Health giant jumps into Memorial ballot battle

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The battle over the fate of Memorial Health System is pitting one of the biggest hospital companies in Colorado, which wants to buy Memorial, against a fledgling group of locals that supports the hospital’s bid to become a nonprofit.

HealthOne, controlled by for-profit giant HCA, has launched a campaign to halt progress of the effort to put the Memorial issue before voters in April.

The group has paid for a direct-mail campaign and hired a call center to encourage voters to contact council members and request a delay in putting the question on the ballot.

No one receiving either the mailer or the phone calls would be able to make the HealthOne connection. The company is not identified as the backer of either effort. The mailer also is incorrect. It proclaims the city could receive $350 million from the sale of Memorial. State law prohibits cities from benefiting from the sale of nonprofit hospitals. Any profits – and they won’t equal $350 million because Memorial’s debts will have to be paid from the sale – would go into a trust fund for a community foundation.

Kevin Walker, a Springs consultant hired by HealthOne, declined to say how much money the hospital giant is planning to spend on the campaign. He also refused to say how much he was getting paid to spread its message in the Springs.

The Colorado Springs City Council appointed a citizens’ commission last year to explore options for the city-owned health care system.

The nine-member commission agreed that Memorial should become an independent nonprofit. A task force, made up of Memorial board members and city council members, this week finalized the language of a ballot measure for the April municipal election. City Council will vote on whether to place the measure on the ballot at its Jan. 25 meeting.

While HealthOne has canvassed the market with phone calls and flyers, Memorial’s case is being made by a group calling itself Keep Colorado Springs Healthy.

The newly created organization — headed by Memorial board chairman Arlene Stein — is raising money to help its bid to convince voters that the best strategy is to turn Memorial into an independent nonprofit system.

The group has raised about $35,000 so far, said treasurer Jeff Murrell. Although HealthOne won’t say how much it is spending, it has the ability to spend many times that amount.

Memorial for a brief time hired a public relations firm, SE2 of Denver, to help sell its viewpoint. But SE2 principal Eric Sondermann had to pull out of the contract last month after HealthOne publicly announced its opposition to the nonprofit idea. HealthOne is one of Sondermann’s clients.

Memorial was criticized for the hire — and for spending $16,500 on full-page newspaper ads and $28,000 on a telephone survey to promote its vision of the future. But the days in which Memorial’s administration can have a voice in the debate are numbered. If the council places the issue on the ballot later this month, as city employees, Memorial workers can no longer discuss their plan.

That places the hospital at a disadvantage, said CEO Larry McEvoy.

“There’s no way Memorial can compete either politically or financially with someone with these deep pockets,” McEvoy said. “Our money has to go toward patient care. The other thing is that Memorial took a huge amount of criticism for articulating what we think is best for patients.”

Walker said HealthOne was interested only in slowing down the process long enough to submit a proposal for its own view of what should happen with Memorial. The hospital giant wants to expand beyond the Denver area, where it owns eight hospitals and employs 8,500 people.

“The Memorial Commission,” he said, “did good work, but they left out this step — allowing hospital systems to explain how they would work with Memorial — how they would handle local control, create jobs, expand Memorial’s reach. They didn’t get to do that.”

HealthOne hasn’t been shy about expressing its interest in Memorial. Last year, while the commission was early in the process, spokeswoman Linda Kanamine said the system was interested in purchasing Memorial.

“It’s not all that complicated from our perspective,” she said at the time. “We’ve known and worked with Memorial in various ways through the years. The system has accomplished a lot in the region. It’s just a good fit.”

Walker said he has met with City Council members to express concerns about how quickly the process is moving. Beyond the direct-mail and phone campaign, HealthOne isn’t planning any other step in its campaign, he said.

Keep Colorado Springs Healthy isn’t planning any immediate major marketing campaigns, Murrell said. But the group is meeting with community groups to discuss the benefits behind Memorial’s nonprofit push. It also is building an email list of possible supporters and soliciting donations.

“We are going to start marketing — newspaper ads, maybe television ads — once it’s on the ballot,” Murrell said. “Right now, we’re collecting donations and we’re educating people; but we’ll be doing more once council puts it on the ballot.”

The strong opposition from HealthOne isn’t surprising, he said.

“The commission spent nine months studying the issue,” he said. “And we think they did their due diligence. But that doesn’t mean we expect everyone to agree with us. We’re not surprised by their interest. Memorial is a great hospital, and it has a large market share.”