Hospital with situation similar to Memorial’s went nonprofit

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Carson Tahoe Regional Healthcare system in Nevada used to be a lot like Memorial Health System: It was publicly owned but did receive tax revenue for operation.

And, when officials decided to sell it, they enlisted the aid of an independent commission to explore options.

In the end, they turned the hospital into a nonprofit and haven’t looked back.

The independent commission from Memorial heard a presentation today from Carson Tahoe CEO Ed Epperson today.

He explained why officials decided to turn the hospital into a free-standing 501c3, a nonprofit system.

“Our need for capital really drove the decision,” he said. “But we wanted to retain local control, local decisions.”

At least a dozen for-profit systems expressed interest in buying Carson Tahoe, and one Universal Health Group, made a presentation to city council. They did not take being turned down well, Epperson said.

“They told us they’d buy every parcel of land big enough to build the new hospital – and there are only three in Carson City – and then we’d have no choice,” Epperson said. “For-profits have done that kind of thing before, once they realize there’s an opportunity.”

For Carson Tahoe, the move to a non-affiliated nonprofit system has been positive – both medically and financially. In an era when Standard & Poor’s downgraded the outlook for the entire health care system, Carson Tahoe was recently upgraded.

“We have money in the bank,” Epperson said. “We showed them debt is going down, while cash on hand is going up.”

The hospital also reaped the benefits of going private as the competition no longer had access to its every marketing and expansion plan.

“If we said we were thinking of building a cancer center, the hospital in Reno would move first,” he said. “Now we don’t have to be so public, so we can compete more easily.”

The move wasn’t without its difficulties. Hospital employees were no longer public employees, so a new benefits system had to be created. Employees were members of a public union, so the administration agreed they could form their own in-house union.

“The best thing I can tell you: you can’t communicate enough,” Epperson said. “Even though we had public meetings, even though the newspaper wrote about it – you can’t talk enough about what you’re doing. People want to know what’s happening to their hospital.”

“There are a lot of parallels,” said Commission chairman Bob Lally. “We are larger here, but they went through the same things. It was a good presentation.”

The meeting, held at Colorado Springs Fire Department Station #8 was part of string of community meetings meant to gather comment about the sale of the hospital.

The next meeting is scheduled for 10:30 a.m. Aug. 27 at the Julie Penrose Health Education and Research Center, 6071 E. Woodmen Road. Dr. Ronald Paulus of Mission Health System is scheduled to give a presentation.