mercy-health-systems-community-benefit-report

healing in the broadest sense THE STORY OF MERCY HEALTH SYSTEM

two decades of growth MercyHealthSystem.org

Community Benefit Report

[

letter from the

chairman

Dear Friends, It is a privilege to serve on the Mercy Health System Board of Directors and to be a part of this organization’s incredible transformation over the last 18 years. I have always enjoyed volunteering in the community, and I am honored to be able to serve my friends and neighbors through Mercy Health System.

Creating this report, I had the opportunity to reflect on a principle responsibility of a volunteer Board of Directors, which is to recruit and retain the best chief executive officer possible to assure the success of an organization.

I had the privilege almost 18 years ago of leading the recruitment of Mercy’s first lay chief executive officer in Mercy’s 100-year history, Javon Bea. I speak on behalf of the entire Board of Directors when I say that we could not have envisioned the award-winning transformation that lie ahead when we chose Javon.

On the following pages, you will read about Mercy’s transformation from a single, stand-alone hospital primarily serving Janesville to a large health system with 63 facilities serving 24 different communities throughout southern Wisconsin and northern Illinois.

]

In 1989, Mercy had 89,000 patient visits a year and employed 589 employees, who we call partners. Mercy now sees over 1,000,000 patients annually, and employs 3,856 employees/partners. Mercy has become the largest employer in Rock County, and has added nearly $1.1 billion in industry economic sales, which has created an additional 1,200 jobs in our Wisconsin and Illinois service area, beyond the almost 3,300 new jobs at Mercy. Truly, Mercy has been a major economic engine for over the last two decades.

This report is a unique opportunity for me to fondly reminisce about our past, enjoy our present success and boldly look to the future. We have experienced much change and growth over the years, but one thing has always remained constant: our desire to provide exceptional health care services to our patients and support our local communities.

Sincerely,

Rowland J. McClellan Chairman of the Board

[ letter from the president/ceo ] Dear Friends, Healing in the broadest sense. These powerful words encapsulate the Mercy Health System Mission and our organization’s commitment to our patients and community members. Healing in the broadest sense is what our 3,856 employees, who we call partners, strive for each and every day.

But what does “healing in the broadest sense” truly mean? It means promoting physical, emotional and spiritual healing.

Encouraging greater family unity. Providing compassionate support. Helping patients and loved ones gain acceptance of a medical condition.

In this Community Benefit Report you will see how Mercy partners give of themselves to serve our community each and every day. You will learn of Mercy’s innovative services and committed professionals, and our dedication to community outreach and to meeting the needs of the underserved. You will see Mercy’s incredible transformation over the last 18 years from a stand-alone hospital to a fully integrated health care delivery system serving over 1,000,000 patients each year.

As we’ve grown in size, we have increased the breadth and depth of care provided to our patients. We continually strive to improve the quality of care you receive, stretching ourselves to exceed the most stringent standards.

We are committed to providing our patients with the latest technology, the best medical teams and expert, compassionate care. We have done all of this while remaining conscious of cost. In fact, our administrative cost as a percent of total budget is 10%, which is well below the national average.

These accomplishments have been recognized throughout the nation. Over the last two decades, Mercy has been honored with over 40 national awards for its quality, service and growth, including Wisconsin’s highest quality award, the Wisconsin Forward Governor’s Award of Excellence. Just last fall, Mercy was ranked #1 on the AARP 2006 Best Employers for Workers Over 50 list and was one of the Working Mother Top 100 Best Companies.

While these honors typify our attention to providing quality services, excellent patient care and work/life balance for our partners, they also reflect our desire to provide you with exceptional health care services. I invite you to read through this report and learn more about Mercy and its mission of healing in the broadest sense.

Sincerely,

Javon R. Bea President/CEO

[

who we

are

]

our mission The Mission of Mercy Health System is to provide exceptional health care services, resulting in healing in the broadest sense.

our values

• healing in the broadest sense • patients come first • treat each other like family • strive for excellence

our vision Quality

– Excellence in patient care

• Assure excellence in patient care using best practice benchmarks to ensure continuous improvement • Promote a culture of patient safety • Uphold an effective compliance program • Provide state-of-the-art information systems and technology

Partnering • • • •

– Best place to work

Cultivate high partner satisfaction by being a best place to work Recruit and retain board certified physicians and other qualified partners Promote a safe and healthy work environment Foster a learning organization

Service

– Exceptional patient satisfaction

• Provide exceptional patient service through measured customer satisfaction • Continually improve integrated programs and services based on patient need • Promote educational programs and health initiatives to improve community quality of life • Sustain competitively priced services

Cost • • • •

– Long-term financial success

Continue growth initiatives and integration strategies Emphasize cost containment through efficient operations Enhance access to capital Promote long-term financial success

[ Enhancing the health of our communities Mercy Health System is committed to caring for its patients and community members. Today, Mercy receives over 1,000,000 patient visits and provides thousands of health screenings, community education classes and outreach events each year.

Uncompensated care and free services Last year, Mercy Health System provided more than $28 million in uncompensated care and free services to local communities.

The House of Mercy Homeless Center The House of Mercy Homeless Center in Janesville is one of the only shelters of its kind operated by a health system. Developed after Javon Bea noted that a growing number of emergency room patients were listing the family car as their primary address, the House of Mercy can shelter up to 25 women and children for 30 days at a time. Since its inception, the Center has sheltered more than 3,500 individuals for over 80,000 shelter nights.

who we

help

Free and low-cost medical services Providing affordable care is of the utmost importance at Mercy. We believe all individuals should have access to quality health care. The Community Health Center at Mercy Clinic South in Janesville, in conjunction with the Community Health Center, Inc., of Beloit, provides low-cost care to under-insured and uninsured individuals. Mercy physicians also volunteer their time at local free clinics, including HealthNet of Janesville, the Beloit Area Community Health Center, the Family Health Partnership Clinic in Woodstock. In addition Mercy is a large supporter of the McHenry County Breast Cancer Task Force, which helps uninsured and underinsured women receive mammograms, and the Child Advocacy Agency of McHenry County that provides support services to abused and neglected children.

Over

1,000,000 patient visits at

63 locations

] Support groups Patients with chronic illness and injury often benefit from talking with other patients in similar situations. Mercy offers nearly 50 support groups in Wisconsin and Illinois at no or low cost.

Health screenings and community education classes Each year Mercy provides thousands of free and low-cost community education programs and health screenings to residents in the areas it serves. Classes, workshops and screenings are based on patient requests and needs identified by our providers in various areas.

Screenings include blood pressure, blood glucose, cholesterol, bone density, depression, cancer and much more.

Mercy In Motion Mercy In Motion provides safe, affordable and professional non-emergency transportation for those who have no other means of transportation to Mercy medical appointments throughout southern Wisconsin and northern Illinois.

[ Meals On Wheels Mercy’s Meals On Wheels provides affordable meals for the elderly or disabled in their homes. Available seven days a week, meals are made fresh by the Mercy HospitalJanesville and Mercy Harvard Hospital dietary staff to ensure the foods are nutritional, varied and tasty. As the largest program in the area, Meals on Wheels serves over 140 residents each week.

It is organizations like Mercy that set an excellent example for other businesses in the state.

Wisconsin Governor Jim Doyle

Mercy Lifeline Mercy Lifeline is a personal emergency response system that helps the elderly and disabled remain in their homes and retain their independence. Lifeline communication devices are used to call for medical help with the touch of a button. Mercy Lifeline serves over 850 community members throughout southern Wisconsin and northern Illinois.

Hospice care Mercy Assisted Care operates the largest skilled home care agency in Rock County, Wisconsin. The Mercy hospice program

who we

help

includes a hospice homecare program and the only hospice residential unit in Janesville.

Mercy’s hospice program is the second largest in the area and has doubled its census in the last 10 years.

Senior Connection This free program for community members aged 55 and older offers Medicare advice from trained personal counselors, referrals for home health and home care, social events and multiple discounts throughout Mercy Health System.

Mercy Cooperative Childcare Institute Working with the Janesville School District and Rock County Social Services, the Mercy Cooperative Childcare Institute provides residential treatment options for children ages 6 to 17 with severe emotional disorders. CCI has served 284 children since 1996.

Health Occupations Academy The Health Occupations Academy was conceived as an alternative solution to the

] growing staffing shortage in health care fields.

The Academy is a partnership between Mercy, the Janesville School District and Blackhawk Technical College that provides technical education and training to high school students who wish to pursue a health care career. We also continue to support McHenry County College’s efforts to expand their health occupations offerings.

Encouraging volunteerism Mercy Health System partners are encouraged to volunteer within their communities to effect positive change. All Mercy partners receive eight hours of paid time each year to pursue a community service or volunteer project. Many Mercy partners serve or have served on the boards of directors of vital local charities, and still more volunteer their time to help local charitable organizations improve the community.

In total, Mercy partners personally give thousands of hours of their time and over $550,000 in donations to local volunteer organizations each year.

20062006

[

2006 2006 2006

20062006

National National Mercy National Mercy Mercy National Mercy Average Average Average Average

2006 2006 2006

19891989

National National Mercy National Mercy Mercy National Mercy Average Average Average Average

care ]

MercyCare Administrative Benefit Ratio MercyCare Administrative Benefit Ratio MercyCare Administrative Benefit Ratio MercyCare Administrative Benefit Ratio

how we 9.93% 9.93% 9.93% 6.65% 9.93% 6.65% 6.65% 6.65%

Bond Rating Indicator Bond Rating Indicator Bond Rating Indicator Bond Rating Indicator

20072007

Facilities Effectiveness Facilities Effectiveness Facilities Effectiveness Facilities Effectiveness

A2 A2 A2 A2

34,239 sq.

34,239 sq.ft.

34,239 sq. ft.

34,239 sq. ft.ft.

24,136 sq.

24,136 sq.ftftftsq. ft92.8% 24,136 92.8% 92.8% 24,136 sq.

92.8% 83.5% 83.5% 83.5% 83.5%

good good good good

Unrated Unrated Unrated Unrated 1997 1997 1997 1997

Javon Bea created a Culture of Excellence that is built upon four pillars of excellence:

quality, service, partnering, cost

Quality—Excellence in patient care The Quality pillar uses national and state benchmarks to measure quality clinical care. Every Mercy partner is committed to exceeding patient expectations by making quality a top priority. Ongoing efforts include continuous improvements, such as expanding Mercy Hospital’s central laboratory and ambulatory surgery center, creating patient-centered surgical offices near our three hospitals, and renovating Mercy Hospital birthing center and Mercy Regional Cancer Center for comfort-focused care. An empowered workforce of problem-solving teams, the latest medical technology and the creation of over 50 centers of excellence also contribute to the quality of patient care throughout southern Wisconsin and northern Illinois.

1989 1989 1989 1989

2007 2007 2007 2007

Mortality ---Heart Attack ---Heart Failure Mortality Heart Attack Mortality Heart Failure Mortality - Heart Attack Mortality Mortality - Heart Failure Mortality Heart Attack Mortality Heart Failure

2006 2006 2006 2006

2002 2002 2002 2002

Mortality ---Pnemonia Mortality Pnemonia Mortality - Pnemonia Mortality Pnemonia

2005 2005 2005 2005

Childhood Immunizations Childhood Immunizations Childhood Immunizations Childhood Immunizations

good good good good good good good good

good good good good

2006 2006 2006 2006

2006 2006 2006 2006

Expected Expected Mercy Expected Mercy Mercy Expected Mercy Rate Rate RateRate RateRate Rate Rate

2006 2006 2006 2006

2006 2006 2006 2006

Expected Expected Mercy Expected Mercy Mercy Expected Mercy Rate Rate RateRate RateRate Rate Rate

good good good good

2006 2006 2006 2006

2006 2006 2006 2006

Expected Expected Mercy Expected Mercy Mercy Expected Mercy Rate Rate RateRate RateRate Rate Rate

2006 2006 2006 2006

2006 2006 2006 2006

National National Mercy National Mercy Mercy National Mercy Average Average Average Average

Grossin Revenues Gross Revenues Thousandsin Thousands $764,805

Number of Facilities/Sites Number of Facilities/Sites

$764,805

63

63

[

how we

Number of Employed Physicians Number of Employed Physicians

1989

Mercy is offering more than a Band-Aid for long waits, and patients should appreciate that.

Editorial staff. (2006, November 24).

Our views, Opinion section. The Janesville Gazette, p.6A. on the topic of Mercy’s implementation of a 30-minute urgent care service commitment

$33,000

285

1989 2006

2006

good

good

good

good

1

1

1989

1989 2007

2007

good

good

0

0

1989

1989 2007

2007

Service—Exceptional patient and customer service Clinic Satisfaction Number of Partners Charitable/Uncompensated Care Satisfaction Number of Partners Charitable/Uncompensated The Service pillar focuses on Care fostering a senseOverall of ClinicOverall attitudes toward patients to responsibility and caring $28,000,000 96% $28,000,000 96% enhance the health of the communities we serve.

3,856 3,856 Through continuous benchmarking and tracking of 91% quality indicators, Mercy Health System91% understands the importance of having processes in place that are consistent throughout the organization, and ensure excellence in patient care, to good good good good good good achieve our $621,884 mission $621,884 of healing in the broadest 589 589 sense. The process of putting patients first and doing everything in each partner’s power to 2006 2006 1989 2007 1989 2006 2006 2006 1989 2007 1989 2006 better serve patients also extends to the National Mercy National Mercy Average Average communities Mercy serves as well.

Partner Turnover Partner Turnover

Overall Partner Satisfaction Overall Partner Satisfaction

Patients Treated Total PatientsTotal Treated 1,000,000+ 1,000,000+

285

$33,000

care ]

Gross Expenses Gross Expenses $409,386

$409,386

89,627

89,627

1989

1989 2007

good

good

2007

“

Overall Hospital Satisfaction Overall Hospital Satisfaction 95.2%

95.2% 92%

92%

good

good

2006

National Average

2006 2006

National Mercy Average

Mercy Health System exemplifies a mission to care for all patients.

2006

”

George Quinn Senior Vice President, Wisconsin Hospital Association

Mercy

Administrative as % of Budget Administrative Costs as % ofCosts Budget

We do not lose sight of what is most important, that being the patient’s well being.

Christopher Sturm, MD Neurosurgeon

[

1989

how we

Partnering—Best place to work The Partnering pillar focuses on fostering a supportive, entrepreneurial spirit in each of our partners on all levels of the organization. Mercy considers all employees “partners.” Under this pillar, the Culture of Excellence program empowers our partners to take action and freely make suggestions. Mercy appreciates the valuable contributions of all partners and recognizes the importance of providing them with opportunities and support. Our organization prides itself on creating a work environment that also provides benefits, development and training to all partners.

care ] 2006 1989

2006

Number of Partners Number of Partners

3,856

589

589

1989

2007 1989

1

1

1989

2007 1989

2007

Charitable/Uncompensated Care Charitable/Uncompensated Care $28,000,000 $28,000,000

3,856

good

good

2007

$621,884

$621,884

1989

2006 1989

good

2006

85.6%

2006

2006 2006

Mercy National Average

Gr

85.6%

$3

12% 8%

National Average

good

Overall Partner Satisfaction Overall Partner Satisfaction

Partner Turnover Partner Turnover

12%

Ov

good

8%

2006

Mercy

good

68.2%

2006

National Average

68.2%

2006 2006

Mercy National Average

good

good

2006

Mercy

Bond Rating Bond Indicator MercyCare Administrative Benefit RatioBenefit Ratio Rating Indicator MercyCare Administrative

Fa

0

1 1989

“

2006

1989

Number of Partners

[

how we

Charitable/Uncompensated Care

My father received wonderful care while at Mercy. I am very impressed with Mercy’s dedication to patients and their families.

”

Shirley Birmingham, daughter of a heart attack patient

good

589 1989

2007

91%

2006

Overall Partner Satisfaction

Partner Turnover

Cost—Long-term financial success 85.6% The Cost pillar engages Mercy partners to identify innovative ideas for growing system-wide revenue, decreasing expenses and waste, increasing productivity, maximizing economies of scale, and continuously implementing suggestions for increased 12% effectiveness. Mercy Health System is one of a handful of systems in the United States that successfully 68.2% implemented an employed good good 8% integration model. Mercy partners share responsibilities to physician ensure the organization remains viable and cost-effective to guarantee the organization’s long-term financial success.

2006

National Average

2006

Mercy

MercyCare Administrative Benefit Ratio

2006

National Average

2006

Mercy

Bond Rating Indicator

1989

2007

Overall Hospital Satisfaction

96%

good

$621,884 1989

2007

Overall Clinic Satisfaction

$28,000,000

3,856

care ]

1989

2007

95.2% 92%

good

2006

National Average

good

2006

2006

Mercy

National Average

Gross Revenues in Thousands Gross Expenses

$409,386

2006

Mercy

Number Administrative Costs of asFacilities/Sites % of Budget

$764,805

63

$31,040

20% good

$33,000

good

10% good

1

1989

1989 2007

2006

Number of Partners Facilities Effectiveness

Mercy

WI and IL 2007 1989 state average

Charitable/Uncompensated Care Accounts Receivable in Days

Gross Revenues in Thousands Number of Facilities/Sites

Gross Revenues in Thousands

“

$764,805

[

how we’ve

grown

]

$33,000

1989

2006

0 1 1 1 1 (WI) 89,000 589 0 0 33m

2007 Partner Physicians (employed) Hospitals Clinical Sites Communities Served Counties Served Total Patient Visits Employees/Partners Insurance Licenses Insurance Products Revenue

285 3 63 24 7 (WI/IL) 1,000,000+ 3,856 2 (WI/IL) 7 (WI/IL) 765m

1989

good

good

$33,000 $33,000 $33,000 $33,000 good 1

589 1989

2006

1989

2007

1989

good

good good good

Mercy is always giving back to not only its partners, but also the communities it $33,000 serves. This makes 89,627 89,627me proud to be a Mercy partner. good

2006

Linda

0

1

1989

1989 2007

3,856

$621,884

1989 2007 1989 2006 1989 2006 1989 2006 1989 2006 1989

285 91%

3,856

92%285 285 285

285

good good good good

good good

good

good

1989 1989 1989

2007

91% 285

1989 2006 1989 2006 1989 20072007 1989 2007 1989 2007 1989 1989 2007 1989 2007 2006 2006 National Average

good good

good

$621,884 1

1

good good good good

89,627

good

011

1

2006 2007 2007

1989 1989 1989

0

0

00

Mercy

good good 89,627good 89,627 good 89,627 89,62789,627

$28,000,000 85.6%

12%

0

good good good

3,856 3,856 3,856

85.6% 3,856

8% 2006

Mercy

good

589

1989

68.2% good good good good 589 good 589 $621,884 589 589 1989 2006 1989 2007 1989 2007 2006 1989 1989 2007 2007 National Average

85.6%

National Mercy Average

3,856

91%

2007 2006 2006

92% 91% 91% 91%

Mercy

good

good good

good good

5898%$621,884 $621,884 $621,884 $621,884 $621,884

Mercy

$409,386

2007 2006 1989 1989 2006 2007 2007

National National Average Average

91% 92%

92% 92% 92%

68.2%

good good

good

$621,884

good

good

good

good 10% good good good

Mercy 1989 2006 2006 2006 2006 2006 2006 2006 20062006 2006 2006 2006 2006

National Mercy NationalMercy National Mercy National National Mercy National Mercy National Mercy Average Average Average Average Average Average Average

good

Mercy Mercy

Overall Partner Satisfaction MercyCare Benefit Ratio Bond RatingAdministrative Indicator

95.2%

95.2%

goodgood

2006 19892006 2006 2006 2006

National2006 Mercy 2006 National Mercy Average Average

96% 95.2%95.2% 95.2% 95.2%

A2

85.6%

92%

92% 12%

$31,040 20%

1989 2007 19892006 2006 20072006 20062006 1989 1989 1989 2006 1989 2006 1989 2006 MercyNational Average

96%

91%

$31,040

goodgood

National Mercy Average

$28,000,000 96% 95.2% 96% 96% 96%

68.2% $621,8848%

good

0

2007 2007 1989 1989 1989 2007 1989 2007 19892007 2007 1989 2006 2006 2006

National Average

good 89,627 589 8%

good good

good

2007 2007 2006

Partner TurnoverSatisfaction Overall Partner Charitable/Uncompensated Care

92%

285

good

20072007 1989 1989 2007 1989 2007 2007 1989 2007 198919891989 2007 2006 2006 1989 2006

96% $28,000,000 $28,000,000 $409,386 $28,000,000 $28,000,000 $28,000,000

12%

National Average

2007

12%

$33,000 good 589 1

12%

2007 2006

1989

RN

1989

good good

589 $621,884 1

3,856

91%

1989

2007

589

0 Christian,

good

good good good

good

good

3,856

$28,000,000

589

good

good

good

$33,000

”

285

285

Partner Turnover Clinic Satisfaction Overall Clinic Satisfaction Care NumberCharitable/Uncompensated ofOverall Partners Charitable/Uncompensated Care Overall Clinic Overall Satisfaction Clinic Costs Satisfaction Overall Hospital Satisfaction Overall Hospital Number Partners NumberPartner of Partners Charitable/Uncompensated Charitable/Uncompensated Care Partner Care Overall Hospital Overall Satisfaction Hospital Satisfaction MercyCare Administrative Benefit Satisfaction Partner Turnover GrossasExpenses Administrative Costs as %Satisfaction of Ratio Budget Satisfaction Gross Administrative % of Budget of Partners CareOverall Overall Clinic Satisfaction Overall Clinic Satisfaction Number ofofOverall Partners Charitable/Uncompensated Care Overall Hospital Satisfaction Overall Hospital Satisfaction Overall Clinic Satisfaction Number Number ofCharitable/Uncompensated Partners Charitable/Uncompensated CareExpenses Overall Hospital Satisfaction

Number of Partners Partner Turnover

good

3,856

Gross Revenues Thousands Patients Treated Total Patients Treated Employed Physicians Number of Employed Physicians Number Facilities/Sites NumberNumber Facilities/Sites Number Employed Number ofPhysicians Physicians Employed Physicians Gross Revenues Thousands in Thousands TotalPatients Patients Total Treated Patients Treated Number Facilities/Sites Number of Facilities/Sites Partner Turnover Number of Partners Gross Revenues ininRevenues Thousands Number ofofFacilities/Sites Total Treated Number ofof Employed Number ofinofFacilities/Sites Total Patients Treated Gross Revenues inGross Thousands of Employed Physicians Number ofNumber Facilities/Sites Number ofofTotal Employed Physicians Total Patients Treated Gross Revenues inofThousands Clinic Satisfaction Number of Partners Charitable/Uncompensated Care Overall HospitalOverall Overall Hospital Satisfaction Charitable/Uncompensated Care Overall Clinic Satisfaction Satisfaction 63 $764,805 63 1,000,000+ 1,000,000+ $764,805 $764,805 63 63 1,000,000+1,000,000+ 63 63 1,000,000+ $764,805 1,000,000+ $764,805$764,805 63 1,000,000+ $28,000,000 96% 95.2% $28,000,000 96% 95.2%

3,856

$33,000

1989 2007

1,000,000+

Number of Facilities/Sites Number of Partners Charitable/Uncompensated Care 63 $28,000,000

3,856

good

$33,000

Gross Revenues in Thousands Number PartnersTreated TotalofPatients $764,805 1,000,000+

Number of Employed Physicians Total Patients Treated

63

1

Gross Revenues in Thousands Number of Partners $764,805

1989

$764,805

63

good

Number of Facilities/Sites Number of Employed Physicians

20% 6.65% 8% 10% good

9.93% 68.2%

9.93% good

good good

good

good good

2006 2006 2006 2006 2006 2006 WI and IL 2006 1989 2007 2006 2006 2006 2006 2006

6.65%

good good

good good

good

National Mercy Mercy NationalMercyNational Mercy National Mercy state average National National Mercy Average Average Average Average Average Average

good

2006 2006 Mercy 2006 WI and IL2006 2006 1997 2007 National Mercy Mercy Mercy state average Average National Average

Overall Partner Satisfaction Gross Expenses OverallExpenses Partner Satisfaction Gross Expenses Partner Turnover PartnerPartner Turnover Administrative Costs asExpenses % of Budget Administrative as %Ratio of Budget Overall Partner Overall Satisfaction Partner Satisfaction Gross Expenses Gross Partner Turnover Partner Turnover Administrative Costs asBudget Costs ofBudget Budget as Administrative % of Budget Costs MercyCare Administrative Benefit Administrative as % of Partner Turnover Overall Partner Satisfaction Gross Expenses Partner Turnover Overall Partner Satisfaction Gross Expenses Administrative Costs as %%of Costs asCosts % Administrative of Budget Partner Turnover Overall Satisfaction Gross MercyCare Administrative Benefit Facilities Ratio Effectiveness Accounts Receivable in Days Bond Rating Indicator Facilities Effectiveness MercyCare Administrative Benefit Ratio Accounts Receivable in Days Bond Rating Indicator

Unrated 2006 2006 1997 2007 1989 National 2006 Mercy Average

Bond Rating Indicator

“

Mercy’s commitment to McHenry County and Harvard is really apparent when you look at the new services and improved facilities they are sponsoring. What a great boost to the community.

“

Mark Hayes, Harvard resident

[ how we’ve enhanced the economy ] Enhancing the economy, creating jobs In 2006, Mercy Health System officially surpassed General Motors as the largest employer in Janesville and the surrounding area. Mercy is proud to employ 3,856 of the area’s most talented residents. But its impact as an engine of economic development goes far beyond its partners. For example, did you know that: • An additional 1,200 positions exist indirectly as a result of Mercy’s presence, and another 802 jobs exist as a result of the induced multiplier effect of dollars being spent within the local economy • Mercy Health System provides approximately $580 million in personal income to families in Wisconsin and Illinois, and another $160 million in additional income is supported by Mercy Health System in Wisconsin through the multiplier effect • Nearly $1.1 billion in annual industry sales (for health-related products and services) result from Mercy’s operations and its multiplier effect

In addition to generating jobs and income, the economic activity associated with Mercy Health System’s Wisconsin operations generates tax revenue for the State of Wisconsin and local governments through property, sales and income taxes.

“

Mercy’s growth in the community over the years has been remarkable. With over 3,800 employees it has been a huge economic asset to the City of Janesville and surrounding communities.

John Beckord, President, Forward Janesville, Inc.

[

how we’ve been

recognized

]

Honors, awards and accreditations It is a privilege to be recognized for providing excellent patient care and exceeding industry standards. Mercy Health System is honored to have received the following awards: 2006 • Ranked 18th of the Top 100 Integrated Health Networks by Verispan and Modern Healthcare magazine • AARP 2006 Best Employers for Workers Over Age 50, ranked #1 in the nation • 2006 Working Mother Top 100 Best Companies from Working Mother magazine • Commission on Cancer Outstanding Achievement Award for providing excellent care to cancer patients • Spirit of Excellence Award from Modern Healthcare magazine and Sodexho for House of Mercy Homeless Center • Medical Group Management Association’s Fred Graham Award for Innovation in Improving Community Health for House of Mercy Homeless Center • Forward Janesville Community Improvement Award for House of Mercy Homeless Center • Multiple Hospitals for a Healthy Environment (H2E) Awards, including: Environmental Leadership Award at Mercy Hospital Partners in Change Awards at Mercy Walworth Hospital and Medical Center, and Mercy Harvard Hospital • Friend of the Environment Award from Wisconsin Working Group 2005 • Top 100 Integrated Health Networks by Verispan and Modern Healthcare magazine • AARP 2005 Best Employers For Workers Over Age 50, ranked #11 in the nation • Innovative Program Award from Employee Services Management Association for excellence in employee services • Wisconsin Hospital Association’s Global Vision Award for the House of Mercy Homeless Center • Wisconsin Award for Volunteer Excellence (WAVE) for the House of Mercy Homeless Center

2004 • Top 100 Integrated Health Networks by Verispan and Modern Healthcare magazine • Governor’s Forward Award of Excellence for 2003 application, the highest honor bestowed by the Wisconsin Forward Association • Javon R. Bea named CEO/Employer of the Year by Employee Services Management Association • American Hospital Association NOVA Award finalist for effective, collaborative community health programs • California Pacific Foundation Award for Excellence in Patient Education • United Way Campaign Leadership Circle Award • Wisconsin Psychological Association Healthy Workplace Award 2003 • Top 100 Integrated Health Networks by SMG and Modern Healthcare magazine • One of four national finalists for the Foster G. McGaw Award for outstanding community service efforts • Wisconsin Forward Award Mastery Level for 2002 application • Employee Services Management Association Eastwood Award • Forward Janesville Business of the Year

Mercy has full accreditation by Joint Commission on Accreditation of Healthcare Organizations (2005-2008) National Committee for Quality Assurance--MercyCare Insurance Company received Full Accreditation with Excellence (2004-2007) Mammography Quality Assurance (2004-2007) American College of Radiology (2004-2007) Intersocietal Commission for the Accreditation of Vascular Labs (2005-2007) National Association of Sleep Programs (2005-2010) American College of Surgeons Commission on Cancer--Full accreditation with Commendations (2006-2010) American Association of Blood Banks (2004-2006) American Diabetes Association (2005-2008) Council for Graduate Medical Education (2001-2006) Wisconsin Medical Society of CME (2003-2009)

[

where we’ve

In the beginning In 1883, Dr. Henry Palmer, a gifted surgeon and astute businessman, opened Janesville’s first hospital, known as the Janesville City Hospital.

Two years later, following Dr. Palmer’s untimely death, his son Dr. William Palmer opened a larger facility, known as Palmer Memorial Hospital. In 1907, the Sisters of Mercy of Chicago purchased the hospital, and renamed it Palmer Memorial Mercy Hospital. In 1963, a new administrator, Sister Mary Michael Berry, joined Mercy, and provided direction and leadership for over two decades.

been

]

In the last two decades By the end of the 80s, Mercy Hospital was severely losing market share.

Area residents largely perceived it as a primary care hospital and drove to Madison, Milwaukee and Rockford for specialized health care services. It was then that the volunteer board of directors chose Javon R. Bea as the first lay president and CEO, and Mercy began its nationally acclaimed transformation from one stand-alone hospital to today’s vertically integrated health system with 63 facilities in 24 communities throughout southern Wisconsin and northern Illinois, with over 1,000,000 patient visits.

Mercy is always looking for ways to offer advanced yet comfortable and exceptional care services that result in healing in the broadest sense to the communities we serve.

Dean Wolanyk, MD, emergency medicine

nineteen eighty-nine

1989-1993

nineteen ninety-three

Additional facilities and services during 1989-1993 In 1989, Mercy employed its first physician, Dr. Eugene Hartlaub, and thus began its vertical integration strategy.

Mercy opened its first medical center in Evansville in 1989, followed by centers in Whitewater, Lake Geneva, Edgerton and Delavan.

In 1991, Mercy started its Family Medicine Residency Program to give newly graduated family medicine physicians experience in inpatient, outpatient, nursing home, hospice and home care settings. The program is now located at Mercy Clinic South, Janesville. To date, the program has graduated 54 family medicine physicians. In 2000, the program’s residents brought back traditional house calls to homebound patients.

1989

1989

where we’ve

1991

been

During this time, Mercy brought numerous specialty Centers of Excellence to the Janesville community, including:

Mercy Mercy Mercy Mercy

Regional Regional Regional Regional

Plastic and Reconstructive Surgery Center Cancer Center Neurosurgery Center Heart Center

1990

Since opening in 1990, the Mercy Regional Emergency Medical Services Training Center has trained and recertified more than 2,760 emergency medical technicians (EMTs) and paramedics, increasing the availability of life-saving, pre-hospital care in southern Wisconsin.

Mercy Evansville Medical Center New CT and MRI technology Southern Wisconsin Emergency Training Program Expansion of Mercy Hospital inpatient psychiatric unit Mercy Regional Plastic and Reconstructive Surgery Center WINGS (mental health treatment program) at Mercy Hospital Mercy Janesville Sports Medicine and Rehabilitation Center Mercy Regional Cancer Center Mercy Regional Neurosurgery Center Mercy Health System Family Medicine Residency Program Comprehensive Inpatient Rehabilitation Unit at Mercy Hospital Mercy Whitewater Medical Center Integration of Janesville Medical Center/Mercy Clinic East Audiology services (inpatient/outpatient) Mercy Whitewater Sports Medicine and Rehabilitation Center MercyCare Insurance Company Expansion of critical care services Mercy Lake Geneva Medical Center Mercy Edgerton Medical Center Expansion of Mercy Janesville Sports Medicine and Rehabilitation Center Comprehensive occupational medicine program Lithotripsy Mercy Delavan Medical Center Employee Assistance Program Mercy Outpatient Rehabilitation Center Diabetes education program Mercy Regional Lung Center Implementation of HBOC Billing System Mercy Regional Heart and Vascular Center Expansion of cardiology services Open heart surgery Reconstruction of Mercy Regional Emergency Medicine and Trauma Center Mercy Clinic West Mercy Women’s Health Center

nineteen ninety-four

1994-1997

nineteen ninety-seven

Additional facilities and services during 1994-1997 MercyCare Insurance Company was established in 1994. Today, MercyCare has over 30,000 members and offers several health insurance plans to employers in southern Wisconsin and northern Illinois.

Adolescent psychiatry services at Mercy Options Acquired Parkside Lodge (alcohol and drug treatment services)

Javon R. Bea noted that a growing number of emergency room patients were listing the family car as their primary address. Seeing a need for short-term emergency housing for the area’s homeless, the House of Mercy Homeless Center opened in 1996.

Since opening over a decade ago, the Center has provided shelter for over 3,500 individuals, half of whom were children.

1994

1994

Consolidation of Mercy Options mental health and addiction services Mercy Brodhead Medical Center Integration of Visiting Nurse Health Care Services Mercy Walworth Medical Center Employment of radiologists Mercy Walworth ambulatory surgery center became Medicare certified Mercy Beloit Medical Center Senior Connection Employment of emergency medicine physicians Renovation of Mercy Edgerton Medical Center

1996

Parish nurse program Mercy in Motion Expansion of Mercy Walworth Medical Center

1996

Renovation of Mercy Options at Mercy Hospital Consolidation of alcohol and drug treatment services Mercy Options Cooperative Childcare Institute

In 1994, Mercy Health System merged with the Visiting Nurse Association, now known as Mercy Assisted Care, which offers numerous home health, hospice, residential care, transportation, and durable medical equipment services to the community.

The opening of Mercy Harvard Clinic South in 1996 signaled Mercy’s growth into Illinois. Three years later, a multi-specialty clinic, complete with a pharmacy, ambulatory surgery area and immediate care clinic, was opened in Woodstock. Other Illinois clinics opened in the 90s including Mercy Barrington, Mercy Cary and Mercy Richmond.

Employment of anesthesiologists Mercy Harvard Clinic South House of Mercy Homeless Center Consolidation of Mercy Options at Franklin Street Expansion of Mercy Beloit Medical Center Acquisition of Beverly Pharmacy at Mercy Clinic East Mercy Milton Pharmacy Mercy Crystal Lake Pediatrics Mercy Clinic West pharmacy Renovation of Mercy Oncology/Hematology Center

nineteen ninety-eight

1998-2000 two thousand

Additional facilities and services during 1998-2000 The Mercy Regional Breast Center opened in 2000 to provide a full array of services that help create a healthy quality of life for women of all ages. These services include mammograms, breast ultrasound, breast MRI, stereotactic breast biopsy, bone density screenings, and assessments and referrals.

During this time, Mercy also added a dozen new services and clinics, including LASIK laser vision correction, intra-cranial thrombolysis treatment, additional CT and MRI services in Woodstock, and the opening of Mercy Richmond, Mercy Milton, Men’s Health Center, Treatment Coordination Center, Regional Dialysis Center, Pain Center, vascular surgery program and Regional Urology Center.

Mercy Men’s Health Center Renovation of physical/occupational therapy departments Mercy Walworth Sports Medicine and Rehabilitation Center Construction of twin cardiac catheterization labs Mercy Occupational Conditioning Center renovation New Transitional Work Program Sports Medicine Fellowship Program Angiography suite enhancements Mercy Health Mall expansion Mercy Barrington Medical Center Mobile MRI services at Mercy Walworth Medical Center Vascular surgery program

2000

2000 1998

Mercy Richmond Medical Center

Installation of Sieman’s Symphony MRI at Mercy Hospital Renovation of Cardiac Rehabilitation Center MercyCare offered as health plan to General Motors employees

2000

Mercy Assisted Care Treatment Coordination Center Mercy Business Center

In 1998, the Mercy Health Mall, a unique health and wellness superstore, opened. Today the Mall offers a vision center, pharmacy, urgent care, occupational medicine and conditioning, durable medical equipment, a cardiac rehabilitation and fitness center, complementary medicine, community education classes, physician clinic, Mercy Diabetes Center, Coffee Creations, and Senior Connection, a free service for adults aged 55 and older.

This time period saw advances in technology at Mercy including twin state-of-the-art catheterization labs, angiographic suite enhancements, mobile MRI services at Mercy Walworth, Mercy Woodstock and Mercy Harvard Hospital, and the installation of a new MRI unit at Mercy Hospital.

Mercy Milton Medical Center Mercy Woodstock Medical Center Mercy Regional Dialysis Center Mercy Crystal Lake Medical Center-West Inpatient acute dialysis services CT at Mercy Woodstock MRI at Mercy Woodstock Mercy Regional Breast Center Pain Center at Mercy Clinic West Installation of the HillRom Nursing/Patient Communication System Inpatient massage therapy services for obstetrics patients LASIK services at Mercy Hospital and Mercy Woodstock Mercy Regional Urology Center Intra-cranial thrombolysis

two thousand one

2001-2003 two thousand three

Additional facilities and services during 2001-2003 Mercy welcomed Harvard Memorial Hospital and its affiliates into its family in 2003. The 77-bed acute care hospital acquired a new name, Mercy Harvard Hospital, and offered local residents a new level of care, with medical specialties previously unavailable in the Harvard, Illinois area. A multi-million dollar renovation and remodeling of Mercy Harvard Hospital and the adjacent Mercy Harvard Hospital Clinic included larger, state-of-the-art surgical suites, an expanded laboratory, a restructured emergency room, an enlarged conference center and much more.

The Mercy Acceleration Sports Training Program, based on the internationally acclaimed Frappier Acceleration® program, is a unique and innovative conditioning program designed to optimize an athlete’s strength, speed, power and agility.

The Center trains athletes ages 13 through adult.

2001 2001

2003 2003

In 2001, Mercy opened Wisconsin’s first satellite emergency department at Mercy Walworth Medical Center in Lake Geneva, WI.

In 2003, Mercy formed a partnership with the City of Whitewater and the Whitewater School District to bring the Mercy Fitness and Whitewater Aquatic Center to area residents. The facility holds a 30,000-square-foot indoor waterpark with a separate lap pool. Mercy then built a 6,000-square-foot fitness center, fully outfitted with strength training and aerobic equipment, which hosts exercise and community education classes for all ages.

Mercy Algonquin Medical Center Renovation of Treatment Coordination Center OPCAB (off-pump coronary artery bypass) surgery StealthStation Surgery Guidance System at Mercy Hospital Mercy Walworth satellite emergency department Mercy Acceleration Sports Training Program Renovation of Mercy Sports Medicine and Rehabilitation Center Bispectral Index Monitor (BIS) for anesthesiology at Mercy Hospital PET scanning (mobile services) Inpatient medical service (hospitalist) program Expansion of Mercy Walworth Medical Center Mercy Walworth Rehabilitation Center relocated to Mercy Walworth Medical Center Mercy Barrington ENT/Plastic Surgery Medical Center Mercy Crystal Lake Medical Center-East Mercy McHenry Medical Center Electronic claims processing Rehabilitation services at Mercy Woodstock and Mercy Brodhead Mercy Walworth heliport Mercy Sharon Medical Center Mercy Harvard Sleep Disorders Laboratory Mercy Harvard Care Center Mercy Bariatric Center Mercy Harvard Rehabilitation and Fitness Center Information systems upgrade of network infrastructure Coronary artery screening at Mercy Walworth Mercy Regional Sleep Disorder Center Piloting of computer kiosks Healthy Family Program Mercy Travel Clinic Health Services Academy Physiatry clinic outreach to Mercy Walworth Stress lab at Mercy Walworth Newborn infant security system installation at Mercy Hospital Software Refill Telemanager System for all Mercy pharmacies Indigo Laser at Mercy Men’s Health Center for prostate treatment Renovation of Cardiac Rehabilitation Center Lower level Mercy Delavan renovation Whitewater Aquatic Center partnership Renovation of Occupational Conditioning Center Mercy McHenry Occupational Medicine Sensation 16 multi-row CT scanner at Mercy Hospital Sports medicine outreach services at Harvard High School Donation of Mercy Lodge to Family Services of S. WI and N. IL Expansion of Mercy Walworth Occupational medicine at Mercy Woodstock Post-operative epidural pain service Renovations of cardiology ECHO at Mercy Hospital Renovation of Mercy Regional Plastic Surgery Center Mercy Harvard Hospital

two thousand four

2004-2007 two thousand seven

Additional facilities and services during 2004-2007

Since 2004, Illinois residents saw seven new Mercy clinics open: • • • • • • •

Mercy Crystal Lake OB/GYN Mercy Bariatric Wellness Center in Vernon Hills Mercy Fox River Grove Medical Center Mercy Northwest Women’s Group in Lake in the Hills Mercy Harvard Clinic North Mercy McHenry Medical Center Mercy Centers for Corrective Eye Surgery

2004

In 2006, the Mercy Regional Neurosurgery Center became part of the Mercy Institute of Neuroscience. Using a multi-disciplinary approach to diagnosis and treatment, the MIND team specializes in complex neurological and neurosurgical problems of the brain and spine.

2006

2006

2004

In 2006, Mercy Walworth Medical Center became Mercy Walworth Hospital and Medical Center. The transformation of Mercy Walworth from an outpatient center to a licensed hospital facility fulfills our ongoing commitment to bring much-needed hospital care closer to the thousands of residents of Walworth County and the Southern Lakes area.

2006

The radiation therapy department of the Mercy Regional Cancer Center acquired its newest weapon for its war on cancer—the amazing PRIMATOM radiation therapy delivery system—in 2004. This digital, three-dimensional system, the only one of its kind in the Midwest and one of only eight in the country, enables radiation oncologists to more precisely target and attack malignant tumors with higher doses of radiation, while minimizing damage to nearby healthy cells. Mercy also constructed a 20,000-square-foot addition to the Cancer Center to house the new system.

Mercy acquired a Siemens® mobile MRI unit that travels between Mercy facilities in Janesville, Walworth, Harvard and Woodstock, bringing state-ofthe-art imaging technology closer to home for many individuals. This new magnetic resonance imaging technology allows for improved image resolution, leading to more accurate diagnoses.

Mercy Crystal Lake OB/GYN Renovations at Mercy Clinic South CT wellness screening Stride for Health mall walking program at Janesville Mall Mercy Harvard Hospital lab renovation Valet service at Mercy Hospital High-dose rate brachytherapy at the Mercy Regional Cancer Center VNUS closure radiofrequency ablation of veins procedure Renovations at Mercy Clinic East Mercy McHenry Medical Center Critical access hospital status at Mercy Harvard Hospital Mercy Center for Corrective Eye Surgery in McHenry Mohs micrographic surgery (skin cancer treatment) at Mercy Walworth Mercy Mall Clinic chiropractic services Occupational medicine at Mercy Harvard Clinic South Expansion of urgent care hours at Mercy Clinic South (weeknights) Renovation of Mercy Regional Lung Center at Mercy Assisted Care Expansion of Mercy Regional Sleep Disorders Center Mercy Fox River Grove Medical Center Mercy Northwest Women’s Group Renovation of radiation oncology at Mercy Hospital Mercy Harvard Hospital operating room renovation Peri-operative computerized documentation system Mercy Harvard Hospital emergency department renovation Mercy Harvard Hospital ambulatory surgery renovation Mercy Bariatric Wellness Center-Vernon Hills Mercy Terrace Mercy Harvard Clinic North Mercy Harvard Hospital vascular program Mercy Institute of Neuroscience Mail order pharmacy services at Mercy Milton Renovation of hematology/oncology at Mercy Hospital Expansion of Mercy Woodstock Medical Center Mercy Walworth Hospital and Medical Center critical access status Mobile MRI Radiofrequency vein ablation procedure at Mercy Harvard Hospital PiGalileo computer-assisted orthopaedic surgery system Mercy Hospital emergency department waiting room renovation Mercy Hospital cafeteria renovation Mercy Woodstock Orthotic Center Easy compression system (ECS) mammography at Mercy Harvard Hospital Mercy Crystal Lake East expansion Mercy Assisted Care telemonitoring equipment for home health monitoring Mercy Lakeside Orthopaedics Mercy In Motion services in Illinois Janesville Geriatric Assessment Center Partnership with Community Health Center, Inc. Mercy Harvard Hospital cafeteria renovation Renovation of nursing services office Renovation of Mercy Clinic East urgent care Renovation of Mercy Health Mall Expansion of Mercy Cardiac Fitness Center Renovation of Mercy Pain Center Mercy Orthotics and Prosthetics Center at Mercy Beloit and Mercy Woodstock 30-minute service commitment at all urgent/immediate care clinics

“

“

The outstanding work ethic of Mercy partners is infectious.

Jacob Gerzenshtein, MD, plastic surgeon

[

where we’re

At Mercy Health System, our future efforts focus on your improved health and well being.

We constantly add new technology and new medical specialties and services, renovate existing facilities, expand into underserved communities, and seek new opportunities for improvement to serve you better.

going

]

•

In response to identified community needs in northern Illinois, we continue to expand services.

•

We continue to expand specialty and surgical services at Mercy Harvard Hospital as needs are identified.

•

We continue our implementation of our physician clinic electronic medical record (EMR) program across the System to improve communication and sharing of patient records between physicians and clinics.

•

Mercy’s Web site, MercyHealthSystem.org, is being upgraded to provide the latest in web portal technology and interactivity for all users. The web site will provide extensive health information, including Mercy’s screenings, classes and much more.

As part of our growth, we have many exciting plans: •

For moms and dads, we’re promoting family-centered maternity care by creating new home-like patient rooms at the New Generations obstetrical unit at Mercy Hospital.

•

Patient access to services will be easier as we move Mercy Hospital’s newly expanded laboratory to the ground floor.

•

To provide expanded services to our patients, Mercy Hospital’s outpatient surgery center will double in size and be outfitted with the latest technology.

•

In response to your feedback, we’re expanding the Mercy Milton Medical Center to include more physicians as well as physical and occupational therapy services.

To expand our world-class cancer care, we’re upgrading our computerized tomography simulation equipment at the Mercy Regional Cancer Center.

•

Building on our successful Janesville Community Health Center model at Mercy Clinic South in Janesville, we continue to create community partnerships to bring vital health care services to all residents, regardless of income or resources.

•

•

•

For greater patient comfort and privacy, we’re relocating the Mercy Pain Center at Mercy Hospital to the ground floor.

In response to community feedback, we added inpatient services to the Mercy Walworth Hospital and Medical Center, and will add a new inpatient bed tower.

We value your opinions and suggestions. It’s through listening to your thoughtful feedback that we learn and move forward to create a health system that best serves your family. Thank you for your continued support of Mercy Health System.

mapping our

“

growth Mercy Hospital

(Walworth Mercy Facility) Walworth

Hospital & Medical Center

Janesville

MERCY1989 HEALTH SYSTEM 1 facility Signifies a location with a Health System facility.

1 Mercy community

Member of the Mercy Alliance, Inc.

Janesville

MERCY2007 HEALTH SYSTEM 63 facilities Signifies a location with a Health System facility.

24 Mercy communities

Member of the Mercy Alliance, Inc.

The quality of care I received before, during and after my surgery was nothing short of exceptional.

Theresa Bodnar, Mercy patient

Mercy Harvard Hospital

I give Mercy straight A’s. The staff at Mercy is great.

Dan Peters, Mercy patient

”