Running in place 

Memorial Health System hasn't generated a lot of new jobs since its lease began in 2012

In the two-plus years since the city leased Memorial Health System to University of Colorado Health, job creation has been flat at Memorial and its partner, Colorado Children's Hospital.

Which shouldn't be a surprise, considering Memorial has lost market share over the years as its chief competitor, Penrose-St. Francis Health Services, has charged ahead in signing up doctor groups and expanding services.

But UCHealth is making significant investment in Memorial, having installed a $35 million medical records system to help attain efficient and effective delivery of care. UCHealth also plans to spend $40 million more on various upgrades. And there currently are a total of 258 open jobs posted for Memorial and Colorado Children's in Colorado Springs, says UCHealth spokesman Dan Weaver.

When filled, the two entities will employ 4,309, or 155 more people than were employed at Memorial and Memorial Children's before the lease.

City and UCHealth officials promoted the deal as a job generator. Yet the agreement itself had only one job requirement: that Memorial's workers be retained for the first six months of the lease.

Asked about promises of new jobs, City Councilor Jan Martin, a strong lease proponent, says she didn't expect UCHealth itself to create jobs so much as provide an economic boost for health care throughout the community.

"I think UCH has the authority to manage the hospital the way they find necessary," Martin says. "I have no reason to believe that UCH is not a healthy organization."

The idea of selling or leasing Memorial — which included the central and north hospitals, plus Children's — emerged from a years-long review triggered by concerns that the city shouldn't be in the hospital business. Uncertainty over how the Affordable Care Act would impact Memorial also played a role.

In the run-up to the August 2012 election, city and UCHealth officials predicted the deal would bring more jobs. "We think we can grow this system," Bruce Schroffel, then UCHealth's CEO, told the Independent in August 2012. "We've been hiring people consistently for the last three years."

In August 2012, voters overwhelmingly approved the UCHealth lease, and on Oct. 1, 2012, UCHealth inherited 4,154 Memorial employees. Today, Memorial has 3,555 employees.

However, Weaver notes that Memorial currently has 197 job openings, and that many Memorial workers transferred to Colorado Children's Hospital, which took over Memorial Children's Hospital as part of the lease. That operation, which had 60 employees prior to the lease, now has 496 employees today, many of them from Memorial, he says, adding that Children's has 61 openings posted.

(Colorado Children's makes no annual payments to the city, as UCHealth does under the lease.)

Flat employment numbers at Memorial might stem from a 9 percent drop in daily patient census at Memorial and Children's, from 107,831 for the 12 months ending September 2012, compared to 98,172 for the 12 months ending June 2014. That drop follows statewide and nationwide trends, Weaver notes, as hospitals work to shorten hospital stays through aggressive prevention and other strategies.

But at Penrose-St. Francis, president and CEO Margaret Sabin, without releasing exact figures, says the system has seen a 5 percent increase in patient days in the last calendar year alone. "We've had growth every year for the last six years," she says.

Sabin also notes that Penrose-St. Francis Health Services has added about 600 jobs in the last two years, a continuation of the system's "consistent growth."

A decade or so ago, Penrose reported a 37 percent market share and consistently stood second to Memorial; now, she says, Penrose has captured 48 percent of the market, Memorial has about 44 percent, and Colorado Children's about 4 percent, with the rest shared by providers outside the community.

Asked about that on Tuesday, Weaver wasn't able to respond by the Indy's press deadline.

"Memorial is going through a rough time," Sabin says. "We believe there should be two strong health systems in Colorado Springs. If one struggles too much, it opens the door for a for-profit health care provider to come in that may not meet the needs of charitable care."

Penrose and Memorial provide tens of millions of dollars of care annually to the poor, with Memorial historically having provided more than Penrose.

It's worth noting that Dallas-based First Choice Emergency Room, a private company, plans to build a 52-bed, 86,600-square-foot "general hospital" north of University Village west of Nevada Avenue, according to city planning documents.

On Dec. 8, when Memorial and Colorado Children's Hospital officials outlined their annual reports for City Council, there were no questions raised about employment. Rather, Council members took turns praising UCHealth. "We're so proud to be a partner," President Pro Tem Merv Bennett said.

(For her part, Martin says she's excited about UCHealth helping to establish a branch medical school at University of Colorado Colorado Springs; students will come in 2016.)

At that December meeting, Memorial CEO George Hayes said UCHealth will spend $40 million in the next few years to make most of Memorial's patient rooms private, update technology, such as MRI and CT scanning equipment, and continue pushing for Memorial Central's Level 1 trauma center designation.

"We're really making a dedicated effort," he said, "to identify those areas where we can bring resources to bear to keep people from going elsewhere."


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