It's time to brace for the next dose of campaign fliers, TV ads and robocalls.
Memorial Health System's future will be at stake if Colorado Springs City Council decides Tuesday, Jan. 25, to put a question on the mail ballot for the April 5 municipal election.
The measure would ask voters to convert city-owned Memorial into an independent nonprofit. Doing so would relieve taxpayers of potential tax liability, as currently authorized in the City Charter, and give the city a one-time $5 million fee to set up a health care foundation, along with smaller annual payments depending on Memorial's success.
Bob Lally, who chaired the citizen panel that recommended the measure, believes $1 million could go into the campaign this spring. Memorial board members already have set up a "vote yes" campaign, with a fundraiser and a website in place. Opponents so far have done little except try out slogans such as "the big giveaway."
While a majority of Councilors seem to support asking voters to decide, it's not unanimous. Sean Paige, for one, doesn't think the April election "gives the public sufficient time to make an educated choice, given the complexities of the issues that are involved." He also says he doesn't like the proposal itself.
Mayor Lionel Rivera backs it, but says one point gives him pause: the as-yet-undefined amount it will cost Memorial to leave the Public Employees' Retirement Association, which covers government workers but not nonprofit workers. "If it's a really big number and Memorial can't do it financially, we may not [refer a ballot measure]," Rivera says.
Barring that, he thinks the question will make the ballot on Tuesday. Public comment will be heard before a vote is taken.
The city's asset
James Moore, Memorial trustees vice-chair, is heading an effort to support the measure. He calls the conversion "a way for us as taxpayers and area citizens to assert, 'This is our asset, and we want to be sure it continues to serve the community in the years ahead.'"
As government ratchets down health care reimbursements, free-standing hospitals are linking with others to compete for market share. Moore says that's forcing Memorial to hire doctors and look to expansion beyond the city. Neither's really possible under city ownership, he says, because most doctors don't want their contracts subject to public disclosure laws, and the hospital currently is restricted to serving the city.
A nonprofit, "Keep Colorado Springs Healthy," was formed Dec. 14 to raise money for the nonprofit issue. That money will be transferred to a political action committee if a ballot question emerges, Moore says. Advocates also have set up keepcoloradospringshealthy.org to collect donations, and hired public-relations firm O'Donnell & O'Donnell to raise money — hopefully $500,000, Moore says.
A campaign consultant hasn't been hired, but Moore is pondering a slogan. "Keep Memorial Ours," he suggests.
Some political observers say conversion will be a tough sell, and that people will ask, "Why now?" Most successful campaigns are tied to a problem that needs fixing, and it's hard to see Memorial, with $382 million in assets and $542 million in revenue in 2009, as being in trouble.
And then there's the argument that says if you're going to change its structure, you should sell Memorial to a for-profit company. One estimate valued the system at $400 million.
"Why give it away?" asks state Sen. Andy McElhany, who's just fine with the idea that under law, proceeds would go into something like a health care foundation: "El Pomar [Foundation] started with $18 million [in 1937], and now it's worth almost $500 million."
Gambling with Memorial
At the moment, the deep-pocketed, Denver-based HCA-HealthOne, is watching and waiting, says its local rep, Kevin Walker. The multi-hospital system recently spent thousands of dollars on fliers urging a delay so it could bid on Memorial. Walker says HealthOne, along with others interested in buying Memorial, might spend money to defeat a nonprofit measure.
Meanwhile, other potential players are gearing up a bit. Ken Barela, the former Fountain mayor, has joined with community activist Rev. Promise Lee and others to promote keeping Memorial as it is. "Let's focus on maintaining or enhancing an existing asset within our community that can support our community," Barela says. "This is not the time to start playing poker with your health care system."
Barela says he hopes to raise $10,000 "to get the material out, and some signage."
Jeff Crank, local radio talk-show host and former congressional candidate, says his Americans for Prosperity Colorado 501(c)4 group will oppose any ballot question that "takes an asset like Memorial Hospital which belongs to the taxpayers of Colorado Springs and disposes of the asset with no financial benefit for its fair market value to the taxpayers." He calls the current proposal "a rip-off."
Finally, there's anti-tax crusader Douglas Bruce, whose strident voice is a currency all its own; Bruce didn't even have to form a campaign committee to abolish the Stormwater Enterprise in 2009. This time, he's toying with yard sign messages: "NO HOSPITAL GIVEAWAY."
One outfit that can't legally be involved is Memorial itself. Already having spent more than $100,000 on a poll, newspaper ads and PR consulting, the hospital is barred by the Fair Campaign Practices Act from funding a campaign after a measure is on the ballot.
Although "employees really want to advocate," Memorial spokesman Brian Newsome says. "We're saying, 'Hey you can't do this.'"