NOREEN: To sell or to convert Memorial is a tough call

Sell Memorial Health System to a for-profit chain or let it become a nonprofit?
A city that touts its faith must decide whether it really believes in dividends that are not entirely financial.
Last week, Memorial CEO Dr. Larry McEvoy laid out his vision for an independent nonprofit entity that would not be a part of city government and would never again expose taxpayers to the risk of a bailout.
In McEvoy’s scenario, local control would be retained through a local board of directors. All black ink would be poured back into a nonprofit operation geared to providing health care for the entire community.
Sell to a corporate hospital chain, he warned, and all black ink will leave town to pay shareholders elsewhere. Any semblance of local control would be lost.
“We think if this is built the right way this is a substantial ‘give’ to the community,” McEvoy said.
McEvoy’s presentation was informative, persuasive and at times heart-felt, but this is going to be a tough call. Colorado Springs makes its decisions according to dollars and cents, often suspicious of a more holistic bottom line.
When it comes to Memorial Health System, Mayor Lionel Rivera personifies that mind-set.
“I don’t support a change of ownership of the hospital that does not provide a financial benefit for the owners,” Rivera said.
The mayor criticized the process conducted by the Citizens Commission on Ownership and Governance of Memorial Health System.
“In my mind their process is not complete,” Rivera said, charging that McEvoy “brought in someone with a biased opinion” without presenting other subjective viewpoints.
Rivera envisions selling Memorial and retaining a pot of money. It’s hard to know how much, but it would be in the millions – enough to act as a community trust fund, used for a variety of purposes. His solution also would relieve taxpayers of risk.
Everyone agrees the ground is shifting quickly in the health care industry and federal health care reform will bring more change and a degree of uncertainty. Also, Memorial’s uncompensated care has leveled off for now but remains a concern in the future, especially if city taxpayers might be left holding the bag.
McEvoy said Memorial’s revenues, at about $600 million annually, can be expected to grow to nearly a $1 billion in a few years.
Maybe. But the sweeping systemic changes he described don’t sound as if they can be done quickly.
McEvoy is confident Memorial can thrive as a nonprofit. Newspaper columnists, like most citizens, (see my blog) don’t know enough about the health care industry to decide — yet.
Between now and when we’re asked to vote next year, we owe it to ourselves to study this.
—
Listen to Barry Noreen on KRDO NewsRadio 105.5 FM and 1240 AM at 6:35 a.m. on Fridays and read his blog updates at gazette.com/blogs/barrysblog