOWA MENTAL HEALTH CENTER INCORPORATED 720 KENYON DRIVE FORT DODGE IA 50501 420937390 MENTAL HEALTH CARE IA 501(C)(3) 170(B)(1) (A)(III) TRINITY HEALTH SYSTEMS INC 1 ST LUKE'S HEALTH CARE FOUNDATION 855 A AVENUE NE STE 105 CEDAR RAPIDS IA 52402 421106819 CHARITABLE FUNDRAISING IA 501(C)(3) 170(B)(1) (A)(VI) ST LUKE'S METHODIST HOSPITAL (50 BENEFICIAL INTEREST) 1 ST LUKE'S HEALTH FOUNDATION OF SIOUX CITY IOWA 2720 STONE PARK BLVD SIOUX CITY IA 51104 421301885 CHARITABLE FUNDRAISING IA 501(C)(3) 170(B)(1) (A)(VI) NORTHWEST IOWA HOSPITAL CORPORATION (50 BENEFICIAL INTEREST) 1 ST LUKE'S HEALTH RESOURCES 2720 STONE PARK BLVD SIOUX CITY IA 51104 421059182 OUTPATIENT CLINICS AND HEALTHCARE SERVICES IA 501(C)(3) 509(A)(2) ST LUKE'S HEALTH SYSTEM INC 1 ST LUKE'S HEALTH SYSTEM INC 2720 STONE PARK BLVD SIOUX CITY IA 51104 421294091 SUPPORT AFFILIATES' MISSION TO IMPROVE HEALTH CARE IA 501(C)(3) 509(A)(3), TYPE III IOWA HEALTH SYSTEM 1 ST LUKE'S HEALTHCARE 1026 A AVENUE NE CEDAR RAPIDS IA 52402 421487968 SUPPORT AFFILIATES' MISSION TO IMPROVE HEALTH CARE IA 501(C)(3) 509(A)(3), TYPE II IOWA HEALTH SYSTEM 1 ST LUKE'S METHODIST HOSPITAL 1026 A AVENUE NE CEDAR RAPIDS IA 52402 420504780 HOSPITAL IA 501(C)(3) 170(B)(1) (A)(III) ST LUKE'S HEALTHCARE 1 ST LUKE'SJONES REGIONAL MEDICAL CENTER 1795 HIGHWAY 64 EAST ANAMOSA IA 52205 421487967 HOSPITAL IA 501(C)(3) 170(B)(1) (A)(III) ST LUKE'S HEALTHCARE 1 STL CARE COMPANY 1026 A AVENUE NE CEDAR RAPIDS IA 52402 421276632 IMPROVE PUBLIC HEALTH SERVICES IA 501(C)(3) 509(A)(2) ST LUKE'S HEALTHCARE 1 THE DUBUQUE VISITING NURSE ASSOCIATION 350 NORTH GRANDVIEW AVENUE DUBUQUE IA 52001 420680410 PUBLIC HEALTH SERVICES/HOME CARE IA 501(C)(3) 509(A)(2) FINLEY TRI-STATES HEALTH GROUP INC 1 THE FINLEY HOSPITAL 350 NORTH GRANDVIEW AVENUE DUBUQUE IA 52001 420680354 HOSPITAL IA 501(C)(3) 170(B)(1) (A)(III) FINLEY TRI-STATES HEALTH GROUP INC 1 THE ROBERT YOUNG CENTER FOR COMMUNITY MENTAL HEALTH 2701 17TH 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IA IHS C 62920 1.00000 MEDIMORE INC 1200 PLEASANT ST DES MOINES IA 50309 421414390 MANAGED CARE IA IHS C 155826 1.00000 PRECEDENCE INC 4622 PROGRESS DRIVE STE A DAVENPORT IA 52807 371288604 MANAGED MENTAL CARE IA RYC C 535068 395659 1.00000 RURAL IOWA SPECIALTY PHYSICIAN CONSORTIUM INC 700 E UNIVERSITY AVE DES MOINES IA 50316 261271143 SPECIALTY PHYSICIANS MEDICAL CARE IA CIHC C 406868 164732 0.57100 ST LUKE'S DEVELOPMENT COMPANY 1026 A AVE NE CEDAR RAPIDS IA 52402 421353658 LESSOR NONRESIDENTIAL REAL ESTATE IA SLHCF C 1.00000 STL HEALTH RESOURCES CO 1026 A AVE NE CEDAR RAPIDS IA 52402 421193499 PHYSICIAN OFFICE RENTAL IA SLMH C 1075846 6293579 1.00000 TRIMARK PHYSICIANS GROUP INC 802 KENYON ROAD FORT DODGE IA 50501 421335554 MEDICAL CLINICS IA THS C 43433525 17778844 1.00000 TRINITY HEALTH ENTERPRISES INC 2701 17TH ST ROCK ISLAND IL 61201 363320141 RETAIL DURABLE MEDICAL EQUIPMENT & PHARMACY IL TRHS C 3554376 3394181 1.00000 0 1 1 0 0 0 0 0 1 0 1 1 0 1 0 1 1 0 SECTION 512(B)(13) CONTROLLED ENTITY SCHEDULE R, PART II, COLUMN (G) THE ORGANIZATION IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, "IOWA HEALTH SYSTEM." FOR ENTITIES THAT ARE PART OF THE 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, WE ARE REPORTING ALL RELATED ORGANIZATIONS OF THE HEALTH SYSTEM IN PARTS II, III & IV. FOR PART V REPORTING, THE TRANSACTIONS DISCLOSED ARE THOSE BETWEEN THE DIRECTLY CONTROLLED PARENT-SUBSIDIARY ONLY.