Memorial CEO Dr. Larry McEvoy revealed Wednesday night that Memorial Health System recommends converting from a city hospital to a privately run, community-based nonprofit. The news may have come as a shock for some, since Memorial has long defended its public ownership and operated successfully under it.

So why does Memorial want to change? Why now? What’s in it for you?

Memorial will spend a great deal of time and energy in the coming months educating you on our preferred ownership model – and it’s best for patient care. In the meantime, we’ll take these questions one by one. If you want to see Dr. McEvoy’s Power Point presentation, download it here:

» Download: MHS Point of View Presentation (.pdf/1.7 MB)

Why Does Memorial Want to Change?

• Survival. The health care industry is undergoing unprecedented volatility, and numerous experts have said our current ownership structure is ill-suited to deal with it. Selling, by contrast, might mean survival, but a loss of local control. A community-based nonprofit enables Memorial to preserve its community focus while withstanding industry challenges.
• Potential. Memorial’s vision for the future, based on providing highest quality care, is big. Memorial is borrowing from the best health systems’ playbooks, and its leadership team aims to turn Memorial into the kind of place people flock to for great care. Memorial aims to be an even greater economic engine for the community. The community nonprofit is the best ownership model to accomplish that.

Why Now? Memorial won’t get this moment back. The industry is changing too fast, and the winners and losers are separating quickly!

What’s In It For You? Oh, where to start?

• Jobs. More than any other ownership model, an independent nonprofit enables Memorial to become an even stronger economic engine. Free from government, Memorial will be better positioned to grow, improve its quality and lower costs. Translation: More jobs, new business, a draw for Colorado Springs. Poudre Valley Health System, which converted from a public health system to a community-based nonprofit in 1997, has seen its jobs grow at 5 times the rate of the population.
• A tired debate ends. For decades people have called for the city to get out of the hospital business. Under this model, taxpayers are no longer at risk, yet all of the benefits remain: Care for everyone, community-relevant programs, local decision making, etc.
• Better health care. City politics and governmental regulations don’t contribute to better health care. At times, it can work against it. Memorial believes an independent nonprofit is the best way to improve quality, something that benefits everyone.

What do you think?

There’s no shortage of opinions about what to do with Memorial Health System.

That is, except Memorial’s.

Plenty of people have weighed in on Memorial’s future in the past seven months as a city-appointed commission considers whether the health system’s ownership or governance should change. Memorial Health System has waited patiently on the sidelines. Why? Because from the beginning, we pledged to wait until we were asked.

That time has come. On Sept. 1, Memorial CEO Dr. Larry McEvoy will tell the commission what ownership and governance model this health system prefers and why. After hearing from more than 20 experts about the possibilities for Memorial’s future, the commission asked to hear from Dr. McEvoy last. It will then begin drafting its final recommendation, which could come by late September.

It is worth noting that Memorial has no decision-making authority in this process. The commission, composed of volunteers, will develop its recommended ownership/governance model based on months of research and analysis. That recommendation will go to the City Council, which must decide whether or not to accept it. If a change is recommended and accepted, the issue would then go to voters, possibly in April 2011.

Still, Memorial thinks it knows a thing or two about the topic and hopes its position will receive some serious thought. Memorial’s point of view will be based its mission to provide the highest quality health care. To that end, Memorial believes there are five simple considerations:

• Who makes the decisions and where do they live?
• Where are earnings invested?
• What is the potential economic impact?
• Care for all in need, regardless of ability to pay?
• Strategic and operational agility?

The meeting will be at 5:30 p.m. at the Westside Community Center, 1628 W. Bijou St. Please attend. If you cannot make it, you can view a live blog or watch the replay later. You may sign up now for an e-mail reminder alerting you when the live blog is about to begin.

Blogger’s Note: There are four basic ownership options for Memorial Health System (stay as is, hospital authority, community nonprofit, and selling to/merging with a larger system). This is the last of four blog posts in an occasional series that highlight the pros and cons of each. The blog posts are based on the findings, so far, of a city-appointed commission that is tasked with making a recommendation about the health system’s future structure. 

Health systems face a tough road ahead. Dwindling reimbursements, soaring costs, and some 40,000 pages of new health care regulations, to name a few. To survive, experts say, a health system must be large enough to access capital and have the “deep bench strength” to keep abreast of the many changes.

If you’re not big enough, you’ll fail, so survival means scale, Memorial Citizens’ Commissioners have been told. One of the ways to achieve scale is to sell, merge or enter a joint venture with a larger health system, nonprofit or for-profit. To look at the pros and cons of this option, Memorial Citizens’ Commissioners turned to David Burik, of Navigant Consulting, a long-time national industry expert familiar with hospital transactions around the country.

Burik told the commission that Memorial, if sold to a for-profit or nonprofit system, would likely find the scale it needs to survive. It would likely be able to access the capital and achieve the economies of scale necessary to weather storms ahead.

That came with one major catch: any such arrangement would result in a loss of control. He pointed to other health systems that sold to for-profit systems with a list of expectations, but in reality such expectations were rarely carried out or enforceable after the sale. Additionally, there’s a pattern of flipping hospitals, until a far less valuable asset is left for the “bottom feeders.” He noted for-profit systems, in particular, are Wall Street darlings at the moment, and that many are funded by private equity firms that expect a significant return on their investment in a relatively short amount of time. How they collect that return would be unknown until the new owners take charge.

The Citizens’ Commission approved its analysis of these options at its meeting on Friday, Aug. 27. Although it saw certain advantages to merging with a larger system, it saw a number of drawbacks, too. The struggle, as outlined in the criteria worksheets, generally revolved around the possibilities to access capital and additional resources relative to the unknowns surrounding whether an out-of-town board would send those resources here or not.

Download the complete list of pros/cons compiled by the Citizens’ Commission: pro-con-analysis-sell model or pro-con-analysis-nonprofit merger.

Check out Part 1, Part 2 and Part 3 of this series.

Dr. Ronald Paulus told the Memorial Citizens’ Commission today that Colorado Springs should be leery of selling the health system and instead focus on growing its value. Selling, he said, was like “a great weekend in Vegas with a hangover at the end.”

Paulus was an executive vice president and chief of innovation at Pennsylvania’s Geisinger Health System until recently, when he accepted a job as CEO of North Carolina’s Mission Health System. Geisinger is held up as a model health system nationally. To read more about it, check out yesterday’s post.

He spoke to the commission via video conference about the importance of integration, especially in the context of health care reform. Industry financial pressures will make integration, where quality goes up and costs go down, critical, he said.

Paulus emphasized the importance of quality and efficiency, and he noted how they amount to a winning formula. At the end of Paulus’s presentation, Dr. Larry McEvoy, CEO of Memorial, asked about Geisinger’s economic impact on Pennsylvania. Paulus said it was substantial, noting that Geisinger employees 14,000 people in a town of 6,000.

Paulus, who once worked for a for-profit, said he had no ax to grind with for-profit health systems, but he noted that they will take jobs from the community and bring in a different set of values. He likened selling Memorial as the weekend in Vegas to make the point that value grown over time is a wiser investment.

To see a replay of the live blog, check out yesterday’s post and scroll to the bottom.

In health care, Pennsylvania’s Geisinger Health System is a LeBron James or Lance Armstrong. Its stats dominate. Its achievements inspire. It even earned a shout-out during a speech by President Obama: “We have to ask why places like the Geisinger Health system in rural Pennsylvania…can offer high-quality care at costs well below average, but other places in America can’t. We need to identify the best practices across the country, learn from the success, and replicate that success elsewhere.”

On Friday, the Memorial Citizens’ Commission will hear from one of the executives responsible for Geisinger’s success. Commissioners hope to understand what lessons Geisinger can offer about Memorial as they consider what ownership or governance model would best equip Memorial for a similar future.

You can view the live blog or watch a replay at the end of this post.

Commissioners will hear from Dr. Ronald Paulus at 11 a.m. at the Julie Penrose Health Education and Research Center. The center is located in the North Care Building next to St. Francis Medical Center, 6071 E. Woodmen Road, Suite 220 (at Woodmen and Powers Boulevard). Paulus was Geisinger’s Chief Innovation Officer and Executive Vice President of Clinical Operations until recently, when he took a job as President and CEO of North Carolina’s Mission Health System. Paulus is an authority on integrated health systems, of which Geisinger has been a national leader. He is expected to discuss integrated health systems and health care reform.

Geisinger has made major strides in improving its quality, all while lowering its costs. David Burik, of Navigant Consulting, noted to the Memorial Citizens’ Commission earlier this month that Geisinger is so confident in the quality of its heart program that it offers a money-back guarantee.

The Scranton Times-Tribune wrote: “The pilot for the program began with elective heart surgery and came with a guarantee. Insurers pay a flat fee from the time the surgery is deemed necessary until 90 days after the operation, and if the patient develops a complication within that time, Geisinger will not send out another bill.” Read the full story here.

The key for Geisinger has been integration, which is the idea of moving from today’s typical fragmented health care system to one in which a continuum of care is built around patients.

Read more about Geisinger from The Washington Post, The New York Times, and Fast Company.

Blogger’s Note: There are four basic ownership options for Memorial Health System (stay as is, hospital authority, community nonprofit, and selling to/merging with a larger system). This is the third of four blog posts in an occasional series that will highlight the pros and cons of each. The blog posts are based on the findings, so far, of a city-appointed commission that is tasked with making a recommendation about the health system’s future structure. 

A hospital authority is arguably the most unusual ownership and governance model being evaluated by the Memorial Citizens’ Commission. To understand it, the commission turned to Denver Health, which converted from a city hospital to such an authority and is the only example of such a model they’ve looked at.

The authority, based on Denver Health, is a quasi-governmental state agency that has more autonomy than a traditional city hospital. 

The city-appointed group heard from Denver Health CEO Dr. Patricia Gabow earlier this summer. Afterward, during commissioners’ analysis, they found that such a model might help Memorial in some ways while working against it in others. And they questioned whether an authority is really all that different than being a city enterprise, as Memorial is now. You can download the commission’s complete list of pros/cons at the bottom of this post.

Denver Health formed in 1860, less than two years after a group of prospectors founded the city of Denver. Denver Health operated for the next 137 years as a department of the city, akin to parks and rec, police, etc. It has always employed all of its physicians, and its role in the city goes well beyond that of a hospital. Denver Health runs poison control, the city’s ambulance service, school clinics, community clinics, the health department, and health programs for the correctional systems.

Dr. Gabow explained that Denver Health was hindered by its municipal structure, specifically when it came to the strategic agility needed to survive in a competitive health care environment. Denver Health saw the city’s poorest patients, yet was unable to offset that by expanding or innovating. So, after persistently asking the mayor for a new model, Gabow eventually succeeded in making the case for an authority.

In an arrangement that involved the help of Colorado’s legislature, Denver Health and Hospitals became the quasi-state agency known as the Denver Health and Hospitals Authority in 1997. In the 13 years since, Denver Health has dramatically improved its bottom line – and its quality outcomes – even as 46 percent of its patients are completely uninsured.

The question for the commission was, would it work here? The group agreed that, if properly structured, such an authority might benefit Memorial and attempt to achieve the objectives of their charter.

• Minimize taxpayer financial and legal exposure
• Maximize MHS’s benefit to community, including high quality care and economic/financial impact
• Access to excellent health care designed and delivered around community needs.

However, they questioned how much of Denver Health’s success was attributed to the ownership model v. its intrinsic integrated structure combined with its community history. For example, Denver Health receives $27 million a year in taxpayer subsidy from Denver residents, an idea that contradicts the objective to minimize taxpayer risk. The commissioners wondered whether a hospital authority was really all that different than Memorial’s situation as a city enterprise and whether the same cons they found for that model, such as politics and additional public regulatory hurdles, would remain.

To see the group’s full analysis: pro-con-analysis-Model-6-hospital authority

The commission will begin working on its recommendation and soliciting community input in September. Memorial Health System is scheduled to share its preferred ownership option on Sept. 1.

The finalized pros-and-cons sheets of each model evaluated so far are available at the Citizens’ Commission Web site. You can also learn more about the objectives and the criteria.

See Part 1 and Part 2 of this blog series.

There’s a lesson to be learned from crawling through mud, jumping over cars, climbing over a wall of hay bales and leaping through flames to a finish line. And, no, the lesson is not that Memorial should be more careful about who it allows to be its spokesperson.

I was one of several Memorial employees who competed in the Warrior Dash over the weekend at Copper Mountain. The 5k race took participants partway up a mountain and through a dozen obstacles. The reward: A viking hat, a T-shirt, and the satisfaction of washing off mud in a freezing cold lake. Nearly 10,000 people registered for the two-day event.

The lesson? Taking an interest in your health doesn’t have to be a drag. To the contrary, a healthy lifestyle should be fun if you’re in it for the long haul. For me, fun was donning some war paint and fake tattoos as I planted my foot on the hood of a car.

In health care, there’s a lot of talk about America’s obesity epidemic and the correlating rise of chronic diseases such as Type 2 diabetes and heart disease. Our staff at Memorial treats such conditions on a daily basis, and the medical literature is chock full with grim statistics about our society’s struggle against inactivity and calorie-rich foods.

For most of my life, I was set to be the next statistic. I hated exercise and loved to eat like Homer Simpson. I was overweight, save for a few months here and there where I would find marginal success on an unsustainable fad diet. 

In my time as a health writer, though, my thinking changed. I realized there was more value in taking care of myself than aiming for the waistline. Moreover, if you’re going to make a long-term change, it must be something you can actually do. Complete self-denial won’t work for too many people. I found a healthier life built around achievable goals and finding new ways to have fun.

If playing a barbarian for the weekend isn’t your thing, maybe it’s a hike, a walk with the dog, or a bike ride with the kids. Maybe its a yoga class or trying something you’ve always wanted to do. I took up ice hockey, despite having never played before.

Memorial CEO Dr. Larry McEvoy talks often about the need to move “upstream.” His goal is to move Memorial beyond being “a patch-up joint” to a health system that keeps people from needing a hospital in the first place.

Maybe moving “upstream” is something we all could stand to do.

Blogger’s Note: There are four basic ownership options for Memorial Health System (stay as is, hospital authority, community nonprofit, and selling to/merging with a larger system). This is the second of four blog posts in an occasional series that will highlight the pros and cons of each. The blog posts are based on the findings, so far, of a city-appointed commission that is tasked with making a recommendation about the health system’s future structure.

For decades residents in Colorado Springs have debated whether Memorial should be sold to someone else (a for-profit or nonprofit chain) or remain a city enterprise.

But a third model has earned the highest marks so far from the Memorial Citizens’ Commission, which has spent the last six months studying the issue. This idea would involve converting Memorial from a public enterprise to a private, community-based nonprofit.

Under this model, Memorial would remain local but become private and independent. The commission has heard from CEOs at two health systems that made such conversions. Both of them touted the idea as a way to keep decision-making local while removing political hurdles. Such hurdles, they said, put public hospitals at a competitive disadvantage in the volatile health care industry. Once out from under them, the hospitals were able to do more for their communities than they did previously, and with no risk to taxpayers.

One of those CEOs, Ed Epperson, spoke to commissioners earlier today (Wednesday, Aug. 18). He leads Carson Tahoe Regional Medical Center in Carson City, Nev., which converted from a public hospital to private, independent nonprofit a few years ago.

His community evaluated the same basic options that are now on the table for Memorial, and he said there are no regrets about converting to an independent nonprofit. He outlined a list of programs and accomplishments achieved, in large part because of the conversion.

Earlier this summer commissioners heard similar remarks from Rulon Stacey, head of Poudre Valley Health System in Fort Collins. Stacey credited the model with helping his system grow from a $100 million a year operation to $1.2 billion, and acquiring a Baldrige Award, a quality award only nine hospitals have ever received.

The commission is evaluating each ownership model based on three objectives:

• Minimize taxpayer legal and financial risk.
• Maximize benefit around community needs, including high quality care and economic/financial impact.
• Access to excellent health care designed and delivered around community needs.

The group has analyzed the pros/cons for each model based on those three objectives. The community nonprofit model has so far received the most pros, relative to the others.

To download the full analysis: pro-con-analysis-Model-5-community nonprofit

You can see a replay of the live blog from this morning’s meeting with Ed Epperson here:

It is with great sadness that I report Dr. Ted Eastburn, a long-time physician at Pikes Peak Cardiology, died tragically this morning at Memorial Hospital Central, where his practice is located.

Eastburn, a former City Councilor, was praised by patients and city officials Tuesday as word of his death spread. ”Ted was dedicated to our community and his life deserves to be honored for his service to his patients, Memorial Health System, and our city,” said Mayor Lionel Rivera, in a statement. “As a council member Ted always cared for and worked to support our employees and the citizens who elected him to office. We will miss him.”

“Colorado Springs lost one of it’s best citizens today. A statesman and an awesome doctor, mentor, and friend to all,” a Gazette reader commented in response to the news article. “We will miss you Dr. Eastburn. Thanks for the care you gave our family and making Colorado Springs a better place to live for all.”

Eastburn’s family asked Memorial to release the following statement on their behalf:

“Dr. Ted Eastburn was born on Feb. 7, 1954, in Columbus, Mississippi, and he grew up in Fort Worth, TX, and Memphis, Tennessee.

Dr. Eastburn graduated from Rhodes College, where he was President of the Honor Council and Senior Class President. Dr. Eastburn graduated from Vanderbilt University School of Medicine in 1980. He completed his residency in internal medicine at Tripler Army Medical Center, in Honolulu, HI. He served in the U.S. Army from1980 – 1984.

Dr. Eastburn returned to Vanderbilt for an academic fellowship in cardiology, where he served alongside Dr. William Frist, former U.S. Senate Majority Leader, setting up one of the first heart transplant programs in the country.

Dr. Eastburn joined Pikes Peak Cardiology in Colorado Springs in 1991 and became a senior partner. He served as City Councilman for the City of Colorado Springs from 1999 – 2003, and ran for mayor at the end of his term.

Dr. Eastburn was an avid bicyclist who toured the western region and parts of Europe whenever he had a chance. He loved Colorado Springs and contributed his time, energy, and expertise to causes like Peak Vista (clinics for the underserved and uninsured).

His life ended tragically this morning, August 17, 2010. Services will be announced at a later date.”

The office of Pikes Peak Cardiology, which leases space in Memorial’s East Tower, will be closed tomorrow and is scheduled to re-open Thursday. Scheduled procedures on Wednesday will go on as planned, performed by Dr. Eastburn’s colleagues.

Blogger’s Note: There are four basic ownership options for Memorial Health System (stay as is, hospital authority, community nonprofit, and selling to/merging with a larger system). This is the first of four blog posts in an occasional series that will highlight the pros and cons of each. The blog posts are based on the findings, so far, of a city-appointed commission that is tasked with making a recommendation about the health system’s future structure. 

As a city enterprise, Memorial has a proven track record of success. But aspects of public ownership make it ill-suited for the unprecedented volatility of the health care industry moving forward. You can download the commission’s complete list of pros/cons at the end of this post.

Historically, Memorial has cared for everyone, regardless of ability to pay, without help from taxpayers. Under the current model, City Council is the ultimate governor, overseeing the health system’s budget, bonds, and Board of Trustees. The board provides strategic direction and quality and financial oversight.  As a city enterprise, decisions about Memorial are made locally, and any money generated by Memorial has been reinvested into the health system and thus the community.

Yet city-appointed commissioners have also learned that Memorial’s public status puts the health system at a competitive disadvantage. Memorial faces political and legal hurdles that other systems don’t. Such disadvantages, industry experts have said, are likely to be amplified by industry changes and pressures to a point where Memorial’s present-day success won’t last much longer. If that happens, taxpayers are on the hook.

Commissioners are evaluating each ownership/governance model based on three, equally-weighted priorities outlined in their charter: minimize taxpayers’ financial and legal risks, maximize Memorial’s benefit to the community, and ensure access for all around the community’s needs.

 The stay-as-is option, which has three variations, scored low marks in the commission’s analysis, based on the above concerns. 

See the full analyses: Pro-con-analysis-Model-1-Stay-as-is  ; pro-con-analysis-Model-2-as is no mill levy ; pro-con-analysis-Model-3-as is

The finalized pros-and-cons sheets of each model evaluated so far are available at the Citizens’ Commission Web site. You can also learn more about the objectives and the criteria.

The commission will begin working on its recommendation and soliciting community input in September. Memorial Health System is scheduled to reveal its preferred ownership option on Sept. 1.