City council wants to receive some sort of payment from Memorial Health System, but doesn’t want to lease the property to the new organization.
“I think they should own it lock, stock and barrel,” Mayor Lionel Rivera said. “I don’t see any benefit in retaining it.”
The city does want an annual payment. Rivera pointed to the Poudre Valley Health System, a system held up as a model, which pays $330,000 a year. That payment hasn’t changed, even though Poudre Valley’s revenue has jumped from $100 million the year it became a nonprofit to $1.3 billion this year.
The group also discussed a foundation, funded from Memorial’s profits, to take care of citizens’ needs.
Vice Mayor Larry Small warned against ham-stringing the system by asking for too much money.
“We don’t want to pull the money out of the system so that they can’t continue to provide high-quality care,” he said. “I like the idea of being used for specific purposes that are health care related – like the parks system – so people can relate to the use.”
Currently, all Memorial’s profits go back into the system itself. No taxpayer dollars have ever gone to support Memorial.
Memorial currently gives $430,000 to the city’s de-tox unit. That money could be used for a foundation, Rivera said.
Councilman Randy Purvis expressed concern about the concept.
“If you take money out of the system, they aren’t providing health care to people,” he said. “The hospital has 190 days of cash on hand. My question is what haven’t you been spending money on? We need to make sure that care is continued to be provided.”
Carm Moceri, chief strategy officer for Memorial, said the hospital is modeling options to provide the city a financial return on its investment.
“We don’t have a number today,” he said. “But we will have some idea of what that’s going to look like. We’ve done a financial analysis for the next five years, and we’ll use that as a baseline.”
No matter what, that’s money that comes out of health care, said Vic Andrews, board member.
“There are numbers out there,” he said. “Every dollar that comes out of the system, there’s less patient care, there’s less health care. The community has some expectation of a return, but there are already some benefits there, not the least of which is the $70 million a year in uncompensated care.”
Councilman Sean Paige said that downward pressure was needed to keep Memorial from becoming bloated.
“As an outsider, I always wondered, if you make $20 million, that’s plowed right back into the system,” he said. “I don’t see efficiencies pressures coming to bear. When you plow it back into the system, you create a fiefdom, bloated salaries. There’s no incentive to pinch (dollars).”