The two public hearings on the proposed sale of the Colorado Health Foundation's 40% interest in the HealthOne joint venture to majority partner HCA included new demands for Colorado Attorney General John Suthers to require more guarantees regarding low-income patients and keeping HealthOne's hospitals open.
In a letter to Suthers' office and in comments made last week at the hearings, the Colorado Center on Law and Policy said it supported the foundation's desire to cash out its stake in HealthOne in order to concentrate on making healthcare-related grants. The center does not have an opinion on whether the $1.45 billion the foundation would receive under the deal is a fair price.
The center also urged Suthers to impose five conditions on the deal—four on HCA and one on the foundation. On HCA, the center urged eliminating a noncompete clause that would restrict the foundation; adjusting the dollar value of HCA's commitments on charity care, community benefits and other matters by medical inflation; guaranteeing that none of HealthOne's seven hospitals would be closed for at least 10 years; and giving the foundation six seats on an eight-member oversight board, rather than the proposed 4-4 split. The center also urged Suthers to require the foundation to report for at least three years on its investment advisers to ensure that there are no conflicts of interest. The center disclosed that it has received grants from the foundation.
Other critics of the sale suggested in a 14-page position paper, unveiled at the first of the two hearings, that it's not in the public interest for the foundation to lose the control it shares with Nashville-based HCA over the hospitals and the price is not fair market value. Ten former members of the boards of the foundation, its predecessor organization or the joint venture itself signed the letter, including six physicians.
The foundation has argued that the sale would diversify its portfolio, allowing it to focus on making healthcare-related grants instead of helping to run a healthcare system with seven hospitals and 13 ambulatory surgery centers. The letter suggests that the joint venture could borrow money and make payments to its owners that would allow the foundation to cash out part of its investment and thereby diversify, yet still retain its oversight role.
Moreover, the former board members argue that the returns from its HealthOne stake are better than what the foundation could expect to earn on a diversified investment portfolio. The foundation, in a white paper issued in June, contends that the returns from the joint venture are highly variable, and the prospects from a healthcare services business are especially uncertain for the foreseeable future.
Dede de Percin, executive director of the Colorado Consumer Health Initiative, said in an e-mail that her organization does not oppose the sale. The CCHI supports the law center's suggested conditions, noting that the lawyer who drew them up served until recently on the organization's board, de Percin wrote. The CCHI also would like to see the commitments to Medicaid and uninsured patients more clearly spelled out, de Percin added. The CCHI has received nearly $1.4 million in operating and other grants from the foundation since 2006, according to de Percin.
Another not-for-profit agency that has received grants from the foundation, Mental Health America of Colorado, also spoke in support of the sale at both hearings, according to Jacy Conradt, MHAC's community relations manager. The foundation and the MHAC work to reduce barriers to receiving mental healthcare services, Conradt wrote in an e-mail. The MHAC has received $310,000 from the foundation since 2006, according to Conradt.
The Colorado Community Health Network also supports the sale, said Ross Brooks, the network's chief operating officer. The foundation has increased its support of community health centers by funding the CCHN's programs for the centers on capital development, operations, quality improvement, technology and workforce development, Brooks said in an interview. In 2011, the foundation is making grants of about $500,000 to the network, up from about $50,000 in 2006, when the foundation funded a CCHN program that helps uninsured residents qualify for Medicaid and children's health programs, Brooks said. In addition, the foundation provides millions of grants directly to community health centers that are CCHN members, he said.
The sale will help the foundation meet its commitment to double the number of Coloradans who have a community health center as their medical home from 500,000 to 1 million over the next decade, Brooks said. “I really do respect and trust the judgment of the Colorado Health Foundation in this divestiture” of its HealthOne stake, Brooks said.
