A city task force charged with writing a ballot measure to convert city-owned Memorial Health System to an independent nonprofit emerged from its meeting today with language for the April 5 city election.
Here's the question:
“Shall an independent nonprofit organization be formed, separate from the City of Colorado Springs, to continue Memorial Health System’s mission to provide the highest quality patient care, including charitable care, and shall all assets used by Memorial Health System be transferred to this independent nonprofit organization that shall assume all past, present and future debts/liabilities of Memorial Health System, that shall retain the name ‘Memorial Health System’, that shall be governed by a community Board of Trustees and required to maintain its headquarters in Colorado Springs; and that shall establish a new community foundation devoted to improving the health and wellness of local residents with a $5,000,000 up front contribution and annual contributions thereafter, without raising taxes; and shall it be mandated that a vote of the electorate would be required for any future sale of this independent nonprofit organization or sale or lease of substantially all assets of this independent nonprofit organization, with net proceeds of sale returned to the City of Colorado Springs and that continued protection for this community would be required for any future merger; and shall the 1949 electoral ordinance numbers 1854 (tax levy) and 1856 (Board of Trustees) and the 1965 electoral ordinance number 3131 (expansion of Board of Trustees) be rescinded in favor of this new independent nonprofit organization?”
That's a lot of words, but the upshot is that city taxpayers, by making the change, would relieve themselves of liability for an increase in property taxes to cover any deficit of the city-owned health system.
The city and Memorial will work out a lengthy agreement to spell out all the details, such as how many will be on Memorial's board, how they will be appointed and how and when the actual transfer would take place.
The City Council is expected to take action later this month to place the measure on the ballot, which is sure to be followed by an expensive campaign to defeat the measure. For-profit HealthOne of Denver wants to make a bid on Memorial and already has blanketed the city with direct-mail pieces urging residents to slow down the transfer process. The only way HealthOne can gain at this point is to defeat the measure and instigate a outright sale, it would seem.
Memorial's CEO Larry McEvoy, a doctor, has said the only way Memorial can be strong and grow in the new age of health care reform is to be independent of the constraints of public ownership so it's free to strike agreements with doctor groups and other networks. For example, as a city-owned hospital, Memorial has been discouraged, if not prevented, from extending its reach to southern Colorado — Trinidad or La Junta — because those populations aren't city taxpayers. Never mind that city taxpayers haven't subsidized Memorial for decades. But as an independent nonprofit, Memorial could expand its service area.
Here's the agreement that accompanies the ballot measure: