New bill complicates Memorial’s future

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A last-minute bill introduced last week in the General Assembly adds a new wrinkle to the debate about the future of Memorial Health System.

Senate Bill 202, introduced by Sen. Bill Cadman and co-sponsored by Rep. Bob Gardner, had to get special approval to be introduced. If passed, it stands to change the way hospitals are sold or converted in the future.

Essentially the bill amends the Colorado Transfer Act, which restricts proceeds of the sale of a nonprofit hospital so they can be used only for similar charitable purposes. The change would allow residents to vote to use the proceeds in any other way, including putting the money in the general fund.

“The people need to decide what happens to the proceeds, they are the owners of the system,” Gardner said. “This bill allows the people in the communities to decide what to do with the assets they already own.”

Gardner feels there is little risk that people will vote merely to give the city the money with no restrictions.

The issue has been central to the debate around Memorial’s future. John Suthers, the Colorado attorney general, announced that the law would apply to the hospital last summer. Many people viewed that decision as taking away the option to sell the hospital to a for-profit system.

But the system most interested — HealthOne, in Denver — wasn’t so easily swayed. Even after the Memorial Citizens’ Commission recommended the system become a nonprofit, it launched an effort to stop the process. Owned by HCA and the largest hospital in Denver, HealthOne launched a telephone and direct-mail campaign, and then approached Gardner about the bill.

“That isn’t why I decided to introduce the bill,” he said. “I’m not carrying water for HealthOne. I just really believe that the voters should decide the issue.”

But Ed Kahn, senior counsel at Colorado Center on Law and Policy, believes the bill goes too far.

“This bill would allow any assets — (those) of El Pomar, for instance — to be used in any way voter see fit,” he said. “It sets a bad precedent to take money already used for a specific purpose that benefits the public and use it for an entirely other purpose.”

Kahn was on the committee that drafted the original legislation. He said the purpose was to ensure access to health care for Colorado residents.

“At the time, in the mid-1990s, there were a lot of hospital conversions and sales to for-profit hospital systems,” he said. “There was a concern that the conversions would make it more difficult for the uninsured and poor to receive health care. That concern still exists.”

CCLP isn’t the only group opposed to the bill. Memorial Health System is also actively lobbying against the bill. The local government committee will hear testimony from the hospital Tuesday.

The hospital’s actions have raised the ire of Colorado Springs City Council member Sean Paige, who wrote asking City Attorney Pat Kelly to examine what has happened. Memorial has routinely advertised its position in local newspapers and now on the radio station.

“I think this is unprecedented — a city enterprise taking a stance against and lobbying for a bill that the city hasn’t decided if it supports or not,” he said. “Personally, I support this bill.”

Cari Davis, spokeswoman for Memorial, has said the hospital’s efforts fall within its legal rights.