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UCHealth Memorial Hospital Central is on Boulder Street in Colorado Springs.
In 2018, Memorial Central’s emergency room, the state’s busiest, was designated a Level 1 trauma center.
Doctors and nurses wave to the U.S. Thunderbirds Air Force squadron as members fly over UCHealth Memorial Hospital Central in Colorado Springs in April 2020 to honor Colorado’s front line workers, health care workers, first responders and military members.
A rendering shows the Eastview Medical Center that’s under construction northwest of Powers Boulevard and North Carefree Circle. The outpatient facility will include imaging, rehabilitation, surgery facilities and seven specialty clinics.
UCHealth Memorial Hospital Central is on Boulder Street in Colorado Springs.
In 2018, Memorial Central’s emergency room, the state’s busiest, was designated a Level 1 trauma center.
Doctors and nurses wave to the U.S. Thunderbirds Air Force squadron as members fly over UCHealth Memorial Hospital Central in Colorado Springs in April 2020 to honor Colorado’s front line workers, health care workers, first responders and military members.
A rendering shows the Eastview Medical Center that’s under construction northwest of Powers Boulevard and North Carefree Circle. The outpatient facility will include imaging, rehabilitation, surgery facilities and seven specialty clinics.
When UCHealth began leasing the Memorial Hospital system from the city of Colorado Springs 10 years ago, the system was losing money and market share, was having trouble attracting and retaining medical staff and needed millions of dollars in maintenance.
Today, the system is profitable, has regained and added to its market share, nearly doubled its number of employees and spent more than $1 billion on expanding and renovating its two hospitals, acquiring two more, starting and acquiring physician practices and on maintenance.
The nonprofit also has made payments to the city that fund a foundation that now has $158.5 million in assets and annually makes grants totaling about $7 million to improve the health of residents in El Paso and Teller counties.
The Colorado Springs Health Foundation has made nearly $33 million in grants since 2016, with the largest awards going to the University of Colorado Foundation to develop a trauma-informed emergency behavioral health care program at the University of Colorado Colorado Springs, trail and fitness improvements at Memorial Park and an interdisciplinary simulation initiative at Pikes Peak State College Healthcare Education Center.
The lease resulted from three years of debate on whether to sell the city-owned hospital system to either a group led by its management at that time, competitor Centura Health or for-profit hospital chains, or lease it to UCHealth, which at that time included two hospitals in Denver and Fort Collins. Voters backed the lease deal — which required $259 million in upfront payments ($190 million later went to settle employee pension obligations) plus annual $5.6 million payments and $3 million to open a local branch of the University of Colorado School of Medicine — by an 83% to 17% margin.
“The lease has been a great success story,” Colorado Springs Mayor John Suthers said.
“I have lived here my entire life, and it was very clear as a longtime resident of Colorado Springs that the city needed to get out of the business of hospital ownership. They are huge enterprises and very complex; I don’t think cities are well equipped to run them. UCHealth has invested in a way the city never could. The lease has been a huge win for the city and its citizens.”
While debate over the city’s ownership of Memorial had lingered for decades, calls for selling the system heated up after a $32 million loss in 2008. A special committee recommended the city either sell or spin off the hospital to a separate nonprofit, and a citizen’s committee backed the second option. A dispute with the Colorado Public Employees Retirement Association over pension obligations sunk that deal, leading to the city seeking bids and receiving five proposals. The city accepted UCHealth’s bid to lease the system for 40 years.
“The hospital was in real trouble — losing money with a lot of deferred maintenance,” former Colorado Springs City Council President Merv Bennett said.
“As part of the lease, UCHealth had to share the profits it generated with the foundation. I thought it would take 15 to 20 years, but it happened in two years. The investments made here by UCHealth have been very significant. I don’t think it (the lease) could have turned out any better.”
The lease began Oct. 1, 2012, and last year was extended indefinitely. Under a sublease with UCHealth that began on the same day, Children’s Hospital Colorado took over Memorial’s pediatric operations and moved those operations in 2019 to its own hospital built on the campus of UCHealth Memorial North. UCHealth acquired Grandview Hospital, another small hospital in Broomfield and 17 free-standing emergency rooms out of the bankruptcy of its partner, Adeptus Health, in 2017 and bought Pikes Peak Regional Hospital in Woodland Park a year later.
UCHealth has since completed a major addition of Memorial North, converted pediatric facilities at Memorial Central and Memorial North for adult patients, built a medical office building adjacent to Grandview Hospital focused on orthopedic care and acquired medical specialty and primary care practices and clinics. Renovations now underway will add 56 beds next year, boosting the total to more than 600. The Memorial system has grown from eight to 65 locations since 2012.
The hospital giant is building a major outpatient care facility northwest of Powers Boulevard and North Carefree Circle and a major clinic in the InterQuest area, both opening next year. The outpatient facility, Eastview Medical Center, will include imaging, rehabilitation, surgery facilities and seven specialty clinics, while InterQuest will include primary care, laboratory, imaging and rehabilitation services. Additional primary care clinics are planned in the Black Forest, northern Colorado Springs and Fountain areas.
Former Mayor Steve Bach called the deal “a smashing success. Everything I see is positive. With the way that health care has evolved, it was fortuitous that we leased the hospital to such a large, well-run organization.”
Bach opposed spinning off Memorial to a separate nonprofit headed by its former management and said the terms of that deal would have produced only a fraction of the revenue that resulted from the UCHealth lease.
“Under the terms of the lease, UCHealth has to return all real estate and equipment in good working order at the end of the lease, spend at least $17 million a year on capital projects, give a share of the profits from the hospital to the foundation, make a good-faith effort to get Children’s Hospital to build a hospital here and establish a medical education program,” Bach said. “They have exceeded all commitments and that is a great win for the community, and it continues to be so.”
Memorial has thrived under UCHealth’s management with an average revenue growth rate of 9% and consistent profitability, allowing the nonprofit to annually make more than $1 million in profit-sharing payments to the foundation. During the past 10 years, hospital admissions to UCHealth in the Springs area have more than doubled. Outpatient and clinic visits have grown by nearly tenfold while visits to the system’s four area emergency rooms have jumped more than 50%.
Memorial’s profits slowed during the COVID-19 pandemic as a result of surging expenses for supplies and having to hire expensive traveling nurses to fill shifts amid employee absences due to illness and staff departures from retirements and leaving the health care industry.
Memorial CEO Joel Yuhas said earnings will be squeezed this year by paying higher wages to retain employees and inflation.
Memorial employs 6,660 people in the Colorado Springs area, up from 3,454 just after the deal was completed; those numbers don’t include employees who moved from Memorial to Children’s under Children’s sublease with UCHealth. Those numbers are likely to grow when Eastview Medical Center and the InterQuest and primary care clinics open along with the expected expansion of UCHealth Memorial’s other facilities in coming years to accommodate the area’s booming growth.
Memorial hit major milestones in 2018 when Memorial Central’s emergency room, the state’s busiest, was designated a Level 1 trauma center, capable of the highest level of medical care, and was also designated a comprehensive stroke center able to treat the most severe strokes around the clock. Both designations took years to win and put Memorial Central in elite company — no other hospital in Colorado outside the Denver area is a level 1 trauma center and no other hospital in southern Colorado has a comprehensive stroke center designation.
“Those patients in the past would have been flown out of or over Colorado Springs to Denver. I believe we save hundreds of lives every year by having a trauma center in Colorado Springs by getting them care more quickly,” Yuhas said.
“As a result, we are attracting patients from all over southern Colorado, northern New Mexico and beyond. These are patients with multisystem trauma or blunt, penetrating trauma injuries that require the highest level of care.”
UCHealth will add a tool late next year to treat local stroke patients when a mobile stroke treatment unit begins operating in the Colorado Springs area, Yuhas said. The $1.2 million unit, paid for by Memorial’s foundation, will treat patients of any hospital or those being transported by ambulance; it will be equipped with a CAT scan to identify the type of stroke and is able to administer tPA clot-busting drugs to restore blood flow to the brain. Such mobile units cost about $1.2 million a year to operate and are available in only about 20 metro areas nationwide.
By opening, acquiring and expanding primary care medical practices, Yuhas said UCHealth hasn’t lost ground in fighting the shortage of primary care providers in the Colorado Springs area despite rapid population growth. That is where UCHealth’s $3 million commitment to subsidize the opening of a branch of the University of Colorado School of Medicine will have its biggest impact, he said; the branch opened in 2016 and has trained or is training nearly 170 students, providing a source of doctors to combat the chronic shortage. The branch sends third- and fourth-year students into clinical rotations at local hospitals and clinics.
“Students in the Colorado Springs branch are spread through clinical practices and hospitals throughout the region, bringing energy to clinical practices and the potential to recruit talented physicians back to their communities,” Dr. Jennifer Adams, a professor of medicine at the CU School of Medicine, said via email.
“In fact, in our six years of operation, we are just now seeing former Colorado Springs branch students complete residency training and look to return to careers in the southern Colorado region. We believe this pipeline of physicians, deeply committed to providing excellent health care to the community, will be the long-term impact of our branch campus in Colorado Springs.”
UCHealth also has helped to expand nursing education programs at UCCS and Pikes Peak State College to help battle a chronic shortage of nursing personnel. The nonprofit will pay the cost of 15 educational programs for employees to move from support positions to clinical, pharmacy or social work roles, including a variety of certificates, associate, bachelor’s and master’s degrees through its Ascend Career Program.
Patrick Faricy, who retired in 2016 as UCHealth Memorial’s chief medical officer, said the UCHealth lease ended job security worries for many Memorial employees who were concerned that an ownership change could bring job cuts. As part of the larger UCHealth system, he said Memorial doctors can consult with physicians across the system — which includes 12 hospitals in Colorado, Nebraska and Wyoming — to adopt best practices for patient care.
Richard Vu, owner of Matthew-Vu Medical Group and a member of the El Paso County Board of Health, said UCHealth has brought more health care services to the Colorado Springs area, especially in medical specialties, which he called “a major benefit.”
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