DOCTORS' MEMORIALHOSPITAL,me.

Financial Statements
for the
Years Ended May 3 I, 2003 and 2002

(with Independent Auditors' Reportthereon)

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 DOCTORS' MEMORIAL HOSPITAL, INC.

Tableof Contents

May 31,2003 and 2002

Pa~

Independent Auditors' Report 1

Financial Statements:
Balance Sheets-- Unrestricted Funds """""""""" """""""""""""""""""""" 2-3

Statements of Operations and Changes in Unrestricted Fund Balance 4

Statements of Cash Flows 5

Notes to Financial Statements """"'" 6-16

 Crisp
Hughes
CERTIFIEO
.11
PUBLIC ACCOUNTANTS
Evans LLP
AND CONSULTANTS

- Independent Auditors' Report-

The Board of Directors

Doctors' Memorial Hospital, Inc.

We have audited the balance sheets--unrestrictedfunds of Doctors' Memorial Hospital, Inc. (the
"Hospital") as of May 31, 2003 and 2002, and the related statementsof operations and changes in
unrestricted fund balance, and cash flows for the years then ended. These financial statements are
the responsibility of the Hospital's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted in the United
States of America and GovernmentAuditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accountingprinciples used and significant
estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonablebasis for our opinion.

In accordance with Government Auditing Standards, we have also issued our report dated July
11,2003, on our consideration of the Hospital's internal control over financial reporting and our
tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That
report is an integral part of an audit performed in .accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the results of our
audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Doctors' Memorial Hospital, Inc., as of May 31', 2003 and 2002, and the
results of its operations and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

July 11, 2003

~ ~s~ /;lY'

225 Peachtree Street, NE 404.586.0133

Suite 600 404.525.8705 fax
Atlanta. GA 30303-1728 www.che-llp.com (1)
AFfiLIATED WORLOWIOE

THROUGH AGN INTERNATIONAL

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 DOCTORS' MEMORIAL HOSPITAL, INC.

Balance Sheets--UnrestrictedFunds

May 31,2003 and 2002

Assets 2003 2002

CUlTentassets:
Cash and cash equivalents $ 1,840,529 $ 2,157,356
Certificates of deposit 400,000 400,000
Receivables:
Patient accounts receivable, net of allowance for
doubtful accounts and contractual adjustmentsof
approximately $5,118,000 and $4,102,000in 2003
and 2002, respectively 3,743,613 4,535,972
Other receivables 266,785 69,507
Estimated third-party payor settlements - 202,782
Supplies 729,013 527,997
Prepaid expenses and other current assets 152,307 46.687
Total current assets 7.132.247 7.940,301

Property and equipment, net 5,794,647 3,098,727

Loan costs, net 132.144 146.288

Total assets $ 13.059.038 $ 11.185.316

The accompanyingnotes are an integral part of these financialstatements.

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 Liabilities and Fund Balance 2003 2002

Current liabilities:
Accounts payable and accrued expenses $ 2,411,894 $ 1,392,802
Estimated third-party payor settlements 249,225 149,368
Current installments oflong-term debt 544,276 314,636
Current installments of capital leases 34.697 40.333
Total current liabilities 3.240.092 1.897.139

Long-termdebt, excludingcurrentinstallments 4,439,860 1,531,361

Capital leases, excluding current installments 45.874 80.570

Total liabilities 7.725.826 3.509.070

Unrestricted fund balance 5.333.212 7.676.246

Total liabilities and fund balance $ 13.059.038 $ 11.185.316

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 DOCTORS' MEMORIAL HOSPITAL, INC.

Statements of Operationsand Changes in UnrestrictedFund Balance

For the Years Ended May 31, 2003 and 2002

2003 2002
Revenues:
Net patIent service revenues $ 23,487,118 $ 23,119,736
County contributions 676,158 611,882
Other revenues 269,971 268,029
Total revenues 24.433,247 23.999,647

Expenses:
Salaries and benefits 12,733,850 10,665,590
Contract labor 618,912 611,616
Supplies 3,159,849 3,019,312
Professional fees 1,363,331 1,290,751
Purchased services 964,387 913,844
Utilities and telephone 446,470 419,877
Facility and equipment rental 731,109 667,889
Depreciation and amortization 938,586 895,789
Insurance 669,275 572,101
Provision for bad debts 4,483,707 3,368,847
Interest 151,710 128,520
Other 591.640 704,314
Total expenses 26,852,826 23,258.450

Income (loss) ITomoperations (2.4 19.579) 741.197

Non-operating income (loss):

Loss on disposal of equipment and leasehold improvements (97,118)
Contributions 173,663 295.532
Total non-operating income 76.545 295.532

Excess pfrevenues over (under) expenses (2,343,034) 1,036,729

Unrestricted fund balance, beginning of year 7,676.246 6,639,517

Unrestricted fund balance, end of year $ 5.333.212 $ 7.676.246

The accompanyingnotes are an integral part of these financial statements.

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 DOCTORS' MEMORIAL HOSPITAL, INC.

Statements of Cash Flows

For the Years Ended May 31,2003 and 2002

2003 2002
Net cash flows from operating activities:
Income (loss) from operations $ (2,419,579) $ 741,197
Interest expense considered financing activity 151,710 128,520
Interest income considered investing activity (42,018) (56,666)
Adjustments to reconcile income (loss) from operations
to net cash provided by operating activities:
Depreciationand amortization 938,586 895,789
Provision for bad debts 4,483,707 3,368,847
Changes in assets and liabilities:
Patient accounts receivable (3,691,348) (3,633,480)
Other receivables (197,278) (20,040)
Estimated third-party payor settlements 302,639 16,971
Supplies (201,016) (1,688)
Prepaid expenses and other current assets (105,620) 9,645
Accounts payable and accrued expenses 1,019,092 (770,895)
Net cash flow provided by operating activities 238,875 678.200

Cash flows from non-capital financing activities:

Non-operating income consisting of contributions 173,663 295532

Cash flows from capital and related financing activities:

Purchase of equipment (3,717,480) (1,032,480)
Loan issuance costs - (150,039)
Payments on capital lease obligations (40,332) (32,304)
Payments on long-term debt (158,182) (655,562)
Proceeds from the issuance of debt 3,296,321 1,671,865
Interestpaid on debt (151,710) (128,520)
Net cash used by capital and related financing activities (771,383) (327,040)

Cash flows from investing activities:

Change in assets limited as to use - 81,010
Interest income 42,018 56,666
Net cash provided by investing activities 42,018 137,676

Net increase (decrease) in cash and cash equivalents (316,827) 784,368

Cash and cash equivalents at beginning of year 2,157,356 1,372,988

Cash and cash equivalents at end of year $ 1.840.529 $ 2.157.356

The accompanying notes are an integraL part ofthese financial statements.

(5)

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 DOCTORS' MEMORIAL HOSPITAL, INC.

Notes to Financial Statements

For the Years Ended May 31, 2003 and 2002

1. Summary ofSienificant Accountine Policies

Oreanization and Basis of Presentation - Doctors' Memorial Hospital, Inc. (the

"Hospital") is a not-for-profit acute care hospital located in Perry, Florida. The Hospital
began operations on May 15, 1992 under an agreement entered into with the Board of
County Commissioners of Taylor County (the "County Board") to operate the County's
facility. The Hospital leases the hospital facility from the County (See Note 12 for leasing
information).

The Hospital applies the accounting and reporting guidelines set forth in the American
Institute of Certified Public Accountants (AlCPA) Audit and Accounting Guide, Health
Care Organizations ("Guide"). One of the purposes of the Guide is to establish the
classification of Health Care Organizations based on their operating characteristics. The
Hospital has been classified as a governmental health care organization based on the fact
that its board members are appointed by the members of the County Board and due to the
leasing arrangement described above.

Pursuant to Government Accounting Standards Board ("GASB") Statement No. 20,

Accounting and Financial Reporting for Proprietary Funds and Other Governmental
Entities That Use Proprietary Fund Accounting, the Hospital has elected to apply the
provisions of all relevant pronouncements of the Financial Accounting Standards Board
(FASB), including those issued after November 30, 1989, that do not conflict with or
contradict GASB pronouncements.

Use of Estimates - The accounting principles followed by the Hospital and the methods
of applying these principles conform with accounting principlesgenerally accepted in the
United States of America ("GAAP") and with general industrypractices. In preparing the
financial statements in conformity with GAAP, management is required to make
estimates and assumptions that affect certain reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Cash and Cash Equivalents - Cash and cash equivalents include investments in highly
liquiddebtinstrumentswithanoriginalmaturityof threemonthsor less.

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DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

Certificates of Deposit - Certificates of deposit are short-tenn investments with maturities

of six and twelve months.

Supplies - Supplies are valued at a method that approximates the lower of cost or market,
using the first-in, first-outmethod.

Property and Equipment - Property and equipment acquisitions are recorded at cost.
Depreciation is recorded using the straight-line method over the estimated useful life of
each class of depreciable asset. Equipment under capital leases is amortized on the
straight-line method over the shorter period of the lease tenn or the estimated useful life
of the equipment. Such amortization is included in depreciation and amortization in the
financial statements. Property and equipment being leased from the County (Note 12) are
not reflected in the accompanying financial statements.

Loan Costs - Loan costs are amortized over the life of the related borrowings using the
straight-linemethod.

Net Patient Service Revenue - Net patient service revenue is reported at the estimated
net realizable amounts from patients, third-party payors, and others for services rendered,
including estimated retroactive adjustments due to future audits, reviews, and
investigations. Retroactive adjustments are accrued on an estimated basis in the period
the related services are rendered and adjusted in future periods as adjustments become
known or as years are no longer subject to such audits, reviews, or investigations. Laws
and regulations governing the Medicare and Medicaid programs are extremely complex
and subject to interpretation. As a result, there is at least a reasonable possibility that
recorded estimates will change by a material amount in the near tenn.

Revenues from the Medicare and Medicaid programs accounted for approximately 54%
and 60% of the Hospital's net patient service revenue for the years ended May 31, 2003
and 2002, respectively.

Charity Care - The Hospital provides care to patients who meet certain criteria under its
charity care policy without charge or at amounts less than its established rates. Because
the Hospital does not pursue collection of amounts detennined to qualify as charity care, .
they are not reported as revenue.

Income Taxes - The Hospital is a not-for-profit corporation as described in Section

501(c)(3) of the Internal Revenue Code and is exempt from federal income taxes on related
incomepursuant to Section 501(a) ofthe Code.

Reclassification - Certain amounts in the May 31, 2002 financial statements have been
reclassifiedto confonn to the May 31, 2003 presentation.

(7)

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 DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

2. Net Patient Service Revenue

The Hospital has agreements with third-party payors that provide for payments to the
Hospital at amounts different from their established rates. A summary of payment
arrangements with major third-party payors follows:

Medicare -
* Inpatient acute-care services rendered to Medicare program beneficiaries are paid at
prospectively determined rates per discharge. These rates vary according to a patient
classification system that is based on clinical, diagnostic and other factors.
* Reimbursement for outpatient services is under a prospective payment system'
called the Ambulatory Payment Classification System ("APCS"). Prospective
payment rates are established for each group of services provided in the outpatient
departments of organizations for the diagnosis or treatment of beneficiaries. This
system categorizes payments according to clinical diagnoses and resource use.
Services covered under other Medicare fee schedules are excluded and will
continue to be paid using the fee schedules.
* Home health services are paid on a prospective payment system that revolves
around a 60-day "episode of care". The payment rendered for the "episode of care"
will cover all services and supplies.

The Hospital is subject to various final settlements determined after submission of annual
cost reports and audits by the Medicare fiscal intermediary. The Hospital's classification
of patients under the Medicare program and the appropriateness of their admissions are
subject to an independent review by a peer review organization. The Hospital's Medicare
cost reports have been final settled by the Medicare fiscal intermediary through May 31,
2000. The Hospital's Medicare cost reports for 2001 and 2002 have been filed with the
fiscal intermediary and tentatively reviewed, but are subject to audit by the governmental
agency. An estimated Medicare cost report provision for 2003 has been reflected in the
accompanying financial statements within estimated third-party payor settlements.

Medicaid -
* Acute inpatient services rendered to Medicaid program beneficiaries are paid
according to prospectively determined per diem rates.
* All outpatient services are reimbursed based on cost metho~ology.
* Home health services are paid at prospectively determined per visit rates.

The Hospital's classification of patients under the Medicaid program and the
appropriateness of their admissions are subject to an independent review by a peer review
organization.

The Hospital recorded as revenue approximately $675,000 and $759,000 during 2003 and
2002, respectively,for funding from the State of Florida under the Medicaid Rural Financial

(8)

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DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

Assistance Program (the "Program"). Approximately $50,000 and $200,000 had not been
received at May 31, 2003 and 2002, respectively, and was recorded as a receivable and
included in estimated third-party payor settlements in the financial statements. Program
proceeds are based on an allocation of a fixed sum appropriated by the Florida Legislature
to be distributed to eligible rural hospitals based on the level of indigent and Medicaid care
provided. Such amounts have been recognized as net patient service revenue in the
accompanying statements of operations.

The State of Florida does not ensure future funding under the Program. Reduced Program
funding may impact the Hospital's operations.

Other Pavors - The Hospital has also entered into payment agreements with certain
commercial insurance carriers, health maintenance organizations, and preferred provider
organizations. The basis for payment to the Hospital under these agreements includes
prospectively determined rates per discharge, discounts from established charges, and
prospectively determined rates.

Net patient revenue decreased $202,000 and $336,000 in 2003 and 2002, respectively,
due to a change in prior year retroactive settlements of amounts previously estimated.

3. Chari!y Care

The Hospit.al provides care to patients who meet certain criteria under its charity care
policy without charge or at amounts less than its established rates. The Hospital maintains
records to identify and monitor the level of charity care it provides. These amounts
approximated $1,175,000 and $1,116,000 for the years ended May 31, 2003 and 2002,
respectively, and reflect the amount of charges forgone for services and supplies
furnished under the Hospital's charity care policy.

4. Cash and Cash Eguivalents

Cash is required to be categorized to give an indication of the level of credit risk assumed'
by the entity at year-end. The three categories of risk as defined by the Government
Accounting Standards Board Statement No.3 are as follows: .

I. Insured or registered, or securities held by the entity or its agent in the entity's
name.

n. Uninsured and unregistered, with securities held by the counterparty's trust

department or agent in the entity's name; and

III. Uninsured and unregistered, with securities held by the counterparty, or by its
trust department or agent, but not in the entity's name.

(9)
DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

Cash and cash equivalents as of May 31, 2003 and 2002, is summarized as follows:

Credit Risk Category

2003 I II In

Cash on deposit and money

market accounts* $1.840.529 $ $

2002

Cash on deposit and money

market accounts* $2,112,762 $ $
Overnight bank repurchase agreement 44.190

$2.112.762 $ $ 44.190

* The Hospital's bank demand accounts are insured to the extent covered by the Federal
Deposit Insurance Corporation ("FDIC").

2003 2002

Bank canying value $ 2.049.410 $ 2.255.333

In addition to insurance provided by the FDIC, all demand deposits are held in banking
institutions approved by the State of Florida Treasurer (the "State Treasurer") to hold public
funds. Under Florida Statutes, Chapter 280, Florida Securityfor Public Deposits Act, the
State Treasurer requires all qualifiedpublic depositories to deposit with the State Treasurer,
or another banking institution, eligible collateral equal to 50 percent to 125 percent of the
average daily balance for each month of all public deposits in excess of any applicable
deposit insurance held. The percentage of eligible collateral (generally, U.S. government
and agency securities, state or local government debt or corporate bonds) to public deposits
is dependent upon the depository's financial history and its compliance with Chapter 280. In
the event of a failure of a qualified public depository, the remaining public depositories.
would be responsible for covering any resulting losses.

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DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

5. Property and EQuipment

Property and equipment consist of the following:

2003 2002

Building improvements $ 730,235 $ 803,708

Furniture and equipment 9J 88,592 5,783,658
9,918,827 6,587,366
Less accumulated depreciation 4,124,180 3,488,639

Property and equipment, net $ 5.794.647 $ 3.098.727

In May 2003, the Hospital moved into a new facility (see Note 12 for leasing
information). In conjunction with this move the Hospital purchased approximately $3.7
million and $1 million during 2003 and 2002, respectively, of new furniture and
equipment. In addition, certain building improvements, furniture and equipment was
abandoned, and appropriately disposed, as a result of the move to the new facility.

6. Long-Term Debt

Long-term debt consists of the following:

2003 2002
Commercial loan with bank, secured by all
inventory, accounts receivable and equipment,
interest at prime (4.25%), adjusted quarterly,
interest only payable monthly through
September 2003, principal and interest
payable in monthly installments thereafter
through September 2013 $ 3,500,000 $ 1,000,000

Commercial loan with bank, secured by all

inventory, accounts receivable and equipment,
interest at prime (4.25%), adjusted quarterly,
interest only payable through August 2003,
principal and interest payable thereafter in
monthly installments through August 2013,
maximum under agreement is $1.0 million 796,321

Line of credit with bank, collateralized by

certain hospital equipment, interest at 7%
per annum, principal and interest payable
in monthly installments t~ough May 2008. 397,109 461,151

(11)
 DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

2003 2002
Line of credit with bank, interest at 3.3%
per annum, collateralized by a certificate
of deposit of $100,000, principal and
interest payable March 2004. . 154,458 174,714

Commercial loan with bank, collateralized

by equipment, interest at 6.83% per annum,
principal and interest payable in monthly
installments of$3,915 through November
2005. 107,620 145,557

Other 28,628 64.575

4,984,136 1,845,997
Less current installments 544,276 314,636

$ 4.439.860 $ 1.531.361

As discussed in note 5, the Hospital purchased a total of approximately $4.7 million of

furniture and equipment for the new facility during 2003 and 2002: The Hospital financed
the majority of these purchases through commercial loans with a bank. The $3.5 million
commercial loan is guaranteed 90% by the United States Department of Agriculture Rural
Development("USDA"). .

In conjunction with these commercial loan agreements, the Hospital and the County have
an agreement, whereby the County's 1% Sales Tax Levy ("Levy") will be utilized to
repay the commercial loans. Revenues generated for the Levy will be applied first by the
County to the payment of the principle and interest on the County's bonds, used to
finance the new facility. Any annual excess will be contributed to the Hospital to be
applied to the payment of principle and interest on the commercial loans. At May 31,
2003, a receivable from the County of $70,476 was included in other receivables for
interest payments made by the Hospital on these loans during 2003.

At May 31,2003, approximately $175,000 of unused borrowings remained on the lines of

credit.

(12)

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DOCTORS' MEMORIAL HOSPITAL, INe. Notes to Financial Statements, Continued

Scheduled principal repayments on long-tenn debt obligations are as follows:

2004 $ 544,276
2005 500,135
2006 499,870
2007 500,080
2008 516,042
Thereafter 2,423,733

$ 4.984.136

7. Debt Covenants

The $3.5 million commercial loan contains certain covenants and restrictions. Among
other items, the agreement requires maintenance of certain financial levels and ratios. At
May 31, 2003, the Hospital was not in compliance with certain loan covenants and
subsequently obtained waivers pertaining to the conditions of default for the year ending
May 31,2003.

8. Capital Lease Oblh!ations

The future minimum lease payments required under capital leases at May 31,2003, are as
follows:

2004 $ 42,363
2005 30,660
2006 20,270
93,293
Less amounts representing interest 12,722
. Present value of future minimum lease payments 80,571
Less currerit installments of capital leases 34,,697

Capital leases, excluding current installments $ 4~74

The capital lease obligations are for Hospital equipment with'interest rates ranging from
9.25% to 15.5% and payments of approximately $4,300 due monthly. Total value of
assets held by Doctors' Memorial Hospital under capital leases is approximately
$199,000 less accumulated amortization of approximately $124,000.

(13)
 DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

9. Concentrations of Credit Risk

The Hospital grants credit without collateral to its patients, most of who are local
residents and are insured under third-party payor agreements. Due to these factors,
management believes no additional credit risk beyond amounts provided for collection
losses is inherent in the Hospital's patient accounts receivable. The mix of receivables
from patients and third-partypayors at May 31, 2003 and 2002 was as follows:

2003 2002

Medicare 19% 18%

Medicaid 5% 6%
Other third-partypayors 23% 25%
Self-pay 53% 51%

100% 100%

10. Retirement Plan

Effective September 4, 1994, the Hospital offered an employee benefit plan created in
accordance with Internal Revenue Code- Section 403(b) to its employees. The plan is
available to all employees who have completed six months of service. The Hospital
makes a contributien equal to.a discretionary percentage as determined each year by the
Hespital. Participants' interest in amounts contributed by the Hospital, as well as ameunts
contributed by the participant, vest immediately.

The Hospital's contributions are invested in accordance with the investment elections
made by the participant. Loans are permitted from a minimum of $1,000 to.a maximum
of 50 percent of an employee's vested account balance or $50,000, whichever is lewer.
The Hespital centributed approximately $194,000 and $176,000, respectively, fer the
years ended May 31, 2003 and 2002.

11. Professional Liabilitv Covera2e

The Hospital is involved in litigation in the ordinary course of business related to

professional liability claims. The Hospital insures its malpractice risks on an occurrence
basis. Coverage limits under such pelicy is $1,000,000 per claim and $3,000,000 in the
aggregate with self-insurance deductibles of $50,000 per claim and $150,000 in the
aggregate. An accrual of appreximately $20,000 has been recorded at May 31, 2003 and
2002, fOt:pessible losses attributable to claims for incidents which may have o.ccurredbut
have net been identified under the Hospital's incident reporting system.

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 DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

12. Facility Lease and County Contributions

The Hospital and the County entered into a renewable lease agreement (the "Agreement")
which expires on November 19, 2005. The Agreement provides that the H;ospitalwill
operate the County's facility as a not-for-profit corporation under the laws of the State of
Florida. Additionally, the Hospital pays the County $150 annually for the use of the
facility and the Hospital pays all related maintenance and other costs. The agreement
provides an option to renew subject to the satisfaction of the County and the Hospital and
successful renegotiation of the terms of the agreement.

GAAP requires the fair value of this rental arrangement with the County to be reported as
revenue and a corresponding rent expense. The square footage under the lease is 49,126.
The fair rental value has been determined to be $7 per square foot. Accordingly,
$343,882 has been reflected as rental expense and county contribution in the
accompanying statement of operations for the years ended May 31, 2003 and 2002,
respectively. The Hospital has reflected the revenues under this arrangement as other
operating, due to the expectation of the Hospital to provide care for the indigent.

The County also subsidizes the Hospital's ambulance service. Contributions by the
County for this service amounts to $22,400 per month.

During 2003, the County funded the construction of a replacement facility to be uS'edby
the Hospital. The Hospital will operate the new facility under the existing lease with the
County. In May 2003, the Hospital moved in to the new facility. The annual fair value of
the rental arrangement and the corresponding county contribution for the new facility has
yet to be determined.

13. Contributions

During 2003 and 2002, the Hospital received grants of approximately $167,000 and
$286,000, respectively, from the State of Florida Department of Health for fixed capital
improvements to acquire, repair, improve or upgrade systems, facilities or equipment.

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DOCTORS' MEMORIAL HOSPITAL, INC. Notes to Financial Statements, Continued

14. Functional Ex}!enses

The Hospital provides general healthcare services to residents within its geographic
location. Expenses relatedto providing these services are as follows:

2003 2002

Healthcare services $ 23,775,953 $ 21,089,693

General and administrative 3,076,873 2.168,757

$ 26,852.826 $ 23.258.450

(16)

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