Memorial: We want to become an independent nonprofit

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The city-owned Memorial Health System would become an independent nonprofit network – free to chart its own course – under a proposal unveiled tonight by the hospital.

Hospital CEO Larry McEvoy, addressing a standing-room only crowd at the Memorial citizen’s commission, which has been meeting this year to explore the system’s future, said his administration would like to see the question on ballot in April.

The commission has been meeting since February, charged with making recommendations to city council about Memorial’s governance. Of the options under debate – which has included selling the hospital to a for-profit – going the community nonprofit system route makes the most sense, McEvoy said.

McEvoy said creating the nonprofit model would free the hospital from city control, allowing it to pursue a wider range of both marketing and financing options – as well as giving it the chance to change the way it delivers care.

“We view this as an opportunity,” McEvoy said. “And it’s one we have to seize if we’re going to stay competitive.”

As national health care reforms unfold, McEvoy hopes to create more partnerships with doctors, even hiring more doctors to work directly within the system, as a means of controlling costs.

McEvoy acknowledged that convincing the citizen’s commission and the city council is going to be tough – and that selling a change this big to the voters is going to be even harder.

“But we have to do it,” he said. “We don’t just sit in the ER and tell people we can’t heal them because it’s going to be hard.”

Details of the plan, such as the structure of the board of directors, will have to be ironed out with city council and would be included in the ballot language. A provision to make sure the hospital continues to care for indigent patients will also be part of negotiations.

But McEvoy appeared to draw a hard line on questions about whether a newly constituted Memorial should pay the city to lease back the hospital’s buildings.

“We’ll talk about it,” McEvoy said. “But the city has to realize that Memorial provides a valuable service – health care for the indigent – that equals $70 million a year. If we have to pay a substantial lease on top of that, we won’t stay in business.”

Under McEvoy’s plan, Colorado Springs taxpayers are no longer responsible for the fiscal health of the system, the city council will no longer be able to control marketing and other decisions, and much of the hospital’s negotiations with insurers and others will be done in private.

McEvoy hopes to expand Memorial’s reach, luring patients from as far away as Kansas, and he wants to be able to negotiate contracts out of the public eye and without having the competition listening.

“We have to be totally open now, because we’re a city enterprise,” he said. “But that makes it hard, because we aren’t a city.”

McEvoy’s plan also would change the way care is delivered at Memorial. He plans to embrace what’s known as “integrated care” models, in which communication between doctors, hospitals and patients is streamlined, with a single doctor in control of a patient’s care, much like the Mayo Clinic. The objective is to deliver higher quality care at a lower price.

“We’ve learned from other hospitals that providing integrated care can lower costs and increase quality,” McEvoy said. “Hospital re-admissions go down – and Medicare isn’t paying for those anymore. With those savings back into the system, we can attract more doctors and more patients.”

Click here to view Memorial’s presentation to the board.