Negotiations are just getting started on one multisystem business arrangement in Colorado, while an announcement about another deal involving the same players is expected shortly.

The Colorado Springs City Council voted unanimously Jan. 10 to choose a joint bid submitted by the University of Colorado Hospital and the Poudre Valley Health System to lease the assets of the city-owned Memorial Health System.

Talks will hammer out the final terms of a 30-year lease—which would include having UCH's neighbor at the Anschutz Medical Campus in Aurora, 318-bed Children's Hospital Colorado, sublease Memorial's approximately 100 pediatric beds.

Once talks conclude, the package will be presented to the city's voters for final approval some time this year.

“Our goal is to work through negotiations as quick as we can,” said Poudre Valley CEO Rulon Stacey.

Children's and UCH are already affiliated in that most physicians at Children's also are faculty at the University of Colorado School of Medicine, Children's spokeswoman Elizabeth Whitehead said.

Separately, 437-bed UCH and the two-hospital Fort Collins-based Poudre Valley Health System also have been discussing merging their operations to form a new system to be called University of Colorado Health. The announcement that a letter of intent to merge the two entities had been signed was revealed last June, and another announcement is expected shortly. In undated materials explaining the proposed arrangement on Poudre Valley's website, it is noted that “the joint operating agreement has progressed steadily and appears on track to be signed near the end of 2011.”

“We're working out those details right now,” Stacey said.

After its proposal received a negative recommendation from a city task force reviewing the five final bids for leasing the Memorial system, HCA-HealthOne released a Dec. 19 statement complaining that the University of Colorado bid relied on “entities that don't currently exist.”

“HealthOne laid out the clearest path for improving the quality of care and turning Memorial around financially to ensure stability and save jobs,” HCA-HealthOne CEO Jeff Dorsey said in the statement. “Our plan is much stronger in quality improvement, financial investment, local control and experience in growing a hospital system.”

According to the statement, HCA-HealthOne's proposal would have generated $332 million more for the local economy, and included an upfront payment of $500 million for a 40-year lease of the Memorial assets, which includes its 548-bed namesake hospital.

The UCH-Poudre Valley joint bid includes an initial $74 million payment, annual payments of more than $5.6 million for 30 years, and an annual payment of $3 million for 40 years to fund development of a Colorado Springs branch school of medicine campus for the University of Colorado. UCH spokesman Dan Weaver said the medical school funding was an important factor in securing the city's approval.