Memorial system to expand, build new facility

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Memorial North will be getting a new neighbor. - COURTESY MEMORIAL HOSPITAL
  • Courtesy Memorial Hospital
  • Memorial North will be getting a new neighbor.

A new children's hospital is planned next to Memorial Hospital North as result of the city's lease agreement with the University of Colorado Health, according to a Memorial news release.

Although Children's Hospital of Denver isn't a signatory to the lease, it took over Memorial's Children's Hospital as part of the Oct. 1, 2012, lease agreement between the city and UCH.

Construction of a new children's hospital could have been good news for the city, if it came with a cut of the action. But the lease's provisions don't allow the city to share in revenues from Children's Hospital.

This is what we reported in a cover story about the lease on Aug. 8, 2012:
The city also is to receive annual lease payments of $5.6 million for 30 years, and for 40 years it would receive "margin sharing payments" based on Memorial's financial performance. [Then City Attorney Chris] Melcher estimates the margin payments at $2.5 million annually.

But the lease's margin sharing formula excludes revenue from services Memorial provides that aren't typically offered at Colorado hospitals of similar size and type. So money from certain specialty services might not be part of the calculation, which would have the effect of lowering the payment to the city. Revenues from Children's Hospital also would be omitted, except for those stemming from use of Memorial's facilities, [then UCH CEO Bruce] Schroffel says, because Children's isn't a party to the lease.
Here's the Memorial press release, which, not surprisingly, doesn't mention the lease's exclusion of revenues from the lease payment provisions:
After a transitional year that included a needs assessment and numerous strategic discussions, University of Colorado Health (UCHealth) and Children’s Hospital Colorado (Children’s Colorado) are pleased to announce a master facilities plan that would include expansion of both pediatric and adult services throughout Colorado Springs and southern Colorado. Components include expanding pediatric urgent care in Colorado Springs and exploring building a new free-standing children’s hospital adjacent to Memorial Hospital North.

While in the early stages of exploration, such a plan aims to meet the growing health care needs of southern Colorado. Additionally, a project of this scope is expected to drive economic development and new jobs. UCHealth and Children’s Colorado will be working with city officials and incorporating input from the community and key stakeholders along the way.

“In 2012 Colorado Springs voters placed their overwhelming support in UCHealth and Children’s Colorado, two nationally recognized organizations, to operate Memorial Hospital and to elevate health care for Colorado Springs,” said Mike Scialdone, President and CEO of Memorial Hospital. “This partnership helps us fulfill that promise and continue to deliver on the vision to make Memorial Hospital a regional and statewide leader in health care.”

“Children’s Colorado and UCHealth have worked diligently over the past year to honor the community’s trust by investing in new equipment, infrastructure, staff and physicians,” said Children’s Colorado CEO Jim Shmerling. “We’re excited to take this next step and deliver on our shared mission to improve lives and elevate patient care for children and teens in our community.”

As plans move forward, UCHealth and Children’s Colorado will work with the community, medical staff, and city leadership on the expansion of medical services throughout southern Colorado.

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