City releases bids for Memorial

The Colorado Springs City Council released thousands of pages of documents from the remaining four groups bidding to run Memorial Health System for the next 40 years.

The four bids from Memorial, Centura, Exempla and University of Colorado that were released today propose a nonprofit system, but their approaches vary.

Memorial and Centura want the nonprofit to be independent and locally controlled. Exempla, while open to other types of collaboration, wants the system to become part of its hospital group, and the University of Colorado is interested in bringing Memorial into a partnership that includes Poudre Valley Health System in Grand Junction.

The fifth bidder, HCA, released its proposal earlier this month, which calls for a for-profit system.

Here’s a look at the bidders and some details from their proposals:


Memorial Health System

Memorial’s board of directors  has proposed an independent, nonprofit system. It says it will provide $1 million in the first year, and ongoing contributions for a nonpforit health-related foundation.

The group has recommended a new board – comprised of local representatives and doctors, with two nationally known health care experts. It has suggested a new defined benefit or 401k plan for existing Memorial employees.

The proposal suggests a national CEO search and allowing the new CEO to choose the hospital’s senior staff.

The strength is that everything will remain local.

“The governance of (Memorial) will remain local, with all strategic decisions, capital expenditures and system growth benefitting our community,” the proposal says.

Memorial will also create hundreds of jobs, and bring millions into the local economy, “with 100 percent of the earnings remaining within the region. This cannot be overstated.”

Memorial has already established relationships and provides ongoing support for medical students, medical residents and physician assistant education programs with 12 medical schools, nine physician assistant schools and two residency programs.

Centura

Centura Health  supports an independent, nonprofit organization – but inside a larger, community health collaborative.

Centura’s proposal has the support of Peak Vista Health Centers and Colorado Springs Health Partners.

“We believe this is best for the community,” said Penrose-St. Francis CEO Margaret Sabin. “We exceed Denver in every health quality metric already. We can create a local solutions and keep this in the community.”

The Centura plan is to establish extensive accredited health professionals education and training programs.

The group will also create the Colorado Rehabilitation Institute and the Colorado Neurosciences Institute.

“We need a fully independent, strong Memorial in Colorado Springs,” Sabin said. “Penrose-St. Francis will be fine: we’re focused on our strategic plan. But we are concerned about the community. That’s why we’re at the table.”

The collaborative isn’t new, she said.

“Memorial and Penrose already do this,” she said. “More than 90 percent of the doctors can practice at both hospitals. This is rare, but we’re doing it here. We collaborated last year about the detox center. This proposal does what everyone, everywhere says is needed in health care: local collaboration.”

Exempla Sisters of Charity

Based in Denver with a hospital in Grand Junction, Exempla is a Catholic health system.

Exempla has offered $400 million up front and a $100 million capital investment during the next five years as well as  $1 million to public health needs up front, and $500,000 annually.

Exempla says its credit rating and balance sheet are stronger than its competitors, and Memorial would become a Sisters of Charity flagship hospital and a regional hub because the group has no presence south of Denver.

Exempla is also open to leasing Memorial in a joint venture, under an operating agreement or in affiilliating with the hospital.

University of Colorado Hospital

The University of Colorado Hospital proposal includes Memorial in the newly created “University of Colorado Health System,” which includes Poudre Valley Health System, the Children’s Hospital Colorado and the University of Colorado.

Memorial will become an equal member in the venture, and the educational hub for southern Colorado.

UCH’s proposal promises $3 million a year for at least 20 years to create a medical school campus in the Springs, and $50 million up front.

The proposal also promises “continuing payments to the city or the city’s designee, a large and ongoing commitment to invest in memorial’s infrastructure, as well as mechanisms to relieve both Memorial and the city from their current debt and unfunded pension liabilities.”

UCH says its proposal is worth a total economic consideration of $1.79 billion.

It also promises job creation and educational goals, expanding the reach of the University of Colorado at Colorado Springs.

HCA/HealthOne

HCA is the largest for-profit hospital system in the country, and released it’s proposal early.

It offers $500 million up front for the hospital system and $1 billion in capital expenditures during the lease period.

Under state law, the proceeds from the sale would go to create a health care foundation. HCA estimates the foundation could receive$325 million once debts and pension costs are paid.

The city will keep all of Memorial’s cash on hand, about $332 million, under the proposal.

The hospital system also says it will keep employees at Memorial for six months, while it conducts an efficiency review.

To read all of the proposals, visit  http://www.springsgov.com/page.aspx?navid=4219

The task force will hear presentations from each bidder tomorrow, starting at 8 a.m. at Plaza of the Rockies, 111 S. Tejon, 5th Floor (Blue River Board Room).

The CSBJ will have full coverage of the meeting.