City-owned Memorial Health System has gotten black eyes in the past: secret bonuses for a select few, cost overruns on its north side hospital, even hiring board members for lucrative executive jobs.
Through it all, Memorial's board of directors remained intact.
But when it voted April 25 to give $1.15 million in severance pay to CEO Dr. Larry McEvoy, board members ignited a firestorm. And they got burned last Friday, with City Council ousting the nine-member board and installing seven new people.
Council specified the new board would be composed of "individuals from the community with healthcare and administrative background," according to the motion. Only Debbie Chandler, CEO of Colorado Springs Health Partners, actually has those qualifications.
But Council President Scott Hente points out that three others used to serve on Memorial's board: Curtis Brown, an executive with UBS Financial Services; Marcy Morrison, former county commissioner, Manitou Springs mayor and state insurance commissioner; and Janice Weiland, executive with Cascade Investment Group.
"They all had governance backgrounds, and all had a long commitment of service in the community," Hente says.
Three others are linked to the development community: Dirk Draper, with engineering firm CH2M Hill; Jim Johnson, with GE Johnson Construction Co.; and Fred Veitch, with Nor'wood Development Group. (Alternates are Doug Stimple, with Classic Homes, and Steven Gold, of Pikes Peak Community College.)
The change comes just months before voters are to decide whether to approve a 40-year lease of Memorial to University of Colorado Health. UCH has said in a statement that the board upheaval hasn't affected negotiations, which it described as "proceeding smoothly."
But whether the new board members will stay on after UCH takes over — assuming voters approve — is anyone's guess. First, UCH will have to OK them. Second, they'll have to accept that big-picture decisions will be made at UCH's Denver headquarters, where Memorial won't have a seat at the table, according to the UCH bid proposal.
Before any of that happens, Americans for Prosperity, a political action group headed in Colorado by radio personality Jeff Crank, is asking City Council to investigate the board's handling of a "consensus statement" it received in December. In it, 22 of Memorial's 850 physicians expressed "no confidence" in the administration.
Ousted board chair James Moore tells the Indy it wasn't big news; in early 2011, a nationwide physician survey showed Memorial near the bottom for its partnership with doctors. "We had seen physicians taking patients to Penrose and other sites," Moore says, "because they weren't happy with Memorial."
Moore says the first-ever report gave the board a "field of data" used to devise "actionable items" that were in the works when the board was removed.
On Monday afternoon, new board member Morrison was still waiting for "informational materials." Under the existing schedule, the board would meet next at 7:30 a.m., May 23, but Morrison says she plans to lobby to hold meetings at times "more accessible to the public."
Next week, a City Attorney's Office report should lay out the city's legal options in canceling McEvoy's parting package or modifying it from the 18 months' pay, plus benefits — a deal the board said aligned with industry standards — to six months' pay as specified in his contract.
Morrison wouldn't say how she would vote if Council asked the board to rescind McEvoy's deal.
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