Memorial is our very own golden goose

Filed under: Opinion,Print | Tags:,

If we allow common sense rather than rhetoric to govern our decisions, Memorial Hospital should remain a municipal entity, with the minimal governance it has endured for years.

It’s not simply that “if it ain’t broke, don’t fix it,” or that conservatives like the status-quo, or that the older we get we fear change, but rather that its original charter has been faithfully and successfully fulfilled of late by its CEO, Dr. Larry McEvoy.

Let’s start with the facts: originally conceived in 1904, then constructed between 1907 and 1911 on land donated by General Palmer and renamed Beth-El, what we know today as Memorial Hospital was a brainchild of community needs and local generosity.

In 1943 the City Council of Colorado Springs purchased Beth-El Hospital for $76,500 and renamed it Memorial Hospital. Between 1946 and 1949 voters approved the operation of the hospital by the city with a citizens’ board of trustees. In 1956 the city approved $600,000 in revenue bonds for expansion and improvements. In 1973 the city approved $15,000,000 in bonds for expansions. Since then — 38 years in all — no additional bonds were issued.

Let’s continue with even more interesting facts (all in round numbers).

In 2010 the net income of Memorial was $32 million (with around $642 million in total revenue). During that year it provided around $32 million for “charity care” and another $61 million for “provision for uncollectable accounts.”

The hospital’s mission has historically been and still is to serve the health needs of the local population. The numbers alone reflect a great success in doing so. If we include “uncollectable accounts” with the “charity” ones, we get about $93 million in services made available for our indigent population — patients with no insurance at all or those unable to pay their full medical bills.

This is incredible; especially when you consider that the hospital was still profitable. It had $125 million surplus (profits plus uncollectable accounts) out of $642 million in total revenue (19.47 percent).

I’m sure many of my business colleagues would love to own this hospital. They could be be charitable and profitable at the same time. Oh, yes, it has some debts and liabilities, but they are all within reason and are serviceable with the current asset and revenue structure.

So, if a decision is made today what to do with the hospital, I’d say, keep going, Dr. McEvoy, you are performing a great service to our community. You and your staff are true custodians of the spirit that originally established this fine institution. You are all important and integral parts of what makes Colorado Springs so special, a model for the rest of the country: efficiently-run municipal hospital.

Yet, the successful Dr. McEvoy cries wolf to anyone who’d listen.

“It’s going to be horrible. We are at great peril from Obamacare. We are in danger of becoming a total failure. Let’s change our status today,” he says.

Not quite the message you’d expect from such a successful CEO. This is odd behavior when compared to the rest of the corporate world, where CEOs of companies that are losing money still manage to trump their virtues and accomplishments.

So, what’s going on here?

A charitable interpretation is that the successful doctor has not let his success get to his head and is trying to warn against the terrible onslaught of increased health-care costs.

But he has had such success so far with increasing costs, why does he think he’ll fail in the future? Do doctors go into every surgery fearing disaster rather than build on their previous successful surgeries? Perhaps it’s because he knows something definite about the future the rest of us don’t, namely, that medical costs will rise indefinitely?

Maybe they will, maybe they won’t. We really don’t know. What if the expenditure on two wars will cease and funds will be available for health care? What if employment increases and contributions to Medicare increase? What if the greed of pharmaceutical companies is curtailed and they will reduce the price of their drugs? What if government bureaucracies become more efficient?

Let’s be honest, Democrats and Republicans alike don’t know what policies they themselves have enacted, and may one day focus on fixing this industry and the well-being of all citizens. Call me naïve, but I doubt any politician viewing the 2012 election will be as oblivious to health-care realities so as to ignore their rising costs and the need for reform.

A less charitable interpretation is that the successful CEO, like so many other CEOs, doesn’t like to be accountable to anyone. This is true for most corporate America that has basically installed boards of directors that rubber-stamp their decisions, renewing their contracts with amazing regularity and high pay-raises (23 percent average in 2010 for the top 200 publicly-held US companies).

But this is a red-herring argument (there are no red herrings). No one is really overseeing the CEO; he has a free hand to run the hospital as he wishes, with marginal blessing from the rest of us. Does he worry that a Strong Mayor and new City Council will pose an onerous oversight? I doubt it. Given that none of our elected officials are hospital experts, I doubt they’ll give any guidance at all. They probably will leave the esteemed CEO alone. In fact, from what I hear, it is he who is lobbying them to move the hospital into the new territory of a non-profit organization (as if being a city-owned institution isn’t non-profit).

Regardless of your ideological bent, what’s wrong with being accountable to someone? If you are doing something wrong, you should be stopped; if you are doing something right, you should be praised and get a raise. It looks straightforward to me: we have a great asset we should be proud to own, an asset that performs exceedingly well under perilous conditions. We haven’t been asked to contribute to the hospital in 38 years and we gave away $93 million in free health care in 2010 alone. Looks like a textbook win-win strategy!

Another interpretation of Dr. McEvoy’s concern may be personal: we have not praised him enough; we have failed to show gratitude to his incredible accomplishments at the helm of Memorial Hospital. May mine be a small contribution to an outpour of support and admiration for a job well done. Keep it up, Dr. McEvoy, doctor and businessman, humanitarian and visionary. Keep treating for free, while making millions. You are the man!

Raphael Sassower is professor of philosophy at UCCS and author (with Mary Ann Cutter) of Ethical Choices in Contemporary Medicine (2007). He can be reached at rsassower@gmail.com .