2011-05-16T15:27:19-05:00 2010-06-30 KPMG LLP Two Central Park Plaza Suite 1501 Omaha NE 681021626 990 2009-07-01 440605373 The Children's Mercy Hospital CHIL 8162343000 2401 Gillham Road Kansas City MO 64108 Sandra AJ Lawrence 8162343000 2011-05-16 1 4023481450 2009 2016-02-24 21:20:13Z Sandra AJ Lawrence 2401 Gillham Road Kansas City MO 64108 787060103 0 X www.childrensmercy.org X 1901 MO Excellence in healthcare for children 13 8 6231 778 0 0 21463734 52687242 649237674 720080489 3356045 1100651 10059192 13191721 684116645 787060103 111300 12606043 0 400006965 441095079 0 3249485 255262029 289513277 655380294 743214399 28736351 43845704 736076529 878174313 296920810 395935037 439155719 482239276 To operate a clinical- and hospital-based system that strives to achieve excellence in health care services and medical treatments for children and their families; to build research programs that successfully translate basic science into clinical and bedside practices that improve the effectiveness of pediatric health care everywhere; to serve as an epicenter for pediatric medical and allied health education teaching and training tomorrow's pediatric health care professionals today; fulfilling the health care needs of our community's children regardless of their ability to pay. 1 0 631636856 12606043 720080489 All expenses for program services relate to providing healthcare. There were a total of 317 licensed beds and 79,749 patient days during the year from 14,644 admissions. Interim stays totaled 6,923 and outpatient encounters were 640,198 from 180,215 individual patients.The Children's Mercy Hospital (the Hospital) consists of a 263-bed teaching hospital for children located in Kansas City, Missouri, and a 54-bed hospital for children located in Overland Park, Kansas. The Children's Mercy Hospital provides the highest level of medical care, technology, services, equipment, and facilities promoting the health and well-being of children in the region, from birth through adolescence. Patients and their families are treated with compassion in a family-centered environment that recognizes their physical, emotional, financial, social, and spiritual needs. The comprehensive healthcare environment provided by the Hospital includes clinical services, research, and teaching efforts, which are designed to serve today's and tomorrow's children, and the community in which they live.The Hospital's services are available to all regardless of ability to pay. 631636856 1 1 0 1 0 0 0 0 1 1 0 1 0 0 1 0 0 0 0 0 1 1 1 1 1 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 1 1 0 0 1 434 0 6231 1 0 1 CJ 0 0 0 1 1 1 1 0 0 13 8 0 0 1 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 X Sandra AJ Lawrence Executive Vice President & CFO 8162343000 2401 Gillham Road Kansas City MO 64108 Edward Connolly Jr 1.00 X X 0 0 0 Page Reed 1.00 X X 0 0 0 Charles Schellhorn 1.00 X X 0 0 0 Robert Jackson MD 1.00 X X 0 0 0 Peggy Dunn 1.00 X 0 0 0 Mary Hunkeler 1.00 X 0 0 0 James Nutter Jr 1.00 X 0 0 0 David Oliver 1.00 X 0 0 0 John Ovel 1.00 X 0 0 0 Margi Pence 1.00 X 0 0 0 Jon Zindel 1.00 X 0 0 0 Doug Blowey MD 40.00 X 194139 0 23568 Randall L O'Donnell PhD 40.00 X X 1178477 0 738048 V Fred Burry MD 40.00 X 634867 0 22980 Sandra AJ Lawrence 40.00 X 583737 0 15012 Karen S Cox RN PhD FAAN 40.00 X 501049 0 22980 Jo Stueve 40.00 X 491687 0 22980 Kevin Kelly 40.00 X 802727 0 21821 Gary K Lofland MD 40.00 X 1219139 0 26544 Richard A Hopkins MD 40.00 X 803231 0 26544 Daniel J Ostlie MD 40.00 X 727920 0 26544 Charles L Snyder MD 40.00 X 727782 0 26544 John M Gatti MD 40.00 X 726809 0 26544 8591564 0 1000109 908 0 1 0 Anesthesia Associates of KC 10301 Hickman Mills Drive Kansas City MO 64137 Anesthesiologists 19325690 JE Dunn Construction Company PO Box 26147 Shawnee Mission KS 66225 Construction 16525865 Sodexho Marriott Services Inc 4880 Paysphere Circle Chicago IL 60674 Food Services 7028159 Lytle Construction Inc 3001 Cherry Street Kansas City MO 64108 Construction 4230015 Kansas University Physicians 3901 Rainbow Boulevard Kansas City MO 66160 Otolaryngolic Surgeons 2481440 300 1035850 8440329 8826664 34384399 20949 52687242 Net Patient Services 621110 720080489 720080489 720080489 1100651 1100651 Cafeteria 722210 4334940 4334940 Transport 621910 3727660 3727660 Reinsurance 524298 1218277 1218277 3910844 3910844 13191721 787060103 733272210 0 1100651 142640 142640 12463403 12463403 5257440 1700995 3556445 355144404 312956942 40053168 2134294 14993366 13218585 1684994 89787 40873742 34599959 6037389 236394 24826127 21887430 2790026 148671 1350448 266773 1083664 11 263936 263936 344415 344415 67108990 53903129 13131891 73970 1511690 26108 1485582 3502100 923870 2488281 89949 11455427 4575795 6830480 49152 4529884 3623122 801106 105656 14566595 14566595 36285104 18416305 17733513 135286 9866172 8694564 1171608 Medical Supplies 78034937 73537722 4402364 94851 State Medicaid Taxes 27445073 27445073 Bad debt 14902859 14902859 Inventory 5223592 5007613 203929 12050 Equipment Rental & Main 3891331 2754345 1136395 591 9230724 6023029 3128872 78823 743214399 631636856 108328058 3249485 65153036 36519019 148067828 189701246 7509084 28040710 100854527 117676994 6818323 7061215 8001810 8617098 637573357 268632809 345539555 368940548 9410973 70743424 30886098 28752448 13835295 22121611 736076529 878174313 88162970 102526842 173850000 250406120 874517 625640 34033323 42376435 296920810 395935037 X 419626956 434059687 19528763 48179589 439155719 482239276 736076529 878174313 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 344415 344415 631292441 631636856 1000000 250000 0 0 1000000 1000000 1000000 1000000 4000000 6000000 271328 134632 290191 344415 1040566 250000 250000 250000 250000 1000000 1500000 3000 3000 33889964 317605 3237589 1731696 35713462 42887302 416385 -7597819 1815904 33889964 0.00000 0.99350 0.00650 0 1 1 13627270 13627270 351770901 115292196 236478705 246529602 153340613 93188989 25645584 25645584 368940548 Reserve for Self-Insured Risks 34706183 Deferred Lease Incentive 1431235 Postretirement Medical Liability 6239017 42376435 Part V, Line 4: Description of Intended Use of Endowment Funds: Endowment funds are held by The Children's Mercy Hospital Foundation, a supporting organization of The Children's Mercy Hospital. The endowment funds are intended to provide a permanent source of funding for designated activities carried out by The Children's Mercy Hospital, the funds for which are provided from the earnings and principal of these endowment funds. Part X: Description of Uncertain Tax Positions Under FIN 48: FIN 48 Footnote: The Hospital and its affiliates adopted ASC Subtopic 740-10, Income Taxes-Overall. ASC Subtopic 740-10 provides specific guidance on how to address uncertainty in accounting for income tax assets and liabilities, prescribing recognition thresholds and measurement attributes. At June 30, 2010 and 2009, there were no uncertain tax positions. North America 0 0 Program Services Travel for healthcare-related education and information sharing 164968 Central America & the Caribbean Program Services Travel for healthcare-related education and information sharing 18164 Europe Program Services Travel for healthcare-related education and information sharing 14929 East Asia & the Pacific Program Services Travel for healthcare-related education and information sharing 12743 Middle East & North Africa 0 0 Program Services Travel for healthcare-related education and information sharing 2469 Russia & the Newly Independent States Program Services Travel for healthcare-related education and information sharing 270 South America Program Services Travel for healthcare-related education and information sharing 2888 0 0 216431 Method Used to Acccount for Expenditures: Schedule F, Part I, Line 3: Method Used to Account for Expenditures: Actual expenses for international travel 1 1 X 1 X 300.000000000000 1 X 1 1 0 0 1 5008 12346402 6194649 6151753 0.00840 3 278827 362500327 283969626 78530701 0.10780 3 2302 8847683 5486340 3361343 0.00460 7 286137 383694412 295650615 88043797 0.12080 36 14034 1298384 157941 1140443 0.00160 32 3427 25555795 16129091 9426704 0.01290 8 227093 111660124 97073255 14586869 0.02000 204 821 8616561 77561 8539000 0.01170 6 46949 446049 0 446049 0.00060 286 292324 147576913 113437848 34139065 0.04680 293 578461 531271325 409088463 122182862 0.16760 4 1666 139772 5304 134468 0.00020 7 1070 69766 0 69766 0.00010 1 0 1614 0 1614 0.00000 1 24 15417 0 15417 0.00000 13 2760 226569 5304 221265 0.00030 0 14902859 0 2357171 2818715 -461544 X 1 1 The Children's Mercy Hospital

2401 Gillham Road Kansas City MO 64108

X X X X X X Specialty Clinics; Primary Care Clinics Children's Mercy South

5808 W 110th Overland Park KS 66211

X X X X Specialty Clinics; Urgent Care Part I, Line 7: Cost-to-charge ratios were calculated as appropriate and applied to charges. Part I, Line 7g: In addition to subsidized inpatient, outpatient and diagnostic services provided at the hospital, Children's Mercy also provides a primary health care clinic within an inner city day care center serving 600 children daily, and a primary care clinic in the underserved community of Kansas City, KS. Additionally, our physicians and nurses provide outreach specialty clinics in communities throughout our region, making this specialized care more easily accessible to families so they don't have to travel long distances to receive care in Kansas City. Part III, Line 4: There is no financial statement footnote on bad debt. The primary basis of bad debt is the sum of adjustments made to patient accounts that represent non-collectible amounts. The allowance for uncollectible accounts is adjusted to equal the sum of all accounts whose balances are in excess of 365 days and self pay account balances. If the prior period's allowance balance is less than the current month's calculated balance, the allowance is credited and bad debt is increased. If the balance requires a decrease, then bad debt is also decreased by the same amount.Discounts (Gross Charges less Ratio of Cost to Charge applied) and any other adjustments on patient accounts are applied to account balances prior to any bad debt expense determination. Part III, Line 8: The Children's Mercy Hospital follows the regulations governing the preparation of the Medicare Cost Report. In doing so, the Medicare allowable costs are based on the Hospital's audited financial statement amounts adjusted for those costs not allowable, such as costs related to physician and nurse practitioner services, marketing, and physician referrals. Other revenue sources such as for the cafeteria, vending machines, medical records fees, and various miscellaneous operating revenues are offset from total costs to determine allowable costs. Total costs per functional area, or Cost Report line/category, are divided by charges to determine cost-to-charge ratios for each area. Part III, Line 9b: Collection attempts are discontinued once charges are determined to be eligible for charity care or financial assistance; insurance collection attempts continue as appropriate. Part V: In addition to the licensed facilities listed in Part V, The Children's Mercy Hospital has three outpatient physician clinics. Part I, Line 6: The Children's Mercy Hospital plans to prepare a community benefit report for fiscal year 2011, which will be made available to the public.Part I, Line 7, Column (f): Denominator for calculation of total percent of total expenses was calculated by taking total functional expenses of $743,214,399 from 990, Part IX, line 25 and deducting the included bad debt expense of $14,902,859, for a denominator of $728,311,540. Part VI, Line 2: The Children's Mercy Hospital has committees which include community physicians and a Physician Services Department staff which visits community physicians throughout a 150-county area to obtain their input on which services are needed for pediatric patients. The Children's Mercy Hospital also has a hospital governing board, a foundation governing board, and a Board of Advocates, made up of community volunteers, who provide input on community needs. Finally, The Children's Mercy Hospital has a Strategic Planning Department which provides ongoing information on our service area's demographics; expected numbers of patients with specific illnesses or medical needs' services already provided by other institutions in our service area; and other data on service needs, availability, and feasibility. Part VI, Line 3: Financial assistance information is posted on the Hospital's website. Flyers and business cards are available at all access points within the Hospital. All self pay patients and families are contacted by a financial counselor, either in person, or through phone call or letters. Self pay or underinsured patients can also be referred to a financial counselor by an Access Representative, Patient Care Services, Social Work, Patient Financial Servies, or other staff members for screening and assistance. Part VI, Line 4: The primary service area includes an 18-county area, including counties in both Missouri and Kansas. The secondary service area expands to 50 counties in both states, with a tertiary service area of more than 150 counties. In the primary service area, which includes urban, suburban and some rural areas, approximately 20% of households are at or below the federal poverty level. This translates to approximately 31% of all children (birth-17) living in our primary service area. The hospital's patient population includes 47% who are Medicaid recipients and 6% who are uninsured. The Children's Mercy Hospital is the only pediatric hospital within the tertiary service area and we provide a number of unique services not available anywhere within a 200-mile radius of Kansas City. In addition, a minority of the pediatric primary care providers in our service area accept Medicaid, so our primary care and dental services see a disproportionate share of uninsured and underinsured patients. The hospital is located in an area designated by HRSA as medically underserved and as a primary care and dental health provider. Part VI, Line 5: The Children's Mercy Hospital has conducted a variety of community-building activities. We offer a Teen Advisory Board, a Family Advisory Board, a Hispanic Family Advisory Board to provide input on better meeting the needs of these groups, providing leadership development and training for community members. Community-building training is also provided through our Parent to Parent support program for families of children with cancer. We founded and provide the leadership for a metro-wide coalition of more than 200 organizations focused on childhood obesity prevention and treatment, and we also provide leadership for a Metro Task Force on Drug Abuse. We offer a variety of training and education outreach programs in high schools and colleges throughout our region, and we provide a mentoring program for an inner city elementary school. The hospital also offers Project RISE, an innovative program which provides full-time employment for young adults with special needs. In addition, the hospital provides training for employees who wish to develop bilingual skills in order to better serve Spanish-speaking families and visitors. Part VI, Line 6: The Children's Mercy Hospital is a nonprofit hospital operated to serve a public rather than a private interest and meeting the requirements of Revenue Ruling 69-545. Control of the Hospital rests with its Board, which is primarily composed of members of the community, in addition to a few select employees of the Hospital. The Hospital accepts patients paying with Medicaid and Medicare, and operates an active and generally accessible emergency room open to all children without regard to ability to pay. The Hospital uses any surplus funds to improve the quality of patient care, expand its facilities, and advance its medical training, education, and research programs. Part VI, Line 7: The Children's Mercy Hospital is not part of an affiliated health care system.Part VI, Line 8: The Children's Mercy Hospital did not file a community benefit report in any states. 1 Missouri Health Association Center for Education PO Box 60 Jefferson City MO 65102 430898947 501(c)3 15123 Scholarships: medical, nursing, & allied health; initiatives addressing shortages Ronald McDonald House Charities 2502 Cherry Street Kansas City MO 64108 431190760 501(c)3 39601 Comfort & care for families seeking life-saving medical treatment for children Cystic Fibrosis Foundation 6950 Squibb Road Suite 310 Mission KS 66202 131930701 501(c)3 23115 Research, care, and education programs 3 0 Medical Residency 39 117000 Patient Financial Assistance 5008 12346403 Book Charity Care Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: Grants generally go to nonprofit organizations and agencies with which The Children's Mercy Hospital shares a common mission. These are agencies that generally support the health and well-being of children and families. The Children's Mercy Hospital documents the appropriate use of our funds by attending annual events to collaborate with agency board members and their executive leaders about issues related to the achievement of the agency's mission; reviewing web-based annual reports; and requesting and receiving a report from the agency grant recipient confirming the portion of grant dollars that go directly to the agency's mission-critical enterprise. Grants are also provided to the Medical Residents of The Children's Mercy Hospital. X 0 1 X X X X X 1 1 0 0 0 1 0 0 0 Doug Blowey MD 192257 0 0 0 1882 0 11724 0 11999 0 217862 0 0 0 Randall L O'Donnell PhD 968097 0 126000 0 84380 0 726204 0 12266 0 1916947 0 0 0 V Fred Burry MD 498595 0 103314 0 32958 0 14700 0 8658 0 658225 0 0 0 Sandra AJ Lawrence 459236 0 99661 0 24840 0 14700 0 690 0 599127 0 0 0 Karen S Cox RN PhD FAAN 381119 0 79600 0 40330 0 14700 0 9647 0 525396 0 0 0 Jo Stueve 379885 0 79600 0 32202 0 14700 0 8588 0 514975 0 0 0 Kevin Kelly 420281 0 0 0 382446 0 14700 0 7441 0 824868 0 0 0 Gary K Lofland MD 1199258 0 0 0 19881 0 14700 0 12222 0 1246061 0 0 0 Richard A Hopkins MD 798605 0 0 0 4626 0 14700 0 12222 0 830153 0 0 0 Daniel J Ostlie MD 708981 0 0 0 18939 0 14700 0 12222 0 754842 0 0 0 Charles L Snyder MD 708981 0 0 0 18801 0 14700 0 12222 0 754704 0 0 0 John M Gatti MD 708710 0 0 0 18099 0 14700 0 12222 0 753731 0 0 0 Part I, Line 1b Social club dues are paid on behalf of the CEO only; the payments are approved by the Compensation Committee of the Board of Directors and such payments are written into the CEO's Employment Agreement. Part I, Line 4a Kevin Kelly, M.D. received $379,200 in separation pay. Part I, Line 4b: A Supplemental Executive Retirement Plan (SERP) was made available to President & CEO, Randall O'Donnell, Ph.D. $458,351 was deferred into the plan during the year. Part I, Line 6 A portion of the total cash compensation paid to the President/CEO and all Executive Vice Presidents is determined by a performance based plan approved by the Compensation Committee of the Board of Directors. The plan includes Hospital and individual performance goals, one component of which is based in part on net earnings. Health and Educational Facilities Authority of the State of Missouri 431178966 60635RC62 2002-06-13 50000000 See Schedule O 0 0 Health and Educational Facilities Authority of the State of Missouri 431178966 60635RC88 2003-06-05 27500000 Refund 1993 Bonds June 5, 2003 0 0 Health and Educational Facilities Authority of the State of Missouri 431178966 60635HH85 2009-11-15 178852416 See Schedule O 0 0 46000000 2004 1 0 1 1 25550000 1995 1 0 1 1 181485000 70734192 2632584 9268224 0 0 0 1 0 0 0 0 0 0.00000 0.00000 0.00000 1 0 0 0 0 0 0.00000 0.00000 0.00000 1 0 1 1 UBS 30.900000000000 0 0 0 0 1 1 UBS 20.900000000000 0 0 0 0 0 0 0 0 0 Peggy Dunn Director JE Dunn, More than 35% owned by family member 16525865 Construction 0 Margi Pence Director Hallmark Cards, More than 35% owned by family member 459401 Rental Property; Payments made to Kessington/Hunter Mgmt Co and Crown Center Parking 0 John Ovel Director Commerce Bank, Officer of Commerce Trust Company 928963 Banking; bank account service fees, credit card processing; bank term loan interest, loan fees, bond fees 0 Form 990, Part III, line 2 New Program Services ATTENTION DEFICIT HYPERACTIVITY CLINIC We established an independent clinical service focusing on a developmental disorder which, if untreated, could disable a child from growing into and enjoying healthy adult years. Attention Deficit Hyperactive Disorder (ADHD) cannot be cured, but can be successfully treated through a combination of drugs and behavioral therapies. An untreated ADHD patient, however, has a far greater likelihood of developing other physical and emotional disorders than in children where there is no evidence of ADHD. For instance, children with ADHD are at increased risk of academic failure: approximately 50% repeat a grade by their teen years; 35% eventually drop out of high school; and only 5% graduate college. A teenager with untreated ADHD is 400% more likely to contract a sexually transmitted disease or to be involved with traffic tickets related to accidents or speeding. The untreated ADHD pediatric patient is 10 times more likely to become pregnant or cause a pregnancy. Twenty percent of teens with untreated ADHD will be involved with a felony, in contrast with only 3% of young people who do not have ADHD. Some studies estimate that as many as 40% of adults who are currently incarcerated for crimes suffer from untreated ADHD. Many studies suggest that the longer ADHD goes untreated, the more a patient will be challenged with developmental or physical disorders requiring attention from the health care system. Earlier intervention and earlier expression of a treatment plan to deal with ADHD can lead to improved outcomes for the patient and lower costs to the system. Until the introduction of this clinical service, the region had no centralized resource with an interdisciplinary medical team of ADHD treatment experts and other medical subspecialists equipped to address the primary disorder and its various secondary consequences. Our special ADHD clinic is created with the intention of enabling earlier opportunities for diagnosis and treatment of this disorder. CENTER FOR SPORTS MEDICINE We opened a sports medicine clinic to take care of the unique needs of young athletes who are injured or made ill through participation in sports. Unlike an adult, a sports injury in the body of a young athlete is different because a young person's body is constantly growing and changing. Although training for and playing in a sport can be good exercise, it's a kind of exercise that is typically rougher and riskier than exercise for the sake of fitness. Research shows over 60% of high school age youth are participating in some organized team sports, and 36% of all pediatric injuries are sports-related. Among elite young athletes, 50% encounter one or more injuries per year. The number of young people participating in sports is growing, and many participate in multiple sports. It is not uncommon for a student athlete who participates in a sport such as football in the fall to be competing on a baseball team in the spring. In fact, many of our young athletes play organized sports literally 12 months of the year. This makes those young athletes vulnerable to injury caused by overuse, particularly during growth spurts when the bones grow faster than the muscles and tendons. These trends recently led one medical journal to observe that sports injuries among young people have become a "silent epidemic." Because the growing and changing body of a child is so remarkably different than the body of a mature adult, the medical education, technologies and protocols to treat pediatric sports injuries are different, too. Our physicians have received unique training and education, enabling them to develop treatment plans that are injury-specific and accommodate the requirement for a young person's ongoing growth and development. For instance, if a sports injury requires the placement of metal hardware in a part of the body that is still growing, special technologies and protocols are necessary to make sure the hardware does not stunt the young athlete's growth. If shoulder surgery is performed on an adolescent and the procedure does not anticipate the patient's future growth, the tension can be too tight, resulting in a lifetime of chronic pain. Our program features medical doctors who are fellowship-trained in pediatric sports medicine and whose medical practices make use of these protocols and technologies. Our services include pediatric radiology, neuro-cognitive testing, and complex concussion care. Interdisciplinary care teams include sports-specific rehabilitation and physical therapists. We counsel our patients and families on risks associated with re-injury and on when it's safe to resume participating in the sport. With the introduction of this program, we become among a handful of organizations nationwide and first in our region to offer sports medicine services to young athletes. FETAL HEALTH CENTER INTEGRATED SPECIALTY CLINIC This new consultation service brings a fully integrated team of neonatologists, perinatologists, and medical subspecialists to diagnose and to develop prenatal treatment plans for a fetus presenting evidence of various complex or congenital malformations. The consulting service works collaboratively with referring obstetricians and maternal/fetal specialists to coordinate prenatal services and pediatric subspecialty services, and works through an interdisciplinary team process to develop and facilitate a fetal treatment plan. Coordination of care is enhanced and stress is relieved by a program feature enabling parents to go to a single location to meet with their team of subspecialist medical doctors in one visit. Early diagnosis and treatment of a fetus with a medically complex or congenital disorder promotes a healthier birth. It also enables greater precision in deployment of neonatal and other medical subspecialist resources at the time of birth or soon thereafter. Plans call next year for the Fetal Health Center's program to include a birthing center for healthy mothers who are delivering babies with complex or congenital disorders. The consulting service started this year sets in place relationships and resources that will be vital as at-risk births take place at Children's Mercy in years to come. VASCULAR ANOMALIES SPECIALTY CLINIC When a vascular tumor or malformation presents in a newborn or child, the diagnosis and treatment are at times quite complex. The most common vascular anomolies are infantile hemangiomas resembling lesions or birthmarks. Though these lesions are usually without medical complications, they can have significant risk of permanent cosmetic implications. More complex hemangiomas and vascular malformations can grow dramatically and compromise vital organs, circulation, eyesight, hearing, breathing, and feeding. These complex cases require the attention of an interdisciplinary care team drawn from medical subspecialties including dermatology, ear, nose and throat (ENT), plastic surgery, diagnostic and interventional radiology, hematology and social work. As a result of these complex patient needs, we have formed the new Vascular Anomalies Specialty Clinic. Considered developmental abnormalities, complex vascular malformations are chronic, lifelong conditions requiring access to large numbers of medical specialists on an ongoing basis. Without effective coordination of care, obtaining treatment can be a source of stress, causing anxiety for patients and their families. This new clinic enables patients and families timely access to these interdisciplinary teams. Rather than seeing many doctors across several days, patients see their doctors on the same day, a process which not only reduces stress but also improves the coordination of care and communication among health care providers on the team. Form 990, Part VI, Section A, line 4 Change to Bylaws: Composition of Board: Originally allowed for only two Children's Mercy Hospital employees - the President/CEO and President of the Medical Staff - to serve on the Board. Updated to allow for not more than one Chidren's Mercy Hospital employee to serve on the Board in addition to the President/CEO and the President of the Medical Staff. Form 990, Part VI, Section B, line 11 The final Form 990, including all required schedules, was provided to each voting member of the Board of Directors prior to its filing with the IRS. Form 990, Part VI, Section B, line 12c Each employee is required to complete an Outside Professional and Commercial Interests Form (Conflict of Interest Form) at the time of employment, at the time of their annual evaluation, and any time their financial interests change. Board members are required to complete a Conflict of Interest Questionnaire at the time of their appointment, at least one time annually, and are required to update their information any time their financial interests change. All Outside Professional and Commercial Interests Forms and Conflict of Interest Questionnaires are reviewed by the Corporate Compliance Manager. Form 990, Part VI, Section B, line 15 The Compensation Committee of the Board of Directors is responsible for approving the compensation of the CEO, which they document in an Employment Agreement between the Board of Directors and the CEO. The Compensation Committee also approves the compensation of the EVP/CFO, the EVP/Chief Medical Officer, two persons with the title EVP/co-Chief Operating Officer, all officers of the Hospital, and the Chair of the Department of Pediatrics, who is a key employee. The Compensation Committee is composed of independent outside directors who receive no compensation for their participation on the Board. The Compensation Committee engages an outside consulting firm, whose practice includes the analysis of compensation for not-for-profit hospitals, to advise the Committee with regard to market data and analysis, which was used to establish compensation. A letter from the compensation consultant opining on the reasonableness of the compensation was provided to the Committee and documentation of the Committee's deliberations and decision are in existence. Form 990, Part VI, Section C, line 19 The organization's governing documents, conflict of interest policy, and audited financial statements are available upon request. Schedule K, Part I, Row A, Column (f) Bond Issue, Description of Purpose A portion of the proceeds of the Bonds will be used to finance and reimburse the Corporation for a portion of the costs of the Project, which consists of (1) the following improvements at the Corporation's Main Campus in Kansas City, Missouri: (a) construction of four new operating rooms designed for cardiac surgery, together with related support facilities and space over the emergency room parking area at the southeast corner of the Main Campus, (b) construction of a fifth floor addition to the existing Henson Tower to house a new 27-bed inpatient unit, (c) construction of a new heliport with two landing surfaces on the roof of the existing Sutherland Tower and (d) construction of a four-story 72,000 square foot clinic and research building over the existing parking garage; and (2) construction of the following improvements at the Corporation's South Campus in Overland Park, Kansas: (a) a new 120,000 square foot building, connected to the existing approximately 50,000 square foot building, to be used to house an urgent care center, new patient beds and additional general support space and (b) the development of 400 new surface parking spaces. Schedule K, Part I, Row C, Column (f) Bond Issue, Description of Purpose $100,000,000: Refinance of Commerce Bank debt which refinanced Series 2007 bonds. $80,002,416: A portion of the proceeds of the Bonds loaned to the Corporation will be used to construct and equip a new six-story bed tower on the Corporation's Main Campus. The tower will provide an additional 42 medical/surgical beds, a maternal fetal medicine unit with four observation beds and a labor and delivery suite, 14 additional pediatric intensive care beds, expansion of radiology and infusion services, expansion of the cafeteria, dock, and storage space and expanded gift ship. The Corporation plans to establish a presence in Independence, Missouri in eastern Jackson County to be known as Children's Mercy East, which will include outpatient pediatric services. The Corporation has purchased the 8.9 acre site and has received a grant for $1 million to pay for the architectural and engineering costs associated with this project. Construction is expected to begin on this facility in 2011 and proceeds of the Bonds are expected to be used to fund $15 million of the costs of this facility. The Corporation will also use a portion of the proceeds of the Bonds for other capital expenditures at its facilities that are part of its ongoing capital improvement plan. CMH Insurance Company LLC 1000 Bank Street Suite 100 Burlington VT 05401 Insurance for The Children's Mercy Hospital VT 44236 8837520 N/A Children's Mercy Health Network 2401 Gillham Road Kansas City MO 64108 Managed care contracts MO 0 0 N/A Children's Mercy Hospital Foundation 2401 Gillham Road Kansas City MO 64108 431564302 Investment management for Children's Mercy Hospital MO 501(C)(3) line 11, III-FI N/A Friends of Children's Mercy 2401 Gillham Road Kansas City MO 64108 430961097 Support of Children's Mercy Hospital MO 501(c)(3) line 11, III-FI N/A Children's Mercy's Family Health Partners Inc 2420 Pershing Kansas City MO 64108 431726517 Integrated health insurance benefits care system MO 501(C)(3) line 9 N/A 0 1 1 0 1 0 0 0 1 0 1 0 0 1 1 1 0 1 Children's Mercy's Family Health Partners P 14543361 Children's Mercy's Family Health Partners I 498991 Children's Mercy's Family Health Partners N 10596 Children's Mercy's Family Health Partners R 6066 Children's Mercy's Family Health Partners K 2328857