Living Out a Spirit of Courageous Innovation

It has been said that the one constant in life is change. Yet it can be difficult for us to let go of the old and comfortable so we can reach out to grasp the new and unfamiliar. For God our Creator, the work of creation was not a one-time event – it continues through the fullness of time. As God's children we are called to be co-creators in building the kingdom, and that calling requires us to embrace the Ascension Health Value of creativity and be courageous innovators.

In these times of accelerating change for healthcare and the world's economic and political systems, the U.S. Catholic health ministry has been challenged like never before – challenged to live out our Value of creativity through courageous innovation and a heightened focus on stewardship. Ascension Health has risen to that challenge this past year, taking bold steps in new directions in order to fulfill our Mission of serving all persons with special attention to those who are poor and vulnerable.

Early in the fiscal year we began a process to review and refine our Strategic Direction, which guides our planning efforts. This year's annual report begins with a summary of that work, emphasizing the need to put the person at the center of all we do. The report also reaffirms the key elements of the refined Strategic Direction, highlights the progress we have made on achieving our 2020 Vision, including our ability to continue to meet the growing needs of the communities we serve by providing more than
$1.2 billion in Care of Persons Living in Poverty and Community Benefit.

Even while celebrating progress, we realize that we cannot simply continue in our old, comfortable ways. New times and new challenges call for new ideas and approaches. In the Gospel of Mark, Jesus tells us about the importance of wisdom:

No one sews a patch of unshrunk cloth on an old garment; otherwise the patch pulls away from it,
the new from the old, and a worse tear results. No one puts new wine into old wineskins; otherwise the wine will burst the skins, and the wine is lost and the skins as well; but one puts new wine into fresh wineskins.
Mark 2:21-22

Thus inspired, this year Ascension Health set about preparing the new wineskins by launching a number of innovative initiatives to help us to not only respond to current challenges, but also position our national health ministry for continued success. Those initiatives include:

• Ascension Health Ministries. During the year the members of our sponsoring communities worked to develop a new sponsorship model for Ascension Health. The ministry is now sponsored by a new, non-congregational public juridic person known as Ascension Health Ministries. This model assures the ministry will be sustained and strengthened over time, with religious and lay persons being responsible for the ministry and welcoming others to join.
• Ascension Health Care Network. Ascension Health and Oak Hill Capital Partners formed this innovative, for-profit joint venture to provide an alternative funding source for the acquisition of Catholic hospitals and other healthcare provider entities. AHCN will offer these entities access to superior financial, operational and clinical resources. As hospitals across the country face many difficulties in the current economic climate – including evolving clinical requirements and the need to keep pace with technological innovations – AHCN provides a solution for those hospitals to move forward with the resources and expertise they need to survive and thrive, while enabling them to maintain their Catholic identity. Leo P. Brideau, FACHE, formerly President and CEO of Columbia St. Mary's, Milwaukee, serves as President and CEO of AHCN.
• Catholic Healthcare Investment Management Company (CHIMCO). Catholic Healthcare Investment Management Company makes the expertise of Ascension Health's investment professionals available to other health systems, giving them a partner with compatible values and a track record of success during turbulent times.
• Resource and Supply Management Group. By reorganizing our supply chain and materials management function into a separate operating unit, we are creating greater value for our Health Ministries, freeing up more resources to be applied to improving direct patient care.

Development of our refined Strategic Direction put us in a perfect position to examine whether we are organized optimally to realize our Vision by 2020. As the fiscal year came to a close, with the endorsement of the Board and Sponsors, senior leaders began developing a new organizational model to optimize the performance of Ascension Health and each of its components in these challenging times to ensure the ability to carry out the Mission and most effectively achieve the refined Strategic Direction. That work is leading to a new organizational model to be implemented in fiscal 2012.

As Ascension Health continues to evolve and innovate, we acknowledge the tremendous legacy we inherited from those who came before us. We thank them for their service and dedication, and we thank you for your continued interest in Ascension Health and our Health Ministries.

Sincerely,

Sr. Kathleen Kelly, CSJ
FY11 Chair, Board of Trustees

Sr. Kay Ryan, CSJ
FY11 Chair, Sponsors Council

Anthony R. Tersigni, EdD, FACHE
President & Chief Executive Officer

Sr. Kathleen Kelly, CSJ

Sr. Kay Ryan, CSJ

Anthony R. Tersigni, EdD, FACHE