Friday, December 16, 2011

CU-led partnership most favored to run Memorial

Posted By on Fri, Dec 16, 2011 at 11:19 AM

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Although a final decision won't come until Monday, most members of the City Council's task force on leasing city-owned Memorial Health System said Friday they favor a proposal from University of Colorado Hospital, Poudre Valley Health System of Fort Collins, Children’s Hospital Colorado, and the University of Colorado.

From University's proposal:

We outline our plans to work with Memorial and the City of Colorado Springs to develop Memorial Health System as the southern hub of a new statewide non-profit health system. The proposed University of Colorado Health System will be Colorado-owned and Colorado-operated and will combine the State’s best community hospital systems (Memorial and Poudre Valley) with the State’s nationally recognized academic hospitals (University Hospital and Children’s) and the University of Colorado multi-campus educational system and health science schools.

If you're interested in the financial impacts, here's University's executive summary outline of what it expects to pay to the city and invest in Memorial in coming years:

As part of this proposal, we are making a very large direct financial commitment to MHS and the City of Colorado Springs. Our financial proposal includes a total economic consideration of $1.79 billion, which is based in part on a $400.0 million enterprise value of Memorial Health System. The proposed payment structure includes a significant upfront contribution of $50.0 million, 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.

Moreover, UCH commits at least $3 million per year for at least 20 years towards making the CU Colorado Springs Medical School Campus a reality. In addition to these direct financial contributions, we expect our proposed strategic collaboration with the Medical School and the University of Colorado to have very positive effects on the Colorado Springs economy through job stability, expansion of educational opportunities, and acquisition of new clinical trial and research dollars. To compare: the Anschutz Medical Campus, which only started to develop in 1996, directly employed 8,112 people in 2010 , representing some $718 million in wages, salaries and benefits. Campus institutions also brought in over $400 million of clinical trial and research grants last year alone. A recent study of the Anschutz Medical Campus showed that the campus has a total State economic impact of $2.05 billion through direct campus expenditures and indirect effects.

For-profit bidder HCA-Health One had offered a net up-front payment of $325 million or so, but University's promise to develop a medical school here persuaded task force members to choose it as their first choice.

Task force member and former Councilman Randy Purvis put it this way in choosing University, according to a blog post by Brian Newsome with Memorial: "I am aware that jobs will probably be lost," he said, but University will likely provide the most opportunity for creating jobs and growing the economy here as that consolidation occurs. He also said the proposal must go to voters, and he believes University's proposal has the greatest chance for success.

Doug Quimby, Phil Lane, Dr. David Corry, Dr. Michael Welch and Carolyn Flynn chose University.

Councilors Jan Martin, Tim Leigh, Brandy Williams and Merv Bennett will decide Monday which proposal to recommend to the council, which will decide whether to send the proposal to voters early next year.

Here's Martin's comment near the end of the meeting, according to Newsome, which just wrapped up:

Jan Martin said this shows why it was so important to select a task force with so many members of our community from health care to business. You can see also how much thought and time and care has gone into these decisions.

We have worked so hard to be transparent, until just now, we did not know where people would come down.

For that reason, we, the City Council members, will think about this over the weekend. You'll hear from us on Monday morning and we'll talk about next steps.

Well that's it for now. Sounds like we have to wait until Monday for a final decision, but University is clearly the likely outcome based on scorecards and the unofficial votes from other task force members.

See you then.

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