Denver Health describes transition to Memorial Commission

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Denver Health didn’t divorce the city of Denver when it became a hospital authority – it just decided to live in a separate house.

That’s the way CEO Patricia Gabow described the relationship between the city and its former department, Denver Health. In 1997, the hospital system split from the city, creating a separate authority that works in conjunction with the Denver Department of Health and the University of Colorado Medical School.

Some 13 years later, the relationship is cordial. The city still issues bonds for the hospital, but the hospital system is able to move much more agilely in conducting its business functions.

“For example, it would take months to get a contract from the city attorney’s office,” Gabow said. “We can turn around a contract in a day if we have to.”

Gabow spoke via teleconference to the citizens’ commission on Memorial Health System. The commission is tasked with making recommendations to city council about the future of the municipal health system. They are hearing from hospital systems throughout Colorado that made the switch to a different governance system successfully.

The hospital system also created its own pension plan years after the split. It remained part of the Denver Employees Retirement Program until 2001 when it created its own problem.

“That was a lesson learned the hard way, a painful lesson,” she said. “The city decided it was paying for old employees without getting any new money, so we had to negotiate to pay them for employees who remained in the system. Those negotiations were intense. If we had to go it again, we would have left the city pension plan in 1997.”

Denver Health also used a citizen’s commission to come up with a recommendation. Their single goal: To recommend a change in governance that would ensure the future success of the hospital. The Memorial Commission, on the other hand, is charged with maintaining the quality of health care, reducing taxpayer risk and providing access to care that is centered around the community’s needs.

They decided on an authority – a partnership with the city – because of public perception.

“At the time, we didn’t think people would accept anything with ‘profit’ in it,” she said. “They were worried that we would forget our main mission, taking care of the indigent.”