Children’s Memorial
Hospital, Chicago
2011 Annual Report

Patrick M. Magoon President & Chief Executive Officer Children's Memorial MedicalCenter and J. Christopher Reyes Chairman Board of Directors

Thank You

It’s certainly an exciting time as we prepare to open Ann & Robert H. Lurie Children’s Hospital of Chicago on June 9, 2012. This tremendous new resource for our children is unlike any hospital, anywhere in the world. And in just a few short months, you will be able to see just how extraordinary it is. Soon, children’s healthcare and research will be elevated to new heights. Young lives will be healed and transformed. The best is yet to come.

With the support of friends like you, we are managing a complex and thorough transition process, while achieving excellence in all areas of our mission.

The quality of our care has been recognized nationally by U.S. News & World Report, the Joint Commission, and most recently, the Leapfrog Group (see Highlights below), a national consortium that promotes “leaps” in patient safety, for achieving four quality and safety practices that are proven to reduce preventable medical mistakes. And Working Mother magazine and Chicago Tribune again recognized our workplace excellence in their annual rankings.

We thank you for your continued support to benefit the children and families we are privileged to serve.

J. Christopher Reyes
Chairman Board of Directors
Children’s Memorial Medical Center

Patrick M. Magoon
President & Chief Executive Officer
Children’s Memorial Medical Center

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One Amazing Story

Two in a million: The Swanson Twins

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The Power
of Philanthropy

In fiscal year 2011, nearly 49,579 donors gave a total of $62.4 million, which allowed more than 148,443 children to receive superior healthcare and the opportunity to reach their greatest potential in life.

Stories like Luke and Jake's are made possible through the generosity of friends like you. A world-class transplantation center could not have been established without support from the Siragusa Foundation and other generous donors whose contributions help transform care.

Your gifts allow Children’s to recruit and retain the best surgeons, doctors and nurses; advance pioneering research; and provide compassionate care for children and families.

Philanthropic contributions will continue to be critically important, both to complete the new facility and to pursue the best treatments and cures for our children. Click here to help now!

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2011 Highlights

Click on the highlight bubbles to learn more!

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Serving Our
Community

Despite severe government funding challenges, Children’s Memorial Hospital has remained steadfast in its commitment to partner with the government and others to improve the health and well-being of children locally, nationally and globally.

Children’s provides more care to children insured by Medicaid than any other hospital in Illinois. In fiscal year 2011, Children’s provided twice as many inpatient, outpatient and physician pediatric Medicaid services than the next highest Illinois hospital. Last year, more than 55 percent of Children’s inpatient days were covered by Medicaid and Children’s absorbed $66 million in losses due to Medicaid underfunding. Despite significant losses like this annually, Children’s fully participates in the Medicaid program, relieving the burden of government.

Last year, the hospital also invested $33 million in efforts to serve the community. Children’s sponsored public health efforts to encourage immunizations and prevent pediatric injuries, violence, obesity and abuse.

In addition, Children’s is one of only four Level 1 Pediatric Trauma Centers in the State of Illinois. Last year we served more than 93,000 children in our Emergency Department. And, through our Discovering Health Care Careers program, we are proud to have mentored more than 150 Chicago Latino High School students since 2001, offering them paid summer internships during which they learn about promising health care career opportunities. Often, these students become our very own employees.

Learn more about how Children’s serves our community.

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Looking Ahead to
an Amazing Future

Watch this sneak peek video and Prepare to be amazed!

An outstanding construction management team and its thorough planning efforts has ensured that the construction of Ann & Robert H. Lurie Children’s Hospital of Chicago has been managed successfully and is on time to open on June 9, 2012. The exterior of the building is now complete, and the Certificate of Occupancy was issued in December 2011.

Transition and occupancy planning were a key priority last year. Each department finalized a new operations plan; training and orientation plans were created for all employees, physicians and volunteers; and the City of Chicago approved the move day plan.

More than 20 of Chicago's top cultural institutions volunteered their design expertise and shared concepts and images for the décor of each floor, ensuring that Lurie Children’s will provide a unique, healing environment for children and their families.

Learn more about Lurie Children’s

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2011 Financials
At A Glance

In fiscal year 2011, the medical center reported a strong operating performance for the hospital and the physician groups, laying the best possible fiscal foundation for our move to Lurie Children’s. Growth in surgeries and outpatient visits, together with good expense control, contributed to our second best operating income ever, $32.7 million. Our investments performed well despite volatile financial markets, and together with operating income, resulted in Excess of Revenues over Expenses of $132.5 million. Our balance sheet remains strong, with improved liquidity, coverage, and leverage measures. Our goal is to move into Lurie Children’s with a tailwind of solid operating performance and a strong balance sheet. We are off to a good start.

Consolidated Financial Summary

for the periods ending August 31, ($ in millions)

Statement of Operations 2011 2010
Patient Care Revenues, Net $ 564.3 $ 559.3
Grants, Gifts, and Endowment Income   64.9    63.6
Other Revenue   33.7   28.5
Total Operating Revenue $ 662.9 $ 651.4
         
Salaries and Benefits $ 376.6 $ 346.1
Supplies, Services, Other   211.5   221.9
Depreciation   42.1   48.2
Total Operating Expenses $ 630.2 $ 616.2
         
Income (Loss) from Operations $ 32.7 $ 35.2
Other Income (Expense) Net   99.8   35.7
Excess of Revenue over Expenses $ 132.5 $ 70.9
Balance Sheet   2011   2010
Assets
Current Assets $ 106.7 $ 88.9
Investments   984.5   1,063.5
Property and Other   996.7    837.1
Total Assets $ 2,087.9 $ 1,989.5
         
Liabilities and Net Assets        
Current Liabilities $ 131.6 $ 143.6
Long-Term Debt and Other   680.4   711.2
Net Assets $ 1,275.9 $ 1,134.7
Total Liabilities and Net Assets $ 2,087.9 $ 1,989.5
Serving Our Community 2011 2010
Charity care, losses due to Medicaid reimbursement below cost of services, and other uncompensated costs $ 69.8 $ 66.0
Resident and fellow training   15.5   15.0
Language assistance services, pastoral care, social work, art and music therapies, volunteer services, transplant patient family housing and other family support services   6.8   6.9
Research funding   4.3   8.5
Community clinic support   2.9   2.8
Child advocacy programs   0.6   0.8
Total   $99.9   $100.0
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Nationally Ranked
for Exceptional Care

Children’s is in the top 50 Best Children’s Hospitals list in all 10 specialties ranked by the U.S. News & World Report. The hospital has three specialties in the top 10 including Urology (No. 6), Gastroenterology (No. 8) and Neurology/Neurosurgery (No. 9). The hospital’s academic partner, Northwestern University Feinberg School of Medicine’s Department of Pediatrics, based at Children’s, improved its ranking to 14. For the first time, Children’s is one of 10 hospitals honored as a Top Children’s Hospital by the Leapfrog Group, a national consortium of healthcare payers that promotes “leaps” in patient safety.

More awards and accolades

A Top Performer
in Children’s Asthma Care

Children’s was one of only three children’s hospitals to be named one of the nation’s Top Performers on Key Quality Measures for Asthma Care by the Joint Commission, the leading accreditor of healthcare organizations in the U.S. Only three hospitals in Chicago were selected for the Top Performers list in any specialty.

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Milestone:
1000th Cochlear Implant

Nancy M. Young, MD, (left), founder and medical director of Children’s Audiology & Cochlear Implant Program, performed her 1,000th implant procedure, making her one of a select few in the U.S. to have achieved this distinction. Dr. Young also served as course director and program committee co-chair for the 13th Symposium on Audiology & Cochlear Implants in Children, hosted for the first time in Chicago by Children’s and Northwestern University Feinberg School of Medicine.

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Endowments Help
Recruit and Retain the Best and the Brightest

Barbara J. Deal, MD, Elfriede Pahl, MD, and C. Shekhar Mayanil, PhD, were invested in endowed positions in May. Dr. Deal, Head of the Division of Cardiology, (center) was invested as the Getz Professor in Cardiology. Dr. Pahl, Attending Physician and Medical Director of the Heart Transplant Program, (second from right), was invested as the Marvin E. Wodika Research Professor in Cardiology. Dr. Mayanil, Director of the Developmental Neurobiology Research Program at Children’s Memorial Research Center, (second from left) was invested as the Eleanor Clarke Research Scholar in Developmental Neurobiology Research. Over the years, donor support has enabled Children’s to establish 52 endowed faculty positions to advance the distinguished work of recognized leaders in pediatric medicine and science.

Largest Survey Ever Conducted
on Food Allergies in Children

Ruchi Gupta, MD, MPH, headed a national food allergy survey that found that more children have food allergies than previously reported. The widely-publicized report, published in the July issue of Pediatrics, shows food allergies affect 8 percent of those under 18 years of age, or about 5.9 million kids in the U.S. Dr. Gupta's research is supported by Dave and Denise Bunning, the Food Allergy Initiative and the Robert Wood Johnson Foundation.

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Preventing Children’s Injuries
from Batteries

Karen Maule, MD, received the Anne E. Dyson Child Advocacy Award from the American Academy of Pediatrics for her work on both the state and national levels in raising awareness of the dangers of young children swallowing button (lithium) batteries, which are found in many toys and electronic games. Dr. Maule has been working with electronics industry and battery manufacturers to urge them to develop consumer warning and industry standards to prevent access to these batteries by young children.

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Preserving the Fertility
of Young Cancer Patients

Children’s expanded its fertility preservation services for young cancer patients. Surgeon-in-Chief Marleta Reynolds, MD, (left) and Julian Schink, MD, of Northwestern Memorial Hospital, performed Children’s first ovarian harvest on a female patient, before she underwent aggressive chemotherapy and radiation, in order to preserve her fertility.

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New Legislation
to Protect Young Athletes

Cynthia LaBella, MD, medical director of Children’s Institute for Sports Medicine, provided testimony for a new Illinois law requiring high school athletes to receive physician approval before returning to play after suffering a concussion. The law also requires coaches, parents, referees and players to receive education on the warning signs of concussions. Sports medicine specialist Rebecca Carl, MD, is also working with Chicago Park District football coaches on concussion education, thanks to funding from Children’s Office of Child Advocacy.

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Rebuilding Damaged Hearts
– In a Laboratory

A study headed by Sunjay Kaushal, MD, PhD, while a surgeon at Children’s, showed that heart stem cells from children with congenital heart disease were able to rebuild the damaged heart in the laboratory. These results show great promise for children with congenital heart conditions, and may prevent the need for a heart transplant for some children.

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Bladder Regeneration Study
Heralds New Treatment

Earl Cheng, MD, (left), and Arun Sharma, PhD, developed a medical model for regenerating bladders using stem cells harvested from one's own bone marrow. This is especially relevant for children with abnormally developed bladders and another step closer to new organ replacement therapies.

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