It’s unanimous: The Memorial task force will recommend that University of Colorado Hospital lease Memorial Health System for the next 40 years.
All four City Council members on the task force said they support the CU proposal, joining the opinion of the advisory committee, which also supported the University of Colorado.
“We’ll work with it,” said Memorial board member Vic Andrews. “Of course, we’re disappointed, but this is the best of any of the other proposals.”
Andrews and the rest of the Memorial board had hoped for a decision for an independent Memorial – a nonprofit able to create partnerships with other hospital groups and expand its reach beyond El Paso County.
“But we’ll work with them, if council wants us to be part of the negotiations, then we’ll be happy to do that,” he said. “If not, then we’ll sit on the sidelines and wait.”
Peggy James, a Colorado Springs resident who was a member of the original Memorial Citizens’ Commission that recommended that the hospital become an independent nonprofit, said she was disappointed.
“How could I not be? I have supported Memorial for the last two years, and I believe they should have been given a chance for their vision to work,” she said. “I believe the Memorial administration has conducted themselves with the utmost integrity – and at great personal cost.”
The task force members said they believe that the University of Colorado proposal was the best of the five offered.
“I have no reservations,” said council member and task force leader Jan Martin. “I think University is the best option for growth and for the future.”
She might not have had reservations, but council member Brandy Williams did.
“When we did the deep dive into the proposals, as an engineer, I would have picked HCA/HealthOne,” she said. “But I have a different constituency now – and I’m not a doctor. I’m an engineer. The health care professionals here wanted University and I respect that.”
Merv Bennett said he chose University over Memorial’s proposal due to financial uncertainty.
“Both of them were at the top of my list,’ he said. “They both had what I though the hospital needed. But I am concerned that an independent Memorial – after settling the PERA issue and defeasing the bonds – would be financially weakened. I don’t want that, so I think the university proposal is best.”
And she isn’t the only Colorado Springs resident to think so. Pam Shockley-Zalabak, chancellor at the University of Colorado at Colorado Springs, is excited about the partnerhsip.
The University of Colorado Hospital proposal includes a partnership with Poudre Valley Health System and the Children’s Hospital in Denver. It also includes $3 million a year for the life of the lease to create a third-and fourth-year branch of the University of Colorado medical school in Colorado Springs.
The lease would pay $74 million up front and $5.6 million a year for 40 years. The hospital pledged a $1.12 billion capital commitment for the same time period. UCH’s proposal has a profit sharing plan in which the city would get 5 percent of any profits above 8 percent, an estimated $151 million over the life of the lease. UCH would take care of any retirement pension obligations and all debt and other liabilities.
In addition, the University says it believes the new system would bring economic benefits to the region of between $1.3 billion and $1.5 billion annually.