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Denver hospital giant campaigns to delay Memorial vote

January 5, 2011

A Denver hospital giant is working overtime to persuade the Colorado Springs City Council to reconsider putting Memorial Health System’s future on the April ballot.

In recent days, HCA-HealthOne, which owns seven Denver-area hospitals, has sent fliers saying “Slow Down!” and “What’s the rush?” and hired callers to urge voters to tell their council representative to slow the process — even offering to connect the call.

“HealthOne, along with some other interests, is part of a growing coalition of people who think that the City Council should open up the process rather than going ahead with the election in April,” said Kevin Walker, HealthOne’s local spokesman.

Mayor Lionel Rivera said the calls and fliers were misleading, because they don’t make clear that voters will decide the issue.

“I think that someone who is interested in acquiring Memorial Hospital is funding a campaign to mislead the public that we’re going to give away the hospital,” he said.

The fliers read, in part, “The City of Colorado Springs is considering a recommendation that would give away Memorial Hospital this April!” and “The current proposal would give away Memorial to an undefined nonprofit group.”

HCA-HealthOne is interested in buying Memorial, as are several other for-profit and nonprofit hospital groups.

The pressure is high because time is running out for the issue to make the April election.

What’s at stake is what should happen to Memorial. A citizens' commission spent almost a year considering options and recommended in November that the city-owned hospital be turned into an independent nonprofit. Most members of the City Council seem to support the proposal and a council task force is hammering out a plan that the full council is scheduled to vote on Jan. 25.

Memorial’s leadership backs the nonprofit proposal and spent $16,500 on full-page ads and $28,000 on a telephone survey to support that vision, which would include Memorial giving an initial $5 million followed by at least $500,000 a year to a city-focused health care foundation. Walker wouldn’t say how much HCA-HealthOne or other parties have spent on their campaign.

Memorial spokesman Brian Newsome slammed HCA-HealthOne’s efforts in an e-mail.

“While a person or organization has chosen to secretly spend thousands of dollars to try and undermine a public process, those who support making Memorial a nonprofit have done just the opposite,” Newsome wrote. “Unlike the people behind these anonymous phone calls and glossy mailers, the citizens’ commission that recommended making Memorial a nonprofit held town halls and dozens of public meetings, and it published hundreds of pages of research and documents on its Web site.”

Although it’s late in the day to get involved, Walker said HCA-HealthOne stepped back last year to let the citizens’ commission do its work — but expected that at some point along the way, it would get to make a formal offer to buy Memorial.

“I’m sure they thought that at some point, someone would put out a request for proposals, but they never got that opportunity,” Walker said. “That’s all HealthOne wants: To make a proposal.”

It’s estimated that selling Memorial would fetch $300-$400 million. Under state law, however, that money would have to go into a health care foundation, rather than the city’s general fund.

Even that isn’t settled, however. State Sen. Bill Cadman, R-Colorado Springs, said he wants to modify the law on selling nonprofit hospitals to allow the city to keep more of the proceeds of a potential sale. Cadman did not return calls on the issue.

Councilman Sean Paige said he supports Cadman’s proposal and the efforts to delay a vote on Memorial.

“It’s a big, momentous decision,” he said. “I’m not sure people will want to make it on the run.”

Rivera, however, said making Memorial an independent nonprofit was the best option under current law, and April was the best time to put it to voters.

“You can’t bet on a bill getting passed for determining the future of a local government,” he said. “We never do that.”

Walker wouldn’t say what HCA-HealthOne would do if the City Council goes ahead with an April vote, but Rivera said he expects the fight to continue.

“This is the free enterprise, capitalist system,” Rivera said. “They’re in it to make a buck: They look at Memorial as a very attractive target and they’re going to do what they can to protect their interests.”

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