City Council: Nonprofit best for Memorial

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All nine members of the Colorado Springs City Council appear ready to allow Memorial Health System to become an independent, nonprofit system, though that’s where their agreement ends.

The council wants to see a tangible return on the city’s investment, more details about how a proposed health care foundation would benefit the community, and guarantees that the city retains some measure of local control.

“Fundamentally, I support it,” Vice Mayor Larry Small said of the proposal to spin off Memorial. “But it’s the details about how we do it. We need to address ownership, the right of reversion, the assets. How’s it going to operate?”

After months of presentations and debate, the Memorial Citizens’ Commission will make its final presentation to the council Monday (Nov. 22). After that, the council and the administration at Memorial face an early February deadline to iron out details in order to place the issue on the April 2011 ballot. Voters will have the final say about the hospital’s future.

The council appointed the commission to examine the future of the city-owned hospital amid concerns about taxpayer liability in case Memorial’s finances eroded. Though it’s never happened, the city charter mandates taxpayer support if Memorial finds itself in financial trouble.

Interviews with each of the council members in the past week reveal they agree the status quo isn’t acceptable, and that they don’t want the city to retain absolute ownership. But they also want guarantees that the hospital system’s assets won’t be sold in the future.

“I don’t want to wake up one morning and find out the assets have been sold to the Hospital Corp. of America, and the senior administration are all sitting on a beach somewhere,” said council member Randy Purvis. “I will support whatever protections we need in order to make sure Memorial remains a city asset.”

Some council members went so far as to suggest the city maintain ownership of the system’s physical assets, with annual rent payments to the city by the new nonprofit that takes control.

“I wouldn’t be opposed to lease payments,” said council member Bernie Herpin, “as long as it isn’t a burden to Memorial’s function, which is to provide health care to Colorado Springs residents.”

Colorado Springs already has a similar arrangement in place. It leases land to Peterson Air Force Base for $1 a year.

Mayor Lionel Rivera said he hoped the city would benefit not only from lease payments, but also from the foundation proposed by the Memorial commission.

“I think that could work,” he said. “Depending on how you define health care. If we’re talking wellness classes, fighting childhood obesity, then those are great things. There could be wellness classes, exercise classes at our community centers, for instance.”

Councilwoman Jan Martin said she was withholding final judgment until she hears the complete proposal next week, but also expressed support.

“It’s an intriguing option. The hospital has a compelling vision of what the future might look like under the nonprofit scenario,” she said.

While he agreed with that notion in general, council member Sean Paige said he believed strongly that the city deserves a return on its investment — and that some money from Memorial’s operations finds its way to the general fund.

Paige also said he wasn’t willing to rush the process to make a decision by the first week in February, the deadline to put something on the ballot for the April municipal election.

“I think the hospital wants to,” he said, “but that’s because … they don’t want to wait and try to sell it to a new council. They’re going to want to put it on the ballot, and I don’t think we’ll have time to iron out all the issues, the debate.”

Paige’s concerns aside, the only issues to debate might be limited to the details surrounding an independent Memorial.

The biggest difference among council members seems to be whether Memorial will pay cold, hard cash for its independence, or if the establishment of a nonprofit health foundation — along with a provision to continue to provide indigent care — will suffice.

“I think Memorial needs to re-invest its profits in order to provide the highest quality care,” Small said. “That’s where the money needs to go. The general fund shouldn’t receive money slated for health care.”

Councilmember Scott Hente said the city should “absolutely” receive some money from Memorial. But he isn’t sure whether that should come in the form of payments to the general fund, or in funding the foundation.

While he supports spinning off Memorial, Councilmember Tom Gallagher said he doesn’t see the need for a foundation or money going to the general fund. Instead, he said he wants the hospital to go a different direction.

“Why aren’t we the center for sports medicine and research?” he asked. “That’s where the focus needs to be. It’s the perfect fit. The high-altitude training center is right next door, and there are empty floors in the tower. It makes sense; I’ve been pushing this for years.”

Still, with the city council in general agreement, it seems certain Memorial will become its own boss. The big question ahead: what will the city want in exchange?