During the past three years, eager volunteers on the Sustainable Funding Committee (2008-2009), the Memorial Citizens' Commission (2009-10) and finally the Memorial Health System task force (2011) have spent tens of thousands of man hours reflecting upon the future of Memorial Hospital. We're talking sore butts, tiresome speechifying and little action ... until now.
Moving with unaccustomed briskness, the MHS task force has solicited and received bids from qualified entities interested in taking over the hospital operations. Under the peculiarly structured deal, the new operator would sign a 40-year lease to operate the system, with the city "maintaining ownership of the buildings and physical assets."
The task force received six bids by the Nov. 14 deadline, five of which are still active. (Community Health Systems has withdrawn its bid.) Centura Health, HCA-HealthONE LLC, Memorial Health System, Sisters of Charity of Leavenworth Health System and the University of Colorado Hospital Authority now face a gag rule binding them and task force members until Dec. 1, when all bids and task force score sheets will be released.
At a recent meeting, the task force wrangled politely over process, listened to the concerns of a handful of citizens, and gave a respectful hearing to Sean Paige of Americans for Prosperity.
It's no secret that Paige and AFP would like to see Memorial sold to the highest bidder, thereby extricating the city from the considerable risks of the health care market. Paige suggested that several members of the task force resign because their links to the present Memorial management would compromise their objectivity.
One of the members so targeted, Dr. David Corry, was devastating in rebuttal. Pointing out that members' "day-to-day job is something that transcends [this process]," Corry spoke of his own experience as a parent.
"When I was carrying my 2-year-old daughter into the hospital when she was literally dying in my arms, bleeding from the brain," he said to a silent room, "in my time of need, my daughter was able to get her condition taken care of.
"Twenty years from now, most of you here today will have moved on to other things, but I'll still be providing health care. My bond with my patients will continue for the rest of my life."
As task force chair Jan Martin pointed out, the ad hoc group can only recommend a course of action to City Council. That august body will do as it chooses. It alone will decide which bid will go to the voters, who in turn will make the final decision.
Only giant HCA-HealthONE opted to make its bid public before the gag rule took effect. It's a doozy. HCA will pay approximately $325 million in excess of the hospital's liabilities, which include $300 million in existing debt and approximately $200 million in PERA obligations. The company also pledges to spend at least $1 billion on upgrades during the lease term.
As Colorado law requires, the $325 million will not go into city coffers, but will be used to fund a local health care foundation.
It appears to be an attractive deal, to say the least. If it, or a similar proposal, went to our conservative electorate, it'd pass easily. If the task force and Council submit a less credible and less lucrative proposal, angry voters might reject it.
And that'd be a disaster, as task force member Randy Purvis pointed out.
"We'd be back to the status quo," he said, "but the system would be in turmoil. In the present [health care environment] a small, stand-alone independent hospital cannot survive."
Will the process end well? Don't bet on it.
It's telling that the task force and the city have yet to hire high-level professional advisers, such as Goldman Sachs or Bain & Co., to help structure the transaction. Aided only by a single outside lawyer, members of the task force will judge for themselves which of five highly complex, several-hundred-page proposals is best for the city.
That's fine, I guess, but I'm not sure that any of those people ever has structured a billion-dollar deal.
So let's just rely on the city's new brand — "Live it up," not "F**k it up."
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