Memorial suitors line up

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Potential buyers are already sniffing around Memorial Health System, including HealthONE, the largest private hospital company in the state.

Other hospital systems who have expressed an interest include Community Health System and Banner Health System.

HealthONE is making no secret of its interest, either. Memorial has a great reputation statewide, hence the interest, said HealthOne spokeswoman Linda Kanamine.
“It’s not all that complicated from our perspective,” she said. “We’ve known and worked with Memorial in various ways through the years. The system has accomplished a lot in the region. It’s just a good fit.”
If HealthONE purchases Memorial, it would be its first hospital venture outside the Denver metro region.
HealthONE is a joint venture between HCA, a private health care company, and the Colorado Health Foundation, the second largest nonprofit in the state.
Because it is structured in that way, HealthONE pays taxes.
“We are private; we pay taxes,” Kanamine said. “But we also had $500 million in what the IRS defines as community benefit last year.”
Those dollars are not taxed.
The interest doesn’t surprise Memorial CEO Larry McEvoy. But he points out no firm offers can be entertained “until the voters decide if they want to sell.”
Kanamine said so far, there has been little more than discussion with the civic and business leaders in the Springs, and that HealthONE understands it will be a while before it can move ahead.
McEvoy said the recession hasn’t stopped health care mergers and acquisitions.
“One way to survive in health care is to build a bigger boat,” he said, “so groups are going to be interested. It’s not surprising. Our platform here is what I call, ‘wide and deep.’ We’re an attractive target.”
Memorial would be a great purchase for any hospital system – the city is growing and services are already in place, he said. The hospital controls 60 percent of the market.
It’s little wonder that interested buyers are watching the work of the commission closely.
The hospital has been on buyers’ radars since 2008, when the city council again started discussing the sale of the hospital.
Memorial Commission chairman Steve Hyde mentioned the interest at Tuesday’s commission meeting, when the group passed a resolution that prohibits them from entering into discussions about the sale of Memorial without the rest of the commission present.
“I’ve had some contact with a proprietary hospital,” Hyde said. “I just told them that it was too early for the conversation. I did ask them for contacts with other cities who have sold their hospitals.”

10 Responses to Memorial suitors line up

  1. worked for one in florida…they don’t like alot of nurses at the bedside…you will see moral of nurses go down further…
    they are big time penney pinchers…

    jenny
    April 7, 2010 at 6:28 pm

  2. I realize that Mr. McEvoy isn’t considering offers until the voters have spoken, but I think he may want to invite the Cleveland Clinic Foundation to bid. It is a world-class hospital system.

    Ellen
    April 8, 2010 at 11:44 am

  3. OMG, so what Hyde is saying is that he is brokering a deal for something that he has major influence on. were we not discussing conflict of interest a few months ago. This is unbelievable!!!

    Ken
    April 8, 2010 at 11:47 am

  4. Selling Memorial would be such a mistake. The city would make a permanent solution to a temporary problem. We WILL come out of this recession. Selling the hospital may bring a one-time influx of cash, but what about the next recession? Then what? The city simply needs to do better planning in the good times to better weather the bad times. Memorial has been profitable over the years, THAT’s why it’s attractive and a “good fit.” I don’t see that a Denver-based profit-making organization can or will provide the same kind of care for the community. Oh, but it pays taxes, you say. Money will not make up for turning people away because they have no insurance (which won’t get rectified until 2014), or cutting services and nursing attention if it cuts into their profit goals. KEEP MEMORIAL.

    Falconlady
    April 8, 2010 at 11:52 am

  5. And I wonder whether they will provide the same level of service without huge price increases, for TriCare and Tricare for Life Veterans.

    Dave Hughes
    April 8, 2010 at 12:02 pm

  6. Steve Hyde was contacted by Community Health Services. He is not brokering a deal, but he is chairman of the commission making recommendations to council. The hospital can’t be sold until Colorado Springs voters vote on the matter — no matter what the commission recommends. Council will have to place it on the ballot.

    Amy Gillentine
    April 8, 2010 at 3:56 pm

  7. Im sure they did contact him. Sounds like he is positioning him self for a big fat M&A fee when it does sell. and hiring a PR team for a exploritory commission huh. sounds like a waist of money unless the PR team is looking to put a spin on this to the voters. Is everyone that dense to believe what they are being told? Look at the mechanics of whats going on not the statements being made.

    Ken
    April 9, 2010 at 7:33 am

  8. Now a HCA IPO didnt think they would move that fast raising capital. Doesnt get much clearer than that.

    Ken
    April 9, 2010 at 12:17 pm

  9. New to the discussion….. work for a contractor to Memorial. If Hyde has a conflict of interest, especially an interest financially, he would have, should have signed some sort of disclosure document. This needs to be determined. And the document posted for public view. This discussion of selling a publicly owned entity is so typical of cities, states who get into trouble financially, (or are mistakenly convinced that a for-profit can do the job more efficiently) its outcome is completely predictable. Cuts, cuts and more cuts. For-profits serve their stockholders, not their community or patients or employees. Though, employees could own stock and take part in the degradation of the hospitals services……as stockholders. Regardless, the propaganda for a sale of the hospital will need to be watched and responded to as soon as it starts. And the details followed/reported that any suitor makes to match the quality and quantity of services currently provided by Memorial.

    Jim
    April 10, 2010 at 9:36 am

  10. Also, any changes to the city’s charter clause regarding making up revenue for any deficits the hospital accrues will need to be watched. As posted on the Indy blog by Jan Zubeck. IF this were recommended by the commission, citizens beware. I’m not sure it would be put to a vote, though it seems it would be required.

    “Or, the commission could simply recommend that the City Charter be changed to remove an obligation to issue a property tax revenue to make up any deficit in spending. No tax has been levied for Memorial for more than 30 years, but the clause still pertains”

    Jim
    April 10, 2010 at 10:03 am