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HCA exec worried about transparency of Memorial bidding

October 18, 2011
photo - Memorial Health System Photo by Bryan Oller
Memorial Health System Photo by Bryan Oller 

Before the ink was even dry on a request for bids to lease Memorial Health System, one likely bidder raised questions about the openness of the process.

Jeff Dorsey, CEO of the Denver hospital system HCA-HealthOne, said Tuesday he is concerned that the Memorial task force that is overseeing the lease process will not make all of the bids public.

“I can’t imagine that they wouldn’t want these bids to be open to the public,” Dorsey said. “We are specifically calling on the task force to commit to a full disclosure of all the content of the bids.”

City Council President Pro Tem Jan Martin, who heads the task force, said no decision has been made whether the bids will be made public or if the discussion and selection of a winning proposal will be conducted in public.

“I honestly don’t know what that process is going to look like today,” Martin said. “We will be as open and transparent as we can. There may be some conversations that may need to be done privately.”

Mike Anthony, the task force’s consultant on the lease process, said so far, the task force has planned to follow procurement regulations that keep bids private until a winning proposal is chosen.

The request for proposals was sent by FedEx to potential bidders Tuesday afternoon. It includes a confidentiality clause that requires bidders to not disclose their bids or speak publicly about them. Dorsey said that HCA-HealthOne, a subsidiary of the Tennessee-based for-profit hospital giant HCA, had not received the RFP yet, but would abide by the confidentiality agreement.

Another likely bidder, University of Colorado Hospital, already tripped over the confidentiality agreement. UCH CEO Bruce Schroffel and Rulon Stacey, CEO of Poudre Valley Health System, which is forming a joint venture with University, were scheduled to speak about their proposal to Memorial’s board and physicians on Thursday, but canceled the meeting after speaking with Anthony.

Memorial spokesman Brian Newsome defended the meeting, saying that keeping doctors abreast of developments in the leasing process is vital.

“We will respect the wishes or rules of the task force, but we disagree that including Memorial’s physicians in an open way in the future of Memorial’s commitment to the community is ‘against the rules,’” Newsome said in a statement.

The task force was supposed to begin setting up a scoring and evaluation system for bids on Friday, but Martin said she may cancel that meeting and wait until bids are due Nov. 14 before discussing what to make public and how to pick a winning proposal. The task force is supposed to pick a winning bid by the end of the year and then voters would affirm or reject that proposal sometime in 2012.

The task force limited the RFP to companies already running large urgent-care hospitals in Colorado. In addition to HCA and UCH, Arizona-based nonprofit Banner Health, Colorado-based nonprofit Centura Health and Memorial’s current management and board have said that they also plan to bid. Several other hospitals and health systems on the list did not respond to The Gazette’s questions about their intentions.

Dorsey said that detailed negotiations with a winning bidder might involve proprietary information that would require privacy, but said he saw nothing in the proposed RFP that would merit secrecy in the initial round.

“I don’t know that my bid is going to be the best, but we’re not afraid to make it public,” he said.

He said he is also concerned about potential conflicts of interest on the task force, because two members of the panel work for Memorial and two other members have disclosed business dealings with the hospital.

HCA-HealthOne caused a stir in January, when it sent mailings and conducted a phone campaign to urge the City Council to consider options beyond turning Memorial into an independent nonprofit, a plan an earlier task force was developing at the time.

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