January 12, 2011
Voters would be asked whether to turn the city-owned Memorial Health System into an independent nonprofit under draft ballot language approved Wednesday by a City Council task force.
The full council will consider the proposal on Jan. 25 and, if it’s approved, voters will get the final say in April.
The ballot language lays out a plan in which the new Memorial would be free of city control and the city would be freed from any financial liability for the hospital. Memorial would pay an initial $5 million into a new community health foundation, followed by annual payments that would vary depending on the hospital’s profits. The ballot measure would be accompanied by a far more lengthy memorandum of understanding that would spell out the details of the new Memorial’s structure and governance.
Mayor Lionel Rivera said he expects the City Council to approve putting the question on the ballot, but the tougher task will be explaining the deal to voters. HCA-HealthOne, which runs seven Denver-area hospitals and has expressed interest in buying Memorial, sent out fliers and staged a calling campaign in recent weeks to persuade the council to delay putting Memorial on the April ballot and to open up the process to other offers.
“There’s going to be a lot of education required,” Rivera said. “I’m sure on the other side,
HealthOne and their allies are going to spend a lot to defeat this proposal.”
Rivera said an independent Memorial offers the best hope to preserve local control over the hospital system while allowing it to grow without the restraints of city control.
“It’s certainly not losing control of the hospital,” he said. “The community maintains control through a local nonprofit board.”
Councilman Randy Purvis said he supports the proposal, but he’s not hopeful voters will agree with the complicated measure.
“I have a pessimistic view of the chances of success,” Purvis said. “The opponents are going to blanket the community with cards. It takes a huge amount of resources to combat that. We’ve got to sell (the ballot measure) and the easiest vote to make is a ‘no’ vote.”
Still to be determined is how much a year Memorial would pay into the health care foundation. Memorial’s leadership offered several scenarios, each including a fixed payment of $500,000, $750,000 or $1 million, plus a variable payment that depends on the hospital system’s success.
The draft ballot proposal:
“Shall an independent nonprofit organization be formed, separate from the City of Colorado Springs, to continue Memorial Health System’s mission to provide the highest quality patient care, including charitable care, and shall all assets used by Memorial Health System be transferred to this independent nonprofit organization that shall assume all past, present and future debts/liabilities of Memorial Health System, that shall retain the name ‘Memorial Health System,’ that shall be governed by a community Board of Trustees and required to maintain its headquarters in Colorado Springs; and that shall establish a new community foundation devoted to improving the health and wellness of local residents with a $5,000,000 up front contribution and annual contributions thereafter, without raising taxes; and shall it be mandated that a vote of the electorate would be required for any future sale of this independent nonprofit organization or sale or lease of substantially all assets of this independent nonprofit organization, with net proceeds of the sale returned to the City of Colorado Springs and that continued protection for this community would be required for any future merger; and shall the 1949 electoral ordinance for numbers 1854 (tax levy) and 1856 (Board of Trustees) and the 1965 electoral ordinance number 3131 (expansion of Board of Trustees) be rescinded in favor of this new independent nonprofit organization?”