Audited Financial Statements - Sutter Health

Sutter Health and AffiliatesNotes to Combined Financial Statements (continued)(Dollars in millions)1. ORGANIZATIONSutter Health is a California not-for-profit multi-provider integrated health care deliverysystem headquartered in Sacramento, California, which includes a centralized supportgroup and various health care-related businesses operating primarily in five geographicservice areas, principally in Northern California.Sutter Health and its affiliates and subsidiaries provide health care, education, researchand administration services.The five geographic service areas include acute care and psychiatric hospitals, skillednursing facilities, medical foundations, fundraising foundations and a variety of otherspecialized health care service providers. These entities are commonly referred to as theAffiliates. Most acute care hospitals provide a full range of medical services (e.g.,surgical, intensive care, emergency room, obstetrics). All emergency rooms provideemergency care, regardless of a patient’s ability to pay. Sutter Health and its Affiliatesalso serve their communities with programs including health education, health libraries,school-based clinics, home health care, hospice care, adult day care, prenatal clinics,community clinics, immunization services, and training health professionals.2. ACCOUNTING POLICIESBasis of Combination: The combined financial statements include the accounts of SutterHealth and its controlled affiliates and subsidiaries (Sutter). All significant intercompanyaccounts and transactions have been eliminated in combination.Use of Estimates: The preparation of financial statements in conformity with accountingprinciples generally accepted in the United States (U.S.) requires management to makeestimates and assumptions that affect the amounts reported in the combined financialstatements and accompanying notes. Actual results could differ from those estimates.Cash Equivalents: Cash equivalents include all highly liquid investments with originalmaturities of 90 days or less, including money market accounts with limited market risk.Financial instruments that potentially subject Sutter to concentrations of credit riskinclude cash equivalents and investments. Sutter places certain of its cash in banks thatare federally insured in limited amounts and in investment-grade debt instruments, manyof which are backed by the U.S. Government or other government agencies. Cashequivalents are stated at fair market value.7