Friday, September 23, 2011

Who will bid on Memorial? Candidates are being identified

Posted By on Fri, Sep 23, 2011 at 12:02 PM

The list of potential bidders for city-owned Memorial Health System includes only two for-profits: Banner Health from Phoenix, which operates two hospitals in Colorado, and Nashville-based HCA/Health One, which operates six. The rest are not-for-profit operations.

But that doesn't tell the whole story. Other for-profits could team up with another operator in Colorado to bid on leasing Memorial, City Council task force members were told today.

Memorial North: Could it be closed?
  • Memorial North: Could it be closed?

The task force is trying to meet a mid-October deadline for issuing a request for proposals for a lease that will be negotiated by the end of the year. The winning bidder's proposal will go to voters for approval in early 2012.

One topic of discussion today was who might bid. The list worked up by consultant Michael Anthony of Chicago includes the two for-profit companies, and also every hospital system and hospital with more than 110 beds. Some won't bid, obviously, because their interests are narrow, such as Cedar Springs Behavioral Health System.

It's also doubtful that Catholic Health Initiatives, which runs Penrose-St. Francis Health Services here. will make a stab at Memorial, because of anti-trust issues that discourage monopolies. Another group of hospitals unlikely to step up include several government-owned facilities that either have a narrow focus, such as Colorado Mental Health Institute in Pueblo, or a different service area, such as Boulder Community Hospital.

Although the task force didn't approve a final list, task force chair Jan Martin, also the Council president pro tem, said she'd like to see the Sisters of Charity of Leavenworth Health System, based in Lenexa, Kan., disqualified, because it's a Catholic system.

"I think there's some women's health issues that would eliminate a Catholic hospital in this community," she said. "It concerns me if we were to go with two Catholic health systems in Colorado Springs."

Although Memorial doesn't perform elective abortions, it does perform those that are "medically indicated," Memorial spokesman Brian Newsome says. Memorial also will tie the fallopian tubes of women during caesarean section births, if requested to do so, unlike Catholic hospitals. In addition, Memorial provides birth-control counseling on request, which Catholic-owned facilities doesn't provide.

Consultant Larry Singer suggested the task force set out the criteria the city wants in a hospital operator and then analyze what each bidder proposes.

Developer Doug Quimby, who represents the Regional Leadership Forum, suggested the RFP be sent to the top 15 hospitals in the country for quality of care.

Anthony said that would be difficult, because whose measuring stick would be used?

The panel then turned to what values will be represented in the RFP. Among those is local control. Though some task force members want more than half the board of Memorial to be comprised of El Paso County residents, it's unlikely any local board would have say-so over major operational decisions, Singer said.
Rather, he suggested the RFP ask bidders to define the range of decisions that would be made by a local board.

Among the questions that arose:

— Can the city require Council approval of decisions on closing facilities or shifting services elsewhere? That may be impossible for a lessee to commit to for a 40-year term, given the evolving nature of health care, Singer said. He also noted that if some services and facilities are abandoned, it might diminish the value of the asset when it's returned to city control at the end of the lease.

— Should the city require bidders to include a post-graduate medical school program here? Members seem to agree it's a good idea, with Dr. Michael Welch of Peak Vista saying Colorado Springs is the largest city, or close to it, in the nation without a medical degree program.

— Would a lessee be bound by existing contracts with medical staff and other providers? City Attorney Patricia Kelly, who retires next week, said yes, until those contracts are either redone or expire.

— How much charity care should be required? "Indigent care is important," Martin said. "When it comes to community values, I think this one ranks very high."

A subcommittee has been formed to work through all the values questions and make a recommendation next Friday to the task force. Members are Councilman Merv Bennett, Memorial nurse Carolyn Flynn, Dr. David Corry from Memorial, either Quimby or Phil Lane, Charles Sweet, an attorney from UCCS, and Welch.

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