Form 990 for tax year 2023

Revenue

Part VIII, the statement of revenue.

• 1d · Related organizations

  $583,861

• 1e · Government grants (contributions)

  $1,079,664

• 1f · All other contributions, gifts and grants

  $7,040

• 2a · Program service revenue: PATIENT REVENUE

  total $281,153,889 · related or exempt $281,153,889

• 2b · Program service revenue: MEDICARE

  total $80,267,870 · related or exempt $80,267,870

• 2c · Program service revenue: MEDICAID

  total $28,847,541 · related or exempt $28,847,541

• 2d · Program service revenue: RETAIL PHARMACY

  total $8,424,095 · related or exempt $8,595,833 · unrelated business -$171,738

• 2e · Program service revenue: OTHER PROGRAM REVENUE

  total $22,241 · related or exempt $22,241

• 3 · Investment income

  total $6,651,079 · excluded $6,651,079

• 6a · Gross rents

  real property $254,484

• 6b · Less rental expenses

  real property $429,699

• 6c · Rental income or loss

  real property -$175,215

• 6d · Net rental income or loss

  total -$175,215 · excluded -$175,215

• 7a · Gross sales of assets other than inventory

  securities $437,255,233 · other assets $5,983,220

• 7b · Less cost or other basis and sales expenses

  securities $391,893,695 · other assets $6,139,651

• 7c · Gain or loss

  securities $45,361,538 · other assets -$156,431

• 7d · Net gain or loss

  total $45,205,107 · excluded $45,205,107

• 11a · Other revenue: MISCELLANEOUS

  total $7,331,697 · related or exempt $7,331,697

• 11b · Other revenue: OTHER NON OPERATING RE

  total $2,479,521 · excluded $2,479,521

• 11c · Other revenue: CAFETERIA/FOOD SERVICE

  total $1,750,204 · unrelated business -$4,862 · excluded $1,755,066

• 11d · All other revenue

  total $1,476,193 · related or exempt $864,776 · excluded $611,417

• 11e · Other revenue, total

  $13,037,615

Functional expenses

Part IX, the statement of functional expenses.

• 1 · Grants to domestic organizations and governments

  total $320,606 · program services $320,606

• 2 · Grants to domestic individuals

  total $7,284,969 · program services $7,284,969

• 7 · Other salaries and wages

  total $122,428,251 · program services $79,250,932 · management and general $43,177,319

• 8 · Pension plan contributions

  total $1,485,184 · program services $1,188,147 · management and general $297,037

• 9 · Other employee benefits

  total $17,842,669 · program services $14,274,135 · management and general $3,568,534

• 10 · Payroll taxes

  total $8,485,965 · program services $5,841,124 · management and general $2,644,841

• 11b · Fees: legal

  total $298,583 · program services $1,689 · management and general $296,894

• 11c · Fees: accounting

  total $250,069 · program services $13,247 · management and general $236,822

• 11d · Fees: lobbying

  total $110,023 · management and general $110,023

• 11f · Fees: investment management

  total $133,690 · management and general $133,690

• 11g · Fees: other

  total $412,531 · program services $38,805 · management and general $373,726

• 12 · Advertising and promotion

  total $942,406 · program services $7,878 · management and general $934,528

• 13 · Office expenses

  total $4,405,541 · program services $1,393,264 · management and general $3,012,277

• 14 · Information technology

  total $4,193,514 · program services $1,943,416 · management and general $2,250,098

• 16 · Occupancy

  total $4,622,840 · program services $3,736,326 · management and general $886,514

• 17 · Travel

  total $399,472 · program services $129,453 · management and general $270,019

• 19 · Conferences, conventions and meetings

  total $250,059 · program services $39,092 · management and general $210,967

• 20 · Interest

  total $18,436,285 · program services $14,749,028 · management and general $3,687,257

• 22 · Depreciation, depletion and amortization

  total $29,288,362 · program services $23,774,449 · management and general $5,513,913

• 23 · Insurance

  total $6,345,574 · program services $5,076,459 · management and general $1,269,115

• 24a · Other expenses: SUPPLIES/DRUGS

  total $63,508,607 · program services $63,097,569 · management and general $411,038

• 24b · Other expenses: HEALTHCARE SERVICES

  total $61,808,167 · program services $58,390,373 · management and general $3,417,794

• 24c · Other expenses: MEDICAID ASSESSMENT TAX

  total $18,068,472 · program services $18,068,472

• 24d · Other expenses: BAD DEBT EXPENSE

  total $11,430,554 · program services $11,430,554

• 24e · All other expenses

  total $13,133,396 · program services $9,875,830 · management and general $3,257,566

Balance sheet

Part X, book values.

• 1 · Cash, non-interest-bearing

  beginning of year $10,827,479 · end of year $15,636,545

• 2 · Savings and temporary cash investments

  beginning of year $44,180,564 · end of year $35,179,159

• 3 · Pledges and grants receivable

  beginning of year $649,365 · end of year $488,490

• 4 · Accounts receivable

  beginning of year $6,635,652 · end of year $21,521,357

• 7 · Other notes and loans receivable

  beginning of year $3,181,031 · end of year $0

• 8 · Inventories for sale or use

  beginning of year $8,928,487 · end of year $10,349,307

• 9 · Prepaid expenses and deferred charges

  beginning of year $3,034,169 · end of year $2,047,597

• 10a · Land, buildings and equipment: cost or other basis

  $805,297,956

• 10b · Land, buildings and equipment: accumulated depreciation

  $406,600,352

• 10c · Land, buildings and equipment, net

  beginning of year $418,786,395 · end of year $398,697,604

• 11 · Investments: publicly traded securities

  beginning of year $163,690,482 · end of year $181,488,212

• 13 · Investments: program-related

  beginning of year $10,242,202 · end of year $10,385,972

• 15 · Other assets

  beginning of year $16,155,068 · end of year $98,221,816

• 17 · Accounts payable and accrued expenses

  beginning of year $32,541,046 · end of year $24,506,400

• 19 · Deferred revenue

  beginning of year $1,114,167 · end of year $115,188

• 25 · Other liabilities

  beginning of year $560,928,900 · end of year $609,407,802

• 27 · Net assets without donor restrictions

  beginning of year $78,325,009 · end of year $124,604,357

• 28 · Net assets with donor restrictions

  beginning of year $13,401,772 · end of year $15,382,312

The filer's explanations (Part III)

PART I, LINE 3

THE CEO IS PAID FROM A RELATED ORGANIZATION, MERCY HEALTH SYSTEM CORPORATION (MHSC). MHSC USES THE FOLLOWING TO ESTABLISH THE COMPENSATION OF THE CEO: COMPENSATION COMMITTEE, INDEPENDENT COMPENSATION CONSULTANT, FORM 990 OF OTHER ORGANIZATION, WRITTEN EMPLOYMENT CONTRACT, COMPENSATION SURVEY OR STUDY AND APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE. THE MHSC COMPENSATION COMMITTEE IS COMPRISED OF THE BOARD CHAIRPERSON, VICE CHAIR, AND SECRETARY/TREASURER. THE COMPENSATION COMMITTEE IS ASSISTED BY INDEPENDENT LEGAL COUNSEL AND AN INDEPENDENT COMPENSATION CONSULTANT. THE COMPENSATION COMMITTEE, LEGAL COUNSEL, AND THE COMPENSATION CONSULTANT MEET THROUGHOUT THE YEAR AND REPORT DIRECTLY TO THE FULL BOARD OF DIRECTORS ANNUALLY. THIS PROCESS WAS COMPLETED FOR 2023.

PART I, LINE 4B

INCENTIVE PLAN DISTRIBUTION: JAVON R. BEA - $8,510,830 TODD ANDERSON & JOHN DORSEY PARTICIPATED IN THE 457(F) PLAN DURING CALENDAR YEAR 2023. JOHN DORSEY RECEIVED A PAYOUT OF $119,724 DURING CALENDAR YEAR 2023.

PART II, LINE 2:

JAVON R. BEA - DEFERRED COMPENSATION PAYMENT MR. BEA HAS BEEN EMPLOYED BY MHSC AS PRESIDENT AND CEO OVER THE PAST 36 YEARS. DURING THIS TIME, MR. BEA HAS LED AN INCREDIBLE TRANSFORMATION TAKING A SMALL, SINGLE, STAND-ALONE COMMUNITY HOSPITAL AND CREATING A VERTICALLY INTEGRATED HEALTH SYSTEM WITH 89 FACILITIES IN 50 COMMUNITIES THROUGHOUT SOUTHERN WISCONSIN AND NORTHERN ILLINOIS, INCREASING GROSS REVENUE FROM $33 MILLION TO OVER $4.1 BILLION IN FY2024. THIS HAS ALLOWED THE HEALTH SYSTEM TO GO FROM SERVING 89,000 PATIENTS IN 1989 TO OVER 1.9 MILLION PATIENTS TODAY WORKING TOGETHER WITH OVER 7,500+ PARTNERS IN HEALTH CARE AND OVER 800 EMPLOYED PHYSICIANS. TODAY, MHSC HAS BECOME THE LARGEST EMPLOYER IN SOUTHERN WISCONSIN AND NORTHERN ILLINOIS. THIS GROWTH CAN BE ATTRIBUTED TO MR. BEA'S VISIONARY LEADERSHIP. LEADERSHIP THAT OVER THE YEARS HAS LED TO MHSC RECEIVING NUMEROUS NATIONAL RECOGNIZED AWARDS INCLUDING BEING NAMED THE FIRST FULLY INTEGRATED HEALTH SYSTEM TO RECEIVE THE MALCOLM BALDRIGE NATIONAL QUALITY AWARD FROM THE PRESIDENT OF THE UNITED STATES IN THE OVAL OFFICE, THE MAGNET RECOGNITION AWARD, BEING RANKED #1 AND #2 ON AARP'S TOP 100 BEST PLACES TO WORK FOR WORKERS OVER 50, AND BEING RANKED IN THE TOP 25 ON THE TOP 100 INTEGRATED HEALTHCARE NETWORKS LIST BY MODERN HEALTHCARE. THE TURNAROUND OF MHSC IMPLEMENTED BY MR. BEA IS UNPARALLELED. BY PIONEERING A "PARTNERSHIP MODEL" OF COMPENSATION AND DESIGNING A CUSTOM CULTURE OF EXCELLENCE, MR. BEA IS VITAL TO THE DECADES-LONG AND CONTINUING GROWTH AT MHSC. THIS SUCCESS HAS MADE MR. BEA A HIGHLY SOUGHT AFTER SPEAKER AND CONSULTANT AS HE IS NOW WELL-RENOWNED FOR HIS INNOVATIONS IN THE AREAS OF INTEGRATED HEALTHCARE AND PHYSICIAN PARTNERSHIP MODELS. THE TREMENDOUS SUCCESS OF MHSC UNDER THE LEADERSHIP OF MR. BEA HAS ALLOWED HIM TO RECEIVE PAYOUTS FROM A DEFERRED COMPENSATION PACKAGE WHICH MHSC HAS BEEN PAYING INTO OVER MANY YEARS. THESE PAYMENTS ONLY BECAME PAYABLE IF MHSC ATTAINED CERTAIN DEFINED FINANCIAL AND STRATEGIC GOALS AND THE AMOUNTS ARE AT RISK EVERY SINGLE YEAR. AS INDICATED ABOVE, MANY OF THESE GOALS WERE ACHIEVED WITHIN THE PAST FEW YEARS RESULTING IN A RELEASE OF THESE DEFERRED PAYMENTS WHICH IMPACTED MR. BEA'S COMPENSATION REPORTING. THE SETTING OF THESE GOALS WERE LAID OUT BY THE BOARD OF DIRECTORS IN COOPERATION WITH NATIONALLY RECOGNIZED COMPENSATION ATTORNEYS AND CONSULTANTS TO MAKE SURE ALL FACTORS WERE TAKEN INTO CONSIDERATION. MR. BEA'S COMPENSATION HAS ALSO BEEN SCRUTINIZED BY NUMEROUS OUTSIDE ORGANIZATIONS AND MOST IMPORTANTLY, THE INTERNAL REVENUE SERVICE; AND HAS PASSED INSPECTION IN EACH CASE. TOTAL COMPENSATION IS APPROVED ANNUALLY BY THE BOARD OF DIRECTORS OF MHSC.

Disregarded entities

Part I: entities that legally are the filer and file no return of their own.

• ROCKFORD HEALTH SYSTEM VENTURES LLC

  HEALTHCARE · IL · income $3,138,932 · assets $9,237,408

  Directly controlled by JAVON BEA HOSPITAL

Related corporations and trusts

Part IV: related organizations taxable as a corporation or trust.

• ROCKFORD HEALTH INSURANCE LTD

  C · INSURANCE · BD · 100% owned · share of income $1,663,000 · share of assets $1,148,564 · controlled entity

  Directly controlled by JAVON BEA HOSPITAL

• JANESVILLE MEDICAL CENTER INC

  C · MANAGEMENT OF UNION EMPLOYEES · WI

• MERCYCARE INSURANCE COMPANY

  C · INSURANCE · WI

• MERCYCARE HMO INC - CONSOLIDATED WITH MERCYCARE INSURANCE CO

  C · INSURANCE · WI