Form990
Click to see attachment
Department of the Treasury
Internal Revenue Service
Return of Organization Exempt From Income Tax
Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except black lung benefit trust or private foundation)

MediumBullet The organization may have to use a copy of this return to satisfy state reporting requirements.
OMB No. 1545-0047
2010
Open to Public Inspection
A For the calendar year, or tax year beginning 01-01-2010 and ending 12-31-2010
BCheck if applicable:
CName of organization
PHYSICIANS HEALTH NETWORK
 
Doing Business As
 
 
Number and street (or P.O. box if mail is not delivered to street address)
PO BOX 30377
 
Room/suite
City or town, state or country, and ZIP + 4
LANSING, MI48909
D Employer identification number

38-2594856
E Telephone number

G Gross receipts $ 192,886,491
F Name and address of principal officer:
DENNIS SWAN
1215 E MICHIGAN AVE
LANSING,MI48912
I
Tax-exempt status: ( 4 ) LeftBullet (insert no.) or
J
Website:MediumBullet
WWW.PHPMM.ORG
H(a)
Is this a group return for
affiliates?
H(b)
Are all affiliates included?
If "No," attach a list. (see instructions)
H(c)
Group exemption number MediumBullet  
K Form of organization:
 
L Year of formation: 1985
M State of legal domicile: MI
Part I
Summary
Activities & Governance 1 Briefly describe the organization’s mission or most significant activities: PHYSICIANS HEALTH NETWORK'S MISSION IS TO IMPROVE THE HEALTH STATUS OF ITS MEMBERS BY FACILITATING QUALITY, COMPASSIONATE, ACCESSIBLE, COST EFFECTIVE HEALTHCARE.
2 Check this box MediumBullet
3 Number of voting members of the governing body (Part VI, line 1a) .... 3 11
4 Number of independent voting members of the governing body (Part VI, line 1b) .... 4 8
5 Total number of individuals employed in calendar year 2010 (Part V, line 2a) ... 5 0
6 Total number of volunteers (estimate if necessary) .... 6  
7a Total unrelated business revenue from Part VIII, column (C), line 12 .. 7a 0
b Net unrelated business taxable income from Form 990-T, line 34 .. 7b  
Revenues; Prior Year Current Year
8 Contributions and grants (Part VIII, line 1h) .........   0
9 Program service revenue (Part VIII, line 2g) ......... 196,075,711 188,895,311
10 Investment income (Part VIII, column (A), lines 3, 4, and 7d ) .... -1,806,728 391,102
11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e)   0
12 Total revenue—add lines 8 through 11 (must equal Part VIII, column (A), line 12)................... 194,268,983 189,286,413
Expenses; 13 Grants and similar amounts paid (Part IX, column (A), lines 1–3 )...   0
14 Benefits paid to or for members (Part IX, column (A), line 4) .... 199,569,028 179,060,145
15 Salaries, other compensation, employee benefits (Part IX, column (A), lines 5–10)   0
16a Professional fundraising fees (Part IX, column (A), line 11e)....   0
b Total fundraising expenses (Part IX, column (D), line 25) MediumBullet0    
17 Other expenses (Part IX, column (A), lines 11a–11d, 11f–24f).... 12,509 5,930
18 Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25) 199,581,537 179,066,075
19 Revenue less expenses. Subtract line 18 from line 12...... -5,312,554 10,220,338
Net Assets or Fund Balances; Beginning of Current Year End of Year
20 Total assets (Part X, line 16)............ 1,464,646 11,858,594
21 Total liabilities (Part X, line 26)............   0
22 Net assets or fund balances. Subtract line 21 from line 20 ..... 1,464,646 11,858,594
Part II
Signature Block
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than officer) is based on all information of which preparer has any knowledge.
Sign Here
JumboBullet
Signature of officer Date
JumboBullet
Type or print name and title.
Paid Preparer's Use Only Preparer's
signatureBig Right Arrow 		Date
right pointing bullet image Preparer’s taxpayer identification number
(see instructions)
Firm’s name (or yours
if self-employed),
address, and ZIP + 4Big Right Arrow




 		EIN right pointing bullet image
Phone no. right pointing bullet image
May the IRS discuss this return with the preparer shown above? (see instructions) .........
For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions.
Cat. No. 11282Y
Form 990 (2010)
Form 990 (2010)
Page 2
Part III
Statement of Program Service Accomplishments
Check if Schedule O contains a response to any question in this Part III . . . . . . . . . .
1
Briefly describe the organization’s mission: PHYSICIANS HEALTH NETWORK'S MISSION IS TO IMPROVE THE HEALTH STATUS OF ITS MEMBERS BY FACILITATING QUALITY, COMPASSIONATE, ACCESSIBLE, COST EFFECTIVE HEALTHCARE.
2
Did the organization undertake any significant program services during the year which were not listed on
the prior Form 990 or 990-EZ? ....................
If “Yes,” describe these new services on Schedule O.
3
Did the organization cease conducting, or make significant changes in how it conducts, any program services? ..........................
If “Yes,” describe these changes on Schedule O.
4
Describe the exempt purpose achievements for each of the organization’s three largest program services by expenses.
Section 501(c)(3) and 501(c)(4) organizations and section 4947(a)(1) trusts are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported.
4a (Code:   ) (Expenses $ 179,060,145 including grants of $   ) (Revenue $ 188,895,311 )
PHYSICIANS HEALTH NETWORK (PHN) IS A NON-PROFIT HEALTH DELIVERY NETWORK (HDN). IN CONJUNCTION WITH ITS SISTER CORPORATIONS, PHYSICIANS HEALTH PLAN OF MID-MICHIGAN (PHPMM) AND PHYSICIANS HEALTH PLAN OF MID-MICHIGAN - FAMILYCARE (PHPMM-FC), HEALTHCARE SERVICES ARE DELIVERED TO ITS MEMBERS USING A PRIMARY CARE CONCEPT IN AN HDN STRUCTURE. PHPMM AND PHPMM-FC ARE LICENSED HEALTH MAINTENANCE ORGANIZATIONS (HMO), EXEMPT FROM FEDERAL INCOME TAXES UNDER IRS CODE SECTION 501(C)(4), AND AS SUCH ARRANGE FOR THE PROVISION OF COMPREHENSIVE OUTPATIENT AND INPATIENT MEDICAL AND SURGICAL SERVICES TO MEMBERS AND THEIR QUALIFIED DEPENDENTS ON THE BASIS OF A FIXED PREPAID SUM WITHOUT REGARD TO THE FREQUENCY OR EXTENT OF SERVICES FURNISHED TO ANY PARTICULAR MEMBER OR QUALIFIED DEPENDENT. PHPMM AND PHPMM-FC CONTRACT WITH PHN TO PROVIDE A PANEL OF HEALTHCARE PROVIDERS TO DELIVER THE HEALTHCARE SERVICES. PHN, PHPMM, AND PHPMM-FC ARE COMMITTED TO THE DEVELOPMENT AND DELIVERY OF QUALITY MANAGED CARE PRODUCTS AT A REASONABLE COST FOR THEIR MEMBERS. PHPMM AND PHPMM-FC'S SUCCESS IN MANAGING HEALTHCARE IS DUE IN PART TO THE EXTENSIVE NETWORK OF PARTICIPATING PROVIDERS IN PHN. THE HMO/HDN CONTRACTUAL ARRANGEMENT ALLOWS PHPMM AND PHPMM-FC TO ARRANGE FOR HEALTHCARE TO PATIENTS COVERED BY PHPMM'S AND PHPMM-FC'S BENEFIT PLAN. THIS ALLOWS THE MEMBERS TO ACCESS A WIDE VARIETY OF INDEPENDENT PROVIDERS WITHIN THE HDN INCLUDING PHYSICIANS, HOSPITALS, PHARMACIES, SKILLED NURSING FACILITIES, AND ALLIED HEALTH PROFESSIONALS. PHPMM AND PHPMM-FC MEMBERS MAY ALSO RECEIVE CARE FOR SERVICES FROM A NONPARTICIPATING PROVIDER IF SUCH A REFERRAL IS RECOMMENDED BY A PHN PARTICIPATING PHYSICIAN AND IF THE SERVICE REQUIRED FOR TREATMENT, AS DETERMINED BY PHN, IS NOT AVAILABLE WITHIN PHN'S NETWORK. PHPMM AND PHPMM-FC OFFER A VARIETY OF HEALTHCARE PROGRAMS, OR PRODUCTS, TO GROUPS AND INDIVIDUALS. PHPMM AND PHPMM-FC OFFER CHOICES THAT PROVIDE COVERAGE WITHIN THE PHN NETWORK OF CONTRACTED PROVIDERS, LIMITED COVERAGE OUTSIDE OF THE PHPMM AND PHPMM-FC NETWORK, VARIOUS LEVELS OF DEDUCTIBLES, CO-PAYMENTS, AND COVERAGE LIMITS, ALL OF WHICH ARE DESIGNED TO BE RESPONSIVE TO PAYOR NEEDS. PHYSICIAN HEALTH NETWORK AND PHYSICIANS HEALTH PLAN OF MID-MICHIGAN ARE WHOLLY OWNED BY SPARROW HEALTH SYSTEM. PHPMM CONSISTS OF A COMMERCIAL HMO CALLED PHYSICIANS HEALTH PLAN OF MID-MICHIGAN (PHPMM), A COMMERCIAL INSURANCE COMPANY (PHPMM-IC), AND A MEDICAID HEALTH PLAN THAT OPERATES THROUGH A SEPARATE CORPORATION. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN FAMILYCARE (PHPMM-FC) IS ALSO A LICENSED HMO AND A WHOLLY OWNED SUBSIDIARY OF PHPMM. ALL STAFFING FUNCTIONS AND REPORTING ARE ACCOMPLISHED THROUGH THE USE OF THE SAME STAFF AS PHPMM. UNLESS SPECIFICALLY NOTED, ALL REFERENCES TO PHPMM APPLY TO PHPMM-IC, AND PHPMM-FC AND ALL REFERENCES TO PHP INCLUDE THE ENTIRE PHP AFFILIATED GROUP OF PHPMM AND PHN. PHPMM'S SERVICE AREA INCLUDES THE MICHIGAN COUNTIES OF INGHAM, EATON, CLINTON, SHIAWASSEE, GRATIOT, IONIA, MONTCALM AND ISABELLA. PHPMM-IC OFFERS PRODUCTS ACROSS MICHIGAN. THE FAMILYCARE PRODUCT IS AVAILABLE TO MEDICAID ENROLLEES IN EATON, CLINTON, INGHAM, IONIA, MONTCALM AND SHIAWASSEE COUNTIES. AS OF DECEMBER 31, 2010, THERE WERE 35,129 ENROLLEES IN PHPMM'S COMMERCIAL HMO, 12,208 IN TPA, 2,993 IN PHP-IC, AND 18,789 ENROLLEES IN FAMILYCARE. PHP CONTRACTS DIRECTLY WITH 719 PRIMARY CARE PHYSICIANS, 1269 SPECIALTY CARE PHYSICIANS, 365 ALLIED HEALTH PROFESSIONALS, AND 308 ORGANIZATIONAL PROVIDERS THAT INCLUDE 29 HOSPITALS. PHP WAS ALSO RANKED AMONG THE TOP 50 OF AMERICA'S BEST HEALTH PLANS BY U.S. NEWS AND WORLD REPORT/CONSUMER REPORTS FOR THE 5TH CONSECUTIVE YEAR. NCQA USES AN ALGORITHM COMPOSED OF HEDIS, CAHPS AND ACCREDITATION SCORING TO CREATE THESE NATIONAL RANKINGS. THE GOAL OF THE QUALITY IMPROVEMENT PROGRAM IS TO CONTINUOUSLY IMPROVE HEALTH OUTCOMES AND LEVEL OF SERVICE PROVIDED TO ENROLLEES. PHPMM PURSUES ITS GOALS THROUGH IMPLEMENTATION OF THE QUALITY IMPROVEMENT MODEL: -MEASUREMENT OF THE OUTCOMES OF CARE AND SERVICE, INCLUDING BEHAVIORAL HEALTH SERVICES. -ANALYSIS OF BARRIERS TO CARE AND SERVICE. -DEVELOPMENT AND IMPLEMENTATION OF INTERVENTIONS. -FORMAL EVALUATION OF THE EFFECTIVENESS OF THE INTERVENTIONS. PHP MEASURES THE QUALITY OF CARE PROVIDED TO ITS ENROLLEES THROUGH ANNUAL REVIEW OF INDICATORS SUCH AS: -DISEASE MANAGEMENT PROGRAM PARTICIPATION. -QUALITY OF CARE CONCERNS. -HEDIS MEASURES - THE HEALTH PLAN EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) IS A GROUP OF NATIONALLY RECOGNIZED MEASURES OF PERFORMANCE IN A VARIETY OF CLINICAL AND NON-CLINICAL AREAS. PHPMM USES THE EFFECTIVENESS OF CARE MEASURES TO DETERMINE PROGRESS AND IMPROVEMENT IN AREAS SUCH AS: -DIABETES. -ASTHMA. -DEPRESSION AND FOLLOW-UP AFTER MENTAL HEALTH ADMISSIONS. -BREAST AND CERVICAL CANCER SCREENING. -USE OF BETA-BLOCKERS AFTER HEART ATTACKS. -CHILD AND ADOLESCENT IMMUNIZATIONS. -CHOLESTEROL MANAGEMENT. -CONTROLLING HIGH BLOOD PRESSURE. -SMOKING CESSATION. -PRENATAL AND POSTPARTUM CARE. -TREATMENT OF CHILDHOOD RESPIRATORY INFECTIONS. PHP MEASURES THE QUALITY OF SERVICE PROVIDED TO ITS ENROLLEES BY THE REVIEW OF PERFORMANCE MEASURES RELATED TO: -ACCESS AND AVAILABILITY. -ENROLLEE COMPLAINTS AND APPEALS. -CUSTOMER SERVICE TELEPHONE ACCESS PERFORMANCE. -MEMBER ASSESSMENT: THE CONSUMER ASSESSMENT OF HEALTHCARE PROVIDERS AND SYSTEMS (CAHPS) SURVEY GIVES A GENERAL INDICATION OF HOW WELL THE ORGANIZATION MEETS MEMBERS' EXPECTATIONS. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN RECEIVED THE HIGHEST RATING OF "EXCELLENT" FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA). THIS STATUS IS GRANTED TO HEALTH CARE PLANS THAT HAVE DEMONSTRATED CONTINUOUS QUALITY IMPROVEMENT IN THEIR PROGRAMS WHILE MEETING OR EXCEEDING NCQA'S RIGOROUS ACCREDITATION STANDARDS. PHP FAMILY CARE RECEIVED A COMMENDABLE RATING. PHPMM AND PHPMM-FC WERE REVIEWED BY NCQA IN 2009. THE SERVICE EXCELLENCE PROGRAM HAS A MISSION OF: PROVIDING FOCUSED LEADERSHIP TO CREATE AND MAINTAIN A CULTURE OF WORLD CLASS CUSTOMER SATISFACTION. IN 2010 PHPMM WAS RANKED ABOVE THE 90TH PERCENTILE IN SATISFACTION WITH CUSTOMER SERVICE AND WAS THE HIGHEST RANKED HEALTH PLAN IN MICHIGAN. THIS WAS YEAR FOUR OF A HIGHLY STRUCTURED AND GOAL ORIENTED APPROACH TO MEMBER SATISFACTION AND EMPLOYEE ENGAGEMENT. THE PROGRAM IS A "TOP DOWN BOTTOM UP" APPROACH TO CHANGING THE CULTURE OF SERVICE. SERVICE EXCELLENCE ADVISORS ARE FRONT LINE STAFF TRAINED TO PRESENT A TWO HOUR CLASS TO ALL ASSOCIATES IN THE HEALTH PLAN. THE BOOK A COMPLAINT IS A GIFT BY JANELLE BARLOW WAS THE BASIS FOR THE 2010 TRAINING. -CAPITALIZING ON COMPLAINTS -HOW TO SAY NO AND REMAIN FRIENDS -BUILDING A CUSTOMER TOLERANCE ZONE -THE GIFT FORMULA OUR 2010 CAHPS SCORES FOR THE COMMERCIAL PRODUCT RESULTED IN A RANKING OF 1 IN MICHIGAN FOR CUSTOMER SERVICE AND 4 FOR THE OVERALL HEALTH PLAN RANKING. NATIONALLY, PHPMM'S COMMERCIAL PRODUCT WAS RANKED 40TH FOR OVERALL HEALTH PLAN RANKING. CUSTOMER SATISFACTION AND ASSOCIATE ENGAGEMENT ARE CLOSELY RELATED. WEBSTER DEFINES ENGAGEMENT AS "EMOTIONAL INVOLVEMENT OR COMMITMENT." EVERY CUSTOMER WANTS SOMEONE TO PARTNER WITH THEM, TO SHOW CONCERN AND BE COMMITTED TO THEIR ISSUE AT HAND. MAINTAINING AN ENGAGED WORKFORCE IS THE FOUNDATION FOR DELIVERING COMPASSIONATE AND EXCEPTIONAL SERVICE. PHP PARTICIPATES IN A HEALTH SYSTEM WIDE ANNUAL ASSOCIATE ENGAGEMENT SURVEY CONDUCTED BY KENEXA. THE NATIONALLY RECOGNIZED SURVEY MEASURES ELEVEN DIMENSIONS OF THE WORKFORCE AND PROVIDES REPORTS TO DEPARTMENT TEAMS. THE 2010 SURVEY REPORTED PHP ASSOCIATE ENGAGEMENT LEVEL IN THE 93RD PERCENTILE. FOLLOWING THE ANNUAL SURVEY, PHP INVITES ALL ASSOCIATES TO PARTICIPATE IN GROUP DISCUSSIONS LED BY FRONT LINE STAFF WHERE RESULTS ARE REVIEWED AND IDEAS FOR IMPROVEMENT ARE WELCOMED. TEAMS MAKE RECOMMENDATIONS, THE BEST OF WHICH ARE IMPLEMENTED. OVER THE YEARS, CHANGES HAVE OCCURRED THAT HAVE BECOME PART OF THE PHP WAY OF DOING BUSINESS. SOME OF THOSE INCLUDE: CROSS FUNCTIONAL COMMUNICATION TEAMS, MONTHLY ALL STAFF MEETING UPDATES, ENHANCED ON-LINE ACCESS TO INFORMATION, NEW APPROACHES TO TRAINING, IMPROVED REFERENCE RESOURCES AND MANY MORE. COMMITMENT AND INVOLVEMENT DESCRIBE OUR EXPECTATION FOR STAFF. MAINTAINING A HIGH LEVEL OF ASSOCIATE ENGAGEMENT IS A VERY IMPORTANT PART OF PHP'S DEDICATED EFFORT TO PROVIDE OUTSTANDING SERVICE AND TO ACHIEVE NATIONAL RANKINGS IN OVERALL CUSTOMER SATISFACTION. PROCESS IMPROVEMENTS DESIGNED TO ENSURE THAT PHP MAXIMIZED THE AUTOMATED CAPABILITIES OF ITS CLAIMS PAYMENT SYSTEM WERE THE FOCUS FOR THE INFORMATION TECHNOLOGY DEPARTMENT. AS A RESULT OF THESE EFFORTS, PHP EXPERIENCED EXCELLENT ELECTRONIC DATA INTERCHANGE (EDI) AND AUTO-ADJUDICATION RATES AS WELL AS A REDUCTION IN CLAIM TURNAROUND TIME. PHP ENDED 2010 WITH AN AUTO ADJUDICATION RATE OF 76%, AND AN EDI RATE OF 92%. DAYS RECEIPT ON HAND OF CLAIMS WAS REDUCED FROM 2.4 TO 1.96. MAJOR INITIATIVES: -COMPLETED IMPLEMENTATION OF MENTAL HEALTH PARITY LEGISLATION. -DETERMINED PRODUCT DIRECTION NECESSARY TO SUPPORT HEALTH CARE REFORM LEGISLATION. -
4b (Code:   ) (Expenses $   including grants of $   ) (Revenue $   )
4c (Code:   ) (Expenses $   including grants of $   ) (Revenue $   )
4d Other program services. (Describe in Schedule O.)
(Expenses $   including grants of $   ) (Revenue $   )
4e Total program service expensesMediumBullet$ 179,060,145
Form 990 (2010)
Form 990 (2010)
Page 3
Part IV
Checklist of Required Schedules
Yes
No
1
Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? If “Yes,” complete Schedule A.....................
1
 
No
2
Is the organization required to complete Schedule B, Schedule of Contributors? ........
2
 
No
3
Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If “Yes,” complete Schedule C, Part I..........
3
 
No
4
Section 501(c)(3) organizations. Did the organization engage in lobbying activities? If “Yes,” complete Schedule C,
Part II.........................
4
 
 
5
Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Revenue Procedure 98-19? If “Yes,” complete Schedule C, Part III........................
5
 
No
6
Did the organization maintain any donor advised funds or any similar funds or accounts where donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? If “Yes,” complete
Schedule D, Part IClick to see attachment.......................
6
 
No
7
Did the organization receive or hold a conservation easement, including easements to preserve open space,
the environment, historic land areas or historic structures? If “Yes,” complete Schedule D, Part IIClick to see attachment...
7
 
No
8
Did the organization maintain collections of works of art, historical treasures, or other similar assets? If “Yes,” complete Schedule D, Part III Click to see attachment....................
8
 
No
9
Did the organization report an amount in Part X, line 21; serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? If “Yes,”
complete Schedule D, Part IVClick to see attachment...................
9
 
No
10
Did the organization, directly or through a related organization, hold assets in term, permanent,or quasi-endowments? If “Yes,” complete Schedule D, Part VClick to see attachment
10
Yes
 
11
If the organization’s answer to any of the following questions is ‘Yes,’ then complete Schedule D, Parts VI, VII, VIII, IX, or X as applicable:
a
Did the organization report an amount for land, buildings, and equipment in Part X, line10? If “Yes,” complete Schedule D, Part VI.Click to see attachment
11a
 
No
b
Did the organization report an amount for investments—other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X, line 16? If “Yes,” complete Schedule D, Part VII.Click to see attachment
11b
 
No
c
Did the organization report an amount for investments—program related in Part X, line 13 that is 5% or more of its total assets reported in Part X, line 16? If “Yes,” complete Schedule D, Part VIII.Click to see attachment
11c
 
No
d
Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? If “Yes,” complete Schedule D, Part IX.Click to see attachment
11d
Yes
 
e
Did the organization report an amount for other liabilities in Part X, line 25? If “Yes,” complete Schedule D, Part X.Click to see attachment
11e
 
No
f
Did the organization’s separate or consolidated financial statements for the tax year include a footnote that addresses the organization’s liability for uncertain tax positions under FIN 48 (ASC 740)? If “Yes,” complete Schedule D, Part X.Click to see attachment
11f
 
No
12a
Did the organization obtain separate, independent audited financial statements for the tax year? If “Yes,” complete Schedule D, Parts XI, XII, and XIII Click to see attachment
12a
 
No
b
Was the organization included in consolidated, independent audited financial statements for the tax year? If “Yes,” and if the organization answered ‘No’ to line 12a, then completing Schedule D, Parts XI, XII, and XIII is optional Click to see attachment
12b
Yes
 
13
Is the organization a school described in section 170(b)(1)(A)(ii)? If “Yes,” complete Schedule E
13
 
No
14a
Did the organization maintain an office, employees, or agents outside of the United States?....
14a
 
No
b
Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, and program service activities outside the United States? If “Yes,” complete Schedule F, Part I.........
14b
 
No
15
Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or assistance to any organization or entity located outside the U.S.? If “Yes,” complete Schedule F, Part II..
15
 
No
16
Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or assistance to individuals located outside the U.S.? If “Yes,” complete Schedule F, Part III..
16
 
No
17
Did the organization report a total of more than $15,000, of expenses for professional fundraising services on Part IX, column (A), lines 6 and 11e? If “Yes,” complete Schedule G, Part I
17
 
No
18
Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines 1c and 8a? If “Yes,” complete Schedule G, Part II..........
18
 
No
19
Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? If “Yes,” complete Schedule G, Part III...................
19
 
No
Form 990 (2010)
Form 990 (2010)
Page 4
Part IV
Checklist of Required Schedules (continued)
20a
Did the organization operate one or more hospitals? If “Yes,” complete Schedule H.....
20a
 
No
b
Did the organization attach its audited financial statement to this return? Note: All Form 990 filers that operate one or more hospitals must attach audited financial statements. .....
20b
 
 
21
Did the organization report more than $5,000 of grants and other assistance to governments and organizations in the United States on Part IX, column (A), line 1? If “Yes,” complete Schedule I, Parts I and II..
21
 
No
22
Did the organization report more than $5,000 of grants and other assistance to individuals in the United States on Part IX, column (A), line 2? If “Yes,” complete Schedule I, Parts I and III.....
22
 
No
23
Did the organization answer “Yes” to Part VII, Section A, questions 3, 4, or 5, about compensation of the organization’s current and former officers, directors, trustees, key employees, and highest compensated employees? If “Yes,” complete Schedule J................ Click to see attachment
23
Yes
 
24a
Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? If “Yes,” answer questions 24b–24d and complete Schedule K. If “No,” go to line 25................
24a
 
No
b
Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception?...
24b
 
 
c
Did the organization maintain an escrow account other than a refunding escrow at any time during the year
to defease any tax-exempt bonds?......................
24c
 
 
d
Did the organization act as an “on behalf of” issuer for bonds outstanding at any time during the year?...
24d
 
 
25a
Section 501(c)(3) and 501(c)(4) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If “Yes,” complete Schedule L, Part I......
25a
 
No
b
Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization’s prior Forms 990 or 990-EZ? If “Yes,” complete Schedule L, Part I................
25b
 
No
26
Was a loan to or by a current or former officer, director, trustee, key employee, highly compensated employee, or disqualified person outstanding as of the end of the organization’s tax year? If “Yes,” complete Schedule L,
Part II...........................
26
 
No
27
Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial contributor, or a grant selection committee member, or to a person related to such an individual? If “Yes,” complete Schedule L, Part III...............
27
 
No
28
Was the organization a party to a business transaction with one of the following parties? (see Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions):
a
A current or former officer, director, trustee, or key employee? If “Yes,” complete Schedule L, Part IV .........................
28a
 
No
b
A family member of a current or former officer, director, trustee, or key employee? If “Yes,”
complete Schedule L, Part IV...................
28b
 
No
c
An entity of which a current or former officer, director, trustee, or key employee (or a family member thereof) was an officer, director, trustee, or owner? If “Yes,” complete Schedule L, Part IV..
28c
 
No
29
Did the organization receive more than $25,000 in non-cash contributions? If “Yes,” complete Schedule M
29
 
No
30
Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? If “Yes,” complete Schedule M............
30
 
No
31
Did the organization liquidate, terminate, or dissolve and cease operations? If “Yes,” complete Schedule N,
Part I...........................
31
 
No
32
Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If “Yes,” complete Schedule N, Part II.......................
32
 
No
33
Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections 301.7701-2 and 301.7701-3? If “Yes,” complete Schedule R, Part I........ Click to see attachment
33
 
No
34
Was the organization related to any tax-exempt or taxable entity? If “Yes,” complete Schedule R, Parts II, III, IV, and V, line 1..................... Click to see attachment
34
Yes
 
35
Is any related organization a controlled entity within the meaning of section 512(b)(13)? .....
35
 
No
a
Did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? If “Yes,” complete Schedule R, Part V, line 2... Click to see attachment
36
Section 501(c)(3) organizations. Did the organization make any transfers to an exempt non-charitable related organization? If “Yes,” complete Schedule R, Part V, line 2...........
36
 
 
37
Did the organization conduct more than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal income tax purposes? If “Yes,” complete Schedule R, Part VIClick to see attachment
37
 
No
38
Did the organization complete Schedule O and provide explanations in Schedule O for Part VI, lines 11 and 19? Note. All Form 990 filers are required to complete Schedule O. ............
38
Yes
 
Form 990 (2010)
Form 990 (2010)
Page 5
Part V
Statements Regarding Other IRS Filings and Tax Compliance
Check if Schedule O contains a response to any question in this Part V . . . . . . . . . .
Yes
No
1a
Enter the number reported in Box 3 of Form 1096. Enter -0- if not applicable. .......
1a
2,222
b
Enter the number of Forms W-2G included in line 1a. Enter -0- if not applicable.
1b
0
c
Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners? ..................
1c
Yes
 
2a
Enter the number of employees reported on Form W-3, Transmittal of Wage and Tax Statements filed for the calendar year ending with or within the year covered by this return .....................
2a
0
b
If at least one is reported on line 2a, did the organization file all required federal employment tax returns?

Note. If the sum of lines 1a and 2a is greater than 250, you may be required to e-file. (see instructions)
2b
 
 
3a
Did the organization have unrelated business gross income of $1,000 or more during the year?.............................
3a
 
No
b
If “Yes,” has it filed a Form 990-T for this year? If “No,” provide an explanation in Schedule O.....
3b
 
 
4a
At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account or securities account)?.......................
4a
 
No
b
If "Yes," enter the name of the foreign country: MediumBullet
See instructions for filing requirements for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts.
5a
Was the organization a party to a prohibited tax shelter transaction at any time during the tax year?..
5a
 
No
b
Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction?
5b
 
No
c
If “Yes” to line 5a or 5b, did the organization file Form 8886-T? ........
5c
 
 
6a
Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit any contributions that were not tax deductible?..........
6a
 
No
b
If “Yes,” did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible?........................
6b
 
 
7
Organizations that may receive deductible contributions under section 170(c).
a
Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor?....................
7a
 
 
b
If “Yes,” did the organization notify the donor of the value of the goods or services provided?.....
7b
 
 
c
Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282?...........................
7c
 
 
d
If “Yes,” indicate the number of Forms 8282 filed during the year ....
7d
 
e
Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract?..........................
7e
 
 
f
Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract?..
7f
 
 
g
If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required?...................
7g
 
 
h
If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C?...............
7h
 
 
8
Sponsoring organizations maintaining donor advised funds and section 509(a)(3) supporting organizations. Did the supporting organization, or a donor advised fund maintained by a sponsoring organization, have excess business holdings at any time during the year?................
8
 
 
9
Sponsoring organizations maintaining donor advised funds.
a
Did the organization make any taxable distributions under section 4966?.........
9a
 
 
b
Did the organization make a distribution to a donor, donor advisor, or related person?......
9b
 
 
10
Section 501(c)(7) organizations. Enter:
a
Initiation fees and capital contributions included on Part VIII, line 12 ...
10a
 
b
Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities
10b
 
11
Section 501(c)(12) organizations. Enter:
a
Gross income from members or shareholders .........
11a
 
b
Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them.) ........
11b
 
12a
Section 4947(a)(1) non-exempt charitable trusts. Is the organization filing Form 990 in lieu of Form 1041?
12a
 
 
b
If “Yes,” enter the amount of tax-exempt interest received or accrued during the year.
12b
 
13
Section 501(c)(29) qualified nonprofit health insurance issuers.
a
Is the organization licensed to issue qualified health plans in more than one state?
Note. All 501(c)(29) organizations must list in Schedule O each state in which they are licensed to issue qualified health plans, the amount of reserves required by each state, and the amount of reserves the organization allocated to each state.
13a
 
 
b
Enter the aggregate amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans.
13b
 
c
Enter the aggregate amount of reserves on hand.
13c
 
14a
Did the organization receive any payments for indoor tanning services during the tax year?.....
14a
 
 
b
If "Yes," has it filed a Form 720 to report these payments? If “No,” provide an explanation in Schedule O..
14b
 
 
Form 990 (2010)
Form 990 (2010)
Page 6
Part VI
Governance, Management, and Disclosure For each “Yes” response to lines 2 through 7b below, and for a “No” response to lines 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions.
Check if Schedule O contains a response to any question in this Part VI . . . . . . . . . .
Section A. Governing Body and Management
Yes
No
1a
Enter the number of voting members of the governing body at the end of the tax year ..............
1a
11
b
Enter the number of voting members included in line 1a, above, who are independent .................
1b
8
2
Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee? .................
2
 
No
3
Did the organization delegate control over management duties customarily performed by or under the direct supervision of officers, directors or trustees, or key employees to a management company or other person? ..
3
 
No
4
Did the organization make any significant changes to its governing documents since the prior Form 990 was filed?
4
 
No
5
Did the organization become aware during the year of a significant diversion of the organization’s assets? .
5
 
No
6
Does the organization have members or stockholders? ................
6
Yes
 
7a
Does the organization have members, stockholders, or other persons who may elect one or more members of the governing body? .........................
7a
Yes
 
b
Are any decisions of the governing body subject to approval by members, stockholders, or other persons? ..
7b
Yes
 
8
Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following:
a
The governing body? .........................
8a
Yes
 
b
Each committee with authority to act on behalf of the governing body? ............
8b
Yes
 
9
Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the organization’s mailing address? If “Yes,” provide the names and addresses in Schedule O .....
9
 
No
Section B. Policies (This Section B requests information about policies not required by the Internal
Revenue Code.)
Yes
No
10a
Does the organization have local chapters, branches, or affiliates? ............
10a
 
No
b
If “Yes,” does the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with those of the organization? ....
10b
 
 
11a
Has the organization provided a copy of this Form 990 to all members of its governing body before filing the form?
11a
Yes
 
b
Describe in Schedule O the process, if any, used by the organization to review the Form 990. .....
12a
Does the organization have a written conflict of interest policy? If “No,” go to line 13.......
12a
Yes
 
b
Are officers, directors or trustees, and key employees required to disclose annually interests that could give rise to conflicts? ...........................
12b
Yes
 
c
Does the organization regularly and consistently monitor and enforce compliance with the policy? If “Yes,” describe in Schedule O how this is done ....................
12c
Yes
 
13
Does the organization have a written whistleblower policy? ...............
13
Yes
 
14
Does the organization have a written document retention and destruction policy? .........
14
Yes
 
15
Did the process for determining compensation of the following persons include a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision?
a
The organization’s CEO, Executive Director, or top management official ...........
15a
Yes
 
b
Other officers or key employees of the organization ................
15b
Yes
 
If "Yes" to line a or b, describe the process in Schedule O. (See instructions.)
16a
Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? ......................
16a
 
No
b
If “Yes,” has the organization adopted a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and taken steps to safeguard the organization’s exempt status with respect to such arrangements? ............
16b
 
 
Section C. Disclosure
17
List the States with which a copy of this Form 990 is required to be filedMediumBullet
18
Section 6104 requires an organization to make its Form 1023 (or 1024 if applicable), 990, and 990-T (501(c)(3)s only) available for public inspection. Indicate how you make these available. Check all that apply.
19
Describe in Schedule O whether (and if so, how), the organization makes its governing documents, conflict of interest policy, and financial statements available to the public.
20
State the name, physical address, and telephone number of the person who possesses the books and records of the organization: MediumBullet
DAVID VIS
1400 E MICHIGAN AVE
LANSING,MI48909
(517) 364-8400
Form 990 (2010)
Form 990 (2010)
Page 7
Part VII
Compensation of Officers, Directors,Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors
Check if Schedule O contains a response to any question in this Part VII . . . . . . . . . .
Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees
1a Complete this table for all persons required to be listed. Report compensation for the calendar year ending with or within the organization’s tax year.
RoundBullet List all of the organization’s current officers, directors, trustees (whether individuals or organizations), regardless of amount
of compensation, and current key employees. Enter -0- in columns (D), (E), and (F) if no compensation was paid.

RoundBullet List all of the organization’s current key employees, if any. See instructions for definition of "key employee."
RoundBullet List the organization’s five current highest compensated employees (other than an officer, director, trustee or key employee)
who received reportable compensation (Box 5 of Form W-2 and/or Box 7 of Form 1099-MISC) of more than $100,000 from the
organization and any related organizations.

RoundBullet List all of the organization’s former officers, key employees, or highest compensated employees who received more than $100,000
of reportable compensation from the organization and any related organizations.

RoundBullet List all of the organization’s former directors or trustees that received, in the capacity as a former director or trustee of the
organization, more than $10,000 of reportable compensation from the organization and any related organizations.

List persons in the following order: individual trustees or directors; institutional trustees; officers; key employees; highest
compensated employees; and former such persons.
Check this box if neither the organization nor any related organizations compensated any current or former officer, director, or trustee.
(A)
Name and Title 		(B)
Average hours per week (describe hours for related organizations in Schedule O) 		(C)
Position (check all that apply) 		(D)
Reportable compensation from the organization (W- 2/1099-MISC) 		(E)
Reportable compensation from related organizations (W- 2/1099-MISC) 		(F)
Estimated amount of other compensation from the organization and related organizations
Individual Trustee or Director; Institutional Trustee; Officer; Key Employee; Highest compensated employee; Former;
(1) DENNIS SWAN
PRES/CEO - S
 1.00 X   X       0 1,063,298 30,471
(2) SCOTT WILKERSON
PRESIDENT/CE
 5.00 X   X       0 438,165 32,408
(3) LARRY RAWSTHORNE MD
DIRECTOR
 1.00 X           0 411,455 31,251
(4) MARYLEE DAVIS PHD
CHAIR/DIRECT
 1.00 X           0 0 0
(5) RANDOLPH RIFKIN
SECRETARY/DI
 1.00 X           0 0 0
(6) PATRICK GRIBBEN JR
TREASURER/DI
 1.00 X           0 0 0
(7) WENDELL BARRON
DIRECTOR
 1.00 X           0 0 0
(8) MARTHA BIBBS
DIRECTOR
 1.00 X           0 0 0
(9) RICHARD BRUNER
DIRECTOR
 1.00 X           0 0 0
(10) DIANA RODRIGUEZ ALGRA
DIRECTOR
 1.00 X           0 0 0
(11) DAWN SPRINGER
DIRECTOR
 1.00 X           0 0 0
(12) PAULA REICHLE
VP/CFO - SHS
 0.00     X       0 415,453 23,739
(13) DAVID VIS
VP FINANCE/A
 5.00     X       0 220,692 16,020
(14) HOWARD BURGESS
EXECUTIVE ME
 1.00       X     0 299,358 30,912
(15) CRAIG LESLIE
VP SALES & M
 1.00       X     0 209,246 0
(16) JULIA GRIFFITH
VP NEW PROGR
 1.00         X   0 146,652 18,497
(17) SANDRA WINCHELL
DIR MED RESO
 1.00         X   0 137,450 22,722
Form 990 (2010)
Form 990 (2010)
Page 8
Part VII
Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued)
(A)
Name and Title 		(B)
Average hours per week (describe hours for related organizations in Schedule O) 		(C)
Position (check all that apply) 		(D)
Reportable compensation from the organization (W- 2/1099-MISC) 		(E)
Reportable compensation from related organizations (W- 2/1099-MISC) 		(F)
Estimated amount of other compensation from the organization and related organizations
Individual Trustee or Director; Institutional Trustee; Officer; Key Employee; Highest compensated employee; Former;
(18) MARY ANN SESTI
DIR GOVT PRO
 1.00         X   0 129,549 22,114
(19) ANN HUNT-FUGATE RPH
MGR CLINICAL
 1.00         X   0 124,778 23,152
(20) KEVIN ESSENMACHER
CONTROLLER
 1.00         X   0 121,826 15,569
(21) THOMAS OSTRANDER
FORMER DIREC
 0.00           X 0 289,344 34,745
(22) GARY REETZ
FORMER DIREC
             X 0 212,575 20,009
















1b Sub-Total................MediumBullet
c Total from continuation sheets to Part VII, Section A....MediumBullet
d Total (add lines 1b and 1c)............MediumBullet   4,219,841 321,609
2
Total number of individuals (including but not limited to those listed above) who received more than $100,000 in reportable compensation from the organizationMediumBullet  
Yes
No
3
Did the organization list any former officer, director or trustee, key employee, or highest compensated employee on line 1a? If “Yes,” complete Schedule J for such individual .............
3
Yes
 
4
For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If “Yes,” complete Schedule J for such individual...........................
4
Yes
 
5
Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If “Yes,” complete Schedule J for such person .....
5
 
No
Section B. Independent Contractors
1
Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization.
(A)
Name and business address 		(B)
Description of services 		(C)
Compensation
2
Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization MediumBullet  
Form 990 (2010)
Form 990 (2010)
Page 9
Part VIII
Statement of Revenue
(A)
Total revenue 		(B)
Related or
exempt
function
revenue 		(C)
Unrelated
business
revenue 		(D)
Revenue
excluded from
tax under sections
512, 513, or 514
Contributions, gifts, grants and other similar amounts 1a Federated campaigns..1a  
b Membership dues....1b  
c Fundraising events....1c  
d Related organizations...1d  
e Government grants (contributions)1e  
f All other contributions, gifts, grants, and
similar amounts not included above1f 		 
g Noncash contributions included in lines 1a-1f:$  
h Total. Add lines 1a-1f.......MediumBullet  
Program Service Revenue Business Code
2a HEALTH SERVICE FEES 621,990 188,895,311 188,895,311    
b
c
d
e
f All other program service revenue .        
g Total. Add lines 2a–2f........MediumBullet 188,895,311
Other Revenue 3 Investment income (including dividends, interest
and other similar amounts).....MediumBullet 125,668     125,668
4 Income from investment of tax-exempt bond proceeds..MediumBullet        
5 Royalties............MediumBullet        
(i) Real (ii) Personal
6a Gross Rents    
b Less: rental expenses    
c Rental income or (loss)    
d Net rental income or (loss).......MediumBullet        
(i) Securities (ii) Other
7a Gross amount from sales of assets other than inventory 3,865,512  
b Less: cost or other basis and sales expenses 3,600,078  
c Gain or (loss) 265,434  
d Net gain or (loss)..........MediumBullet 265,434     265,434
8a Gross income from fundraising events (not including
$  
of contributions reported on line 1c). See Part IV, line 18 ...
a  
b Less: direct expenses ...b  
c Net income or (loss) from fundraising events..MediumBullet      
9a Gross income from gaming activities.
See Part IV, line 19 ...
a  
b Less: direct expenses ...b  
c Net income or (loss) from gaming activities...MediumBullet        
10a Gross sales of inventory, less
returns and allowances .
a  
b Less: cost of goods sold ..b  
c Net income or (loss) from sales of inventory..MediumBullet        
Miscellaneous Revenue Business Code
11a            
b            
c            
d All other revenue ....        
e Total. Add lines 11a–11d ......MediumBullet  
12 Total revenue. See Instructions....MediumBullet 189,286,413 188,895,311   391,102
Form 990 (2010)
Form 990 (2010)
Page 10
Part IX
Statement of Functional Expenses
Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A) but are not required to complete columns (B), (C), and (D).
Do not include amounts reported on lines 6b,
7b, 8b, 9b, and 10b of Part VIII. 		(A)
Total expenses 		(B)
Program service expenses 		(C)
Management and general expenses 		(D)
Fundraising expenses
1 Grants and other assistance to governments and organizations in the U.S. See Part IV, line 21    
2 Grants and other assistance to individuals in the U.S. See Part IV, line 22    
3 Grants and other assistance to governments, organizations, and individuals outside the U.S. See Part IV, lines 15 and 16    
4 Benefits paid to or for members 179,060,145 179,060,145
5 Compensation of current officers, directors, trustees, and key employees ....        
6 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) ....        
7 Other salaries and wages        
8 Pension plan contributions (include section 401(k) and section 403(b) employer contributions) ....        
9 Other employee benefits .......        
10 Payroll taxes ...........        
11 Fees for services (non-employees):        
a Management ......        
b Legal .........        
c Accounting ...........        
d Lobbying ...........        
e Professional fundraising. See Part IV, line 17..    
f Investment management fees ...... 5,930   5,930  
g Other ..........        
12 Advertising and promotion ....        
13 Office expenses .......        
14 Information technology ......        
15 Royalties ..        
16 Occupancy ...........        
17 Travel ............        
18 Payments of travel or entertainment expenses for any federal, state, or local public officials ......        
19 Conferences, conventions, and meetings ....        
20 Interest ...........        
21 Payments to affiliates .......        
22 Depreciation, depletion, and amortization .....        
23 Insurance ..............        
24 Other expenses. Itemize expenses not covered above. (Expenses grouped together and labeled miscellaneous may not exceed 5% of total expenses shown on line 25 below.)
a
b
c
d
e
f All other expenses        
25 Total functional expenses. Add lines 1 through 24f 179,066,075 179,060,145 5,930 0
26 Joint costs. Check here MediumBullet if following
SOP 98-2 (ASC 958-720). Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation 		       
Form 990 (2010)
Form 990 (2010)
Page 11
Part X Balance Sheet
(A)
Beginning of year 		(B)
End of year
Assets 1 Cash—non-interest-bearing ..........   1  
2 Savings and temporary cash investments ....... 588,216 2 1,127,833
3 Pledges and grants receivable, net .........   3  
4 Accounts receivable, net .........   4  
5 Receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of
Schedule L ..........   5  
6 Receivables from other disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B). Complete Part II of
Schedule L ..........   6  
7 Notes and loans receivable, net .............   7  
8 Inventories for sale or use ..............   8  
9 Prepaid expenses and deferred charges ............   9  
10a Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D 10a  
b Less: accumulated depreciation. ..... 10b     10c  
11 Investments—publicly traded securities .......... 516,569 11 8,172,216
12 Investments—other securities. See Part IV, line 11 ......   12  
13 Investments—program-related. See Part IV, line 11 ..   13  
14 Intangible assets .........   14  
15 Other assets. See Part IV, line 11 ........... 359,861 15 2,558,545
16 Total assets. Add lines 1 through 15 (must equal line 34)... 1,464,646 16 11,858,594
Liabilities 17 Accounts payable and accrued expenses .   17  
18 Grants payable ..........   18  
19 Deferred revenue ..........   19  
20 Tax-exempt bond liabilities ..........   20  
21 Escrow or custodial account liability. Complete Part IV of Schedule D..   21  
22 Payables to current and former officers, directors, trustees, key
employees, highest compensated employees, and disqualified
persons. Complete Part II of Schedule L..........   22  
23 Secured mortgages and notes payable to unrelated third parties ..   23  
24 Unsecured notes and loans payable to unrelated third parties ....   24  
25 Other liabilities. Complete Part X of Schedule D.....   25  
26 Total liabilities. Add lines 17 through 25..... 0 26 0
Net Assets or Fund Balance Organizations that follow SFAS 117, check here MediumBullet and complete lines 27 through 29, and lines 33 and 34.
27 Unrestricted net assets ..... 1,464,646 27 11,858,594
28 Temporarily restricted net assets .....   28  
29 Permanently restricted net assets .....   29  
Organizations that do not follow SFAS 117, check here MediumBullet and complete lines 30 through 34.
30 Capital stock or trust principal, or current funds .....   30  
31 Paid-in or capital surplus, or land, building or equipment fund .....   31  
32 Retained earnings, endowment, accumulated income, or other funds   32  
33 Total net assets or fund balances ..... 1,464,646 33 11,858,594
34 Total liabilities and net assets/fund balances ..... 1,464,646 34 11,858,594
Form 990 (2010)
Form 990 (2010)
Page 12
Part XI
Reconcilliation of Net Assets
Check if Schedule O contains a response to any question in this Part XI . . . . . . . . . .
1
Total revenue (must equal Part VIII, column (A), line 12) . . .
1
189,286,413
2
Total expenses (must equal Part IX, column (A), line 25) . . . . .
2
179,066,075
3
Revenue less expenses. Subtract line 2 from line 1 . . . .
3
10,220,338
4
Net assets or fund balances at beginning of year (must equal Part X, line 33, column (A)) . .
4
1,464,646
5
Other changes in net assets or fund balances (explain in Schedule O) . . . .
5
173,610
6
Net assets or fund balances at end of year. Combine lines 3, 4, and 5 (must equal Part X, line 33, column (B)) . . . . . .
6
11,858,594
Part XII
Financial Statements and Reporting
Check if Schedule O contains a response to any question in this Part XII . . . . . . . . . .
Yes
No
1
Accounting method used to prepare the Form 990:  
If the organization changed its method of accounting from a prior year or checked "Other," explain in
Schedule O.
2a
Were the organization’s financial statements compiled or reviewed by an independent accountant?..
2a
 
No
b
Were the organization’s financial statements audited by an independent accountant?........
2b
Yes
 
c
If “Yes,” to 2a or 2b, does the organization have a committee that assumes responsibility for oversight of the audit, review, or compilation of its financial statements and selection of an independent accountant?
If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O............................
2c
Yes
 
d
If “Yes” to line 2a or 2b, check a box below to indicate whether the financial statements for the year were issued on a separate basis, consolidated basis, or both:
3a
As a result of a federal award, was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A-133? ................
3a
 
No
b
If “Yes,” did the organization undergo the required audit or audits? If the organization did not undergo the required audit or audits, explain why in Schedule O and describe any steps taken to undergo such audits. ..
3b
 
 
Form 990 (2010)
Additional Data


Software ID:  
Software Version:  
Form 990, Special Condition Description:
Special Condition Description
SCHEDULE D
(Form 990)
Department of the Treasury
Internal Revenue Service
Supplemental Financial Statements
SchDMd Bullet Complete if the organization answered "Yes," to Form 990,
Part IV, line 6, 7, 8, 9, 10, 11, or 12.
SchDMd Bullet Attach to Form 990. SchDMd Bullet See separate instructions.
OMB No. 1545-0047
2010
Open to Public Inspection
Name of the organization
PHYSICIANS HEALTH NETWORK
 
Employer identification number

38-2594856
Part I
Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Complete if the organization answered "Yes" to Form 990, Part IV, line 6.
(a) Donor advised funds (b) Funds and other accounts
1 Total number at end of year .......    
2 Aggregate contributions to (during year) ...    
3 Aggregate grants from (during year) ...    
4 Aggregate value at end of year .......    
5
Did the organization inform all donors and donor advisors in writing that the assets held in donor advised
funds are the organization's property, subject to the organization's exclusive legal control? ............
6
Did the organization inform all grantees, donors, and donor advisors in writing that grant funds may be
used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit. ...................................
Part II
Conservation Easements. Complete if the organization answered "Yes" to Form 990, Part IV, line 7.
1
Purpose(s) of conservation easements held by the organization (check all that apply).
2
Complete lines 2a–2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year.
Held at the End of the Year
a Total number of conservation easements ....................... 2a  
b Total acreage restricted by conservation easements .................. 2b  
c Number of conservation easements on a certified historic structure included in (a) ..... 2c  
d Number of conservation easements included in (c) acquired after 8/17/06 ........ 2d  
3
Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during
the taxable year SchDMd Bullet  
4
Number of states where property subject to conservation easement is located SchDMd Bullet  
5
Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and
enforcement of the conservation easements it holds? .............................
6
Staff and volunteer hours devoted to monitoring, inspecting and enforcing conservation easements during the year SchDMd Bullet  
7
Amount of expenses incurred in monitoring, inspecting, and enforcing conservation easements during the year SchDMd Bullet $  
8
Does each conservation easement reported on line 2(d) above satisfy the requirements of section
170(h)(4)(B)(i) and 170(h)(4)(B)(ii)? ....................................
9
In Part XIV, describe how the organization reports conservation easements in its revenue and expense statement, and
balance sheet, and include, if applicable, the text of the footnote to the organization’s financial statements that describes
the organization’s accounting for conservation easements.
Part III
Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets.
Complete if the organization answered "Yes" to Form 990, Part IV, line 8.
1a
If the organization elected, as permitted under SFAS 116, not to report in its revenue statement and balance sheet works of
art, historical treasures, or other similar assets held for public exhibition, education or research in furtherance of public service,
provide, in Part XIV, the text of the footnote to its financial statements that describes these items.
b
If the organization elected, as permitted under SFAS 116, to report in its revenue statement and balance sheet works of art,
historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service,
provide the following amounts relating to these items:
(i)
Revenues included in Form 990, Part VIII, line 1 ........................SchDMd Bullet $  
(ii)
Assets included in Form 990, Part X ..............................SchDMd Bullet $  
2
If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the
following amounts required to be reported under SFAS 116 relating to these items:
a
Revenues included in Form 990, Part VIII, line 1 ..........................SchDMd Bullet $  
b
Assets included in Form 990, Part X ...............................SchDMd Bullet $  
For Privacy Act and Paperwork Reduction Act Notice, see the Intructions for Form 990
Cat. No. 52283D
Schedule D (Form 990) 2010

Schedule D (Form 990) 2010
Page 2
Part III
Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued)
3
Using the organization’s accession and other records, check any of the following that are a significant use of its collection
items (check all that apply):
a
d
b
e
 
c
4
Provide a description of the organization’s collections and explain how they further the organization’s exempt purpose in
Part XIV.
5
During the year, did the organization solicit or receive donations of art, historical treasures or other similar
assets to be sold to raise funds rather than to be maintained as part of the organization’s collection?........
Part IV
Escrow and Custodial Arrangements. Complete if the organization answered "Yes" to Form 990,
Part IV, line 9, or reported an amount on Form 990, Part X, line 21.
1a
Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not
included on Form 990, Part X? ....................................
b
If "Yes," explain the arrangement in Part XIV and complete the following table:
Amount
c Beginning balance ................................. 1c  
d Additions during the year .............................. 1d  
e Distributions during the year ............................. 1e  
f Ending balance ................................... 1f  
2a
Did the organization include an amount on Form 990, Part X, line 21? .....................
b
If “Yes,” explain the arrangement in Part XIV.
Part V
Endowment Funds. Complete if the organization answered "Yes" to Form 990, Part IV, line 10.
(a)Current Year (b)Prior Year (c)Two Years Back (d)Three Years Back (e)Four Years Back
1a Beginning of year balance .... 1,550,687 1,307,182  
b Contributions ........ 163,793 134,195  
c Investment earnings or losses ... 65,279 109,310  
d Grants or scholarships .....      
e Other expenditures for facilities
and programs ........ 		     
f Administrative expenses ....      
g End of year balance ...... 1,779,759 1,550,687  
2
Provide the estimated percentage of the year end balance held as:
a
Board designated or quasi-endowment: SchDMd Bullet  
b
Permanent endowment: SchDMd Bullet100.000 %
c
Term endowment: SchDMd Bullet  
3a
Are there endowment funds not in the possession of the organization that are held and administered for the
organization by:

Yes
No
(i) unrelated organizations ........................
3a(i)
 
No
(ii) related organizations ........................
3a(ii)
Yes
 
b
If "Yes" to 3a(ii), are the related organizations listed as required on Schedule R? .........
3b
Yes
 
4
Describe in Part XIV the intended uses of the organization's endowment funds.
Part VI
Investments—Land, Buildings, and Equipment. See Form 990, Part X, line 10.
Description of investment (a) Cost or other basis (investment) (b)Cost or other basis (other) (c) Accumulated depreciation (d) Book value
1a Land .................      
b Buildings ................        
c Leasehold improvements ............        
d Equipment ................        
e Other .................        
Total. Add lines 1a-1e. (Column (d) should equal Form 990, Part X, column (B), line 10(c).)........SchDMdBullet  
Schedule D (Form 990) 2010

Schedule D (Form 990) 2010
Page 3
Part VII
Investments—Other Securities. See Form 990, Part X, line 12.
(a) Description of security or category
(including name of security)		 (b)Book value (c) Method of valuation:
Cost or end-of-year market value
(1)Financial derivatives    
(2)Closely-held equity interests    
Other








Total. (Column (b) should equal Form 990, Part X, col.(B) line 12.)Small Bullet  
Part VIII
Investments—Program Related. See Form 990, Part X, line 13.
(a) Description of investment type (b) Book value (c) Method of valuation:
Cost or end-of-year market value








Total. (Column (b) should equal Form 990, Part X, col.(B) line 13.)Small Bullet  
Part IX
Other Assets. See Form 990, Part X, line 15.
(a) Description (b) Book value
(1) RELATED PARTY RECEIVABLE 2,558,413
(2) INTEREST RECEIVABLE 132







Total. (Column (b) should equal Form 990, Part X, col.(B) line 15.)...........Small Bullet 2,558,545
Part X
Other Liabilities. See Form 990, Part X, line 25.
1.(a) Description of Liability (b) Amount
Federal Income Taxes  








Total. (Column (b) should equal Form 990, Part X, col.(B) line 25.)Small Bullet  
2. Fin 48 (ASC 740) Footnote. In Part XIV, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC740).
Schedule D (Form 990) 2010

Schedule D (Form 990) 2010
Page 4
Part XI Reconciliation of Change in Net Assets from Form 990 to Financial Statements
1 Total revenue (Form 990, Part VIII, column (A), line 12) .................... 1 189,286,413
2 Total expenses (Form 990, Part IX, column (A), line 25) ..................... 2 179,066,075
3 Excess or (deficit) for the year. Subtract line 2 from line 1 ............. 3 10,220,338
4 Net unrealized gains (losses) on investments .......................... 4 173,610
5 Donated services and use of facilities ............................. 5  
6 Investment expenses ................................... 6  
7 Prior period adjustments .................................. 7  
8 Other (Describe in Part XIV) ................................. 8  
9 Total adjustments (net). Add lines 4 - 8 ............................. 9 173,610
10 Excess or (deficit) for the year per financial statements. Combine lines 3 and 9 ......... 10 10,393,948
Part XII Reconciliation of Revenue per Audited Financial Statements With Revenue per Return
1 Total revenue, gains, and other support per audited financial statements ....... 1 189,460,023
2 Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a Net unrealized gains on investments .......... 2a 173,610
b Donated services and use of facilities ......... 2b  
c Recoveries of prior year grants ........... 2c  
d Other (Describe in Part XIV): ............ 2d  
e Add lines 2a through 2d ..................... 2e 173,610
3 Subtract line 2e from line 1..................... 3 189,286,413
4 Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b . 4a  
b Other (Describe in Part XIV): ........... 4b  
c Add lines 4a and 4b....................... 4c  
5 Total Revenue. Add lines 3 and 4c. (This should equal Form 990, Part I, line 12.) ...... 5 189,286,413
Part XIII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return
1 Total expenses and losses per audited financial statements ............. 1 179,066,075
2 Amounts included on line 1 but not on Form 990, Part IX, line 25:
a Donated services and use of facilities .......... 2a  
b Prior year adjustments .............. 2b  
c Other losses ................ 2c  
d Other (Describe in Part XIV): ............ 2d  
e Add lines 2a through 2d...................... 2e  
3 Subtract line 2e from line 1..................... 3 179,066,075
4 Amounts included on Form 990, Part IX, line 25, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b .. 4a  
b Other (Describe in Part XIV): ............ 4b  
c Add lines 4a and 4b....................... 4c  
5 Total expenses. Add lines 3 and 4c. (This should equal Form 990, Part I, line 18.) ...... 5 179,066,075
Part XIV
Supplemental Information
Complete this part to provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part lV, lines 1b and 2b;
Part V, line 4; Part X; Part XI, line 8; Part XII, lines 2d and 4b; and Part XIII, lines 2d and 4b. Also complete this part to provide any additional information.
Identifier Return Reference Explanation
INTENDED USES FOR ENDOWMENT FUNDS SCHEDULE D, PAGE 2, PART V, LINE 4 PHYSICIANS HEALTH NETWORK DOES NOT HOLD ENDOWMENTS. THE ENDOWMENTS ARE HELD BY SPARROW FOUNDATION. SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF BOTH PHYSICIANS HEALTH NETWORK AND SPARROW FOUNDATION. THE ENDOWMENTS ARE MAINTAINED TO PROVIDE A PERMANENT SOURCE OF INCOME, WITH THE STIPULATION THE PRINCIPAL IS KEPT INTACT IN PERPETUITY AND THE INCOME GENERATED FROM INVESTMENTS OF THE ENDOWMENT FUNDS CAN BE USED FOR THE PURPOSE OF ESTABLISHMENT BY THE ENDOWMENT.
SUPPLEMENTAL FINANCIAL INFORMATION SCHEDULE D, PAGE 4, PART XIV PHYSICIANS HEALTH NETWORK DOES NOT RECEIVE SEPARATE AUDITED FINANCIAL STATEMENTS. PHYSICIANS HEALTH NETWORK IS INCLUDED IN THE CONSOLIDATED AUDITED FINANCIAL STATEMENTS OF SPARROW HEALTH SYSTEM.
Schedule D (Form 990) 2010

Additional Data


Software ID:  
Software Version:  




Schedule J
(Form 990)
Department of the Treasury
Internal Revenue Service
Compensation Information
For certain Officers, Directors, Trustees, Key Employees, and Highest
Compensated Employees
SchJMediumBullet Complete if the organization answered "Yes" to Form 990,
Part IV, question 23.
SchJMediumBullet Attach to Form 990. SchJMediumBullet See separate instructions.
OMB No. 1545-0047
2010
Open to Public Inspection
Name of the organization
PHYSICIANS HEALTH NETWORK
 
Employer identification number

38-2594856
Part I
Questions Regarding Compensation
Yes
No
1a
Check the appropiate box(es) if the organization provided any of the following to or for a person listed in Form
990, Part VII, Section A, line 1a. Complete Part III to provide any relevant information regarding these items.
b
If any of the boxes in line 1a are checked, did the organization follow a written policy regarding payment or reimbursement orprovision of all the expenses described above? If "No," complete Part III to explain....
1b
 
 
2
Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all
officers, directors, trustees, and the CEO/Executive Director, regarding the items checked in line 1a? ....
2
 
 
3
Indicate which, if any, of the following the organization uses to establish the compensation of the
organization's CEO/Executive Director. Check all that apply.
4
During the year, did any person listed in Form 990, Part VII, Section A, line 1a with respect to the filing organization or a related organization:
a
Receive a severance payment or change-of-control payment? ...............
4a
 
No
b
Participate in, or receive payment from, a supplemental nonqualified retirement plan? ........
4b
 
No
c
Participate in, or receive payment from, an equity-based compensation arrangement? ........
4c
 
No
If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.
Only 501(c)(3) and 501(c)(4) organizations only must complete lines 5-9.
5
For persons listed in form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the revenues of:
a
The organization? ...........................
5a
Yes
 
b
Any related organization? .........................
5b
Yes
 
If "Yes," to line 5a or 5b, describe in Part III.
6
For persons listed in form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the net earnings of:
a
The organization? ...........................
6a
Yes
 
b
Any related organization? .........................
6b
Yes
 
If "Yes," to line 6a or 6b, describe in Part III.
7
For persons listed in Form 990, Part VII, Section A, line 1a, did the organization provide any non-fixed
payments not described in lines 5 and 6? If "Yes," describe in Part III ............
7
 
No
8
Were any amounts reported in Form 990, Part VII, paid or accured pursuant to a contract that was
subject to the initial contract exception described in Regs. section 53.4958-4(a)(3)? If "Yes," describe
in Part III .............................
8
 
No
9
If "Yes" to line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section 53.4958-6(c)? .........................
9
 
 
For Privacy Act and Paperwork Reduction Act Notice, see the Intructions for Form 990
Cat. No. 50053T
Schedule J (Form 990) 2010

Schedule J (Form 990) 2010
Page 2
Part II
Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use Schedule J-1 if additional space needed.
For each individual whose compensation must be reported in Schedule J, report compensation from the organization on row (i) and from related organizations, described in the
instructions on row (ii). Do not list any individuals that are not listed on Form 990, Part VII.

Note. The sum of columns (B)(i)-(iii) must equal the applicable column (D) or column (E) amounts on Form 990, Part VII, line 1a.
(A) Name (B) Breakdown of W-2 and/or 1099-MISC compensation (C) Retirement and other deferred compensation (D) Nontaxable
benefits		 (E) Total of columns
(B)(i)-(D) 		(F) Compensation
reported in prior
Form 990 or
Form 990-EZ
(i) Base compensation (ii) Bonus & incentive compensation (iii) Other reportable compensation
(1) DENNIS SWAN (i)
(ii)		  
726,090 		 
307,354 		 
29,854 		 
18,130 		 
12,341 		 
1,093,769 		 
 
(2) SCOTT WILKERSON (i)
(ii)		  
329,439 		 
106,745 		 
1,981 		 
18,130 		 
14,278 		 
470,573 		 
 
(3) LARRY RAWSTHORNE MD (i)
(ii)		  
349,730 		 
58,218 		 
3,507 		 
18,130 		 
13,121 		 
442,706 		 
 
(4) PAULA REICHLE (i)
(ii)		  
389,545 		 
25,300 		 
608 		 
13,573 		 
10,166 		 
439,192 		 
 
(5) DAVID VIS (i)
(ii)		  
173,566 		 
46,184 		 
942 		 
15,424 		 
596 		 
236,712 		 
 
(6) HOWARD BURGESS (i)
(ii)		  
299,358 		 
  		 
  		 
18,130 		 
12,782 		 
330,270 		 
 
(7) CRAIG LESLIE (i)
(ii)		  
171,246 		 
38,000 		 
  		 
  		 
  		 
209,246 		 
 
(8) JULIA GRIFFITH (i)
(ii)		  
127,563 		 
19,089 		 
  		 
4,377 		 
14,120 		 
165,149 		 
 
(9) SANDRA WINCHELL (i)
(ii)		  
119,436 		 
18,014 		 
  		 
  		 
22,722 		 
160,172 		 
 
(10) MARY ANN SESTI (i)
(ii)		  
112,631 		 
16,918 		 
  		 
  		 
22,114 		 
151,663 		 
 
(11) THOMAS OSTRANDER (i)
(ii)		  
246,947 		 
40,513 		 
1,884 		 
20,499 		 
14,246 		 
324,089 		 
 
(12) GARY REETZ (i)
(ii)		  
187,769 		 
23,086 		 
1,720 		 
15,731 		 
4,278 		 
232,584 		 
 




Schedule J (Form 990) 2010

Schedule J (Form 990) 2010
Page 3
Part III
Supplemental Information
Complete this part to provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 4c, 5a, 5b, 6a, 6b, 7, and 8. Also complete this part for any additional information.
Identifier Return Reference Explanation
COMPENSATION CONTINGENT UPON REVENUES OF ORGANIZATION SCHEDULE J, PAGE 1, PART I, LINE 5A THE 2010 INCENTIVE COMPENSATION PLAN PAYMENTS WERE ACCRUED IN 2010 AND WILL BE PAID IN 2011. THE INCENTIVE COMPENSATION PLAN IS BASED, IN PART, ON THE OPERATING MARGIN OF SPARROW HEALTH SYSTEM, WHICH INCLUDES PHYSICIANS HEALTH NETWORK AS WELL AS ITS AFFILIATED COMPANIES.
COMPENSATION CONTINGENT UPON REVENUES OF RELATED ORG SCHEDULE J, PAGE 1, PART I, LINE 5B THE 2010 INCENTIVE COMPENSATION PLAN PAYMENTS WERE ACCRUED IN 2010 AND WILL BE PAID IN 2011. THE INCENTIVE COMPENSATION PLAN IS BASED, IN PART, ON THE OPERATING MARGIN OF SPARROW HEALTH SYSTEM, WHICH INCLUDES PHYSICIANS HEALTH NETWORK AS WELL AS ITS AFFILIATED COMPANIES.
COMPENSATION CONTINGENT UPON NET EARNINGS OF ORGANIZATION SCHEDULE J, PAGE 1, PART I, LINE 6A THE 2010 INCENTIVE COMPENSATION PLAN PAYMENTS WERE ACCRUED IN 2010 AND WILL BE PAID IN 2011. THE INCENTIVE COMPENSATION PLAN IS BASED, IN PART, ON THE OPERATING MARGIN OF SPARROW HEALTH SYSTEM, WHICH INCLUDES PHYSICIANS HEALTH NETWORK AS WELL AS ITS AFFILIATED COMPANIES.
COMPENSATION CONTINGENT UPON NET EARNINGS OF RELATED ORG SCHEDULE J, PAGE 1, PART I, LINE 6B THE 2010 INCENTIVE COMPENSATION PLAN PAYMENTS WERE ACCRUED IN 2010 AND WILL BE PAID IN 2011. THE INCENTIVE COMPENSATION PLAN IS BASED, IN PART, ON THE OPERATING MARGIN OF SPARROW HEALTH SYSTEM, WHICH INCLUDES PHYSICIANS HEALTH NETWORK AS WELL AS ITS AFFILIATED COMPANIES.
OTHER ADDITIONAL INFORMATION SCHEDULE J, PART III SCHEDULE J, PART I, LINE 3: SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF PHYSICIANS HEALTH NETWORK. SPARROW HEALTH SYSTEM IS AN INTEGRATED NON-PROFIT ORGANIZATION THAT INCLUDES A NUMBER OF NON-PROFIT ENTITIES. THE METHODS SELECTED FOR DETERMINING THE COMPENSATION OF THE CEO/EXECUTIVE DIRECTOR ARE METHODS WHICH ARE BEING USED BY ALL SPARROW HEALTH SYSTEM RELATED ENTITIES. THOMAS OSTRANDER AND GARY REETZ ARE FORMER BOARD MEMBERS OF PHYSICIANS HEALTH NETWORK. THE FORMER BOARD MEMBERS ARE BEING COMPENSATED BY SPARROW HEALTH SYSTEM AND AFFILIATES FOR SERVICES PROVIDED TO SPARROW HEALTH SYSTEM AND AFFILIATES. THE FORMER BOARD MEMBERS ARE NOT BEING COMPENSATED FOR ANY PAST SERVICES PROVIDED TO PHYSICIANS HEALTH NETWORK.
Schedule J (Form 990) 2010

Additional Data


Software ID:  
Software Version:  
SCHEDULE O
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ

Complete to provide information for responses to specific questions on
Form 990 or to provide any additional information.
MediumBullet Attach to Form 990 or 990-EZ.
OMB No. 1545-0047
2010
Open to Public
Inspection
Name of the organization
PHYSICIANS HEALTH NETWORK
 
Employer identification number

38-2594856
Identifier Return Reference Explanation
ADDITIONAL INFORMATION FORM 990 ALL LINES LEFT BLANK ARE NOT APPLICABLE TO THE ORGANIZATION.
FIRST ACHIEVEMENT DESCRIPTION FORM 990, PAGE 2, PART III, LINE 4A CONTRACT WITH PHN TO PROVIDE A PANEL OF HEALTHCARE PROVIDERS TO DELIVER THE HEALTHCARE SERVICES. PHN, PHPMM, AND PHPMM-FC ARE COMMITTED TO THE DEVELOPMENT AND DELIVERY OF QUALITY MANAGED CARE PRODUCTS AT A REASONABLE COST FOR THEIR MEMBERS. PHPMM AND PHPMM-FC'S SUCCESS IN MANAGING HEALTHCARE IS DUE IN PART TO THE EXTENSIVE NETWORK OF PARTICIPATING PROVIDERS IN PHN. THE HMO/HDN CONTRACTUAL ARRANGEMENT ALLOWS PHPMM AND PHPMM-FC TO ARRANGE FOR HEALTHCARE TO PATIENTS COVERED BY PHPMM'S AND PHPMM-FC'S BENEFIT PLAN. THIS ALLOWS THE MEMBERS TO ACCESS A WIDE VARIETY OF INDEPENDENT PROVIDERS WITHIN THE HDN INCLUDING PHYSICIANS, HOSPITALS, PHARMACIES, SKILLED NURSING FACILITIES, AND ALLIED HEALTH PROFESSIONALS. PHPMM AND PHPMM-FC MEMBERS MAY ALSO RECEIVE CARE FOR SERVICES FROM A NONPARTICIPATING PROVIDER IF SUCH A REFERRAL IS RECOMMENDED BY A PHN PARTICIPATING PHYSICIAN AND IF THE SERVICE REQUIRED FOR TREATMENT, AS DETERMINED BY PHN, IS NOT AVAILABLE WITHIN PHN'S NETWORK. PHPMM AND PHPMM-FC OFFER A VARIETY OF HEALTHCARE PROGRAMS, OR PRODUCTS, TO GROUPS AND INDIVIDUALS. PHPMM AND PHPMM-FC OFFER CHOICES THAT PROVIDE COVERAGE WITHIN THE PHN NETWORK OF CONTRACTED PROVIDERS, LIMITED COVERAGE OUTSIDE OF THE PHPMM AND PHPMM-FC NETWORK, VARIOUS LEVELS OF DEDUCTIBLES, CO-PAYMENTS, AND COVERAGE LIMITS, ALL OF WHICH ARE DESIGNED TO BE RESPONSIVE TO PAYOR NEEDS. PHYSICIAN HEALTH NETWORK AND PHYSICIANS HEALTH PLAN OF MID-MICHIGAN ARE WHOLLY OWNED BY SPARROW HEALTH SYSTEM. PHPMM CONSISTS OF A COMMERCIAL HMO CALLED PHYSICIANS HEALTH PLAN OF MID-MICHIGAN (PHPMM), A COMMERCIAL INSURANCE COMPANY (PHPMM-IC), AND A MEDICAID HEALTH PLAN THAT OPERATES THROUGH A SEPARATE CORPORATION. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN FAMILYCARE (PHPMM-FC) IS ALSO A LICENSED HMO AND A WHOLLY OWNED SUBSIDIARY OF PHPMM. ALL STAFFING FUNCTIONS AND REPORTING ARE ACCOMPLISHED THROUGH THE USE OF THE SAME STAFF AS PHPMM. UNLESS SPECIFICALLY NOTED, ALL REFERENCES TO PHPMM APPLY TO PHPMM-IC, AND PHPMM-FC AND ALL REFERENCES TO PHP INCLUDE THE ENTIRE PHP AFFILIATED GROUP OF PHPMM AND PHN. PHPMM'S SERVICE AREA INCLUDES THE MICHIGAN COUNTIES OF INGHAM, EATON, CLINTON, SHIAWASSEE, GRATIOT, IONIA, MONTCALM AND ISABELLA. PHPMM-IC OFFERS PRODUCTS ACROSS MICHIGAN. THE FAMILYCARE PRODUCT IS AVAILABLE TO MEDICAID ENROLLEES IN EATON, CLINTON, INGHAM, IONIA, MONTCALM AND SHIAWASSEE COUNTIES. AS OF DECEMBER 31, 2010, THERE WERE 35,129 ENROLLEES IN PHPMM'S COMMERCIAL HMO, 12,208 IN TPA, 2,993 IN PHP-IC, AND 18,789 ENROLLEES IN FAMILYCARE. PHP CONTRACTS DIRECTLY WITH 719 PRIMARY CARE PHYSICIANS, 1269 SPECIALTY CARE PHYSICIANS, 365 ALLIED HEALTH PROFESSIONALS, AND 308 ORGANIZATIONAL PROVIDERS THAT INCLUDE 29 HOSPITALS. PHP WAS ALSO RANKED AMONG THE TOP 50 OF AMERICA'S BEST HEALTH PLANS BY U.S. NEWS AND WORLD REPORT/CONSUMER REPORTS FOR THE 5TH CONSECUTIVE YEAR. NCQA USES AN ALGORITHM COMPOSED OF HEDIS, CAHPS AND ACCREDITATION SCORING TO CREATE THESE NATIONAL RANKINGS. THE GOAL OF THE QUALITY IMPROVEMENT PROGRAM IS TO CONTINUOUSLY IMPROVE HEALTH OUTCOMES AND LEVEL OF SERVICE PROVIDED TO ENROLLEES. PHPMM PURSUES ITS GOALS THROUGH IMPLEMENTATION OF THE QUALITY IMPROVEMENT MODEL: -MEASUREMENT OF THE OUTCOMES OF CARE AND SERVICE, INCLUDING BEHAVIORAL HEALTH SERVICES. -ANALYSIS OF BARRIERS TO CARE AND SERVICE. -DEVELOPMENT AND IMPLEMENTATION OF INTERVENTIONS. -FORMAL EVALUATION OF THE EFFECTIVENESS OF THE INTERVENTIONS. PHP MEASURES THE QUALITY OF CARE PROVIDED TO ITS ENROLLEES THROUGH ANNUAL REVIEW OF INDICATORS SUCH AS: -DISEASE MANAGEMENT PROGRAM PARTICIPATION. -QUALITY OF CARE CONCERNS. -HEDIS MEASURES - THE HEALTH PLAN EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) IS A GROUP OF NATIONALLY RECOGNIZED MEASURES OF PERFORMANCE IN A VARIETY OF CLINICAL AND NON-CLINICAL AREAS. PHPMM USES THE EFFECTIVENESS OF CARE MEASURES TO DETERMINE PROGRESS AND IMPROVEMENT IN AREAS SUCH AS: -DIABETES. -ASTHMA. -DEPRESSION AND FOLLOW-UP AFTER MENTAL HEALTH ADMISSIONS. -BREAST AND CERVICAL CANCER SCREENING. -USE OF BETA-BLOCKERS AFTER HEART ATTACKS. -CHILD AND ADOLESCENT IMMUNIZATIONS. -CHOLESTEROL MANAGEMENT. -CONTROLLING HIGH BLOOD PRESSURE. -SMOKING CESSATION. -PRENATAL AND POSTPARTUM CARE. -TREATMENT OF CHILDHOOD RESPIRATORY INFECTIONS. PHP MEASURES THE QUALITY OF SERVICE PROVIDED TO ITS ENROLLEES BY THE REVIEW OF PERFORMANCE MEASURES RELATED TO: -ACCESS AND AVAILABILITY. -ENROLLEE COMPLAINTS AND APPEALS. -CUSTOMER SERVICE TELEPHONE ACCESS PERFORMANCE. -MEMBER ASSESSMENT: THE CONSUMER ASSESSMENT OF HEALTHCARE PROVIDERS AND SYSTEMS (CAHPS) SURVEY GIVES A GENERAL INDICATION OF HOW WELL THE ORGANIZATION MEETS MEMBERS' EXPECTATIONS. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN RECEIVED THE HIGHEST RATING OF "EXCELLENT" FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA). THIS STATUS IS GRANTED TO HEALTH CARE PLANS THAT HAVE DEMONSTRATED CONTINUOUS QUALITY IMPROVEMENT IN THEIR PROGRAMS WHILE MEETING OR EXCEEDING NCQA'S RIGOROUS ACCREDITATION STANDARDS. PHP FAMILY CARE RECEIVED A COMMENDABLE RATING. PHPMM AND PHPMM-FC WERE REVIEWED BY NCQA IN 2009. THE SERVICE EXCELLENCE PROGRAM HAS A MISSION OF: PROVIDING FOCUSED LEADERSHIP TO CREATE AND MAINTAIN A CULTURE OF WORLD CLASS CUSTOMER SATISFACTION. IN 2010 PHPMM WAS RANKED ABOVE THE 90TH PERCENTILE IN SATISFACTION WITH CUSTOMER SERVICE AND WAS THE HIGHEST RANKED HEALTH PLAN IN MICHIGAN. THIS WAS YEAR FOUR OF A HIGHLY STRUCTURED AND GOAL ORIENTED APPROACH TO MEMBER SATISFACTION AND EMPLOYEE ENGAGEMENT. THE PROGRAM IS A "TOP DOWN BOTTOM UP" APPROACH TO CHANGING THE CULTURE OF SERVICE. SERVICE EXCELLENCE ADVISORS ARE FRONT LINE STAFF TRAINED TO PRESENT A TWO HOUR CLASS TO ALL ASSOCIATES IN THE HEALTH PLAN. THE BOOK A COMPLAINT IS A GIFT BY JANELLE BARLOW WAS THE BASIS FOR THE 2010 TRAINING. -CAPITALIZING ON COMPLAINTS -HOW TO SAY NO AND REMAIN FRIENDS -BUILDING A CUSTOMER TOLERANCE ZONE -THE GIFT FORMULA OUR 2010 CAHPS SCORES FOR THE COMMERCIAL PRODUCT RESULTED IN A RANKING OF 1 IN MICHIGAN FOR CUSTOMER SERVICE AND 4 FOR THE OVERALL HEALTH PLAN RANKING. NATIONALLY, PHPMM'S COMMERCIAL PRODUCT WAS RANKED 40TH FOR OVERALL HEALTH PLAN RANKING. CUSTOMER SATISFACTION AND ASSOCIATE ENGAGEMENT ARE CLOSELY RELATED. WEBSTER DEFINES ENGAGEMENT AS "EMOTIONAL INVOLVEMENT OR COMMITMENT." EVERY CUSTOMER WANTS SOMEONE TO PARTNER WITH THEM, TO SHOW CONCERN AND BE COMMITTED TO THEIR ISSUE AT HAND. MAINTAINING AN ENGAGED WORKFORCE IS THE FOUNDATION FOR DELIVERING COMPASSIONATE AND EXCEPTIONAL SERVICE. PHP PARTICIPATES IN A HEALTH SYSTEM WIDE ANNUAL ASSOCIATE ENGAGEMENT SURVEY CONDUCTED BY KENEXA. THE NATIONALLY RECOGNIZED SURVEY MEASURES ELEVEN DIMENSIONS OF THE WORKFORCE AND PROVIDES REPORTS TO DEPARTMENT TEAMS. THE 2010 SURVEY REPORTED PHP ASSOCIATE ENGAGEMENT LEVEL IN THE 93RD PERCENTILE. FOLLOWING THE ANNUAL SURVEY, PHP INVITES ALL ASSOCIATES TO PARTICIPATE IN GROUP DISCUSSIONS LED BY FRONT LINE STAFF WHERE RESULTS ARE REVIEWED AND IDEAS FOR IMPROVEMENT ARE WELCOMED. TEAMS MAKE RECOMMENDATIONS, THE BEST OF WHICH ARE IMPLEMENTED. OVER THE YEARS, CHANGES HAVE OCCURRED THAT HAVE BECOME PART OF THE PHP WAY OF DOING BUSINESS. SOME OF THOSE INCLUDE: CROSS FUNCTIONAL COMMUNICATION TEAMS, MONTHLY ALL STAFF MEETING UPDATES, ENHANCED ON-LINE ACCESS TO INFORMATION, NEW APPROACHES TO TRAINING, IMPROVED REFERENCE RESOURCES AND MANY MORE. COMMITMENT AND INVOLVEMENT DESCRIBE OUR EXPECTATION FOR STAFF. MAINTAINING A HIGH LEVEL OF ASSOCIATE ENGAGEMENT IS A VERY IMPORTANT PART OF PHP'S DEDICATED EFFORT TO PROVIDE OUTSTANDING SERVICE AND TO ACHIEVE NATIONAL RANKINGS IN OVERALL CUSTOMER SATISFACTION. PROCESS IMPROVEMENTS DESIGNED TO ENSURE THAT PHP MAXIMIZED THE AUTOMATED CAPABILITIES OF ITS CLAIMS PAYMENT SYSTEM WERE THE FOCUS FOR THE INFORMATION TECHNOLOGY DEPARTMENT. AS A RESULT OF THESE EFFORTS, PHP EXPERIENCED EXCELLENT ELECTRONIC DATA INTERCHANGE (EDI) AND AUTO-ADJUDICATION RATES AS WELL AS A REDUCTION IN CLAIM TURNAROUND TIME. PHP ENDED 2010 WITH AN AUTO ADJUDICATION RATE OF 76%, AND AN EDI RATE OF 92%. DAYS RECEIPT ON HAND OF CLAIMS WAS REDUCED FROM 2.4 TO 1.96. MAJOR INITIATIVES: -COMPLETED IMPLEMENTATION OF MENTAL HEALTH PARITY LEGISLATION. -DETERMINED PRODUCT DIRECTION NECESSARY TO SUPPORT HEALTH CARE REFORM LEGISLATION. -IN-SOURCED OUR ID CARD GENERATION PROCESS, RESULTING IN FEWER ERRORS AND MORE FLEXIBILITY IN CARD DESIGN. -BEGAN UPGRADE OF CORE SYSTEM AND WEB PRESENCE TO INCREASE INFORMATION SHARING AND IMPROVE CONSTITUENT EXPERIENCES. -IMPLEMENTED WRAP PRODUCTS TO SUPPORT SALES OF HIGH DEDUCTIBLE HEALTH PLANS. -IMPLEMENTED THE HIP MICHIGAN PRODUCT, A FEDERAL PROGRAM TO PROVIDE COVERAGE TO PEOPLE WHO OTHERWISE WOULD NOT QUALIFY FOR INSURANCE. PHP'S QUALITY IMPROVEMENT PROGRAM CONTINUES TO BE HIGHLY EFFECTIVE AND HAS DEMONSTRATED SIGNIFICANT RESULTS YEAR AFTER YEAR. QI STRUCTURE AND SUPPORT THE QUALITY IMPROVEMENT STRUCTURE REMAINS STRONG. ADEQUATE RESOURCES HAVE BEEN ALLOCATED TO SUPPORT THE INITIATIVES FOR THE CURRENT AND UPCOMING YEAR. THE QUALITY AND MEDICAL RESOURCE MANAGEMENT COMMITTEE RECEIVES
MATERIAL DIFFERENCES IN VOTING RIGHTS EXPLANATION FORM 990, PAGE 6, PART VI SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF BOTH PHYSICIANS HEALTH NETWORK AND PHYSICIANS HEALTH PLAN OF MID-MICHIGAN. THE COMPOSITION OF THE BOARD OF DIRECTORS FOLLOWS PHYSICIANS HEALTH PLAN OF MID-MICHIGAN.
CLASSES OF MEMBERS OR STOCKHOLDERS FORM 990, PAGE 6, PART VI, LINE 6 SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF PHYSICIANS HEALTH NETWORK AND HAS 100% OWNERSHIP. SPARROW HEALTH SYSTEM IS ALSO THE SOLE MEMBER OF PHYSICIANS HEALTH PLAN OF MID-MICHIGAN. PHYSICIANS HEALTH NETWORK AND PHYSICIANS HEALTH PLAN OF MID-MICHIGAN ARE SEPARATE NOT-FOR-PROFIT ENTITIES BUT ARE OPERATED ON AN INTEGRATED BASIS, AS ONE BUSINESS UNIT.
ELECTION OF MEMBERS AND THEIR RIGHTS FORM 990, PAGE 6, PART VI, LINE 7A THE BOARD MEMBERS ELECTED BY THE BOARD OF DIRECTORS ARE RATIFIED BY THE BOARD OF DIRECTORS OF SPARROW HEALTH SYSTEM.
DECISIONS SUBJECT TO APPROVAL OF MEMBERS FORM 990, PAGE 6, PART VI, LINE 7B THE BOARD MEMBERS ELECTED BY THE BOARD OF DIRECTORS ARE RATIFIED BY THE BOARD OF DIRECTORS OF SPARROW HEALTH SYSTEM. DECISIONS BY THE BOARD OF DIRECTORS OF PHYSICIANS HEALTH NETWORK MAY BE SUBJECT TO THE APPROVAL OF THE SPARROW HEALTH SYSTEM BOARD OF DIRECTORS.
ORGANIZATION'S PROCESS USED TO REVIEW FORM 990 FORM 990, PAGE 6, PART VI, LINE 11B THE FORM 990 WAS PROVIDED TO THE FINANCE COMMITTEE FOR REVIEW AND COMMENT. UPON COMPLETION OF THIS REVIEW, THE FINANCE COMMITTEE RECOMMENDED RATIFICATION OF THE FORM 990 AND COPIES OF THE COMPLETED FORM WERE PROVIDED TO THE BOARD OF DIRECTORS OF PHYSICIANS HEALTH NETWORK. BASED UPON THIS RECOMMENDATION, THE BOARD APPROVED THE FILING OF THE FORM 990.
ENFORCEMENT OF CONFLICTS POLICY FORM 990, PAGE 6, PART VI, LINE 12C 1) CORPORATE COMPLIANCE SENDS OUT CONFLICT OF INTEREST POLICY AND QUESTIONNAIRES TO ALL VOTING BOARD MEMBERS AND THE EXECUTIVE TEAM ANNUALLY. 2) ALL DISCLOSURES ARE RECEIVED AND REVIEWED BY CORPORATE COMPLIANCE. 3) ALL DISCLOSURES ARE GIVEN A RESOLUTION CODE AND PRESENTED TO THE CEO AND GOVERNANCE COMMITTEE OF THE BOARD. 4) ALL BOARD/COMMITTEE LEVEL DISCLOSURES ARE PROVIDED TO THE RESPECTIVE BOARD CHAIR AND EXECUTIVE LIAISON TO ENSURE ISSUES CAN BE ADDRESSED ON A TRANSACTIONAL LEVEL (I.E. IF A VOTE IS REQUIRED ON A TRANSACTION INVOLVING AN INTERESTED PERSON).
COMPENSATION PROCESS FOR TOP OFFICIAL FORM 990, PAGE 6, PART VI, LINE 15A THE PROCESS FOR DETERMINING COMPENSATION FOR THE CEO OF THE ORGANIZATION INVOLVED THE FOLLOWING: UTILIZING THE COMPENSATION COMMITTEE, INDEPENDENT CONSULTANTS, REVIEWING OTHER SIMILAR ORGANIZATIONS' 990S, COMPENSATION SURVEYS, AND FINAL APPROVAL BY THE BOARD OF DIRECTORS, AS WELL AS FINALIZING THE SALARY PACKAGE WITH A WRITTEN EMPLOYMENT CONTRACT.
COMPENSATION PROCESS FOR OFFICERS FORM 990, PAGE 6, PART VI, LINE 15B THE PROCESS FOR DETERMINING COMPENSATION FOR OFFICERS OR KEY EMPLOYEES OF THE ORGANIZATION INVOLVED THE FOLLOWING: UTILIZING THE COMPENSATION COMMITTEE, INDEPENDENT CONSULTANTS, REVIEWING OTHER SIMILAR ORGANIZATIONS' 990S, COMPENSATION SURVEYS, AND FINAL APPROVAL BY THE BOARD OF DIRECTORS, AS WELL AS FINALIZING THE SALARY PACKAGE WITH A WRITTEN EMPLOYMENT CONTRACT.
GOVERNING DOCUMENTS DISCLOSURE EXPLANATION FORM 990, PAGE 6, PART VI, LINE 19 GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS. THE CONFLICT OF INTEREST POLICY IS AVAILABLE THROUGH SPARROW HEALTH SYSTEM BY REQUEST TO THE SPARROW COMPLIANCE OFFICER. FINANCIAL STATEMENTS FOR PHYSICIANS HEALTH NETWORK ARE AVAILABLE THROUGH REQUEST MADE DIRECTLY TO THE CEO OF PHYSICIANS HEALTH NETWORK.
RELATED ORGANIZATIONS FORM 990, PAGE 7, PART VII SPARROW HEALTH SYSTEM IS AN INTEGRATED NON-PROFIT ORGANIZATION AND IS THE PARENT CORPORATION FOR PHYSICIANS HEALTH NETWORK AND OTHER RELATED ENTITIES - SEE SCHEDULE R. DENNIS SWAN IS THE PRESIDENT & CHIEF OPERATING EXECUTIVE OF SPARROW HEALTH SYSTEM AND THEREBY SERVES AS THE PRINCIPAL OFFICER WITH ULTIMATE RESPONSIBILITY FOR IMPLEMENTING THE DECISIONS OF THE GOVERNING BODY OR SUPERVISING THE MANAGEMENT, ADMINISTRATION, OR OPERATION OF ENTITIES WITHIN THE SYSTEM. THE FOLLOWING OFFICERS, DIRECTORS, KEY EMPLOYEES, AND HIGHEST COMPENSATED EMPLOYEES PROVIDE SERVICES TO BOTH PHYSICIANS HEALTH NETWORK AND RELATED ORGANIZATIONS. BELOW IS THE AVERAGE NUMBER OF HOURS DEVOTED TO THE RELATED ORGANIZATIONS: SCOTT WILKERSON - 39 HOURS LARRY RAWSTHORNE - 39 HOURS DENNIS SWAN - 39 HOURS PAULA REICHLE - 40 HOURS DAVID VIS - 35 HOURS HOWARD BURGESS - 39 HOURS CRAIG LESLIE - 39 HOURS JULIA GRIFFITH - 39 HOURS SANDRA WINCHELL - 39 HOURS MARY ANN SESTI - 39 HOURS KEVIN ESSENMACHER - 39 HOURS ANN HUNT-FUGATE - 39 HOURS
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2010

Additional Data


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SCHEDULE R
(Form 990)
Department of the Treasury
Internal Revenue Service
Related Organizations and Unrelated Partnerships
MediumBulletComplete if the organization answered "Yes" to Form 990, Part IV, line 33, 34, 35, 36, or 37.
MediumBulletAttach to Form 990. MediumBullet See separate instructions.

OMB No. 1545-0047
2010
Open to Public Inspection
Name of the organization
PHYSICIANS HEALTH NETWORK
 
Employer identification number

38-2594856
Part I
Identification of Disregarded Entities (Complete if the organization answered "Yes" on Form 990, Part IV, line 33.)
(a)
Name, address, and EIN of disregarded entity


(b)
Primary activity


 		(c)
Legal domicile (state
or foreign country)

 		(d)
Total income
(e)
End-of-year assets


 		(f)
Direct controlling
entity

















Part II
Identification of Related Tax-Exempt Organizations (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related tax-exempt organizations during the tax year.)
(a)
Name, address, and EIN of related organization


(b)
Primary activity


 		(c)
Legal domicile (state
or foreign country)

 		(d)
Exempt Code section
(e)
Public charity status
(if section 501(c)(3))

 		(f)
Direct controlling
entity

 		(g)
Section 512(b)(13) controlled organization
Yes No
(1) SPARROW HEALTH SYSTEM (SHS)

1215 E MICHIGAN AVE

LANSING,MI48912
38-2542859 		PARENT MI 501C3 11A NA
 
 
No
(2) PHYSICIANS HEALTH PLAN OF MID-MICH

PO BOX 30377

LANSING,MI48909
38-2356288 		HMO MI 501C4   SHS
 
 
No
(3) PHYS HLTH PLAN OF MID MI FAMILY CAR

PO BOX 30377

LANSING,MI48909
36-4497604 		HMO MI 501C4   PHPMM
 
 
No
(4) SPARROW FOUNDATION

1215 E MICHGAN AVE

LANSING,MI48912
38-6100687 		FUNDRAISE MI 501C3 11B SHS
 
 
No
(5) HOME HEALTH CARE OF SPARROW INC

2909 E GRAND RIVER

LANSING,MI48912
38-2543305 		HOME HLTH MI 501C3 9 SHS
 
 
No
(6) CLINTON MEMORIAL HOSPITAL

805 S OAKLAND STREET

ST JOHNS,MI48879
38-1358172 		HLTH CARE MI 501C3 3 SHS
 
 
No
(7) EDWARD W SPARROW HOSPITAL

1215 E MICHIGAN AVE

LANSING,MI48912
38-1360584 		HLTH CARE MI 501C3 3 SHS
 
 
No
(8) IONIA COUNTY MEMORIAL HOSPITAL CORP

479 LAFAYETTE STREET

IONIA,MI48912
38-3218134 		HLTH CARE MI 501C3 3 SHS
 
 
No
(9) SPARROW SPECIALTY HOSPITAL

1210 W SAGINAW

LANSING,MI48915
14-1885340 		LT ACUTE MI 501C3 3 SHS
 
 
No
For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 50135Y
Schedule R (Form 990) 2010
Schedule R (Form 990) 2010
Page 2
Part III
Identification of Related Organizations Taxable as a Partnership (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a partnership during the tax year.)
(a)
Name, address, and EIN of
related organization



 		(b)
Primary activity




 		(c)
Legal
domicile
(state or foreign
country)


 		(d)
Direct controlling
entity



 		(e)
Predominant income(related, unrelated, excluded from tax under sections 512-514)

(f)
Share of total income




 		(g)
Share of end-of-year
assets



 		(h)
Disproprtionate allocations?




 		(i)
Code V—UBI
amount in box 20 of
Schedule K-1
(Form 1065)
 		(j)
General or
managing
partner?



 		(k)
Percentage
ownership
Yes No Yes No
(1) LANSING MEDICAL DENTAL BUILDING

2909 EAST GRAND RIVER
LANSING,MI48909
38-2566150 		RENTAL PRO MI N/A
         No     No  
(2) SPARROW REGIONAL MEDICAL SUPPLY

1215 E MICHIGAN AVE
LANSING,MI48912
38-3243561 		SALES/RENT MI N/A
         No     No  
(3) LANSING MEDICAL DENTAL BUILDING

2909 EAST GRAND RIVER
LANSING,MI48909
38-2566150 		RENTAL PRO MI N/A
         No     No  
(4) SPARROW REGIONAL MEDICAL SUPPLY

1215 E MICHIGAN AVE
LANSING,MI48912
38-3243561 		SALES/RENT MI N/A
         No     No  






Part IV
Identification of Related Organizations Taxable as a Corporation or Trust (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a corporation or trust during the tax year.)
(a)
Name, address, and EIN of related organization



 		(b)
Primary activity



 		(c)
Legal domicile
(state or
foreign
country)
 		(d)
Direct controlling
entity


 		(e)
Type of entity
(C corp, S corp,
or trust)

 		(f)
Share of total income



 		(g)
Share of
end-of-year
assets

 		(h)
Percentage
ownership
(1) SPARROW DEVELOPMENT INC
1215 E MICHIGAN AVE
LANSING,MI48912
38-2595963 		HEALTH SVS MI N/A
        
(2) PHPMM INSURANCE COMPANY
PO BOX 30377
LANSING,MI48909
20-5565219 		INSURANCE MI N/A
        
(3) PHP OF MID-MICHIGAN TPA INC
1400 E MICHIGAN AVE
LANSING,MI48912
38-3344741 		MED SVS MI N/A
        
(4) EAST LANSING ATHLETIC CLUB
2909 HANNAH BLVD
EAST LANSING,MI48823
38-2886420 		HLTH CLUB MI N/A
        
(5) MAC RESTAURANT LLC
2909 HANNAH BLVD
EAST LANSING,MI48823
20-5120690 		RESTAURANT MI N/A
        
(6) CLINTON SERVICES CORPORATION
805 SOUTH OAKLAND
ST JOHNS,MI48879
38-2494110 		SERVICES MI N/A
        
(7) MEDICAL CENTER WEST CONDO ASSOC
1100 W SAGINAW ST
LANSING,MI48915
38-2635630 		CONDO ASSO MI N/A
        
(8) SPARROW DEVELOPMENT INC
1215 E MICHIGAN AVE
LANSING,MI48912
38-2595963 		HEALTH SVS MI N/A
        
(9) PHPMM INSURANCE COMPANY
PO BOX 30377
LANSING,MI48909
20-5565219 		INSURANCE MI N/A
        
(10) PHP OF MID-MICHIGAN TPA INC
1400 E MICHIGAN AVE
LANSING,MI48912
38-3344741 		MED SVS MI N/A
        
(11) EAST LANSING ATHLETIC CLUB
2909 HANNAH BLVD
EAST LANSING,MI48823
38-2886420 		HLTH CLUB MI N/A
        
(12) MAC RESTAURANT LLC
2909 HANNAH BLVD
EAST LANSING,MI48823
20-5120690 		RESTAURANT MI N/A
        
(13) CLINTON SERVICES CORPORATION
805 SOUTH OAKLAND
ST JOHNS,MI48879
38-2494110 		SERVICES MI N/A
        
(14) MEDICAL CENTER WEST CONDO ASSOC
1100 W SAGINAW ST
LANSING,MI48915
38-2635630 		CONDO ASSO MI N/A
        
Schedule R (Form 990) 2010
Schedule R (Form 990) 2010
Page 3
Part V
Transactions With Related Organizations (Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35, 35A, or 36.)
Note. Complete line 1 if any entity is listed in Parts II, III or IV.
Yes
No
1 During the tax year, did the orgranization engage in any of the following transactions with one or more related organizations listed in Parts II-IV?
a Receipt of (i) interest (ii) annuities (iii) royalties (iv) rent from a controlled entity . . . . . . . . . . . . . . . . . . . . . . .
1a
 
No
b Gift, grant, or capital contribution to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1b
 
No
c Gift, grant, or capital contribution from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1c
 
No
d Loans or loan guarantees to or for other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1d
 
No
e Loans or loan guarantees by other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1e
 
No
f Sale of assets to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1f
 
No
g Purchase of assets from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1g
 
No
h Exchange of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1h
 
No
i Lease of facilities, equipment, or other assets to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1i
 
No
j Lease of facilities, equipment, or other assets from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . .
1j
 
No
k Performance of services or membership or fundraising solicitations for other organization(s) . . . . . . . . . . . . . . . . . . . . . .
1k
Yes
 
l Performance of services or membership or fundraising solicitations by other organization(s) . . . . . . . . . . . . . . . . . . . . . .
1l
 
No
m Sharing of facilities, equipment, mailing lists, or other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1m
 
No
n Sharing of paid employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1n
 
No
o Reimbursement paid to other organization for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1o
 
No
p Reimbursement paid by other organization for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1p
 
No
q Other transfer of cash or property to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1q
 
No
r Other transfer of cash or property from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1r
 
No
2
If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds.
(a)
Name of other organization 		(b)
Transaction
type(a-r) 		(c)
Amount involved 		(d)
Method of determining amount involved
(1)
(2)
(3)
(4)
(5)
(6)
Schedule R (Form 990) 2010
Schedule R (Form 990) 2010
Page 4
Part VI
Unrelated Organizations Taxable as a Partnership (Complete if the organization answered "Yes" on Form 990, Part IV, line 37.)
Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships.
(a)
Name, address, and EIN of entity 		(b)
Primary activity 		(c)
Legal domicile
(state or foreign
country) 		(d)
Are all
partners
section
501(c)(3)
organizations? 		(e)
Share of
end-of-year
assets 		(f)
Disproprtionate allocations? 		(g)
Code V—UBI
amount in box
20 of Schedule K-1
(Form 1065) 		(h)
General or
managing
partner?
Yes No Yes No Yes No






























Schedule R (Form 990) 2010
Schedule R (Form 990) 2010
Page 5
Part VII
Supplemental Information
Complete this part to provide additional information for responses to questions on Schedule R (see instructions).
Identifier Return Reference Explanation
Additional Data


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