Denver Mayor Wellington Webb wants to spin off the city hospital system and create a quasi-municipal authority to run Denver General Hospital and 10 neighborhood health clinics.
The Denver Health and Hospitals system is the city's second-largest department, with 2,900 employees and a $200 million operating budget.
Webb intended to pitch the plan last week to the City Council's Health, Housing and Human Services Committee.
The Colorado Legislature approved creation of a hospital authority two years ago, and now the City Council must approve a contract between the authority and the city to make it a reality. Patricia Gabow, the Denver Health and Hospitals system manager, said a contract won't be ready for the council to examine until March at the earliest.
Webb said the restructuring is the only way to ensure that the city's poorest residents continue to receive healthcare in an increasingly competitive market.
"We're going to have to streamline to be more efficient and survive," Webb said. "We can't function the way we have in the past. My goal is to demonstrate that if Health and Hospitals can do it, every other department in the city can find ways to streamline."
Gabow said switching over to an authority would make Denver General more efficient. It would remove workers from the city's Career Service Authority and place them in a new, more flexible personnel system, she said.
That system, she said, would make hiring and firing less time-consuming and would give managers enough flexibility in setting salaries to respond to marketplace demand.
Gabow said the authority would not fall under the city's annual budgeting cycle, which makes multiyear planning difficult, and would be free of the often-cumbersome city procurement process.
However, the authority still would depend on an annual city subsidy, which this year totaled about $24 million.
Webb and Gabow said now is the time for the spinoff because Health and Hospitals is no longer in debt, and competition is fierce for Medicaid patients, a vital part of Denver General revenues.
Webb said he expects anxiety about job security by hospital employees to be the major sticking point with City Council members.
"Some employees have stopped me when I've been out walking and have said, `I heard you're going to be trying to get rid of my job,"' the mayor said. "I tell them, `If we don't change to meet the conditions of today, it won't be your job because there will be no Health and Hospitals."'