Cleveland Clinic Health System Obligated Group - FMSbonds.com

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The following chart sets forth the number of discharges during 2007 by northeast Ohio’s healthcare serviceproviders:Discharge StatisticsHealthcare System Year Ended December 31, 2007 (1)Cleveland Clinic Health System 161,592University Hospitals 94,023Summa Health System 65,084Akron General Health System 28,734MetroHealth Medical Center 26,866Parma Community 17,539Lake Hospital System 16,443Community Health Partners 15,648Other Hospitals (2) 14,695Total 440,624(1)(2)The source of the discharge numbers is The Center for Health Affairs Volume Statistics, December 2007 except for Summa HealthSystem and Akron General Health System, which were obtained from Ohio Hospital Association 2007 data.“Other Hospitals” includes all hospitals not listed above that discharged patients from northeast Ohio.Economic and Demographic Information. In August 2007, the U.S. Census Bureau released statisticalinformation indicating that the City of Cleveland had the fourth highest percentage of people living below thefederal poverty line when compared to other American cities with populations in excess of 250,000. The estimatedrate of unemployment in June 2008 was 10.1% for the City of Cleveland, 8.1% for Cuyahoga County, 7.7% for theCleveland Primary Metropolitan Statistical Area (i.e., Cuyahoga, Geauga, Lake, Lorain and Medina counties) and6.6% for the State of Ohio, based on information from the Ohio Department of Jobs and Family Services.According to the U.S. Census American Community Survey for 2006, the most recent year for which data areavailable, median household income was $26,535 in the City of Cleveland, $41,522 in Cuyahoga County, $45,925in the Cleveland Primary Metropolitan Statistical Area, $44,532 in the State of Ohio and $48,451 nationally. Mostrecently, reports have indicated that the Cleveland area has been hard hit by the current mortgage crisis throughoutthe U.S., with foreclosure activity significantly increasing.While there is no established correlation between such statistics or conditions and the current or futuredemand for the Health System’s healthcare services or its financial performance, the persistence of such conditionsmay impact the Health System’s financial results in the future.FloridaFlorida Clinic and CCF Florida Hospital Corporation are two of many healthcare providers in southeastFlorida. Florida Clinic owns and operates the Weston Clinic in Weston and has the largest group multi-specialtymedical practice in Broward County. CCF Florida Hospital Corporation owns and operates the 150-bed WestonHospital, which competes in its primary service area with 17 hospitals. The most significant competition comesfrom three other hospitals and health systems, each of which has at least 400 beds, and from other physician practicegroups in the area.A-18
E. UTILIZATIONThe following tables provide selected utilization statistics for the Cleveland Clinic, the Ohio RegionalHospitals that are members of the Obligated Group and the Obligated Group as a whole:THE CLEVELAND CLINICUtilization StatisticsSix Months EndedYear Ended December 31, June 30,2005 2006 2007 2007 2008Available Beds (1) 1,077 1,080 1,080 1,078 1,084Percent Occupancy (1) 85.1% 87.4% 87.5% 86.1% 86.9%Inpatient Admissions (1) 53,316 53,401 52,561 26,581 25,649Patient Days (1) 325,688 332,048 336,388 168,847 167,709Average Lengthof Stay - Acute 5.91 5.95 6.16 6.11 6.38- Non-acute 9.91 11.05 10.83 10.95 9.82Surgical Cases - Inpatient 24,302 24,555 24,958 12,699 12,655- Outpatient 45,119 47,082 49,028 24,455 24,262- Total 69,421 71,637 73,986 37,154 36,917Emergency Room Visits 62,841 61,916 59,194 25,407 25,518Acute Medicare Case Mix Index 2.26 2.28 2.30 2.32 2.36Total Acute Patient Case Mix Index 2.13 2.16 2.15 2.14 2.26(1)Acute and non-acute, including rehabilitative and psychiatric services within non-acute, but excluding newborns and bassinets.OHIO REGIONAL HOSPITALSUtilization StatisticsSix Months EndedYear Ended December 31, June 30,2005 2006 2007 2007 2008Available Beds (1) 1,816 1,868 1,890 1,888 1,952Percent Occupancy (1) 71.0% 70.2% 70.9% 69.0% 68.7%Inpatient Admissions (1) 88,632 89,525 89,694 45,106 46,742Patient Days (1) 470,816 474,279 482,780 237,054 243,914Surgical Cases - Inpatient 25,369 24,299 25,314 13,319 13,308- Outpatient 57,916 55,345 54,127 27,548 27,163- Total 83,285 79,644 79,441 40,867 40,471Emergency Room Visits 289,246 288,193 284,434 138,204 136,607(1)Acute and non-acute, including rehabilitative and psychiatric services within non-acute, but excluding newborns and bassinets.A-19
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NEW ISSUEBOOK ENTRY ONLYSee “RATI
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TABLE OF CONTENTSINTRODUCTORY STATE
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OFFERING CIRCULARRelating to$452,34
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Security and Sources of Payment for
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Upon issuance of the Series 2008A B
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(ii) acquisition of magnetic resona
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$147,200,000 Term Bonds Due January
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that the redemption is conditional
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Use of Certain Terms in Other Secti
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County BondsThe Cleveland Clinic an
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The Cleveland Clinic regularly revi
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ESTIMATED SOURCES AND USES OF FUNDS
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DEBT SERVICE COVERAGEThe following
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MedicareGeneralApproximately 29% of
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there is no assurance that the Obli
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Medicare Conditions of Participatio
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fiscal year’s budget that are in
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Federal Regulatory and Contractual
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Stark-type statutes have fewer exce
Page 39 and 40: party or for any services rendered
Page 41 and 42: typically in a position to refer pa
Page 43 and 44: OhioOhio Certificate of Need Progra
Page 45 and 46: performance demonstration programs
Page 47 and 48: manifest injustice would otherwise
Page 49 and 50: and properties owned or operated by
Page 51 and 52: plan of reorganization, with one ex
Page 53 and 54: percentage may be composed wholly o
Page 55 and 56: The Internal Revenue Service Form 9
Page 57 and 58: Charity Care, Underinsured and Unin
Page 59 and 60: • Proposals to eliminate the tax-
Page 61 and 62: acting in the capacity of underwrit
Page 63 and 64: Frederick R. Nance, Regional Managi
Page 65 and 66: FINANCIAL POSITION — D. BALANCE S
Page 67 and 68: The CommissionBecause the Series 20
Page 69 and 70: APPENDIX ACLEVELAND CLINIC HEALTH S
Page 71 and 72: TABLE OF CONTENTSPageINTRODUCTION .
Page 73 and 74: This Appendix to the Offering Circu
Page 75 and 76: A. ORIGINS AND FUNDAMENTAL MISSIONT
Page 77 and 78: C. GOVERNANCE OF THE CLEVELAND CLIN
Page 79 and 80: Voting Members of theBoard of Trust
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Page 83 and 84: Principal Operating Officers. The d
Page 85 and 86: In addition to the broad range of o
Page 87 and 88: The main campus also includes a com
Page 89: GovernanceThe Cleveland Clinic is t
Page 93 and 94: Statistical Information. The follow
Page 95 and 96: I. COLLABORATIVE PROGRAMSIn additio
Page 97 and 98: Clinic’s charity care policy, see
Page 99 and 100: statements filed with Digital Assur
Page 101 and 102: CLEVELAND CLINIC HEALTH SYSTEMConso
Page 103 and 104: OBLIGATED GROUPConsolidated Stateme
Page 105 and 106: PART IV.MANAGEMENT’S DISCUSSION A
Page 107 and 108: increase in minor equipment purchas
Page 109 and 110: The following table sets forth the
Page 111 and 112: pension plans’ funded status in t
Page 113 and 114: of funding to the pension plan offs
Page 115 and 116: portfolio. Offsetting the decrease
Page 117 and 118: • Clinic Care, Inc. (“Clinic Ca
Page 119 and 120: APPENDIX BCERTAIN FINANCIAL STATEME
Page 121 and 122: A UDITED C ONSOLIDATED F INANCIAL S
Page 123 and 124: • Ernst & Young LLPSuite 1300925
Page 125 and 126: Liabilities and net assetsCurrent l
Page 127 and 128: Changes in Net AssetsNet AssetsTemp
Page 129 and 130: Cleveland Clinic Health SystemNotes
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Cleveland Clinic Health SystemNotes
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Other Financial Information
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• Ernst & Young LLPSuite 1300925
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Liabilities and net assetsCurrent l
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Liabilities and net assetsCurrent l
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Cleveland Clinic Health SystemConso
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Cleveland Clinic Health SystemConso
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APPENDIX CSUMMARY OF BASIC DOCUMENT
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APPENDIX CSUMMARY OF BASIC DOCUMENT
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“Bond Indenture” means the Bond
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period of three months from the com
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PROPERTY”, and all improvements,
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direct, express or charitable trust
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Rate Hedge” for purposes of this
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Debt according to a fixed schedule
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“Officer’s Certificate” means
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provided, however, that Series 2008
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(t) liens on money or obligations d
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Project Administrator. In the event
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“Stated Maturity” means, when u
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(b) the Cleveland Clinic, or if the
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(d) the Master Trustee receives an
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(g) the loan of cash or other non-O
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under this caption shall be deemed
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Supplemental Indenture to which suc
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emedy thereunder, unless the Noteho
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purchase or other acquisition or re
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limitation, (A) the Special Funds a
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(b) Default in the payment of the p
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Fund Requirements, in the order of
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(g) to evidence the appointment of
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THE LEASEThe Lease contains various
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(a) Failure by the Cleveland Clinic
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APPENDIX DPROPOSED FORM OF OPINION
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PROPOSED TEXT OF LEGAL OPINION OFSQ
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October __, 2008Page 32008A Bonds c
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