It's puzzling why the room erupted with approval when City Council decided Tuesday to ask voters to wipe out any potential taxpayer liability for city-owned Memorial Health System.
Many obviously viewed the action as moving toward making Memorial into an independent nonprofit agency, because among the nearly 200 attendees were a good number of hospital employees. They've long argued for freedom from the constraints of city ownership and, thus, state disclosure laws, which doctor groups, other professional caregivers, and even vendors dislike because it means their contracts can be made public.
But judging from Tuesday's meeting, the independent nonprofit option might not be on the table anymore. Instead, Council now seems intent on conducting a competitive bidding process to determine to whom the city will lease its considerable hospital facilities, while retaining ownership. The bent toward bidding is a direct nod to Mayor Steve Bach, who also sternly urged Council to include ballot language requiring voter approval of any transaction.
The vote was 7-2, with Angela Dougan and Lisa Czelatdko voting nay, to do the following:
• Submit a question for the Nov. 1 ballot asking voters to remove taxpayer liability from Memorial. The measure allowing the city to levy a tax for Memorial has been in place since 1949, but never used, as a safety net to pay for any operational deficits. Czelatdko argues it makes no sense to enter into a lease with a contractor and then, if things go south, have no way to resuscitate the hospital's balance sheet. Dougan said not enough options had been considered, and she opposed the city spending $150,000 in November — on an election it would otherwise sit out — just to send a message that it's "moving forward" on a Memorial plan.
• Begin immediately drafting a request for proposals for lessees. While Memorial chief strategy officer Carm Moceri said after the vote that Memorial believes the City Council Task Force in charge of the RFP will limit responses to nonprofits, Councilman Tim Leigh says otherwise. "All comers," he said later, indicating for-profits also will be welcomed to bid for taking over Memorial's operations. The deadline for proposals is Dec. 31, with the selection process left to Council, the mayor and the Regional Leadership Forum.
• Require a second vote of the people to approve the lease, at a special election in early 2012.
• Whoever wins the bid picks up the tab for the RFP process and the special election, which could run into the hundreds of thousands of dollars. Memorial, by the way, already footed the $400,000-plus bill for the workings of the Council-appointed Citizens Commission on Ownership and Governance of Memorial Health System, which after nine months in 2010 made a unanimous recommendation to convert the system to an independent nonprofit.
That proposal is dead, and it has been labeled as not thorough and rigged in favor of Memorial, to the chagrin of that commission's chair, Bob Lally.
"It's disappointing," Lally said outside the meeting Tuesday, referring to how the commission's work and conclusions had been characterized in recent months.
Before the vote, more than a dozen workers from Memorial, many of them doctors, signed up to speak and pleaded Council to let Memorial become a nonprofit so that it could concentrate on health care.
"I don't think you have a firm grasp on the urgency here," Dr. David Corry, a vascular surgeon, told Council. "The vetting has been done. I hope your legacy isn't that you let Memorial die because you didn't act fast enough."
A nurse called it a "complete travesty" to allow greed to undercut the hospital's mission in a hospital sale.
Several doctors said Memorial can't recruit physicians, and its numbers — patient counts and revenues — are falling in a market where it once was the undisputed leader.
Then Bach spoke, saying the Council has no legal authority he knows of to lease a city enterprise to an outside entity. But even if Council does have that authority, only the voters should make that decision, he said.
He added that "all options should be thoroughly considered," noting that "there's only been one proposal on the table." He called for "fair, open and competitive bidding" by entities who want to run the hospital.
Meanwhile, Kevin Walker, who has represented hospital giant HCA Holdings in its bid to elbow its way into a deal to buy Memorial, huddled outside in the corridors with other businessmen. HCA owns seven hospitals in the Denver area.
Charter changes not considered
Despite the recent hoopla over possible changes to the City Charter proposed by City Attorney Pat Kelly, no such changes were even considered Tuesday by City Council before the deadline for putting measures on the Nov. 1 election ballot. Kelly's ideas to "clean up" the new form of government, if approved by voters, would have scaled back some of the mayor's powers.
Upon hearing of the proposed changes through an internal memo that quickly was leaked to the media, Mayor Steve Bach had expressed disapproval, saying he'd rather see a charter review committee suggest changes. Apparently, Council agreed with him. The proposals weren't even included on its agenda Tuesday.
"I think it needs to be more of a thorough process, because at least in my opinion, I don't think we want to piecemeal this together," City Councilor Brandy Williams says. "... Until we know how all the pieces fit together, we don't know if we'll be doing more harm than good."
J. Adrian Stanley
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