stewardsANNUAL REPORT 201 1

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stewardwhat it means to be a

The Benedictine Health System is a mission-based, non-profit health system headquartered in Duluth, Minn., sponsored by the Benedictine Sisters of St. Scholastica Monastery in Duluth. BHS provides complete long-term care services for aging adults, including independent housing, assisted living, skilled nursing and rehabilitation services in seven Midwestern states.

prayer Blest are You, God of the Universe,

the gifts of all creation come from You.

Thank You for our human,

natural and financial resources.

You inspired Saint Benedict

to hold in trust the gifts we are given.

Help us to care for the earth,

for one another,

and for all Your gifts of

time, talent and treasure.

We ask this through Jesus, the Christ,

in the unity of the Holy Spirit,

now and forever.

Amen

STEWARDSHIP

what is a steward?For the Benedictine Health System – together with Hospitality, Respect and Justice – Stewardship is one of four Core Values that serve as a guide for our entire organization. Within BHS, we see a steward as one who embodies that value by identifying his or her own talents and generously sharing those gifts with others; who nurtures relationships by bringing out the best in others; who forms relationships with other individuals or institutions to provide for all in need.

As stewards, we receive God’s gifts gratefully, cultivate them responsibly, share them lovingly in Justice with others and return them with increase to the Lord.

In this year’s annual report, we have sought out simple everyday acts rooted in Stewardship that can have a significant impact on individuals, organizations, communities or the world at large.

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LETTER FROM THE PRIORESS

Dear Friends:

In our ever-changing world and one beset with so much turmoil, it seems fitting that the BenedictineHealth System spent 2011 focusing on the deeper meaning of Stewardship. This foundational CoreValue requires a certain stability, a sense of place and a faithfulness to the Mission during difficulttimes. Through learning and reflecting this year, BHS leadership and staff delved deeply into whatit means to be a responsible steward of this special long-term health care ministry of the Sisters ofSt. Scholastica Monastery. By doing so, it encourages Stewardship as a way of life. It is a preciouspart of our life’s journey. It also makes a clear statement about the fidelity with which BHS lives theMission entrusted to its care and nurturance.

The Rule of St.f Benedict callst us to be good stewards and to gratefully use all that we have been givenas sacred gifts. While important, Stewardship means so much more than carefully using financial andother resources to accomplish our work. Stewardship asks us to hold in reverence all we have beengiven and exercise great care in our relationships with others, ourselves and the Earth. Practicing andfully understanding Stewardship challenges us to gratefully use all resources and, especially, to callforth the best from every person. It encourages us to help people grow in wisdom and grace so thisprecious value can be passed along to those who will continue the Ministry into the future.

Our mission is clear: to carry on the healing ministry of Jesus. We are all part of a greater story andpart of a Divine Plan. In the name of all the Sisters of St. Scholastica Monastery, I want to expressour deep gratitude to the circle of leaders and staff members who carry our health care ministryevery minute of every day. Each one of you is a good and worthy steward of a ministry that startedover a century ago. May you be blessed with the strength of God’s abiding grace in the ministry youserve and know that you are held daily in our hearts and in our prayers.

Lovingly yours in Christ with abounding gratitude and prayer,

Sister Lois Eckes, OSBPrioress, St. Scholastica Monastery

SISTER BEVERLYLL RAWAY, OSB

SISTER DONNA SCHROEDER, OSB, SECRETARY

TERRY SCOTT, CPA

MARY FRANCES SKALA, J.D.

DALE M. THOMPSON, CEO

BOARD OF DIRECTORS

BRIAN LASSITER, CHAIR

REPRESENTATIVE MIKE BEARD

ROXANN DAGGETT

SISTER LOIS ECKES, OSB

DEAN FOX, MD, FACP, VICE CHAIR

SISTER MARY CHRISTA KROENING, OSB

KATHLEEN LATOUR, MA, RHIA, FAHMA

SISTER DANILE LYNCH, OSB

CHANDRA MEHROTRA, PH.D.

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STEWARDSHIP

bringing out thebest in othersBy bringing out the best in others and nurturingtheir careers we are encouraging Stewardship.As Winston Churchill once said: “We make a livingby what we get; we make a life by what we give.”At the Benedictine Health System, no oneembodies this sentiment more than SisterClaudia Riehl, OSB.

Sister Claudia is well known throughout theorganization. Her hugs and words of encourage-ment have the ability to make you think that youare her favorite person in the world. And youare. She leaves you with the desire to be abetter person.

Last year, the BHS Foundation establishedthe Sister Claudia Riehl, OSB, Living a Legacyemployee recognition program to acknowledgeParticipating Organization staff who embraceSister Claudia’s zest for life and passion for ourValues. Well into her 80s, Sister Claudia retiredthis year from her post of senior consultant,Benedictine heritage and values, but she hasn’tleft our lives. Her spirit and wisdom lives on ineach and every person she touched.

STEWARDSHIP

exploring our talents and treasuresOur organization is filled with individuals who don’t simply have jobs or careers, but have found their true calling. When we do what we love, we are able to fully share our talents and treasures. This is Stewardship in its basic form.

Denise Moen, St. Gertrude’s Health and Rehabilitation Center, Shakopee, Minn., and Mary Baumann, St. Mary’s Care Center, Winsted, Minn., are two examples of the thousands of employees within BHS who give their fullest everyday; who have found their true calling. Both are recipients of the inaugural Sister Claudia Riehl, OSB, Living a Legacy award and are highly lauded by their peers and the individuals they serve.

Moen is an inspiration to others by introducing and modeling the Core Values to staff through formal methods, such as leading new employee orientation and training sessions, and informally through show-ing Hospitality, Stewardship, Respect and Justice in everything that she does. She has gone above and beyond her normal job duties by establishing an employee English as a Second Language program – which has resulted in new career opportunities for those who have taken the course – and was instrumental in beginning a collaborative with the local high school to get kids interested in nursing.

Baumann can often be found going that extra mile for the residents she serves, including shopping for necessities during non-working hours and establishing programs that makes the residents feel valued and cherished. By providing stability to the residents and her coworkers and giving her full talents, her full ability, at all times, is a true measure of Stewardship in action.

LETTER FROM THE BOARD CHAIR AND CEO

Dear Members, Partners, Supporters and Friends of the Benedictine Health System:

We are pleased to share the ongoing story of the Benedictine Health System. Focusing on our CoreValue of Stewardship this year, we examined the significance of what it means to be a responsiblesteward of this ministry of the Sisters of St. Scholastica Monastery in Duluth. We are honored to becalled to carry on their work – a responsibility that we share as partners.

The Benedictine Health System is committed to leading the transformation of Catholic long-termcare in the United States. Our Mission calls us to advance the Sister’s health care ministry withspecial concern for those in need.

Despite industry and environmental challenges, 2011 was an exceptional year for the BenedictineHealth System. An exciting and ambitious strategic plan was developed and approved this year.Our financial performance was especially strong in the midst of ever-changing reimbursement andpayer mixes. We continue our journey to performance excellence, using Baldrige to refine and buildprocesses and systems to best deliver care to the aging adults in our service regions. We work todevelop leaders both now and for the future as leadership is key to organizational quality. Andwe are immersed in the Mission and furthering the Core Values of the System every day at ourcommunities throughout the Midwest.

We hope you will enjoy reading about the System’s impact and contributions during this past year.As always, we are grateful to our exceptional staff members, volunteers, physicians, trustees andfriends for their commitment and dedication to advancing the work of the Ministry. It is throughtheir passion and dedication that the BHS Vision of health, independence and choice for agingadults truly comes to life.

Sincerely,

Brian S. Lassiter, Board Chair Dale M. Thompson, President/CEOBenedictine Health System Benedictine Health System

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2011 YEAR IN REVIEW

Working to constantly advance our health careministry, the following are selected highlightsof System accomplishments in 2011.

the System was developed with sevenkey imperatives to continue leadershipin Catholic long-term care delivery.

acknowledged 27 leaders who emulate

Survey was an impressive 91 percent withcontinued strong performance in workforcecommitment and work group performance.

$1.4 million.

partner with a mission of coordinated care

government shut down during the summer of

guide for practices that are the foundation of

during 2011 with enthusiasm for our role inthe future of Catholic long-term care andfurthering the ministry of our sponsors,

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Consolidated Statement of Operations

Selected Statistics

FISCAL YEAR ENDING JUNE 30.

TOTAL OPERATING REVENUE $ 191,122,393 $ 198,516,706 $ 215,143,216

TOTAL OPERATING EXPENSE 184,845,936 193,911,366 206,389,167

OPERATING INCOME 6,276,457 4,605,340 8,754,049

NON-OPERATING INCOME (4,805,833) 2,846,435 2,381,938

EXCESS OF REVENUE OVER EXPENSE $ 1,470,624 $ 7,451,775 $ 11,135,987

2009 2010 2011

2009 2010 2011

BED COMPLEMENT

NURSING BEDS 3,672 3,852 3,789

ASSISTED/INDEPENDENT UNITS 2,147 2,194 2,226

TOTAL BEDS/UNITS 5,819 6,046 6,015

UTILIZATION

NURSING FACILITY RESIDENT DAYS 1,208,304 1,202,848 1,204,270

ASSISTED/INDEPENDENT DAYS 689,322 717,142 740,809

TOTAL EMPLOYEE FULL-TIME EQUIVALENTS 4,669 4,901 5,092

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Collaboration

Each year, the Benedictine Health Systemreaches out to communities throughout the upperMidwest by forming relationships and collaborativearrangements with other health care and Catholicorganizations to provide complete long-term careservices. While about half of our organizations areMember Organizations owned by BHS, the othersare Ministry Partners, in which we serve as co-owners or co-sponsors, or Associate Organizations,where we undertake management obligations.

In 2011, BHS had six Ministry Partner organizations(Carondelet Long-Term Care Facilities, CedarviewCare Center, Cerenity Senior Care, Nazareth LivingCenter, Villa St. Benedict and Villa St. Vincent) andthree Associate Organizations (Clement Manor,Country Manor and Lewiston Nursing Home) on14 campuses.

PARTNERS

Operating Revenue

2011 $108,300,6122010 $102,534,133

2009 $99,235,544

Total Assets

2011 $109,142,2292010 $102,880,942

2009 $103,359,565

ASSOCIATE ORGANIZATIONS

Operating Revenue

2011 $62,647,1682010 $70,174,142

2009 $92,095,025

Total Assets

2011 $114,442,2722010 $108,988,245

2009 $115,201,622

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Consolidated Balance Sheets

ASSETS

CURRENT ASSETS

CASH AND INVESTMENTS $ 38,585,187 $ 43,147,388 $ 42,489,429

ACCOUNTS RECEIVABLE 15,274,955 15,401,856 21,294,132

INVENTORIES AND PREPAID EXPENSES 1,583,613 2,091,215 5,141,098

TOTATT L CURRENT ASSETS 55,443,755 60,640,459 68,924,659

ASSETS LIMITED TO USE 37,588,830 45,506,599 62,215,562

PROPERTY AND EQUIPMENT 146,103,689 155,438,291 165,130,017

OTHER ASSETS 8,044,427 8,498,129 8,979,701

TOTATT L ASSETS $ 247,180,701 $ 270,083,478 $305,249,939

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

ACCOUNTS PAYABLE AND ACCRUALS 21,056,613 24,214,400 30,468,388

CURRENT PORTION LONG-TERM DEBT 11,919,746 3,855,393 5,031,666

TOTAL CURRENT LIABILITIES 32,976,359 28,069,793 35,500,054

OTHER LIABILITIES 8,381,174 14,676,349 22,271,612

LONG-TERM DEBT 138,644,771 154,087,539 159,412,272

NET ASSETS 67,178,397 73,249,797 88,066,001

TOTATT L LIABILITIES AND NET ASSETS $ 247,180,701 $ 270,083,478 $305,249,939

2009 2010 2011

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NET RESIDENT SERVICE REVENUE

Private Medicaid MedicareIns./

Other

$70.1 $68.5 $44.3 $20.0

0 $50 $100 $150 $200millions

$59.9 $63.8 $37.3 $17.82009

$67.7 $63.4 $37.7 $18.12010

2011

NET RESIDENT SERVICE REVENUE

Nursing FacilityAssisted/

IndependentIns./

Other

$167.5 $33.0

0 $50 $100 $150 $200millions

2011 $2.4

$152.9 $31.92010 $2.0

$148.0 $27.92009 $3.0

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NURSING FACILITY CENSUS DAYS

Private Medicaid MedicareIns./

Other

30.8% 49.9% 12.7% 6.6%

27.0% 53.4% 12.9%2009

30.8% 50.4% 12.4% 6.4%2010

2011

0% 20% 40% 60% 80% 100%

6.8%

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HOSPITALITY

Extending warmth and acceptance to each other and everyone we serve.

STEWARDSHIP

Providing wise and respectful use of all human and material resources.

RESPECT

Cherishing and promoting the worth of all human life with dignity and reverence.

JUSTICE

Advocating for the underserved and those in need as we work to eliminate prejudice.

MISSION

The Benedictine Health System is a Catholic organization entrusted with advancing the health care ministry of the Benedictine Sisters of Duluth, Minnesota. Our mission is to witness to God’s love by providing compassionate, quality care with special concern for the underserved and those in need.

VISION

Creating Benedictine Living Communities where health, independence and choice come to life.

COMMUNITY BENEFIT

Reaching out to those we serve is adistinguishing characteristic of our Catholicand Benedictine identity. Through communitybenefit the Benedictine Health Systemimproves the health status of individuals andfamilies, increases access to health programsand other services, and helps prepare for thefuture by providing education, training andresearch. It is a key element of our Mission andis how we advance the common good whilebeing careful stewards of our many giftsand resources.

Community benefit is defined as programsor activities that provide care or treatmentas a response to identified community need.It can include charity care, unpaid costs ofpublic programs, community health services,education for health professionals, subsidizedhealth services, research and innovation,financial and in-kind donations, communitybuilding activities and other similar andrelated projects. For many years, theBenedictine Health System has followed thesystematic method for planning, tracking and

recording community benefit that wasdeveloped by the Catholic Health Association(CHA) of the United States, which has beenrecognized for its consistency in preparingand presenting this important data.

In fiscal year 2011, the Benedictine HealthSystem provided $24,436,840 in quantifiablecommunity benefit in our locations spanningseven states. This substantial contribution rep-resents a 60 percent increase in contributionsfrom those that were provided in 2010. Equallyimpressive is the fact that 84,652 individualswere served through BHS community benefitservices and programs in 2011.

Community benefit is a tangible way todemonstrate the important value BHSParticipating Organizations bring to the peopleand communities we serve. It helps us tell ourstory and supports our commitment to the BHSMission, Vision and Core Values, as well as thehealth care vision of our sponsor, the Sisters ofSt. Scholastica Monastery in Duluth.

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BENEDICTINE HEALTH SYSTEM FOUNDATION

The Benedictine Health System Foundation andits 24 Association Foundations are dedicated toreceiving the gifts of others and investing themwisely so that they can increase and providegreater benefit for those in the care of BHSParticipating Organizations.

Gifts have made a difference in the lives of manyacross the System as illustrated by the following:

Anne Foundation helped build an additionto Callista Court with 30 new assisted livingapartments on three floors.

St. Peter Foundation received BHSF’s largest-

gratefully acknowledge the generosity of the

the Davis Family Dairies.

employees received the first Sister Claudia

recognition program award.

with the goal to support efforts to develop

and enhance safety. Grants have helpedBHS install ceiling tracks in most Minnesotalocations to enhance resident care andemployee safety. Performance awards havefunded studies designed to reduce resident

-ment. Residents in one funded therapy program

satisfaction with their care.

BHS corporate employees continue theircommitment to making a difference in the

to provide support to System employees

help facilities enhance their environmentand services.

Efforts to strengthen Associated Foundation’sphilanthropic efforts continue. BHSF’s major giftcollaborative has resulted in the development ofa major gifts manual which provides tools andtechniques to enhance fund development. BHSFhas added a planned giving officer to work withthe Associated Foundations to create a planned

giving program.

2011 TOTAL NET ASSETS

$11,476,0602010

2009

2011 TOTAL CONTRIBUTIONS

$3,423,4162010

2009

2011 TOTAL CONTRIBUTIONS/GRANTS/PERFORMANCE AWARDS*

$5,161,1412010

2009

*BHS Foundation and BHS Participating Organizations

locations BENEDICTINE HEALTH CENTER DULUTH, MINN.

WESTWOOD APARTMENTS

WESTWOOD TERRACE

BENEDICTINE HEALTH CENTER NEW BRIGHTON, MINN.

AT INNSBRUCK

BENEDICTINE HEALTH CENTER MINNEAPOLIS, MINN.

OF MINNEAPOLIS

BENEDICTINE HEALTH SYSTEM DULUTH, MINN.

FOUNDATION

BENEDICTINE LIVING COMMUNITY ST. PETER, MINN.

OF ST. PETER

BENEDICTINE LIVING COMMUNITIES, INC. BISMARCK, N.D.

BENEDICTINE LIVING CENTER GARRISON, N.D.

OF GARRISON

THE MEADOWS

PRINCE OF PEACE CARE CENTER ELLENDALE, N.D.

EVERGREEN PLACE

ST. BENEDICT’S HEALTH CENTER DICKINSON, N.D.

BENEDICT COURT

ST. CATHERINE’S LIVING CENTER WAHPETON, N.D.

ST. GABRIEL’S COMMUNITY BISMARCK, N.D.

ST. ROSE CARE CENTER LAMOURE, N.D.

ROSEWOOD COURT

BENEDICTINE SENIOR LIVING OSSEO, MINN.

AT STEEPLE POINTE

BRIDGES CARE COMMUNITY ADA, MINN.

CARONDELET LONG-TERM CARE FACILITIES

CARONDELET MANOR KANSAS CITY, MO.

ST. MARY’S MANOR BLUE SPRINGS, MO.

VILLA SAINT JOSEPH OVERLAND PARK, KS

CEDARVIEW CARE CENTER OWATONNA, MINN.

CERENITY SENIOR CARE ST. PAUL, MINN.

CERENITY SENIOR CARE - HUMBOLDT

CERENITY CARE CENTER

CERENITY RESIDENCE

CERENITY SENIOR CARE - MARIAN OF ST. PAUL

CERENITY CARE CENTER

CERENITY RESIDENCE

CERENITY SENIOR CARE - SOUTH ST. PAUL

CERENITY RESIDENCE

CERENITY SENIOR CARE - WHITE BEAR LAKE

CERENITY CARE CENTER

CERENITY RESIDENCE

locations CLEMENT MANOR GREENFIELD, WIS.

COUNTRY MANOR SARTELL, MINN.

COUNTRY MANOR HEALTH CARE

AND REHAB CENTER

COUNTRY MANOR SENIOR APARTMENTS

COUNTRY VILLA

GLENOAKS SENIOR LIVING CAMPUS NEW LONDON, MINN.

LEWISTON VILLA NURSING HOME LEWISTON, MINN.

LIVING COMMUNITY OF ST. JOSEPH ST. JOSEPH, MO.

MADONNA LIVING COMMUNITY ROCHESTER, MINN.

OF ROCHESTER

MADONNA MEADOWS OF ROCHESTER

MADONNA TOWERS OF ROCHESTER

NAZARETH LIVING CENTER ST. LOUIS, MO.

SAINT ANNE OF WINONA WINONA, MINN.

CALLISTA COURT

SAINT ANNE EXTENDED HEALTH CARE

ST. BRIGID’S AT HI-PARK RED WING, MINN.

ST. CLARE LIVING COMMUNITY OF MORA MORA, MINN.

ST. ELIGIUS HEALTH CENTER DULUTH, MINN.

ST. GERTRUDE’S HEALTH AND SHAKOPEE, MINN.

REHABILITATION CENTER

THE GARDENS AT ST. GERTRUDE’S

ST. ISIDORE HEALTH CENTER OF PLAINVIEW, MINN.

GREENWOOD PRAIRIE

GREEN PRAIRIE PLACE

ST. MARY’S CARE CENTER WINSTED, MINN.

THE GARDEN HOUSE AT ST. MARY’S

LINDEN WOOD APARTMENTS

ST. MICHAEL’S HEALTH AND VIRGINIA, MINN.

REHABILITATION CENTER

ST. RAPHAEL’S HEALTH AND EVELETH, MINN.

REHABILITATION CENTER

SPOONER NURSING HOME SPOONER, WIS.

TEKAKWITHA LIVING CENTER SISSETON, S.D.

VILLA ST. BENEDICT LISLE, ILL.

VILLA ST. VINCENT CROOKSTON, MINN.

GOOD SHEPHERD HALL

THE SUMMIT

503 E. THIRD STREET

SUITE 400

DULUTH, MINNESOTA 55805

1995 E. RUM RIVER DRIVE SOUTH

CAMBRIDGE, MINNESOTA 55008

WWW.BHSHEALTH.ORG

© 2012 BENEDICTINE HEALTH SYSTEM