III. QUALIFICATIONS/CAPABILITIES OF RESPONDENT’S UNIVERSITY OF COLORADO HOSPITAL
AUTHORITY
IV. NOTWITHSTANDING YOUR ANSWERS TO THE QUALIFICATIONS/CAPABILITIES BELOW, IF YOUR
ORGANIZATION PREFERS TO CONSIDER AFFILIATING WITH THE HEALTH SYSTEM OTHER THAN
THROUGH A LEASE, PLEASE DESCRIBE SUCH ALTERNATIVE MECHANISM(S), SHORT OF A SALE
(INCLUDING ANY SIMILAR AFFILIATIONS UNDERTAKEN BY YOUR ORGANIZATION), AS WELL AS HOW
SUCH ALTERNATIVE WOULD ADDRESS THE APPLICABLE ISSUES SET FORTH BELOW.
Ꮾ Proposals should clearly indicate, by specific cross-reference to the numbered and lettered Sections above, where the Proposal has responded to each of the above criteria.

Ꮾ Describe current business or business in which respondent and/or affiliates are currently engaged and number of years of substantial hospital operational experience it can bring to the Health Systems through its operations, governance and management. If a joint venture, each affiliate must address questions 2-8. Each respondent must be prepared to guarantee the Commitments set forth in
Section V of this Memorandum and so state in the response.
Four organizations have united in this proposal to create a new entity to work with the City of Colorado Springs to operate and help grow Memorial Health System (MHS).
The University of Colorado Hospital is the primary respondent in this proposal. The University of Colorado Hospital
(UCH) itself is closely affiliated with Poudre Valley Health System (PVHS), Children’s Hospital Colorado (CHC); and the University of Colorado (CU) and its health sciences schools and academic campuses. As of today, UCH is the legal entity making this proposal. We are in the process of forming a new legal vehicle called “The University of
Colorado Health System” for joining UCH and PVHS. With this proposal we are offering to make Memorial Health
System a third participating health system in this new entity.
Individually, these institutions are considered among the national elite in their mastery of clinical care, service excellence, organizational efficiency, and, importantly, higher and post-graduate education. Some of their honors include:
• UCH ranks number one in the nation among academic hospitals on the 2011 Quality and Accountability
Performance Scorecard.
• PVHS has received the presidential Malcolm Baldrige National Quality Award, the nation’s highest honor for innovation and performance excellence.
• CHC ranks in the top five children’s hospitals in the country according to U.S. News and World Report .
Collectively, these institutions offer great depth and breadth of experience, as well as an opportunity to marry the best of academic medicine with the best of community medicine to better serve the people of Colorado and the
Rocky Mountain region.
The University of Colorado Health System: A new strategic partnership. The University of Colorado Hospital and
Poudre Valley Health System have signed a letter of intent to enter into a Joint Operating Agreement.
Our new collaboration is likely to commence operations before the strategic partnership with the City of Colorado
Springs is finalized. Because the Joint Operating Agreement between University of Colorado Hospital and Poudre
Valley Health System has not been finalized as of this writing, the University of Colorado Hospital is serving as the primary respondent to this proposal, and is prepared to guarantee all of the commitments contained herein.
PVHS has indicated that it would welcome and support a Memorial Hospital System transaction as part of the Joint
Operating Company’s scope and mission.
The partners involved in the new University of Colorado Health System believe that together they offer the City of
Colorado Springs and the population served by Memorial Health System unique benefits and advantages that cannot be provided by another other proposer.
• Similar to MHS, our hospitals and affiliates are Colorado-based, non-profit health care and educational institutions that share a public service mission and have long-standing and immutable commitments to the education, health and well-being of the citizenry of Colorado.
• Our affiliation with each of the University of Colorado campuses, including the Anschutz Medical Campus and the Colorado Springs Campus, provides El Paso County with unrivaled opportunities for world-class clinical
2

programs, clinical trials and research, education and work-force development and life sciences-stimulated economic growth.
• Our proposal, in collaboration with the University of Colorado School of Medicine (CU SOM) and the University of Colorado–Colorado Springs (UCCS), sets forward a plan with accompanying financial support for developing a branch Medical School campus in Colorado Springs.
• Our proposal brings with it the expertise of the Children’s Hospital of Colorado, one of the top children’s hospitals in the country.
• We bring an unequaled understanding of populations served by MHS. As the largest TRICARE provider in the state, part-owners of TriWest, and the official TriWest network administrator for the state of Colorado, UCH and its partners are uniquely positioned to help serve the health care needs of the active duty, retired military and their families in Colorado Springs and the extended service area. In addition we had extensive experience serving privately insured patients, Medicare and Medicaid populations.
Below are brief snapshots of the affiliates of the powerful team standing ready to join Memorial Hospital in its mission to care for the citizens of Colorado Springs, El Paso County and the entire Pikes Peak Region.
UCH is operated by the University of Colorado Hospital Authority, a body corporate and political subdivision of the
State of Colorado (the “State”) created by the State legislature in 1991 pursuant to Part 5 of Article 21 of Title 23,
Colorado Revised Statutes, as amended (the “Act”).
University of Colorado Hospital is exempt from federal and state income taxes as a governmental entity, and was created to own and operate the facilities constituting the University of Colorado Hospital (the “Hospital”) separately and independent from the Regents of the University of Colorado (the “Regents”). As contemplated in the Act, the
Hospital was transferred by the Regents to the UCH on October 1, 1991.
3

UCH is the primary teaching hospital for the University of Colorado, and is the only academic medical center in the region. All the attending physicians at UCH are on the faculty of the University of Colorado School of Medicine, while a complement of residents, nurses, pharmacists and other clinicians are also affiliated with the university’s health sciences schools. Its much-decorated “Magnet” nursing corps, clinical technicians, ancillary caregivers and staff are all direct employees of UCH.
More than 800 faculty members currently practice at UCH. They are supported by more than 1,300 nurses and a clinical and operations staff of approximately 3,100.
Founded in 1921 in Boulder, UCH’s headquarters are now at the unique “health care city” on the Anschutz Medical
Campus, where the hospital has built and opened more than 2.25 million gross square feet of new clinical and office facilities. Those facilities include an inpatient facility (with a second 12-story inpatient tower under construction and due to open in 2013), an outpatient treatment center, a cancer treatment center, an eye institute, a residential addiction treatment center and an administration building. UCH has expended approximately $646 million for those projects, while the new inpatient tower and related facilities under construction represent an additional investment of approximately $417 million. These expansion projects have been successfully funded and built as a result of
UCH’s success in increasing care volume and managing costs.
The hospital also operates eight satellite facilities in the Denver metropolitan area that offer a variety of primary and specialty care services. These UCH facilities provide over 750,000 patient visits and admissions each year. UCH has become a national destination for patients seeking many kinds of advanced cancer, neurosciences, cardiovascular, transplant care and other advanced specialty therapies. The Hospital also hosts the region’s only American Burn
Association-verified Burn Center, a primary stroke center and, among many other notable services, the only National
Cancer Institute-designated Comprehensive Cancer Center in the Rocky Mountain Region. The latter is, in fact, one of only 40 in the United States. UCH also houses the region’s only transplantation center which is also one of the busiest in the country.
Honors.
UCH’s national reputation is strong. In September 2011, it was named the top-performing academic hospital in quality, safety and efficiency by the University HealthSystems Consortium. This organization represents an alliance of 115 academic medical centers and 257 of their affiliated hospitals representing approximately 90% of the nation’s non-profit academic medical centers. Well known hospital systems such as Kansas, Northwestern,
Mayo Clinic and UCSD were in the top 5 behind UCH. Two months earlier, US News & World Report again named five of UCH’s specialties among the best in America, and named UCH the best hospital in the metro Denver area for the second year in a row. These are nationally recognized clinical services and competencies that cannot be matched by any other proposer.
Governance. The University of Colorado Hospital is an independent entity, governed by its own board, the members of which are appointed by the University of Colorado Board of Regents. The hospital receives no financial support from the state’s general fund.
4

Poudre Valley Health Care, Inc. (PVHS) and its affiliated entities form an extraordinarily successful regional integrated delivery system that serves communities in northern Colorado, southwestern Nebraska and southeastern Wyoming, an area about the size of the state of New York.
While the origins of the system date back to 1925, PVHS was formed in 1996. PVHS is headquartered in the City of Fort Collins, and its primary service area is Larimer County. PVHS provides tertiary care, acute inpatient and outpatient care, as well as emergency care. Services include regional centers of excellence in cardiology, neurology and orthopedics.
The system also operates one of the northern Front Range region’s two Level II trauma care centers. In addition,
PVHS is the main regional provider of community health education, and operates the region’s only site for resident training for newly graduated physicians. As of the 2011, the medical staff consisted of 643 physicians.
The corporate entities within PVHS are: Poudre Valley Health Care, Inc. (“Poudre Valley”), a Colorado nonprofit corporation; Poudre Valley Hospital Foundation, Inc. (the “Foundation”), a Colorado nonprofit corporation; Healthy
Start, Inc. (“Healthy Start”), a Colorado nonprofit corporation; Lakota Lake LLC (“Lakota”), a Colorado limited liability company which is wholly owned by Poudre Valley; PVHS/Timberline, LLC (“PVHS/Timberline”), a Colorado limited liability company which is wholly owned by Poudre Valley; Innovation Enterprises, Inc. (“Enterprises”), a Colorado for-profit corporation; and Medical Center of the Rockies (the “Medical Center”), a Colorado membership nonprofit corporation which was formed by Poudre Valley and a Nebraska hospital nonprofit corporation, each of which is a member of the Medical Center.
Management of PVHS has long believed that the continued health of its communities, as well as the success of the system, rests on developing an integrated delivery system which provides a comprehensive, coordinated, accessible and high quality continuum of care. Thus, in addition to its owned facilities, PVHS serves its region through provider networks, strategic partnerships, operating agreements and joint ventures with other health care providers.
As a result PVHS has become nationally recognized as an elite hospital. It has won the prestigious Baldrige National
Quality Award and, among many other honors, was recently named one of the best healthcare employers in the
U.S. by Modern Healthcare magazine.
Governance.
The Poudre Valley Board of Directors develops and manages the system and the various entities which comprise PVHS.
5

The Children’s Hospital Association (“Children’s”), a Colorado nonprofit corporation, owns and operates Children’s
Hospital Colorado, a 304 bed general pediatric hospital, located on 48 acres at the Anschutz Medical Campus.
Like UCH, it is adjacent to the medical research facilities and health sciences schools of the University of Colorado
Anschutz Medical Campus. Children’s was founded in 1908, opened its first facility (30 beds) in 1910 and has evolved into a regional pediatric health care center that is now located in more than 1.4 million square feet on the
Anschutz Campus.
Children’s provides a wide range of specialized pediatric services both at its Anschutz Campus and at its “network of care” locations throughout Colorado and the region. As a result, it has become the principal provider of tertiary and quaternary pediatric care in Colorado and surrounding states. The hospital is the primary pediatric teaching facility for the University of Colorado School of Medicine, which provides most of its pediatric services at the hospital.
Children’s is qualified under Section 501(c)(3) of the Internal Revenue Code and as such is exempt from federal taxation on its income other than unrelated business income. The Children’s Hospital Foundation (the “Foundation”), an independent Colorado nonprofit corporation, also a 501(c)(3) entity, conducts fund raising activities on behalf of
Children’s. The only present Members of the Obligated Group under the Master Indenture are Children’s and the
Foundation.
6

The University of Colorado (CU) is a comprehensive degree-granting, public university. In all, the University of
Colorado employs 5,429 instructional faculty who serve 57,361 students through 360 degree programs in 28 schools and colleges on four different campuses.
The Anschutz Medical Campus is home to the university’s advanced clinical research centers and health sciences schools: the schools of Medicine, Pharmacy, Dentistry, Public Health and the College of Nursing. Educationally, it remains a vibrant, growing engine, awarding some 926 clinical and professional degrees in its 2010 fiscal year, a
16% increase during difficult economic times and steadily declining government support since 2005. Scientifically, it is a font of almost constant research innovation and adaptation. Economically, the Anschutz Medical Campus is an engine for the entire State and the region. It represented direct employment of 8,112 jobs in 2010, with some
$718 million in direct wages, salaries and benefits. Clinically, its faculty members – given their research and teaching responsibilities – are the region’s leaders in providing the latest in advanced, proven treatments to patients.
Established in 1965, UCCS is a comprehensive university (with selective admission standards) offering a comprehensive array of undergraduate, master, and doctoral degree programs. It is in fact one of the fastest growing universities in the nation: enrollment has grown by an astounding 21% in just the past five school years, to more than 9,300 students. The campus now offers 36 Bachelor’s degree programs, 19 Master’s degree programs and doctoral programs in Education, Engineering and Applied Science, Arts and Sciences and Nursing and Health
Sciences.
UCCS’s Beth-El College of Nursing (“College”) dates back some 100 years in Colorado Springs, and was part of
Memorial until it merged with the university in 1997. UCCS would hope to expand its ties to both Memorial and the other hospitals in the new University of Colorado Health System. This would broaden the reach of the College and provide its students and researchers new levels of engagement and energy.
US News & World Report has named UCCS “Best in the West” for eight consecutive years.
7

Established in 1861, CU-Boulder is the largest of the university campuses, and is a comprehensive graduate research university offering a complete array of undergraduate, master’s, and doctoral degree programs.
Founded in 1912, CU Denver is an urban comprehensive research university, and offers a full range of undergraduate, graduate, and professional degree programs in life sciences, professional programs, and liberal arts to some 13,337 undergraduates.
Governance.
It is governed by a nine-member Board of Regents (the Regents) elected by popular vote in the
State’s general elections. Serving staggered six-year terms, one member is elected from each of the State’s seven congressional districts with two Regents elected from the State at large.
Ꮾ Describe the organizational structure or structures under which such business or businesses are conducted (including joint ventures and partnerships) and the current scope of services.
We have introduced our plan to create a new joint operating company, the University of Colorado Health System.
In Question 6, we provide more detail about the organizational structure of that new system. In our response to this question, we will describe the organizational structures and scope of services of our current component organizations and affiliates. While part of this larger emerging system, each of the participating health systems maintains local governance and accountability to the communities it serves.
Collectively, the collectively the participating health systems bring to this new system an extraordinary depth and breadth of clinical, educational, research and management services. The hospitals in this system have a history of world class care and are respected leaders both regionally and nationally. The addition of Memorial Health System to the already committed partners will ensure that the University of Colorado Health System is the premier health care delivery and health sciences educational system in a multi-state region. It will create wonderful new synergies that will greatly benefit the state of Colorado and the communities that these institutions serve.
Widest, deepest scope of specialties and services.
As such, it has specialties, research capabilities, a familiarity with the very latest in therapies, multi-disciplinary patient services and a range of clinical trials that cannot be found – and cannot exist in those numbers - at community hospitals. Consequently, for patients in late adolescence through the adulthood and into senior care, UCH is the first to bring the latest in proven new therapies and treatments to its patients and their families.
• UCH is a body corporate and political subdivision of the State of Colorado, created by the State legislature in
1991 pursuant to Part 5 of Article 21 of Title 23, Colorado Revised Statutes. UCH is exempt from federal and state income taxes as a governmental entity and was created to own and operate the facilities constituting the
University of Colorado Hospital (the “Hospital”) separate from the Regents of the University of Colorado. As contemplated in the Act, the Hospital was transferred by the Regents to the Authority on October 1, 1991.
• UCH is governed by an eleven-member Board of Directors. Each director is appointed by the Regents to serve terms of four years.
8

• The executive vice chancellor of the Anschutz Medical Campus was appointed by the Regents to serve on the
Board so long as he or she holds that office.
• Under the Act, the Regents appoint a director from each of the seven congressional districts of the State of
Colorado; these directors require confirmation by the State Senate.
• The executive leadership team at UCH collectively has over 150 years of hospital administrative experience, and has been together as a team for six years. Many of the executives have been part of the leadership of
UCH for more than a decade. Short biographies are in the response to Question 5 and in the Appendix to this proposal.
The University of Colorado Hospital, the primary respondent in this proposal, is a nationally recognized regional, acute care teaching hospital and academic medical center that offers a full spectrum of primary, secondary, tertiary and quaternary services.
UCH‘s primary facilities are in the city of Aurora on the Anschutz Medical Campus, but it operates eight other facilities in the Denver metropolitan area. Many of its clinical specialties – notably in cancer, cardiovascular disease and neurological trauma services – have formal affiliations to provide services at other provider sites around the region.
Changing. With a Joint Operating Company with Poudre Valley Health System now under development, UCH is transforming itself into the academic medicine component of a new, Colorado-based health system. It aims to combine the services of what is currently the best-performing academic hospital in America with one of the best community hospitals in America. UCH and PVHS hope that Memorial Health System will join this new system as its southern hub. With Memorial Health System as part of this new system as its southern hub, we could be a national model.
Partners.
UCH has an integral connection with the University of Colorado and its vast undergraduate and graduate educational programs as well as its clinical and translational research capabilities. UCH enjoys an especially close relationship with the University of Colorado’s health sciences schools. For example, all the attending physicians at
UCH are on the faculty of the University of Colorado School of Medicine (UC SOM), one of the most successful public research institutions in the country.
The hospital is a major financial supporter of the UC SOM’s residency and medical education programs. In its most recent fiscal year, UCH contributed $26 million to the UC SOM. In extending the health system to Colorado Springs,
UCH seeks to expand the benefits of this academic, educational and clinical collaboration to the people of El Paso
County and southern Colorado (see Commitment 15), while broadening the reach of MHS’s services and programs.
In addition, the University of Colorado Hospital has a very strong relationship with TriWest and the other military connected health care systems in the state. UCH and UPI are partial owners of the TriWest Health Alliance and are the network administrators for the state of Colorado. TriWest manages the military’s TRICARE program for 2.9 million military members, retirees and their families in 21 western states. This close connection to TRICARE is a key strength of this proposal as UCH understands the unique needs of the military, both those in active service and veterans.
The University of Colorado Hospital offers patients an array of specialized clinical and patient support services that is broader than those offered any other health care provider in the state.
9

What makes academic medicine different from big corporate hospitals?
More services and more training. Academic teaching hospitals combine patient service, research and teaching missions. As compared to for-profit hospitals, academic medical centers make decision about what care to provide based on careful consideration of the community’s need in balance with financial considerations. Not all of the many specialized services and training that the community needs to deliver are profitable.
It is the role of academic teaching hospitals like ours to provide those services and that training. As a result, teaching hospitals like UCH and CHC frequently offer otherwise difficult to obtain specialty services despite that fact that they are not profitable. Because of their clinical service and teaching missions, non-profit academic hospitals like
UCH and CHC offer a much broader and deeper array of services than their profit-oriented comparators. These hospitals are leaders in moving the field forward by supporting clinicians who translate “bench” research into
“bedside” cures.
While academic hospitals make up less than 5% of hospitals in the state, they provide about 40% of the care to the uninsured and Medicaid.
Anschutz Inpatient Pavilion. The Anschutz Inpatient Pavilion is a 13 story (approximately 483,000 gross square feet) inpatient tower with 407 licensed beds adjacent and connected to the Anschutz Outpatient Pavilion. All patient rooms in the Anschutz Inpatient Pavilion are designed as private rooms. All patient rooms feature large windows; patient controlled lighting, flat-screen television, wireless internet connections and access to customized meals. In addition to inpatient rooms, the facility includes 15 inpatient operating rooms, the emergency department (Level II
Trauma Center), an executive health center and all ancillary services required by a comprehensive academic medical center (pharmacy, radiology, pathology, laboratory, etc.). The Anschutz Foundation contributed $40 million to the development of this facility.
Anschutz Outpatient Pavilion. The Anschutz Outpatient Pavilion is a seven story building of approximately
476,000 gross square feet designed for the provision of all diagnostic services and primary and specialized outpatient care, including internal and family medicine, outpatient surgery and women’s services. Comprehensive sub-specialty services representing virtually all medical and surgical disciplines are available. The Anschutz
Outpatient Pavilion includes eight outpatient operating rooms, laboratory space, diagnostic imaging facilities, physician office space, a retail pharmacy and a cafeteria. This facility was completed in December 2000. The
Anschutz Foundation contributed $25 million to finance a portion of the cost of the Anschutz Outpatient Pavilion.
Anschutz Cancer Pavilion. This four story facility contains approximately 109,000 gross square feet and shares a two story entryway with the Anschutz Outpatient Pavilion. The Cancer Pavilion includes diagnostic and treatment facilities and is the site of the University of Colorado Cancer Center, the only National Cancer Institute (NCI) designated Comprehensive Cancer Center in the Rocky Mountain region. The Cancer Pavilion was completed in
November 2000.
Rocky Mountain Lions Eye Institute. This three story facility of approximately 47,000 gross square feet is adjacent to the Anschutz Cancer Pavilion and was completed in April 2001. The Eye Institute is ranked as a leading comprehensive ophthalmology program nationally by peer academic institutions. The Eye Institute was financed in part with a donation from the Lions Clubs of Colorado and Wyoming and is designed for the provision of specialty ophthalmology care, as well as advanced medical education for residents, graduate students and ophthalmologists.
Center for Dependency, Addiction and Rehabilitation (“CeDAR”). CeDAR is a 50-bed capacity residential evaluation and treatment facility (approximately 52,000 gross square feet) for adults affected with chronic substance dependency and addiction. CeDAR is widely recognized as a leading program nationally for its innovative programs and outcomes. Built in large part on the generosity of The Anschutz Foundation, the Daniels Fund, the Mike
Leprino Family Foundation, and other donors, it is one of the very few residential treatment centers in the country connected to an academic medical center. The facility is located on the west side of the Anschutz Medical Campus.
Construction of CeDAR began in October 2004 and CeDAR opened in November 2005.
10

Leprino Building and Parking Structure. The Leprino Building has ten stories encompassing approximately
277,000 gross square feet and houses administrative and clinical support services (such as administrative offices, clinical laboratories, medical staff sleeping rooms and clinical offices) for the Hospital and Medical School faculty.
The Leprino Building is connected via a sky bridge over 17th Avenue to the Anschutz Inpatient Pavilion. The parking garage has 1,476 parking spaces, the majority of which are used by the employees of the Authority, UCD medical facilities and other Leprino Building tenants, with the balance available for use by the general public. Approximately
12,200 square feet on the ground floor of the parking garage is utilized as mixed retail space with a credit union and five food and beverage vendors.
In June 2009, the Authority’s Board of Directors approved an I ntegrated
I nformatIon
S yStemS
S trategy
which will entail an estimated capital outlay of $69.5 million. This strategy implements the best available information systems technology currently available to hospitals. The primary vendor solutions being implemented include the Epic platform for integrated clinical information and the Lawson enterprise resource system. These systems will improve
Hospital quality and safety, patient and physician experience and operational effectiveness. These projects were fully implemented in September 2011.
In May 2010, the Hospital announced plans to build a
Second InpatIent tower
to meet the growing demand for services. The anticipated $400 million project is expected to add 660,000 gross square feet in a new 12 story tower and renovate approximately 67,000 square feet of the existing inpatient tower. The expected occupancy of the new tower is early 2013. The first phase of the expansion will include doubling the size of the Emergency Department
(ED), building out 144 beds, building a new helicopter landing pad, creating shell space for an additional 144 beds and completing renovations in the existing tower. Diagnostic, treatment and operating room space will be shelled out for future expansion. This project also includes the construction of two additional parking structures. In May
2011, the Hospital issued Series 2011A bonds in the amount of $200,830,000 via a variable rate debt issuance supported by a letter of credit with Wells Fargo Bank. The $200,000,000 net bond proceeds will be used to partially fund construction of this new inpatient tower.
In September 2010, the Hospital announced plans to proceed with a major expansion of the a nSchutz
c ancer p avIlIon
. The $20 million project will increase the facility’s footprint by 30,000 square feet and renovate 11,200 square feet of the current structure. The plan includes increasing chemotherapy infusion capacity by 75%, increasing the clinical rooms by 54%, and adding another radiation therapy vault. The expansion is needed to meet steadily growing inpatient volume. The University of Colorado Hospital Foundation is halfway towards its goal of fully funding this expansion through fundraising activities.
A $16 million expansion of the r ocky
m ountaIn
l
IonS
e ye
I nStItute
is underway. This expansion will include the addition of operating rooms and clinical space to meet the growing need of this program.
The Hospital has successfully negotiated the relocation of r ocky
m ountaIn
g amma
k nIfe
llc to the Anschutz
Medical Campus.
The m arIon
d ownS
h earIng
c enter
f oundatIon
secured $2.8 million in federal funding to develop a new building for the hearing center. An additional $980,000 in federal funds has been committed to plan and design the new
Marion Downs Hearing Center building. The Marion Downs Hearing Center Foundation has committed an additional
$100,000 (approximate) for completion of design development.
c ommunIty facIlItIeS
UCH operates eight off-campus clinics in the Denver metropolitan area providing a variety of primary care, specialty and sub-specialty services:
11

C liniC
l oCations
Denver (Lowry)
Denver (Stapleton
Denver (Colorado Center)
Denver (Authority's Denver Campus)
Aurora (Anschutz Medical Campus)
Boulder
Lone Tree (Park Meadows)
Westminster s erviCes
Primary Care, Specialty Clinics
Primary Care, Physical Therapy, Podiatry
Physical Therapy, Sports Medicine, Imaging
Dialysis Center
Psychiatry
Primary Care; Physical Therapy; Audiology
Primary Care, Physical Therapy, TomoTherapy, Ophthalmology
Primary Care
University of Colorado Hospital also understands that the way care is delivered is as important as the care itself.
• UCH practices “patient and family-centered care,” which is a philosophy and set of standards for design of facilities, staffing, programs and services. Patient and family-centered care empowers the patient and their families by making them the center of medical decision-making. UCH is one of the few hospitals in the country to employ a patient as head of its Patient and Family Centered Care Advisory Council.
• Patient safety is one of the highest priorities in the Hospital’s decision-making and care delivery. UCH has established an exemplary record for safety and quality outcomes.
» The hospital operates numerous programs to keep patients safe. These include special precautions, procedures and engineering to prevent infections, falls and other complications of surgery and hospitalization.
» Our recognition as the highest ranked academic medical center by University HealthSystem Consortium was determined based on composite scores that look at patient safety, patient centeredness, effectiveness of care and mortality.
» The hospital’s latest investment in patient safety is its adoption of a $69 million, new state of the art integrated electronic medical record system, Epic.
¾
Our new integrated system allows providers in different areas to communicate instantly with each other and with the community provider who referred the patient. Just as importantly, it allows patients to communicate directly with their provider.
¾
The new information system, which is operational in most of the hospital’s clinical care areas, will allow the hospital to participate in the broader regional health information-sharing networks now under development.
An affiliation with academic medicine offers advantages to both providers and their patients. With medical knowledge doubling every four years, keeping up with the latest research and clinical best practices can be very challenging. The close affiliation with an academic medical center creates an ongoing bi-directional learning community that makes it easier to keep up the latest developments. Researchers are stimulated by learning more about the care delivered in the clinics and communities, and clinicians benefit from the latest scholarly work. Below is a partial list of some of the medical advances that have arisen out of the UCH/UC SOM learning environment:
• The world’s first successful liver transplant in 1963.
12

• Discovery of a single insulin gene crucial in the development of Type 1 autoimmune or childhood diabetes
• Discovery of a gene causing cleft lip and palate, the most common birth defect.
• Innovations in the surgical treatment of lung infections.
• Leader in interventional radiology, now a vital companion in newly successful treatments of stroke, vascular diseases and abnormalities, and cardiac diseases.
• First hospital in the Rocky Mountain region to introduce new radiation technology, “shaped-beam surgery,” to treat patients with brain and spine tumors as well as small tumors on the liver, lung and prostate.
• First hospital in Colorado to use gene therapy to treat brain tumor patients.
• Pioneering research showing that weight gain can be stopped by walking extra 2,000 steps daily or eating 100 fewer calories a day, leading to a national grassroots initiative, “America On the Move.”
• The nation’s first fetal cell transplant for Parkinson’s Disease in 1988.
• Pioneering work in the use of ultrasound in obstetrics and the first in the nation to use ultrasound technology on a patient.
• The first classification and numbering system of human chromosomes in 1962, now the international standard.
• Revolutionized open-heart surgery around the world with the first successful series of open-heart operations under hypothermia in 1953.
• First use of steroids in immuno-suppression to prevent rejection of transplants.
• Developed the Denver Developmental Standardized Test which established a national model to assess childhood development.
• Discovered that lymphocytes are preprogrammed to respond to antigens, which is the cornerstone of immunology.
• First to identify the genetic factor in conversion of normal cells to cancer cells.
• First to identify the “battered child” syndrome.
• Discovered the magnetic component of human brain response in schizophrenic patients.
• First to prove Vitamin E deficiency as a cause of neurologic symptoms in children with chronic cholestatic liver disease.
• First to identify a growth factor for normal white blood cells.
• First human thyroid autograft, using tissue from one’s own body to repair damaged or diseased tissue.
• First use of human cell cloning to study genetics and cancer.
• Pioneered efforts leading to the global eradication of smallpox.
• World’s first 3-D images of the human body derived from anatomical sections for health professionals’ education.
• First to analyze the molecular structure that allows T cells to recognize antigens.
• First to study the effects of altitude on people who live at high elevations (6,000 to 14,000 feet above sea level) through the establishment of the Colorado Center for Altitude Medicine and Physiology.
• One of the first to co-locate a medical clinic specializing in voice and speech in a performing arts complex with
13

the establishment of the University of Colorado Hospital Voice Practice at the National Center for Voice and
Speech in the Denver Center for the Performing Arts.
• Groundbreaking work in the treatment of cardiac arrest through the use of a non-invasive surface coolant gel to lower the brain temperature of patients and slow their metabolism.
For purposes of this proposal, UCH is affiliated with two other Colorado hospital providers, Poudre Valley Health
System and Children’s Hospital Colorado, as well as with the University of Colorado (including its health sciences schools).
Poudre Valley Health Care, Inc. and its affiliated entities is a regional integrated delivery system that serves communities in northern Colorado, southwestern Nebraska and southeastern Wyoming, an area about the size of the state of New York.
• Headquartered in Fort Collins, in Larimer County, Colorado. Larimer and western Weld Counties are its primary service area.
• The system provides tertiary care and acute inpatient and outpatient care, as well as emergency care at a number of locations, including Poudre Valley Hospital in Fort Collins, Medical Center of the Rockies in Loveland, and at various clinics throughout the communities of its service area affiliated with the Poudre Valley Medical
Group.
• Corporate components are: Poudre Valley Health Care, Inc., a Colorado nonprofit corporation, Poudre
Valley Hospital Foundation, Inc., a Colorado nonprofit corporation; Healthy Start, Inc., a Colorado nonprofit corporation; Lakota Lake LLC, a Colorado limited liability company which is wholly owned by Poudre Valley;
PVHS/Timberline, LLC, a Colorado limited liability company which is wholly owned by Poudre Valley; Innovation
Enterprises, Inc., a Colorado for-profit corporation; Medical Center of the Rockies , a Colorado membership nonprofit corporation which was formed by Poudre Valley and a Nebraska hospital nonprofit corporation, each of which is a member of the Medical Center; and Poudre Valley Medical Group, a wholly owned limited liability company, a network of 27 outpatient clinics and nearly 150 employed physicians in 23 specialties.
• In addition to its owned facilities, the System serves its region through provider networks, strategic partnerships, operating agreements and joint ventures with other health care providers.
• Governance. The Poudre Valley Board of Directors develops and manages the system and the various entities which comprise the System other than the Medical Center, whose management is described below under
“Medical Center of the Rockies.”
PVHS has earned national distinction for awards including:
• Malcolm Baldrige National Quality Award, 2008, the highest presidential honor given to United States businesses and organizations that demonstrate innovation and performance excellence.
• Best Places to Work in Healthcare, given by Modern Healthcare magazine.
• Most Wired and Most Wireless, Hospitals & Health Networks magazine.
14

Poudre Valley Hospital (“PVH”) is a regional medical facility offering a wide array of treatments, surgeries, and diagnostic procedures in more than three-dozen medical specialties. The Poudre Valley Hospital health-care professionals deliver personal and skilled care that integrates the latest medical technologies.
The facilities at PVH comprised 267 licensed beds, including Mountain Crest Behavioral Health Center (24 mental health beds), 16 operating rooms, and 23 critical care beds. In 2011, the medical staff consisted of 694 physicians.
• Medical Center of the Rockies (“MCR”) is a 136-bed tertiary care hospital which officially opened on February
14, 2007. MCR hospital serves not only Loveland, but also surrounding communities in Northern Colorado, southern Wyoming, and southwestern Nebraska, as well as a large regional population that already utilizes services offered by Poudre Valley.
• Poudre Valley Medical Group is the largest, most comprehensive medical group in northern Colorado.
At thE hOSPItALS
Among the services and specialties the system offers are:
• Level II trauma care centers (the other is at UCH)
• Community health education, and operates a site for resident training for newly graduated physicians
• The Regional Orthopedic Center: comprehensive care of bone, joint, tendon, and nerve problems of the limbs, neck and back
• Partnerships with long-term rehabilitation, nursing facilities and home health care services
• Comprehensive range of outpatient radiology services, including MRI and CT scans, diagnostic X-rays, ultrasound, and more.
• Outpatient surgery center
• Cardiovascular services, including cardiovascular surgery, interventional cardiology, non-invasive cardiopulmonary diagnostics, cardiovascular telemetry, cardiac ICU/stepdown
• Surgical services, including general, trauma, neurology and orthopedic trauma
• Obstetrics
• Pediatrics
• Well-baby nursery
• Dialysis
• Hyperbaric oxygen
POuDRE VALLEy MEDICAL GROuP
The largest, most comprehensive medical group in northern Colorado, PVMG is a network of 27 outpatient clinics and nearly 150 employed physicians in 23 specialties. Among them are:
Primary Care .......................................................................... Family Health Care of the Rockies
Family Medicine Center
Foxtrail Family Medicine
Greeley Medical Clinic
Loveland Family Practice
15

Medical Clinic at Centerra
PVMG Internal Medicine
PVMG Family Medicine
Poudre Valley Internists
PVMG Primary Care South Loveland
Sterling
Timberline Medical Family Practice and Urgent Care
Windsor Medical Clinic
Cardiovascular ....................................................................... Heart Center of the Rockies
Endocrinology ........................................................................ Endocrinology Consultants of Northern Colorado
Pediatrics ............................................................................... Peakview Medical Center
Neurology .............................................................................. Neurology Associates of Northern Colorado
Urgent Care ........................................................................... Greeley Urgent Care
Harmony Urgent Care
Loveland Urgent Care
Obstetrics and Gynecology ................................................... PVMG Obstetrics and Gynecology
Brain and Spine Surgery ........................................................ PVMG Brain and Spine Surgery
Physical Medicine/Rehabilitation ........................................... PVMG Physical Medicine & Rehabilitation
Urology .................................................................................. PVMG Urology
Orthopedics ........................................................................... Peak Orthopedics
Oncology ............................................................................... Cancer Center of the Rockies
Greeley Medical Clinic Oncology and Hematology
Loveland Oncology and Hematology
Occupational Health .............................................................. Occupational Health Services
Surgical .................................................................................. Surgical Specialists of the Rockies
The Children’s Hospital Association, a Colorado nonprofit corporation, owns and operates Children’s Hospital
Colorado. Children’s Colorado is a general pediatric hospital that currently operates a total of 318 beds, including
308 at the Anschutz Medical Campus. It also operates beds at Parker Adventist Hospital, in the facility adjacent to
Exempla St. Joseph Hospital and six beds (limited to 72-hour stays) at Children’s North Campus. Children’s services are offered at 15 other locations in its renowned “Network of Care.”
Increasingly today, physicians, patients and families recognize that some pediatric services have become so complex and specialized that the best care often is available only at a facility operated or managed by a dedicated
16

children’s hospital. Our proposal offers the Colorado Springs community the unique advantage of having one of the top children’s hospitals in the nation present and invested in operating an on-site pediatric unit at Memorial. This would minimize the need for transport of infants and children for care elsewhere, and bring families the comfort of knowing that they would have instant access to the best pediatric care.
Under this proposal, Children’s Hospital Colorado would offer its services to run a dedicated pediatric unit within the
Memorial Health System. As part of this offer, Children’s would sub-lease space from the new non-profit Memorial
Health System organization that would be part of the new University of Colorado Health System.
Children’s Hospital Colorado has already started to become an active participant in the Colorado Springs community.
For example:
• Children’s is opening a 50,000 sq. foot medical services facility in the burgeoning north end of Colorado
Springs.
• CHC has launched community safe routes to school program in Colorado Springs by establishing the Pikes
Peak Safe Routes to School network.
• Children’s Colorado supports local pediatricians and family practitioners by regularly offering medical education in the Pikes Peak region.
• As part of the Children’s Miracle Network (CMN), Children’s uses CMN funds to cover transportation and lodging costs for families when kids from the Pikes Peak region have an extended stay at its campus in Aurora.
Children’s provides a comprehensive array of diagnostic and therapeutic pediatric services on both an inpatient and outpatient basis. Children’s wide range of tertiary services include:
• Level I Pediatric trauma Center – the only such facility in the Rocky Mountain region.
• Level III Neonatal Intensive Care unit.
• Organ and Bone Marrow transplantation – 344 heart transplants, 151 liver transplants, 164 kidney transplants, 524 bone marrow transplants from 1990 through 2009.
• Neurosurgery – The referral center for pediatric neurosurgery for a large portion of the Western United States.
• Cardiothoracic and Vascular Surgery – The only pediatric ventricular-assist device program in the Rocky
Mountain region.
• Burn Center – Colorado’s only multidisciplinary acute and rehabilitative pediatric burn center.
• Neurotrauma Rehabilitation Program
• Oncology/hematology/Bone Marrow transplant – the region’s comprehensive diagnostic, treatment and support services for pediatric and adolescent patients.
• Eating Disorders treatment Programs
• Children’s hospital Immunodeficiency Program (ChIP) – a regional referral center for pediatric patients with HIV infection or AIDS.
• Cystic Fibrosis Center – designated by the Cystic Fibrosis Foundation as one of 11 therapeutic development centers in the United States.
• Center for Gait and Movement Analysis – the Rocky Mountain region’s only clinical gait analysis facility, the
Center accepts referrals for both children and adults.
17

• Experimental therapeutics Program – serves cancer and blood disorder patients with recurrent illnesses, those resistant to traditional treatment and patients with a diagnosis that has no reasonable curative prospect by providing access to experimental therapies.
• Colorado high-Risk Maternity and Newborn Program – Children’s and University Hospital have established the Colorado Institute for Maternal Fetal Health, offering services from obstetrics through fetal surgeries.
In addition, Children’s has specialists in rare pediatric disorders, such as inherited metabolic disease and hypoplastic left heart syndrome.
In its Network of Care, Children’s operates seven Specialty Care Centers which together provide the following specialty services: audiology, cardiology, dermatology, diabetes, ear, nose and throat, endocrinology, gastroenterology, neurology/EEG, orthopaedics, pediatric surgery, radiology, rehabilitation medicine and urology. There are also two
Specialty Care Centers dedicated to cancer care one of which is in Colorado Springs and one Specialty Care Center for pulmonary care.
In addition, its Therapy Centers are dedicated to rehabilitation medicine and provide occupational, physical, speech/ language and learning therapy. It also offers pediatric urgent care at a number of sites in the Denver metropolitan area
• The University of Colorado health sciences schools provide undergraduate, graduate and continuing education, research and patient care and service in health disciplines through the School of Medicine, College of Nursing,
School of Dental Medicine, School of Pharmacy, School of Public Health, and the Graduate School.
• The schools are primarily located on the Anschutz Medical Campus. The Amended and restated Affiliation
Agreement dated August 2011 (the “Affiliation Agreement”) between the Regents and the UCH, requires that the Health Sciences Schools will utilize the hospital as the primary site of practice and training in accomplishing their mission.
• The Regents and UCH have in place several agreements that continue and strengthen the historical relationship between the Hospital and the University, including the recently renewed Affiliation Agreement, an Operating
Agreement, a Lease and Transfer Agreement relating to the Denver Campus, an Infrastructure Agreement and the Ground Lease relating to the UCH’s Anschutz Campus.
• The University, through its health sciences schools, helps to staff two of the hospitals that are part of this proposal, UCH and CHC.
• For University of Colorado Hospital, its faculty members serve through three-party agreements between the
UCH, the University and University Physicians Inc. (UPI), the Medical School’s faculty practice plan.
• UPI is a nonprofit corporation which provides billing, administrative and management services to physicians who are full-time faculty members at the School of Medicine.
• Revenues are collected by UPI on behalf of the University faculty and are used by the University to pay physician salaries and for faculty research and education activities of the medical school faculty.
18

• UPI has contracts for physician services with all major health plans in the State corresponding to the Hospital’s provider contracts.
• UCH, working with the School of Medicine and UPI, has developed a primary care network of physicians to support managed care contracts and provide the referral base for hospital services, as well as the clinical specialties of the Medical School faculty. The Medical School has recruited physicians who have volunteered to teach in the Medical School’s various programs, and who have been awarded clinical volunteer faculty status to participate in the clinical network. UCH has focused on entering into contractual arrangements with UPI for physicians to serve as network providers at agreed upon rates, rather than on purchasing practice assets or employing physicians.
Needless to say, meaningful health care is more than the sum of its parts of broad expertise, technical proficiency,
A high quality health care system is more than the sum of its parts. It requires broad expertise, technical proficiency, modern facilities, sensitive caregivers and an unremitting focus on the health care needs of patients and families.
In addition to the qualitative aspects of the patient experience, increasingly consumers and payers are looking for quantitative measures of the quality of care delivered.
Using a balanced score card approach assessing multiple dimensions of safety, quality, and efficiency, the University
Health Systems Consortium ranked the top 5 academic medical centers in the country in 2011 in the following order:
1. University of Colorado Hospital
2. University of Kansas Hospital
3. Northwestern University
4. Mayo Clinic Rochester
5. University of California – San Diego
Some of the other honors we have earned are:
• US News and World Report ranked five UCH specialties – pulomonology, kidney disease, rheumatology, cancer, the neurosciences – among “America’s Best” nationally, It also named UCH the #1 hospital of any kind in the Denver metro area. UCH has had programs ranked in the US News and World Report “Best Hospitals” list for 17 consecutive years.
• US News and World Report named Children’s Hospital a top five pediatric hospital in the United States.
• Magnet Designation
» Considered the gold standard of nursing excellence, UCH, CHC, and PVHS have all three earned multiple
Magnet designations from the American Nurse Credentialing Center.
» UCH and PVHS are two of only forty hospitals in the world to earn three consecutive Magnet designations.
» Children’s Hospital Colorado has been designated twice so far.
» Medical Center of the Rockies won its first designation, which is must be re-earned every three years, in
2010.
• Poudre Valley Hospital was awarded the presidential Malcolm Baldrige National Quality Award, 2008, the highest honor given to United States businesses and organizations that demonstrate innovation and performance excellence.
19

• Modern Healthcare magazine recently named PVHS among the Best Places to Work in Healthcare.
• The same magazine named Rulon Stacey, President and CEO of Poudre Valley Health System, as one of the
100 Most Influential People in Healthcare in 2011.
• Hospitals & Health Networks magazine name Poudre Valley to its “Most Wired and Most Wireless” hospitals in the United States.
• The Denver Post named Bruce Schroffel, President and CEO of the University of Colorado Hospital, as its
Business Person of the Year in 2010.
• Avatar International ranked Medical Center of the Rockies in the top 5 percent in patient satisfaction among the
360 hospitals it tracks, and cited it as Exemplary Service Overall Best Performer.
• The Denver Business Journal , citing UCH’s many efforts to improve the health of its own employees, named
University of Colorado Hospital as its Healthiest Employer of 2011.
Ꮾ  Describe the legal entity that will enter into an agreement with the City regarding the transaction
The University of Colorado Hospital is the proposed legal entity that will enter into an agreement with the City of
Colorado Springs regarding the transaction.
As described in our response to question four below, UCH is in the process of creating an expanded hospital system through a joint operating agreement with Poudre Valley Health System.
This new entity, described in question four will be referred to for these purposes as “University of Colorado Health
System”.
At the time of this bid, it is not certain when the University of Colorado Health Systems will begin operations. For that reason, UCH may utilize the new System to contract with the City of Colorado Springs if it exists at the time an agreement with the city is executed. It would create an ever larger, stronger University of Colorado health system.
Ꮾ  Describe the legal entity or entities that will own, operate, or hold any required licenses for the delivery of health care services at the
Health System sites.
UCH and PVHS will be creating a new 501(c)(3) corporation (referred to here by its temporary working title
“University of Colorado Health System”), which will operate consistent with their joint operating agreement (JOA).
We would anticipate that under the proposed transaction, Memorial Hospital facilities would be leased to the
University of Colorado Health System. Our system has been carefully designed to preserve a significant component of local identity and community input, while also ensuring sufficient operational integration within the system to enable the whole system to achieve efficiencies, diffuse best-practices, and be successful in a competitive health care market. Memorial would continue to be a separately licensed hospital, separate Medicare provider, and hold its own operating licenses. There may be opportunities to combine certain licenses region-wide in the future.
As indicated in the chart in our response to question 6b, we anticipate that Memorial would be operated as an affiliated health system of the University of Colorado Health System. The vision of the University of Colorado Health
System is to create a regionally significant system, which can provide effective and coordinated care across the
Northern, Central and Southern regions of Colorado. In this framework, Memorial Health System would logically serve as the focal point of any future efforts to expand affiliations in that area.
20

To ensure that each community entity in the new health system has a powerful local voice in the development and operation of their hospital, a strong focus has been put on implementing a local board for each of the hospitals in the new system.
Each component hospital system would retain its separate corporate existence, with its own local Board of
Directors. This will allow each affiliated health entity in this expansive new health system to share their unique strengths, while retaining maximum flexibility to respond to the particular needs of their own communities.
The new, local non-profit entity created to operate and hold the licenses for Memorial Health System would be governed by its own Board of Directors. The Board of Directors would be made up primarily of residents of the City of Colorado Springs and/or El Paso County. Preliminarily it is envisioned that the Board would have eleven members, the majority of whom would be current El Paso County residents. The initial Board would be approved by the
Colorado Springs City Council. The board membership would also be approved by the University of Colorado Health
System.
The new Memorial Board will have significant responsibilities as they relate to the operations of Memorial Health
System locally, and this Board will have a relationship with either the UCH Board or the new Board of the University of Colorado Health System.
In order to enhance the pediatric capabilities at Memorial, the Children’s Hospital Colorado intends to sublease space from the new 501(c)(3) entity and will operate pediatric services in a separately licensed and accredited
Children’s Hospital within Memorial Health System.
This sublease arrangement should allow Memorial Health Systems to receive accreditation by the National
Association of Children’s Hospitals (NACH). This will further enhance the current pediatric excellence already present in Colorado Springs.
Because UCH is actively developing the new System with Poudre Valley Health Systems it is uncertain when the formal University of Colorado Health System will be in place. If the University of Colorado Health System has been created at the time a collaboration with Memorial moves forward, a legal structure that has a University of Colorado
Health System as a Colorado nonprofit 501(c)(3) that has its own Board of Directors would be created.
In the event that the University of Colorado Hospital System is not in place at the time of the strategic partnership with the City of Colorado Springs and Memorial Health Systems, then a similar organizational structure will be developed in which the new Memorial 501(c)(3) is a subsidiary of UCH until the University of Colorado Health
System is in place. The same authorities and responsibilities will reside with the new Memorial 501(c)(3) in either scenario.
The University of Colorado Hospital System will be organized and operated so that it maintains its tax-exempt, public charity status under Section 501(c)(3) of the Code.
The University of Colorado Health System is being developed with the specific intent of balancing the desires of the participating health systems to maintain a strong local service delivery capacity and a high degree of local decision-
21

making, with recognition of the need for a regional system to integrate some services to achieve cost-effectiveness.
It is important to note that all the resources of this new entity will be devoted to Colorado and will remain in our region.
Among other things, the University of Colorado Health System will have power and general authority to:
(a) manage, coordinate supervise and implement the operations of the health care facilities and services;
(b) provide administrative and support services to advance the charitable and educational purposes of UCH,
PVHS, Memorial and any other nonprofit health care institutions that join the system in the future;
(c) perform directly charitable and community services consistent with its tax-exempt status under Section
501(c)(3) of the Code, including by providing health care to the general public, participating in the conduct of research on disease and health issues, and disseminating the results for the benefit of the general public;
(d) participate in and support the education and research programs of the School of Medicine and the other
University of Colorado health sciences schools; and
All of this will be done consistent with the overarching values of community leadership and maximization of each entity’s strength.
As the University of Colorado Health System grows into the leading health system in the state, other institutions will likely join us. The addition of institutions (either as members, leased Hospitals, or some other form of affiliate) will require a supermajority vote of the University of Colorado Health System Board.
As noted, the University of Colorado Health System Board is also balanced by significant powers that are reserved to the local level. The local MHS board will be deeply involved in important issues such as credentialing of physicians, assessment of community health needs, community relations, strategic planning, capital and operating budget planning, fundraising and recommendations for local changes in services.
• UCH, PVHS, and Memorial will continue to have their own Boards to allow for active community leadership and involvement.
• UCH, PVHS and Memorial facilities will remain the licensed operators of their facilities (meaning that each will continue to perform all functions legally required to be performed directly by such licensed entity).
Administrative and coordinating authority would be exercised by the University of Colorado Health System
Board to ensure that the system overall functions efficiently and effectively to serve the needs of the state of
Colorado.
• The University of Colorado Hospital System Board will always be mindful of opportunities for efficiency and economies of scale, and may unify some functions of the individual boards that are in the best interest of the system as a whole. These might include function such as information technology, contracting, revenue cycle and supply chain activities.
• The University of Colorado Hospital System will operate in a manner that enables or causes each affiliate to comply with and fulfill its respective obligations under existing law. This focus on maintaining compliance while maximizing the strengths of each entity will ensure that the system achieves the highest level of patient care.
22

a. Organizational Chart
Ꮾ Provide an organizational chart of the respondent’s organization
23

b. Experience with Proposed Transaction
Ꮾ Provide a description of the respondent’s experience with the type of transaction proposed.
In recent decades, the hospital industry has experienced periods of both decentralization and consolidation.
The responding organizations as well as their senior leaders and advisors all have lengthy experience not only in the development and integration of large hospital organizations, but in transitioning from a city-owned health system like
Memorial to a successful not-for-profit hospital.
Previously government-run.
Both University of Colorado Hospital and Poudre Valley Hospital have a history of affiliation with local governments. Their leadership teams understand the cultural issues and alignment of values that can arise between a hospital and a local government. This structure, while it had many benefits, also hindered the ability of the hospitals to be flexible in meeting the changing needs of their patients and the industry. The
University of Colorado separated from state control in 1991, while Poudre Valley separated from Larimer County control in 1994. UCH’s legacy hospital, moreover, spun off its pediatric services and merged them into what became The Children’s Hospital, transforming it into a fully academic hospital.
These institutions have all made this transition into successful independent not-for-profit health systems that are nationally renowned for their quality of care. Each has also made significant contributions to their communities.
Experienced in transformations.
UCH and PVHS are also in the process of forging a strategic partnership – the new Front Range-based University of Colorado Health System that would be yet another kind of consolidation in order to improve services.
UCH, PVHS, Children’s and CU have the necessary experience, including experience working together, to achieve an effective partnership with Memorial. We have ourselves worked through the evolution from governmentallyoperated to private facilities devoted to the community. We have developed a robust array of affiliations with other institutions, without trying to impose a “one size fits all” approach. For that reason, we have succeeded in working with many physicians and institutions that value their own autonomy and local values. Now we are forming the
University of Colorado Health System described above, which is a further consolidation that has been successfully negotiated. We understand the importance of continuing to work with and respect the local Board members, medical staff, and community leaders.
Experienced in lease transactions like this one. Additionally, PVHS has significant experience in a lease transaction, precisely the type of structured transaction the City has requested. The Health District of Northern
Larimer County created a locally controlled private, not-for-profit organization in 1994 to take over the day-to-day management of the Poudre Valley hospital under a lease agreement. PVHS, the private, not-for-profit organization that manages Poudre Valley Hospital, holds that 50-year lease. As noted, operating under this lease, it has achieved numerous prestigious awards for quality and collaboration, been a faithful health steward for the people of its vast service area, and is considered a national model for a successful community hospital.
c. Quality of Care Measures and Experience
Ꮾ Provide specific measures of quality of care in organizations with which it is affiliated, owns or operates, including specific historical performance against national and regional benchmarks in measurements of quality of care provided (e.g., 30 day readmission rates).
The University of Colorado Hospital and its affiliates are all nationally recognized for their quality of care and have achieved those recognitions through rigorous measurement and continuous process improvements. Our national recognitions in 2011 alone are made up of first place rankings in patient safety, mortality, effectiveness and patient centeredness.
24

UCH in particular is well known for delivering medical outcomes consistently above state and national averages. It does so while treating the high percentage of complex, often-advanced conditions that tend to come to an academic hospital, especially in UCH’s signature cancer, neurosciences, cardiovascular and transplant centers.
Measurements.
UCH closely monitors its performance data – available for all faculty members and staff members to see and measures itself in scores of different areas. These metrics include, for example, readmission rates, infection control, patient falls, patient satisfaction, (observed versus expected) mortality rates, and the Centers for
Medicare and Medicaid Service’s “core” clinical process protocols for different kinds of conditions.
The hospital also reports its outcomes data to several independent organizations that, in turn, allows UCH to continuously assess performance against best practices and adopt them as they emerge.
Among those organizations is University HealthSystems Consortium, the professional organization for academic hospitals. During the past years, UCH’s national performance in quality of care and patient safety has risen dramatically from number 23 in the country in 2009, to number eight in 2010 and, this year, to the single bestperforming academic hospital in quality, safety and efficiency in the United States. how it compares to other rankings: While other recognitions often include subjective judgments or are limited to information about certain financial classes of a hospital’s patient population, the UHC award –often referred to as health care’s Academy Award – is based solely on data reflecting the real, objective clinical experiences of all patients, including those in the military.
Hospital leadership firmly believes that quality of care and patient satisfaction are heavily influenced by the levels of faculty and employee satisfaction and engagement. For those and other reasons, it focuses and monitors the effectiveness of many programs aimed at fully engaging employees in their work and a ensuring a culture of highquality care and patient safety. These measurements are part of employees’ performance evaluations. The results have been salutary, and not just in our patients’ experiences.
UCH has also earned the honor of being named as a Magnet Hospital by the American Nurses Credentialing Center for its excellence in nursing three consecutive times. There are only 40 other hospitals in the country that have achieved this recognition.
UCH also has nationally recognized programs in:
• Stroke and Neuroscience
• Heart Failure, heart attack and pneumonia care
• Cancer
• Transplantation
• Ophthalomology
• GI, Urology
And much honored programs in women’s health, cardiac and vascular care, addiction rehabilitation, audiology, multiple sclerosis and neuromuscular disease, mental health primary care and more.
This same kind of attention to constant measurement and improvement earned Poudre Valley Health System the Malcolm Baldrige National Quality Award in 2008. It is considered the nation’s highest honor for innovation and performance excellence, and PVHS was the only recipient in the particularly complex pursuit of health care excellence. Competitors for the award undergo a rigorous review of their leadership; strategic planning; customer and staff focus; knowledge and process management; and clinical, regulatory and financial results. Poudre Valley
25

Hospital has achieved a three time designation as a Magnet Hospital by the American Nurses Credentialing Center for its excellence in nursing.
Over the past ten years, PVHS and its member hospitals also have received numerous other awards recognizing the quality of their care. They have included:
• The Distinguished Hospital Award for Patient Safety from Thomson-Reuters
• The Nursing Quality Award from the National Database of Nursing Quality Innovators
• The HealthGrades Distinguished Hospital Award for Clinical Excellence, Avatar International’s national awards for inpatient care, most improved inpatient and outpatient satisfaction, innovation, exemplary service and exceeding expectations.
Children’s Hospital Colorado is similarly recognized for excellence, and as a result has won numerous quality recognitions.
Children’s is a member of the National Association of Children’s Hospitals (N.A.C.H). which allows them to measure performance against each other and earn classifications that highlight these achievements.
Children’s ranked fifth in the nation on the 2011-12 U.S. News & World Report Best Children’s Hospital Honor Roll.
It has been ranked a top children’s hospital on this every year since the inception of U.S. News ’ rankings edition in 1993. Five of Children’s specialties were among the country’s top ten, including cancer (10), diabetes and endocrinology (4), gastroenterology (5), orthopedics (9) and pulmonology (4).
Aside from being one of only eight Magnet-designated hospitals in the state (University, Poudre Valley and Medical
Center of the Rockies are three others). Children’s has been cited by both Parents and Child magazines as among the ten best children’s hospitals in the nation.
Finally, the hospital – along with Poudre Valley – has once again been recognized as one of the nation’s Most
Wired (Most Improved) according to the results of the 2011 Most Wired Survey released in the July 2011 issue of
Hospitals & Health Networks magazine.
d. Tax Status
Ꮾ Provide respondent’s tax status
All the respondents in this proposal are Colorado based, not-for-profit organizations.
The University of Colorado Hospital is a Colorado based, not-for-profit hospital. More specifically, the hospital is a political subdivision and body corporate of the state of Colorado and, as such, the income generated by the hospital in the exercise of its essential government function is exempt from federal income tax under Section 115 of the
Code. University of Colorado Hospital is also recognized by the IRS as a 501(c)(3) organization.
The system is composed of Poudre Valley Health Care, Inc., a Colorado, nonprofit corporation recognized by the
Internal Revenue Service as a Section 501(c)(3) organization.
26

The Children’s Hospital Association is a Colorado nonprofit corporation. The Association owns and operates The
Children’s Hospital Colorado. Children’s is recognized by the IRS as a 501(c)(3) organization.
The Children’s Hospital Foundation (the “Foundation”), an independent Colorado nonprofit corporation qualified under Section 501(c)(3) of the Code, conducts fund raising activities on behalf of Children’s.
The University of Colorado is a state public institution of higher learning. It is recognized by the IRS as a 501(c)(3) organization and as an instrumentality of the State.
e. Governing Board Members
Ꮾ Provide a list of members of the governing body, including names and addresses of officers and directors or trustees.
Below is an introduction to the leaders who govern UCH and its partners. Additional detail about each member can be found in Appendix B.
UCH is overseen by an eleven-member Board of Directors.
The Board’s bylaws require that the Board have representation from each of the seven Congressional Districts served by the hospital plus the president of the University of Colorado, the President of the University of Colorado
Medical Staff, and the Vice Chancellor of Health Affairs.
No more than four of the directors shall be employees of the University of Colorado or the University of Colorado
Hospital.
UCH’s current board members are a distinguished blend of academic, business and medical leaders. They are, briefly:
Lilly Marks, Chair of the Board, Executive Vice Chancellor, University of Colorado Anschutz Medical Campus
Bruce Benson, President, University of Colorado
Peter H. Coors, Vice Chair, MillerCoors; Chairman MolsonCoors Brewing Co.
Steven Dawes, Capital Funding Advisors
Richard Krugman, MD, Vice Chancellor for Health Affairs; Dean, University of Colorado School of Medicine
Robert McIntyre, MD, President of the Medical Staff at the University of Colorado Hospital; Professor and
Director of Endocrine Surgery within the Division of GI, Tumor and Endocrine Surgery. He is also the Medical
Director of the Surgical Intensive Care Unit and Director of the Trauma & Emergency Surgery Services School
Richard Monfort, Owner/Chairman and CEO, Colorado Rockies Baseball Club; Chairman, Board of Trustees,
University of Northern Colorado
Mary Rhinehart, Senior Vice President and Chief Financial Officer, Johns Manville
Jerry Rutledge, President, Rutledge’s Inc
Elizabeth Slifer, Creative Director and CEO, Slifer Designs
Timothy Travis, President and CEO, Eaton Metal Products Company
27

The Board of Directors of Poudre Valley Health System consists of 11 members, one of which is an ex officio member. The District 4 representative is appointed by the District board of directors. The health system President and Chief Executive Officer serves as ex officio member while he or she holds that position.
The current members of the Poudre Valley Board of Directors and the Medical Center Board of Directors are as follows:
Mike Dellenbach – Mr. Dellenbach is President of Dellenbach Motors.
Stu VanMeveren – Mr. VanMeveren is retired as was the Former District Attorney and Attorney with
VanMeveren Law Group PC
Christine Chin – Ms. Chin is President of Chin & Associates and a past member of the Poudre Valley School
Foundation and the Fort Collins Chamber of Commerce.
Gary Ludwin, MD – Dr. Ludwin is a practicing OB/GYN at the Women’s Clinic of Northern Colorado.
Thaine Michie – Mr. Michie is retired and was the former General Manager of Platte River Power Authority
Chris Osborn – Mr. Osborn is the chairman of the Board and is the former chairman and CEO of First National
Bank of Fort Collins
Todd Sorenson, MD – Dr. Sorenson is Chief Executive Officer of Regional West Medical Center
Laurie Steele – Ms. Steele is the Director of Client Services, Burns Marketing Communications
Dan Stroh – Mr. Stroh is the Owner, Stroh and Company Realty Inc.
Joe Henrickson – Mr. Henrickson is the Special Education Director of Greeley Evans, District 6 District
Rulon F. Stacey, Ph.D.
– Dr. Stacey is an ex-officio member and is President and Chief Executive Officer of
Poudre Valley Health System
Children’s Hospital Colorado is governed by a Board of Directors presently consisting of 26 voting directors. Except for ex-officio directors, prospective directors are nominated by the Children’s Board Nominating and Bylaws
Committee and voted on by the Children’s Board. Elected Directors serve terms of three years and, subject to certain exceptions, are limited to three consecutive three-year terms.
Ex-officio directors (with the right to vote) include the following: Children’s President, the President of the Medical
Staff, the President of Children’s Association of Volunteers, the chair of the Foundation Board of Trustees, and, in accordance with the Affiliation Agreement, the Executive Vice-Chancellor of Anschutz Medical Campus, the Vice
Chancellor for Health Affairs of University of Colorado Anschutz Medical Campus and a representative of University
Physicians, Inc. (“UPI”), the faculty practice group for the University of Colorado School of Medicine.
In addition, the chair of the Children’s Board has pursuant to the Bylaws appointed a physician to the Board for a term of two years. There are also five honorary lifetime directors selected for extraordinary service to Children’s.
Lifetime directors do not vote or count for quorum purposes
Cathy M. Finlon, Chair
Bob Hottman, Vice-Chair/Chair-Elect and Treasurer
Joy Johnson, Vice-Chair
28

Cole Finegan, Secretary
Craig Ponzio, Immediate Past Chair
Kelly Kennedy, Chair, CHC Foundation Board of Trustees
James E. Shmerling, DrHA, President and CEO
Terrance Carroll
Russell Dispense
Donald M. Elliman
Canty “Candy” Ergen
Maria Guajardo, PhD
Eric Hartmeister, Roxann Headley, MD
Randy Hertel
Thomas Honig
Richard Krugman, MD, Vice-Chancellor for Health Affairs, CU SOM
William Lindsay
Lilly Marks, VP for Health Affairs and Exec Vice-Chancellor, CU SOM
R. Scott Nycum
Paul Rady
Kevin Reidy
Jane Schumaker, Executive Director, UPI
Andrew Sirotnak, MD, President of the Medical Staff
Bradley Smith, DDS
Hal Stein, MD
Benjamin Walton
The governance of the University of Colorado is vested in the Board of Regents of the University, which is comprised of nine persons pursuant to the State constitution. Regents are elected by popular vote in the State’s biennial general elections, and serve staggered terms of six years (limited by State Constitution to two terms).
Each of seven Regents must be a qualified elector of, and elected by the qualified electors of each of, the State’s seven congressional districts. The remaining two Regents must be qualified electors of the State and are elected on an at-large basis. Vacancies are filled by appointment of the Governor for a term that continues until the next general election. The Board makes University policy decisions, grants degrees and honors, and appoints a President,
Secretary, and Treasurer to carry out specific duties. Regents serve without compensation but are reimbursed for expenses in performing their duties. The Board currently has one vacancy to be filled by gubernatorial appointment.
The current members and officers of the Board of Regents, are as follows:
29

The Regents are:
Kyle Hybl – Chair
Michael Carrigan
Steve Bosley
Tilman “Tillie” Bishop
Jim Geddes
Stephen Ludwig
Joe Neguse
Sue Sharkey f. Stockholders/Members
Ꮾ Provide a list of stockholders or members
As, not for profit entities, UCH, PVHS, Children’s and University of Colorado do not have stockholders or members.
g. Management
Ꮾ Describe management, including key management personnel
Brief descriptions of the executive teams at each participating health system are below. Additional detail can be found in Appendix B.
Bruce Schroffel, President and Chief Executive Officer: Prior to his appointment in January 2006, Mr. Schroffel was chief executive officer of Stony Brook University Hospital for five years and prior to that was the Senior Vice
President of Operations at University of California, San Francisco (UCSF)/Stanford Health Care.
John Harney, Chief Operating Officer: Appointed in April 2007. Previously, Mr. Harney was executive vice president and chief operating officer at New York University Hospitals Center (NYU) and held other positions during a 20 year career there.
Anthony DeFurio, Chief Financial Officer: Mr. DeFurio has served as chief financial officer since December
2006. He previously held similar positions for the University of Iowa Hospitals and Clinics, Sisters of Charity
Providence hospitals in South Carolina, Catholic Health Initiatives in Denver and Columbia/HCA.
Allen Staver, Vice President, General Counsel and Secretary to the Board of Directors: Appointed to his present position in August 2000. Previously, he was in private practice serving health care clients and served as in-house counsel to the University of Colorado Health Sciences Center 1987 to 1999.
Greg V. Stiegmann, MD, Vice President, Clinical Affairs: Has served in this position since June 1997. Dr.
Stiegmann also holds the position of associate dean for Clinical Affairs at the University of Colorado School of
Medicine.
Carolyn Sanders, Ph.D., Chief Nursing Officer: Appointed in April 2009. She joined UCH in 1989 as a staff nurse, was promoted to Manager in 1991, to Director of Critical Care and Dialysis Nursing Services in 2000 and to
Associate Chief Nursing Officer in 2008.
30

Rulon F. Stacey, Ph.D., FACHE, President and Chief Executive Officer, Poudre Valley Health System: joined
Poudre Valley Health System (PVHS) in 1996 as CEO.
Stephanie A. Doughty, Chief Financial Officer, Poudre Valley Health System: Joined PVHS in May 1998.
Previously, she was the CFO of Bayfront/St. Anthony’s Healthcare in St. Petersburg, Fla. and worked for
Englewood Community Hospital as the controller.
William A. Neff, MD, Chief Medical Officer and Vice President of Poudre Valley Health System: Appointed
PVHS’s first chief medical officer/vice president in March 2008, after serving on the PVHS board of directors and as board chair.
David L. Wood, Esq. Vice President, General Counsel: Began his service to PVHS in 1976 as a board member for the Poudre Valley Hospital District. He assisted in the creation of the private, nonprofit Poudre Valley Health
System in 1994, and served as general counsel to PVHS until 2008 and again since March 2010.
Grace Taylor, MBA/HA, Chief Strategy Officer, Poudre Valley Health System: Joined PVHS in 2007, was appointed director of business development and outreach services in October 2009, and recently assumed the role of chief strategy officer, a new position within PVHS.
Kevin L. Unger, MBA/MSHA, CHE, President and Chief Executive Officer, Poudre Valley Hospital: Came to
PVHS in 2001 and was named the President/CEO of Poudre Valley Hospital in 2005.
Russell P. Branzell, CHE, Chief Executive Officer, Poudre Valley Medical Group: serves as the chief executive officer of the Poudre Valley Medical Group, a wholly owned subsidiary of Poudre Valley Health System, the interim/former chief information officer of Poudre Valley Health System and the president/chief executive officer of Innovation Enterprises, PVHS’s for-profit information systems entity.
George E. Hayes, President and Chief Executive Officer, Medical Center of the Rockies: Joined PVHS in August
2004 as President and CEO of the Medical Center of the Rockies.
Kay J. Miller, MS, RN, NE-BC, CENP, Vice President/Chief Nursing Officer, Medical Center of the Rockies:
Assumed her current position at Medical Center of the Rockies in 2005 after a lengthy career at Poudre Valley
Hospital, which included positions as staff nurse on the orthopedic unit, and head nurse and department director for what became the hospital’s Regional Neurosciences Center.
James E. Shmerling, DrHA, FACHE, President and Chief Executive Officer: Was appointed president and chief executive officer in January 2007. He previously served as executive director and chief executive officer of the
Monroe Carell Jr. Children’s Hospital at Vanderbilt and in several senior positions at LeBonheur Children’s Medical
Center in Memphis, Tennessee.
Jena Hausmann, MHA, Senior Vice President and Chief Operating Officer: Appointed to this position in March
2008 after serving as Vice President of Strategic Planning and Network of Care Operations since 2005.
John LaCouture, JD, Chief Legal Officer: Appointed in December 2007, Mr. LaCouture was previously the vice president for Legal Services for Centura Health Corporation from 1996 to 2007.
Joan Bothner, MD, Chief Medical Officer: Became Chief Medical Officer in June 2007; she is an employee of
UPI and has been a member of the Children’s Medical Staff since 1990.
Amy L. Casseri, JD, Senior Vice President and Chief Strategy Officer: Joined Children’s in 2009 after serving as chief Communications, Community Relations, and Business Development officer and associate hospital director for the Monroe Carell Jr. Children’s Hospital at Vanderbilt in Nashville, Tennessee.
31

Leonard J. Dryer, Jr., MBA, Senior Vice President of Finance and Chief Financial Officer: Has been at Children’s since 1982, and assumed his present position in 1990. He previously was Children’s controller and held various positions in the Accounting Department.
Kelly Johnson, MSN, RN, CNAA, BC, Vice President and Chief Nursing Officer: joined Children’s in September
2008. Previously, she was vice president of Patient Care Services and chief nursing officer for Craig Hospital in
Englewood, Colorado, and held various clinical and management positions at hospitals in Colorado and California.
Daniel Hyman, MD, Chief Quality Officer. Appointed in December 2008. From 2002 to 2008, he served as Chief
Children’s Quality Officer and chief medical officer, Ambulatory Care, for New York Presbyterian Hospital.
The President is the principal executive officer of the University and is charged by the State Constitution with carrying out the policies and programs established by the Board of Regents. Each of the three Chancellors is responsible for the administration of his or her respective campus and reports directly to the President. The
President, the Treasurer, and the Secretary are elected by and serve at the pleasure of the Board. The Chancellors,
Vice Presidents, Associate and Assistant Vice Presidents are appointed by the President. The administrative officers and employees of the University who are most directly involved in the financial operation and general administration of the University, and their principal occupations during at least the past five years, are as follows:
Bruce D. Benson, President of the University. - Mr. Benson was named the 22nd President of the University of Colorado in March, 2008. In addition to his duties as president, he is Executive in Residence and Professor
Attendant at the Business School at University of Colorado Denver.
Dr. Philip P. DiStefano, Chancellor of the University of Colorado Boulder - Prior to his appointment as Chancellor of the University of Colorado at Boulder on May 5, 2009, Dr. DiStefano, who has served the university of 35 years, was the top academic officer at the Boulder campus for eight years as the Provost and executive vice chancellor for Academic Affairs.
Pamela Shockley-Zalabak, Chancellor of the University of Colorado Colorado Springs - Dr. Pamela Shockley-
Zalabak is chancellor and professor of Communication at the University of Colorado at Colorado Springs.
Jerry Wartgow, Chancellor of the University of Colorado Denver - Dr. Wartgow is an experienced veteran at all levels of education in Colorado and beyond.
Lilly Marks, Vice President for Health Affairs and Executive Vice Chancellor of the Anschutz Medical Campus -
Prior to assuming her current, Ms. Marks served as the senior associate dean of Administration and Finance at the
Colorado School of Medicine, and executive director of University Physicians, Inc.
Leonard Dinegar, Vice President for Administration and Chief of Staff - Mr. Dinegar was appointed on June 29,
2006. He also has concurrent title and responsibilities as chief of staff to the University President.
Kelly Fox, Vice President and Chief Financial Officer - Kelly Fox was appointed to her current position in May
2009. She serves in the Office of the President and university system administration, overseeing capital and operating budgets as well as the Controller’s office, the Treasurer’s office, the University Risk Management office, and the University Procurement Service Center.
Dan Wilkerson, Esquire, Vice President, University Counsel and Secretary of the University and of the Board of
Regents - Mr. Wilkerson was appointed to his position in July of 2007 and as secretary in August of 2007.
The School of Medicine has a number of leadership levels. Below are members of the senior leadership team.
Richard Krugman, MD – Dean of the School of Medicine
32

E. Chester Ridgway, MD – Senior Associate Dean of Academic Affairs
Jane Schumaker – Senior Associate Dean of Administration and Finance
Douglas Jones, MD – Senior Associate Dean of Clinical Affairs
Celia Kaye, MD, PhD – Senior Associate Dean of Education
Jack Westfall, MD – Associate Dean
Terri Carrothers – Chief of Staff
Dan Meyers – Communications Director
There are many additional members that constitute the School of Medicine leadership. h. Locations
Ꮾ Provide locations of facilities and businesses operated
The principal location for the University of Colorado Hospital is The Anschutz Medical Campus in Aurora, Colorado.
• This 227-acre complex is one of the nation’s newest health care campuses, and the site of a virtual new
“health care city” built on the former site of the Fitzsimons Army Medical Center.
• It is uniquely divided into clinical, research and education “zones,” occupied by the buildings of the University of Colorado Hospital, Children’s Hospital Colorado, the University of Colorado health sciences schools. Among the growing numbers of health care, scientific and medical enterprises immediately adjacent to the campus are
University Physicians Inc., and the Fitzsimons Life Sciences District.
• The Denver Veterans Administration Medical Center has begun construction just east of the campus.
In addition to the wealth of inpatient and outpatient services housed on the Aurora campus, the University of
Colorado Hospital operates a variety of family medicine clinics, practices, rehabilitation centers and other resources at eight sites throughout the Denver metro area, including locations in Boulder, Denver, Littleton, Lone Tree and
Westminster.
33

Poudre Valley Health System’s primary sites include
• Poudre Valley Hospital in Fort Collins
• Medical Center of the Rockies in Loveland
• Mountain Crest Behavioral Health Center, also in Fort Collins.
Supporting these hospitals is the Poudre Valley Medical Group, and dozens of associated clinics and outpatient services located throughout Fort Collins, Loveland, Windsor, Greeley, and other northern Colorado communities.
CHC’s primary location is on the Anschutz Medical Campus in Aurora, Colorado.
It also offers a broad variety of inpatient, outpatient and emergency care at
• The Children’s North Campus in Broomfield
• Saint Joseph Hospital in downtown Denver
34

It offers additional outpatient, urgent/emergency, rehabilitation/therapy and other specialty treatment for children at
12 additional Denver metro area locations.
Its Colorado Springs Center, one of the largest pediatric programs of its type in the country, specializes in treatment for cancer and blood disorders such as leukemias and hemophilia.
It is also opening a 50,000 sq. ft. medical services facility in the burgeoning north end of town.
The university includes campuses in the cities of Boulder and Colorado Springs, as well as a campus in Downtown
Denver and at the Anschutz Medical Center in Aurora, Colorado.
The largest university campus is in Boulder, a city of approximately 95,000 residents.
The University of Colorado at Colorado Springs campus is community oriented, serving the educational needs of the
566,000 residents of El Paso County.
The Downtown Campus is also community-oriented, serving the educational needs of residents of metropolitan
Denver. It is part of the Auraria Higher Education Center located in downtown Denver. Metropolitan Denver has a population of approximately 2.11 million.
The University of Colorado Health Sciences Schools are located on the Anschutz Medical Campus in Aurora. The
Anschutz Medical Campus includes state-of-the-art teaching, research, and patient care facilities and adjoins a
Biomedical Research Park which the Fitzsimons Redevelopment Authority plans to develop.
i. Medical School Affiliations
Ꮾ Describe the nature and extent of medical school affiliations, if any
UCH and Children’s Colorado are the major affiliates of the University of Colorado School of Medicine, and obtain of their clinical staffing from the school’s faculty.
The school’s research and educational programs will also add an extra dimension to the skills and experience contributed by the other hospital partners in the new University of Colorado Health System.
35

Specifically, these educational programs can:
• Improve the knowledge and skills of practitioners through emphasis on lifelong learning;
• Improve the quality of healthcare services;
• Contribute to solving the workforce shortage of physicians and other health care providers;
• And make the health system a more exciting and enriching place to work.
In Colorado Springs, these affiliations will provide additional educational services to the existing health sciences programs at the University of Colorado Colorado Springs campus, and can help extend the reach of those programs to the rest of the region.
uCh legal commitments.
As set forth in the Amended and Restated Agreement dated September 9, 2011
(the “Affiliation Agreement”) between the regents and UCH, the School and Medicine will use the University of
Colorado Hospital as the primary site of practice and training in accomplishing its mission.
• The relationship is reflected in the requirement that the President of the University of Colorado selects the director who will serve as chair of the UCH Board of Directors.
• The Regents and UCH have entered into several agreements to continue the historical relationship between the hospital and CU, including the Amended and Restated Affiliation Agreement, an Operating Agreement, a
Lease and Transfer Agreement relating to the Denver Campus, an Infrastructure Agreement and the Fitzsimons
Ground Lease relating to the Anschutz Medical Campus.
• UCH obtains certain services from the physicians who are the full-time faculty at the Anschutz Medical
Campus through three-party agreements between the UCH, CU SOM and University Physicians Inc, (“UPI”), the CU SOMs’ faculty practice plan.
» UPI is a nonprofit corporation which provides billing, administrative and management services to physicians who comprise the full-time faculty at the Anschutz Medical Campus. j. Financial Statements
Ꮾ Provide audited financial statements for the most recent three fiscal years and for the current fiscal year (unaudited), if in progress.
Ꮾ Provide a statement regarding the respondent’s plan to fully meet any future financial obligations or responsibilities as may arise under the Health System Operating Lease Agreement.
The most recent three years audited financial statements for UCH, PVHS and Children’s are included as Appendix C.
UCH is fully prepared to meet the financial obligations or responsibilities that may arise under this proposal and the final negotiated Health System Operating Lease Agreement.
If the University of Colorado Health System is effective as of the date a Memorial Health System strategic partnership is consummated, UCH will ensure that the System is fully prepared to meet the financial obligations or responsibilities that may arise under this proposal and the final Health System Operating Lease Agreement.
k. Licenses, Certifications and Accreditations
Ꮾ Describe respondent’s licenses, certifications and accreditations that are applicable to its facilities and its corporate compliance program.
University of Colorado Hospital
1. UCH is licensed by the Colorado Department of Public Health and Environment to operate a general hospital. University of Colorado Hospital Authority, dba University of Colorado Hospital Anschutz Inpatient
36

Pavilion, is currently licensed by the Colorado Dept. of Public Health and Environment for the period of
10/01/2011 through 09/30/2012. The Hospital was granted accreditation by the Joint Commission in 2008.
UCH is a member of the Colorado Hospital Association, the Council of Teaching Hospitals of the American
Association of Medical Colleges and the University Health Systems Consortium.
Poudre Valley Health System
2. Valley Health Care, Inc., dba Poudre Valley Hospital is licensed to engage in business as a general acute care hospital by the Colorado Department of Health under an annual certificate for the period of 07/31/2011 through 07/30/2012. Medical Center of the Rockies is currently licensed by the Colorado Dept. of Public
Health and Environment for the period of 02/09/2011 through 02/08/2012.
Children’s Hospital Colorado is currently licensed as a general acute care hospital by the Colorado Department of
Health under an annual certificate expiring on 03/05/2012. l. Current and Future Financial Resources
Ꮾ Describe the basis on which the respondent believes that it has sufficient current and future financial resources to support the payments due under the terms of the transaction and to operate the Health System over the term of the expected relationship consistent with the
Commitments set forth in this RFP (e.g., EBITDA)..
UCH currently possesses financial strength and flexibility to fund the proposed transaction and successfully operate
Memorial into the foreseeable future. In addition, based on its current credit rating, UCH has access to the debt markets at favorable rates and terms. The table below highlights the key financial metrics:
Credit Rating (Moody’s)
Unrestricted Cash and Investments
Operating EBIDA
F iscal
Y ear
e nded
6/30/2011
A3
$711.5 million
$171.1 million
Based on UCH’s internal financial projections, it is expected to generate more than $750 million of incremental capital capacity by fiscal year 2016.
If the University of Colorado Health Systems were to be effective as of the date the Memorial Health System strategic partnership is consummated, pro-forma financial analysis suggests that the University of Colorado Health
System will have significant financial resources to support the payments due under the terms of the transaction and to operate the Health System over the term of the expected relationship consistent with the Commitments set forth in this RFP.
Credit Rating (S&P/Moody’s)
Unrestricted Cash and Investments
Operating EBIDA
F iscal
Y ear
e nded
12/31/2011
A/A2
$357.0 million
$107.3 million
37

Based on PVHS’ financial projections, it is expected to generate more than $240 million of incremental capital capacity by fiscal year 2016.
Credit Rating (S&P/Moody’s)
Unrestricted Cash and Investments
Operating EBIDA e stimated
F iscal
Y ear e nded
12/31/2011
A/A2
$1.1 billion
$292.3 million
On a pro-forma basis, University of Colorado Health System is projected to generate more than $1.0 billion of incremental capital capacity by fiscal year 2016.
UCH intends to operate the Health System as a viable and ultimately thriving going concern from a financial as well as a clinical and patient perspective.
Until due diligence and discussion with Memorial management afford an opportunity to adequately study
Memorial’s facilities, facility needs, finances etc., we cannot comment definitively on the level of capital investment that might be appropriate in Memorial’s facilities. However, it is a firmly established principle of the University of
Colorado Health System we are building that there will be one overall standard of care for all its components first class care. Therefore, UCH and when established, the University of Colorado Health System would commit to invest on an ongoing basis in Memorial’s facilities, equipment and programs in order to provide state-of-the-art, first class care.
m. Stock and Bond Offerings
Ꮾ For each stock and bond offering completed by your organization within the past three years, provide copies of the offering prospectus
(or similar documents) and any written reports by independent credit analysts.
Offering statements related to UCH’s 2008A, 2008B, 2009A and 2011A revenue bond issuances are included in
Appendix D.
Moody’s Investor Services and Fitch Ratings have issued independent credit reports as of May 2011 supporting positive and stable outlooks for UCH, respectively. The rating agency reports are included in Appendix D of this response.
Offering statements related to PHVS’s 2005 A-F revenue bond issuances are included in Appendix D.
Moody’s Investor Services and Standard and Poor’s have issued independent credit reports for PVHS dated August
2011 and September 2011, respectively. They are included in Appendix D of this response
38

n. Team Members Contact Information
Ꮾ Provide identification and contact information for your team membmers, including legal and financial advisors, if any.
Name
Bruce Schroffel
Anthony DeFurio
Dan Rieber
Bob Williams
Allen Staver
Ken Kaufman
Chad Kenan
Cliff Stromberg
Robert Irvin
Organization
UCH
UCH
UCH
UCH
Position Number Email
President & Chief
Executive Officer
Chief Financial Officer
(720) 848-7833 bruce.schroffel@uch.edu
Director of Finance &
Controller
Manager Decision Support
& Business Development
(720) 848-7816 anthony.defurio@uch.edu
(720) 848-8768 dan.rieber@uch.edu
(720) 848-8780 robert.williams@uch.edu
UCH Vice President, General
Counsel
(720) 848-7828 allen.staver@uch.edu
Managing Partner, Advisor (847) 441-8780 kkaufman@kaufmanhall.com
Kaufman Hall &
Associates
Citi Group Director, Financial Advisor (213) 486-8841 chad.kenan@citi.com
Hogan Lovells Partner, Outside Counsel (202) 637-5699 clifford.stromberg@ hoganlovells.com
Kutak Rock Partner, Outside Counsel (303) 292-7811 robert.irvin@kutakrock.com
o. Colorado Health Care Programs
Ꮾ Describe programs that you have implemented that have changed health care in the Colorado communities in which you operate.
A history of improving – and transforming – care.
University of Colorado Hospital has built its record precisely on the ways it has changed health care in our shared community, and is amassing a growing record of innovations in the ways health care itself is delivered.
Medical knowledge literally doubles every four years. One of the great advantages of academic medicine is that our physicians – as researchers and faculty members at the University of Colorado Medicine – have to keep up with it in ways that community physicians often cannot. They are often leaders in delivering this new care. Thus patients at our hospital and, soon, throughout our system, are typically the first in our region – and often in the nation – to gain the benefit of proven new advanced therapies and treatments.
historic firsts. Many of the historic firsts that have occurred at the University of Colorado Hospital, the School of
Medicine, and Children’s Hospital Colorado were covered earlier in this proposal, in the responses to Question 2
(UCH’s scope of services).
But “firsts” happen all the time in our facilities. Among the recent ones:
Heart disease. For example, clinical improvements brought to our patients in cardiovascular care – a particularly important need in El Paso County and southern Colorado – during the past 24 months have included
• Transradial Catheterization Reach heart through wrist instead of femoral artery in groin, reducing pain and the risk of infection, and often accelerating recovery.
• MitraClip: using a tiny clip to repair mitral valve leaks (part of a national clinical trial)
• New pacemakers employing MRI-safe pacemakers for patients who, in fact, often need MRIs for postoperative care (first in the state to implant)
39

• Cardiac Plug Prevents blood clots in left atrial appendage (part of a clinical trial)
• CARTO 3 Navigation System: Using image mapping to treat arrythmias (first in state to use)
• TandemHeart: Tiny circulatory support device that pumps 8 liters a minute, and can keep heart failure patients comfortable as they await transplant or undergo destination therapy (first in state to use)
• Impella 2.5 Tiny circulatory support device, which is implanted for a short time (first in state to use)
• Cardiac “jumbotron”: giant liquid crystal display screen in Cath Lab for improved image display and increased precision
• HeartWare A “left ventricular artery device” that is now reduced to the size of a golf ball, replacing large, heavy machines that kept patients bed-bound. (part of a clinical trial) transplant. In our solid organ transplant center, by far the biggest in the region and one of the busiest in the country, we recently became the first in Colorado to use the “ex vivo lung transplant” technique, which involves examining the lung outside the body to test its viability for transplant. Our faculty hopes it could double the number of suitable donor lungs.
Cancer. New oncology therapies that have been developed at our National Cancer Institute-designated
Comprehensive Cancer Center (the only one in Colorado) during the past two years include:
• Targeted prostate cancer treatments: Using 3-D mapping to target cancerous tissue, and destroy with laser or cryoablation with minimal damage to the healthy tissue around it (Developed here)
• Cord Blood Stem Cell Transplant: Expand number of stem cells to treat acute myelod leukemia
(Developed in Seattle but first used in Colorado, at UCH)
• Thriving and Surviving Trial: A program that helps survivors manage cancer as a chronic disease
(Developed here)
• ALK Inhibitor: Approved for use in some advanced lung cancer patients
(Major contributions to trial and testing for enzyme at UCH)
• Targeted melanoma treatment: Using the drug vemurafenib - inhibits production of BRAF proteins, which spur tumor growth.
Delivering care. We have many such examples of advances in many areas of care, but this is an age in which our nation must improve the ways it delivers care. Here are some recent improvements that have taken place at the
University of Colorado Hospital, all designed to help patients, insure safety, and
• The “Purposeful Visits Program” for elderly patients uses volunteers to stimulate the patients’ memories of activities and pleasant times. (Home-grown program given top honors for innovation by national hospitalist group)
• Simulation for rural hospitals features custom-designed simulations of medical situations. Using an animated mannequin, the hospital’s WELLS Center takes much-need training to providers at rural critical care hospitals.
• Neuro-hospitalists provides a dedicated team to round on neurosciences patients, replacing rotating shifts for entire neurosciences team.
• Bedside nurse reporting make patient reports at shift change right at the patient bedside to (a) keep the patient at the center of his or her care and (b) improve the “handoff” of a patient from one provider to another. It is at such handoffs where communication can break down.
40

a. Strategic Plan and Challenges
Ꮾ Describe your strategic focus, plan, direction and goals, as well as the challenges you face in achieving these objectives and how you plan to address these challenges
University of Colorado Hospital (UCH), the University of Colorado School of Medicine, and University Physicians,
Inc., collaboratively entered their current phase of strategic planning as a unified clinical enterprise in 2008, and has since updated it twice.
Aligning projections of Colorado’s health care needs, the availability of clinical talent, the needs for physical plant and technology with the arc of the enterprise’s probable financial resources, the partners created an integrated leadership structure to govern long term planning, capital investment planning, program development, patient care quality and safety, managed care contracting, information technology, joint management of clinical operations, and concurrence on leadership appointments and managed care contracts.
This integrated leadership structure is also responsible for balancing the cost-effectiveness of clinical delivery system with the changing needs of our patients.
Four strategic planning subcommittees of faculty members, administrators, clinicians and directors were then formed to implement the plan, and periodically report on its progress, in what ended up being four signature service areas: cancer, neurology and the neurosciences, cardiovascular care, and stroke.
The plan, as foreseen, has since been updated twice to reflect the constant changes in technology, our patients’ needs, the state of the enterprise and its workforce, and the health care environment.
Changes in the health care sector.
The most recent update was in response to the changes contemplated by health care and health insurance reform. In general, those changes point to the need for dramatically greater efficiencies in delivering care. Specifically, they led to plans for faster expansion and a search for alliances with other high-quality providers.
Our new system, University of Colorado Health System, will adopt this kind of model of rigorous monitoring, planning, and readjustment. We would expect the affiliated hospitals to employ a similar model, which we deem essential to meeting patient, provider, employee and community needs in this volatile time in the hospital world.
UCH’s overarching vision provides the foundation for our strategic planning efforts:
By 2020, the University of Colorado Hospital will be recognized as one of the top 10 academic medical centers in the United States. Our visionary model of care will:
» Exceed the expectations of patients, families, staff and faculty
» Deliver seamless and compassionate care
» Foster a highly-spirited, collaborative team
» Educate the next generation of healthcare professionals
41

» Lead the nation in quality outcomes and patient safety
» Advance discovery and innovation
» Ensure a strong financial base
» Provide flawless service in unparalleled facilities.
These objectives, we believe, align with those of Memorial, and underscore the shared missions of the two entities.
This long-term vision for UCH encompasses three major enterprises: research, education and clinical care.
The vision for UCH’s clinical enterprise is to:
» Become recognized by patients and referring physicians as the best place for complex medical care in the western United States.
» Provide patients with the best experience of any academic medical center in the West by harnessing the collaborative and collegial culture and comprehensive nature of the clinical enterprise.
» Become nationally renowned for select, clinically complex services.
National health care reform as well as pre-existing market dynamics underscores the need for increased hospital/ physician integration and care management.
Altered business models.
Independent health systems, in turn, face mounting challenges in the cost of both supplies and technology, rate pressure from the insurance industry, etc.
The assessment of the external health care environment suggested that providers must reduce costs, increase their focus on value (meaning providing the highest possible quality for the lowest cost) and become more accountable for outcomes. UCH believes these themes are driven as much by the general macroeconomic environment in the
United States as by new legislation and regulation, and we will succeed regardless of where health care reform eventually lands.
The updated strategic plan that animates this vision in this changing environment thus includes network development, practice operations management, inpatient operations management, information technology, and specialized clinical service lines (selected based on clinical quality, research expertise and financial performance, these lines are oncology, cardiovascular services, neurosciences and spine). b. How This Transaction Helps Accomplish Goals
Ꮾ Explain how this transaction helps your system to accomplish these goals.
The visionary model of care being developed by the University of Colorado Health System will be extended to the communities of Colorado Springs, El Paso County and the Region. Memorial Health System already exceeds the expectations of patients, families, staff and faculty; delivers seamless and compassionate care; and fosters a highlyspirited, collaborative team. Through the partnership with UCH and PVHS, Memorial Health Systems will have the opportunity to provide first class education to the next generation of healthcare professionals; build upon nationally recognized quality outcomes and patient safety programs; and deliver access to advanced discovery and innovation to the residents of Colorado Springs and El Paso County. The affiliation between the individually remarkable systems of Memorial and UCH and Poudre Valley will together create the leading health care system in the state.
This partnership will ensure each system has a strong financial base and access to unparalleled facilities in which to deliver flawless service. By joining with UCH and PVH, the outstanding physicians, clinical and administrative
42

staff of Memorial Health Systems will be able to take advantage of new opportunities to highlight their strength and provide invaluable insight and leadership in this developmental process.
As we said at the outset, we believe that our combination of institutions can bring Memorial and the Colorado
Springs community advantages that would not be possible with any other proposer. These are not just financial benefits, which while substantial, might be matched by others. But in addition, we can bring benefits in terms of quality of care, and local community focus and enhanced educational opportunities.
For example:
Mission. Our mission is to serve communities, train physicians and health professionals who can devote their lives to improving care, and disseminating research that can save lives. Our perspective is very different from that of organizations which strive to extract maximum profit for shareholders from operating hospitals.
Dedication to Colorado. We are located here, managed here, and irrevocably dedicated to improving communities in Colorado. There is no risk that our management will be located elsewhere, or that our focus will be diverted to the economic or strategic priorities of other regions of the country.
Public-orientation. As noted above, we have evolved from public institutions, and we continue to be responsive to public needs. We regard persons of limited means or payment sources as patients who need services, not as customers to be avoided or re-directed.
Academic medical center quality.
While there are many fine community based hospitals in this nation ( with
PVHS operating two of the best), in general it is widely recognized that over time, academic medical centers are likely to provide the highest level of quality programs. We can make available a range of specialists and subspecialist faculty for unusual clinical needs that simply cannot be replicated elsewhere. How often does a local, governmentally-owned hospital have the opportunity to put in place the kinds of quality of care improvements present at the academic medical center recently rated #1 in the entire nation.
Research and clinical trials. Most community-based physicians would like their patients to have access to the latest innovative therapies, often available only by participation in clinical trials -- without having to travel periodically to a distant center. We can bring those innovative therapies right to Colorado Springs.
Children’s. As noted, our proposal has the unique advantage of including Children’s Hospital Colorado, one of the nation’s top children’ hospitals, operate a pediatric service as Memorial-- without the need for local government or donors to spend enormous sums trying to fund a new children’s hospital.
Economic development. Our relationship with the university, and its Colorado Springs campus, hold the potential to develop additional life-sciences oriented educational programs at the undergraduate and graduate levels. This will help with workforce recruitment and retention, and potentially with technology transfer and economic development as well.
c. Transition Plan
Ꮾ Describe your transition plan for moving the Health System from City control to your control.
UCH has already begun the preliminary transition planning required to work with the people of Colorado Springs and Memorial to operate the Memorial Health System. Upon learning of the City’s intent to negotiate a definitive agreement with University of Colorado Health System, UCH will immediately undertake the comprehensive due diligence and planning required to ensure a smooth transition for the System.
The specific steps required to create the new Memorial Health System 501(c)(3), earn regulatory approvals, and begin operations are well known to UCH as they are quite similar to the processes now being followed in the creation of the University of Colorado Hospital System. Senior leaders at UCH have also been involved in delicate health care organizational consolidations in the past. These actions will be accomplished with a high level of diligence and professionalism.
43

UCH believes that time is of the essence in establishing an effective transition date and that the transition date should be set as soon as practically possible. UCH anticipates “stepping into the shoes” of Memorial Health
System’s current management as of the effective date to allow for as close to a seamless transition as possible.
of Colorado Health System is discussed in item 6.d. below.
d. System Integration Plans
Ꮾ Describe how you see the Health System fitting within your goals and how your plan to integrate the Health System into your system.
University of
Colorado Hospital
CeDAR
Colorado Imaging
Center
UCH Clinics
University of
Colorado Hospital
Foundation
Rocky Mountain
Lions Eye Institute
Center for
Advanced
Maternal Fetal
Medicine
Lakota Lake, LLC
Heron Lake, LLC
Innovation
Enterprise, LLC
Poudre Valley
Health System
Foundation
Poudre Valley
Hospital
Poudre Valley
Medical Group
Medical Center of the Rockies
Harmony Campus
Memorial
Hospital
Central
Memorial
Hospital
North
When the transition is completed, Memorial would be the third major hub of the University of Colorado Health
System, the source not only for this unique application of academic and community care but the chassis to carry it throughout southern Colorado.
Memorial would, as detailed elsewhere in this proposal, be locally controlled even as it shared the resources of its partners. Its clinicians and employees, while supported by the resources and technologies of the larger system as well as of Children’s and CU, would retain their close relationships with their patients, their community groups, their business associates and their donors.
MHS would also retain control over those vital, central components of a great health care institution. Memorial would be afforded access to the larger human resources benefits, continuing medical education, clinical trials, fiscal power and all the other attractions available within the new system.
44

UCH, CU, and UPI, for example, are partners in developing and operating the CU Health Trust which provides the majority of health care benefits to the employees and dependents of those institutions. In its first full year of operations, the Trust saved over $1.1 million in benefit costs. UCH, Colorado Children’s and CU also are working collaboratively to develop innovative insurance products and alternative delivery models to address the needs of various employer groups. Additionally, these partners have various programs designed to meet the needs of underserved populations.
• The Memorial Health System would be integrated into the University of Colorado Health System in substantially the same way as UCH and PVHS themselves currently are being integrated into it.
• When fully integrated, Memorial Health System will have the same rights, responsibilities and authorities as the legacy UCH entities and the legacy PVHS entities.
• The University of Colorado Hospital will create a new Colorado 501(c)(3) organization that will own, operate and hold any required licenses at the Memorial Health System sites.
• The new, local Colorado 501(c)(3) entity at Memorial will be governed by a Board of Directors that is composed of a majority of residents of the City of Colorado Springs and El Paso County. It is preliminarily envisioned that the Board would have eleven members, at least seven of which would be residents of El Paso County.
• Once formed, the overarching UCH/PVHS joint operating company, the University of Colorado Health System, will assume the following legal structure as it relates to the Memorial Health System:
» The University of Colorado Health System will be a Colorado nonprofit membership corporation that has applied for recognition from the Internal Revenue Service of tax exempt status under Section 501(c)(3) of the Code.
» The joint operating company will be governed by a System Board of Directors. UCH, PVHS, and the new
Memorial 501(c)(3) shall be the sole participating health systems corporate-level organizations of the Health
System unless and until additional affiliated systems, if any, are added in the future.
» Each party within the system, including Memorial, shall retain its separate corporate existence.
The larger joint operating company shall be organized and operated in a manner that is sufficient to maintain at all times its tax-exempt, public charity status under Section 501(c)(3) of the Code.
• It shall have the power and general authority, subject to the reserved powers of the Members and participating health systems to: (a) manage, coordinate, supervise and implement the operations of the participating health systems health care facilities and services; (b) provide administrative and support services to advance the charitable and educational purposes of UCH, PVHS, Memorial and any other nonprofit tax exempt affiliates who may be admitted to the Health System in the future; (c) perform directly charitable and community services consistent with its tax-exempt status under Section 501(c)(3) of the Code, including by providing health care to the general public, participating in the conduct of research on disease and health issues, and disseminating the results for the benefit of the general public; (d) participate in and support the education and research programs of the School of Medicine and the other University of Colorado health sciences schools; and
(e) perform other charitable or educational activities consistent with the foregoing.
• UCH, PVHS, and Memorial will retain their own boards with the larger system.
• UCH, PVHS and Memorial will have their boards elected or appointed pursuant to their respective
Organizational Documents, and to adopt, amend or repeal their and their subsidiaries and affiliates’ respective
45

Organizational Documents, so long as consistent with law and with the terms of the Agreement governing the system joint operating company.
• The licensed operators of the UCH, PVHS and Memorial facilities will remain the licensed operators of such facilities (meaning that each will continue to perform all functions legally required to be performed directly by such licensed entity); provided, that significant administrative and coordinating authority shall be ceded to the joint operating company board.
• The board of the joint operating company may decide in the future to transfer additional functions of the participating health systems to itself if they can be provided jointly more effectively than separately by each participating health systems and to integrate the operations of the parties in a manner that will benefit the system as a whole.
Those transferred functions might include functions such as information technology, managed care contracting, revenue cycle and supply chain activities, human resource management and/or legal services that might be developed and deployed throughout the system, as appropriate.
While respecting and enhancing local control, every effort will be made to provide the clinical, educational and research synergies that can be achieved through a system and by sharing resources and expertise.
• The system will operate in a manner that enables or causes each participating health system to comply with and fulfill their respective obligations under existing law.
• The system may function directly on its own behalf, or its functions may be carried out through the participating health systems at the system’s direction.
In the event that the University of Colorado Health System is not in place at the time of the strategic affiliation with the City of Colorado Springs, then a similar organization structure will be developed in which the new Memorial
501(c)(3) is the sole member of UCH.
The same authorities and responsibilities will reside with the new Memorial 501(c)(3) in either scenario.
A specific timeline to complete the structure and initiatives as they apply to Memorial will be developed towards the completion of comprehensive due diligence.
The component organizations of the new University of Colorado Health System are not just paying lip service to
“local control.”
Local control, in fact, has been a vitally important reason why both University of Colorado Hospital and Poudre Valley
Health System have been so successful – both clinically and organizationally – themselves. Not least, it has allowed them to respond nimbly to the changing health care needs of their patients and their communities. Even as they form this new system, they do not want to sacrifice this local involvement to be part of a larger system.
We understand local control will be equally important for the people and providers of Colorado Springs.
Removing health care from local communities – from the needs of the people it serves – to distant decision-makers is not desired. That is why our vision is insistent on keeping local providers and leaders at the very center of control.
The advantage of combining our unparalleled clinical and considerable financial and management strengths is to provide a secure, savvy structure under which our local affiliates can offer nothing but the most effective in sensitive, evidence-based, community care.
All resources generated by the University of Colorado Health System, both human and financial, will stay in
Colorado. The participating health systems will never have to compete with different regions or nationally for resources. The System’s resources will stay in Colorado.
46

e. Integrated Delivery System Approach
Ꮾ Describe your current approach to creating an integrated delivery system
As noted in section 6.a. above, the development of an integrated delivery system is a goal and commitment in the
UCH strategic plan.
A key component of this plan is to provide access to world class programs and services to the people of the major population centers of Colorado. Those, needless to say, are predominantly located along the Interstate 25 corridor running north/south through the State of Colorado.
Additionally, UCH is endeavoring to extend these services to less densely populated areas through a variety of outreach strategies and programs.
Memorial Health System can not only provide the source of this blend of great models of care to the people of
Colorado Springs, but can serve as the source of it for all the rural and other urban areas throughout the southern
Colorado region.
47

f. Flagship Hospital
Ꮾ State whether the Health System will be a “flagship hospital.”
Memorial Health System will be the hub and partner in developing this comprehensive delivery network in Colorado
Springs, El Paso County and throughout the southern Colorado region.
As such, it will be the southern flagship for the new University of Colorado Health System.
It will draw upon the resources and power of the larger system to continue to build the high quality health services that the patients, providers, employees and wider community deserves and desires.
An immediate priority will be to work with Memorial’s clinical and operational stuff to provide a secure structure for current programs, to help enhance program and clinical service lines where needed and to regain Memorial’s market presence in areas it has slipped. Next priorities will include significantly building programs and services.
a. Planned Capital Commitment
Ꮾ Describe the specific amount, terms, timing and form of capital commitment you are prepared to make in a relationship with the Health
System
UCH expects that infrastructure and strategic capital, as it is for all complex organizations, will continue to be a vital determinant of Memorial’s future success.
UCH is committed to supporting those required investments, and to do so based not on the competing capital needs of hospitals in and belonging to systems based in other states or regions, but on Memorial’s needs in serving its home communities.
UCH expects to invest capital spending equal to 100 percent of depreciation as an average over a five-year period for routine facility and equipment needs.
Information technology investments – among the most significant in this new health care era of clinical efficiency and accountability – will be made to ensure Memorial is operating on the appropriate technological platform to facilitate delivery of high quality, outcomes driven patient care.
Strategic capital investment in Memorial, moreover, will be provided based on the capital allocation process of the system-level targets established to maintain and improve credit strength.
We expect that this process will provide Memorial with strategic investment dollars for initiatives with the greatest patient needs, clinical efficacy, and/or a high expected return on investment. b. Impact on Credit and Ability to Access Capital
Ꮾ Describe how the proposed transaction would affect your credit profile, credit ratings and future ability to access capital
The proposed transaction will have de minimus impact on UCH or University of Colorado Health System’s credit profile, credit rating and future ability to access capital. In fact, including Memorial in the new system and the opportunity to derive operating synergies will enhance future ability to access capital at favorable terms.
In addition, the capital markets place significant emphasis on the size of an organization in determining credit rating.
The combined organization, including MHS, would have had pro forma operating revenues of $2.1 billion as of fiscal year ended 2010.
48

The table below highlights the key financial metrics:
Credit Rating (S&P/Moody’s)
Unrestricted Cash and Investments
Operating EBIDA
F iscal
Y ear
e nded
12/31/2011
A-/A3
$301.0 million
$58.8 million
Credit Rating (S&P/Moody’s)
Unrestricted Cash and Investments
Operating EBIDA e stimated
F iscal
Y ear e nded
12/31/2011
>A/A2
$1.4 billion
$329.4 million
On a pro forma basis, University of Colorado Health System, including MHS is projected to generate more than $2.9 billion of incremental capital capacity by fiscal year 2021.
Ꮾ Describe any prior or current/pending state or federal legal actions/inquiries involving your organization, your management or Board of
Directors.
UCH has not experienced, and is not now subject to, any state or federal investigations or legal challenges within the past 5 years outside of routine matters.
UCH knows of no pending investigation or challenge that would threaten to have any material effect on UCH or the success of a Memorial-UCH transaction.
Most importantly, UCH has a robust compliance program, an excellent reputation with the Centers for Medicare and
Medicaid Services, the Colorado regulatory agencies and third party payers.
The corporate compliance program is overseen by the UCH Board of Directors, which regularly monitors the program through reports and ongoing discussions.
This process keeps compliance as a central part of operations. The compliance team is lead by the Director of
Internal Audit and Compliance Officer, Christine Newgren, General Counsel, Allen Staver and includes the Vice
President of Finance/CFO Anthony DeFurio.
49

Ꮾ Describe any regulatory hurdles respondent envisions in closing the transaction proposed and how to overcome.
UCH and its partners are not aware of any regulatory hurdles that would present an impediment to the proposed transaction. Pending more detailed analysis, we assume that the transaction, since it involves a State entity, would not require a Hart Scott Redino filing. Initial analysis does not indicate that there will be an antitrust problem with a
UCH-Memorial transaction. The transaction is assumed to require the review and consent of the Colorado Attorney
General under the Hospital Transfer Act. We believe the Attorney General would view the operation of Memorial by a local, high-quality, State-affiliated facility such as UCH as being the best outcome not only for Memorial, but for the citizens of Colorado Springs and of the State of Colorado.
50

IV. COMMITMENTS/OBJECTIVES
Ꮾ As to each of the Commitments set forth below, the respondent is asked to agree to the Commitment, describe how it is handling similar commitments within its existing organization and how it intends to ensure meeting the Commitment set forth to the Health
System if it is chosen as the successful party to negotiate with the Health System.
Ꮾ Proposals should clearly indicate, by specific cross-reference to the numbered and lettered Commitments below, agreement with each
Commitment and any other relevant response (such as the proposed amounts of the payments to be made pursuant to the Section 1.d
Commitment).
51

Ꮾ Describe commitment to operate the Health System facilities pursuant to the terms of the commitments which follow, as well as the covenants set forth in the attached Draft Health System Operating Lease Agreement.
UCH and our partners, PVHS, Children’s and University of Colorado and the School of Medicine are enthusiastic about the opportunity to partner with Memorial Hospital System. Memorial has a long and distinguished history in the City of Colorado Springs and throughout the region. The accomplishments of Memorial including recent patient safety recognitions as well as a number of patient choice and “best of” awards highlight the outstanding service that the hospital system provides and the caliber of the clinical and administrative staff. We believe that a close collaboration between Memorial, UCH, PVHS, Children’s, University of Colorado and the CU School of Medicine will provide unique synergies that will allow each entity to achieve even greater outcomes for patients. The missions and visions of all these entities align well and highlight the Colorado-based, nonprofit approach to delivering worldclass care. The commitments listed below provide the opportunity to show how the strengths and values of
Memorial and the communities it serves will be enhanced and expanded by partnering with UCH and our affiliates.
UCH and our partners have reviewed the Draft Health System Operating Lease Agreement. While there are some areas in the proposed agreement for which we have questions about the proposed agreement, we agree in spirit with the principles and ideas proposed in the document. UCH and our partners look forward to a positive negotiation process that will allow these finer points to be addressed in a way that is agreeable to everyone.
In Attachment E, we have included some initial comments and clarifications on the lease document itself although we understand that this is just a draft and final agreements will be developed through detailed discussions.
The total economic consideration of this proposal is $ 1,791.3 billion, the details of which are outlined below. We believe this is a competitive and reasonable financial proposal to make Memorial Health System a participant in the
University of Colorado Health System.
These values are based on Memorial’s annualized income statement and balance sheet as of August 31, 2011 and are subject to change at the closing of the transaction based on the then current financial statements of Memorial
Health System.
Our proposed total economic consideration is based, in part, on a $400.0 million enterprise value of Memorial Health
System, which we believe represents the fair market value of the organization. Within this valuation are several key factors to be considered, including the request by the City of Colorado Springs that the responding entity defease the outstanding debt and fund the shortfall in pension obligation. In our proposed transaction, a combination of
Memorial’s current cash and unrestricted investments along with the sale proceeds would be used to defease all outstanding debt obligations and satisfy the long-term workers compensation and other liabilities. The remaining cash surplus would be remitted to the City of Colorado Springs as an upfront cash payment of $50.0 million and annual payments of $5,612,119 for thirty (30) years. The details of such are illustrated in the net proceeds analysis provided following.
52

N et
P roceeds
A
NAlysis
($ millioNs
)
Memorial Health System Enterprise Value
Less: Payoff of net long-term debt (calculated below)
Less: Payoff off PERA Obligation
Less: Payoff of other long-term liabilities
Net Proceeds
$ 400.0
(50.4)
(185.0)
(4.6)
$160.0
Net proceeds comprised of:
Upfront cash payment to Memorial Health System
Annual payments (1)
$50.0
110.8
$160.0
Total net proceeds
Calculation of net long-term debt:
Total long-term debt outstanding and defeasance cost
Cash & unrestricted investments
Total net long-term debt
$358.4
308.0
$50.4
(1) $130.0 million represents the present value of the annual cash payments to the City of Colorado Springs
Importantly, the total economic value to the City of Colorado Springs also includes other considerations the partnering entity will put forth. Taking Memorial Health System’s requests under consideration, the University of
Colorado and their affiliates propose the following, in addition to the upfront and annual cash payment described above:
1. Margin sharing contributions to the City of Colorado Springs (or designee) equal to 5.0% of the incremental
Operating EBITDA margin over a base margin of 8.0%. For example, if Operating EBITDA was 15% on an annual Total Operating Revenue base of $625.0 million, the incremental 7% margin would be $43.75 million and approximately $2.19 million would be contributed to the City of Colorado Springs (or designee). The estimated value, based on achieving a 15.0% EBITDA margin within 5 years and remaining at 15.0% over the next 35 years, equates to approximately $151.3 million in margin sharing to the City over 40 years.
2. Capital contribution commitment of approximately $28.0 million annually for the initial 40 year term. This is a commitment of $1.12 billion over 40 years.
3. Commitment to fund the development of a satellite University of Colorado School of Medicine Campus in
Colorado Springs. This commitment is for $3.0 million annually for 40 years. This is a commitment of $120.0 million over 40 years. s ummAry of
t otAl
e coNomic
c oNsiderAtioN
($ millioNs
)
Memorial Health System Enterprise Value (as detailed above)
Margin Sharing
Capital Commitments
Colorado Springs SOM Campus
Total Economic Consideration
$400.0
151.3
1,120.0
120.0
$1,791.3
The above financial consideration presumes that UCH assume the Memorial Health System operations essentially
“in place”. UCH will retain net working capital of $42.4 million at the time of the transaction. Any net working capital in excess of this amount will be paid to the City of Colorado Springs as additional consideration with the upfront cash payment above, so long as this is achieved without degrading operations or facilities. If the amount of
53

net working capital is less than $42.4 million, the consideration paid in the upfront payment above will be reduced by a like amount.
These terms are, of course, subject to due diligence and the non-occurrence of material adverse intervening events
(such as the degradation of Memorial’s finances or operations).
a. Funding Defeasance of Bonds
Ꮾ Describe commitment to fund the appropriate defeasance of outstanding bonds related to the Health System
Under the assumption that the outstanding debt has to be defeased, there is a significant cost to doing so in the current market. All fixed rate debt will need to be defeased by placing funds in an escrow to the first call date. All variable rate debt is currently callable and should not require a long escrow. The cash balance of MHS at closing will impact the contribution from UCH. A quick summary of the outstanding tax-exempt fixed rate debt follows:
» $101,945,000 Series 2009 has $40,105,000 callable on 12/15/2014 and $61,840,000 callable 12/15/2019.
The negative arbitrage associated with escrowing bonds to their first call date is $20.3 million.
» $95,610,000 Series 2002 is callable 12/15/2018 at par. The negative arbitrage associated with escrowing the bonds to their first call date is $18.7 million.
» $30,175,000 Series 2000 is callable 12/15/2011 and will be currently callable by the time any transaction is finalized.
54

UCH is currently reviewing documents to determine if any opportunities exist to avoid defeasing the bonds to the first call date and thus avoiding the $39 million of negative arbitrage in the current market.
Note: The 2009 bank loan in the amount of $69.5 million has a prepayment penalty of 3% (currently $2.1 million) if called in the first 3 years of closing (2009). This is reflected in the table above. b. Forty Year Team
Ꮾ Describe commitment to a forty-year term
UCH is willing to enter into a lease with an initial term of 40 years. UCH proposes that at the beginning of year nine, and every year thereafter, the lease will automatically renew for an additional year such that there will be a minimum of thirty years remaining on the Lease at all times (subject to otherwise negotiated termination provisions). This would allow UCH flexibility in determining the capital structure for Memorial Health System that will allow Memorial to maintain first-class facilities for decades to come. Alternatively, a lease term of 99 years or longer would address this need.
c. Assumption of Liabilities
Ꮾ Describe commitment to assume all pre-transaction and post-transaction liabilities, including pension obligations, with indemnification of the City of Colorado Springs provided and evidence of appropriate financial resources to support such indemnification.
UCH is prepared to assume all of the pre-transaction liabilities, subject to exclusions based on public policy or specific due diligence. All commercially reasonable and customary liabilities will be assumed. This includes the assumption of pension obligations, with indemnification of the City of Colorado Springs.
With regard to the Public Employees’ Retirement Association of Colorado (PERA), UCH is committed to developing alternatives which may be more attractive to employees, the City, and/or UCH than simply paying off the unfunded pension liability. These alternatives might include creative solutions utilizing benefits of the University of Colorado or
UCH public authority which would otherwise not be available.
UCH is prepared to assume all of the post-transaction liabilities, subject to exclusions based on specific due diligence. All commercially reasonable and customary liabilities will be assumed.
Evidence of the appropriate financial resources to support such indemnification is included in our response to questions 7b. This commitment is subject to the completion of comprehensive due diligence by UCH prior to the transaction date.
d. Payment structuring
UCH proposes a series of financial and other considerations that, in total, would comprise the economic consideration given by UCH to the City of Colorado Springs.
1. UCH requests that the City of Colorado Springs defease the outstanding Memorial bonds prior to the time of the transaction. The projected cost of defeasance based on current market conditions is $358,401,124.
UCH is exploring whether or not there are more cost effective ways to satisfy the bond obligation. To the extent a more cost effective solution is developed, the economic benefit of that course of action compared to defeasance will inure to the benefit of the City of Colorado Springs.
2. An upfront payment to the City of Colorado Springs in the amount of $50.0 million will be paid at the time of closing the transaction.
3. Annual payments in the amount of $5,612,119 will be made to the City of Colorado Springs for 30 years.
55

4. UCH’s satisfaction of the PERA obligation, currently estimated to be in the amount of $185.0 million. Such amount will be determined by PERA as of the transaction date.
5. UCH will commit to a “margin sharing” arrangement with the City (or City’s designee) for 5.0% of annual audited Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) over a baseline annual
EBITDA margin in excess of 8.0%. All EBITDA up to the 8.0% baseline margin will be retained by UCH.
6. UCH will commit $28.0 million per year of capital expenditures for the initial 40 year term. This is a commitment of $1.12 billion over 40 years.
7. Funding of $3.0 million per year to the University of Colorado School of Medicine for 40 years to fund a campus in Colorado Springs. This is a commitment of $120.0 million over 40 years.
8. UCH will reimburse the City of Colorado Springs for all reasonable legal and consulting fees in connection with this transaction. UCH requests that a “not-to-exceed” amount be established as soon as is reasonably practical.
The above financial considerations presume that UCH assumes the Memorial Health System operations essentially
“in place”. UCH will retain net working capital of $42.4 million at the time of the transaction. Any net working capital in excess of this amount will be paid to the City of Colorado Springs as additional consideration under item 2 above, so long as this is achieved without degrading operations or facilities. If the amount of net working capital is less than $42.4 million, the consideration paid in number 2 above will be reduced by a like amount.
These terms are, of course, subject to due diligence and the non-occurrence of material adverse intervening events
(such as the degradation of Memorial’s finances or operations).
e. Reimbursement to the City
Ꮾ Describe commitment to reimburse the City of Colorado Springs for all fees and expenses (including reasonable legal and consulting fees, as well as referendum/election costs related to approval of this transaction) incurred by the City of Colorado Springs in connection with this transaction.
If UCH is identified as the successful bidder and both parties can agree to a lease agreement, UCH agrees to reimburse the City of Colorado Springs for all reasonable fees and expenses associated with this transaction. At the earliest possible opportunity, UCH would like to agree to an amount for these activities that will not be exceeded.
56

Ꮾ Describe commitment to provide the City of Colorado Springs with certain rights of reversion of the operation and assets of the Health
System upon certain events of default, including failure to meet the commitments, failure to meet operational benchmarks agreed to by the parties, a bond default, or insolvency or bankruptcy of the respondent.
UCH will commit to provide the City of Colorado Springs with a right of reversion of the operation and assets of the
Health System upon certain events of default, these would include UCH defaulting on its bonds, becoming insolvent or filing for bankruptcy. However, because UCH anticipates investing substantial resources in improving the facilities and enhancing services at the Memorial Health System, it would be unfair and unreasonable to allow for a termination of the Lease and a reversion of the assets to the City for anything other than extreme breaches.
The final agreements would include a formula such that in the unlikely event that circumstances arose that triggered the City of Colorado Springs to take back the Memorial facilities, the City would pay or finance a repurchase price that fairly reflected its assumption of liabilities, and the intervening increase in value due to capital investments by
UCH in the intervening period, which could include decades. Obviously, 40 years hence, none of the facilities then taken back might have been those originally leased by the City, and all such facilities may have been built with UCH funds in the interim.
Ꮾ Describe commitment to (a)having a majority of local citizens (El Paso County) on Health System’s Board of Directors with (b) initial
Board agreed to by the City Council and (c) limited reserved powers to be specifically identified by respondents, but leaving all but a few mutually agreed-upon decisions to the Health System Board.
In keeping not only with the wishes of the community but with our belief that strong local control is key to developing and maintaining a successful hospital system, the new Memorial would be governed by a local board.
A majority of the board directors would be residents of El Paso County. It is currently envisioned that the new
Memorial Board will consist of 11 individuals, at least seven of whom will be El Paso County residents.
We will work closely with the City Council, Colorado Springs Chamber of Commerce, the Memorial Task Force and other local health care organizations, business and civic groups to identify potential board members with the knowledge and skill sets necessary to ensure the ongoing success of the hospital system. The Colorado Springs
City Council will approve the first board under this new system. The board will also be approved by the University of
Colorado Health System.
Board powers. The new Memorial Health System will be the entity licensed by the State of Colorado to “operate” the two Colorado Springs hospitals, while the Memorial Health System will be managed as part of the University of
Colorado Health System.
Based on information obtained to date, UCH proposes that the following powers and decisions appropriately belong with the new Memorial Health System Board described above. These important powers will remain the same under a lease of Memorial Health System by UCH and under the new joint operating company structure. The powers include:
• Continued ownership of property, plant and equipment owned by Memorial Health System (MHS) (or its subsidiaries or controlled affiliates) as of the Effective Date of the Lease (the “Effective Date”), plus a. all physical improvements, enhancements, replacements or additions to the Legacy Assets, plus b. any other tangible assets that are acquired by and owned by and, if financed, financed by MHS (or its subsidiaries or controlled affiliates), plus
57

c. property, plant and equipment that MHS has identified as expected to be acquired or constructed by the
Health System; however, it will not be necessary to obtain the consent of the Health System Board to sell or otherwise transfer assets for fair market value if the assets are below a certain level.
• Recommending a community service plan
• The right to approve the first MHS CEO and, after three years, the right to be meaningfully consulted on the selection/removal/employment status of the MHS CEO
• The right to recommend capital/operating budgets and strategic plans for MHS to the University of Colorado
Health System Board
• Decisions regarding granting medical staff privileges, approving amendments to the medical staff bylaws and regarding all other medical staff and other hospital matters and activities required for state licensure or by the
Joint Commission, Medicare and Medicaid
• The right to be consulted on major facility decisions affecting Memorial
• Other appropriate powers to be determined
The Joint Operating Agreement will establish a contractual commitment to ensure that specified powers are followed and the Memorial Health System Board will have enforcement rights vis-à-vis the Joint Operating
Company.
Ꮾ Describe commitment to maintain historical charitable purposes of the Health System, meet the current and future health care needs of the community, and operate facilities consistent with IRS rules/ procedures and Colorado State laws and regulations defining tax exemption criteria, including: a. Charity and Indigent Care Policies
Ꮾ Maintaining or enhancing the Health System’s existing charity and indigent care policies (available in the electronic) due diligence room.
As health systems with a similar commitment to serving the needs of the community, the respondents firmly commit to maintaining the historic charitable purposes of Memorial Health System.
Memorial, we know, has long been not only the very center of care in the community but, in many respects, its refuge.
• In most years, well more than a third of its patients are unable to pay for their care. Other hospitals in Colorado
Springs seek to restrict their “medically indigent” payer mix to 12-to-15 percent of their patients per year.
• UCH understands that bearing even that low level of indigent care carries a heavy, often financially debilitating burden. It is why so many for-profit systems work hard to avoid such patients, shifting the burden to nonprofit systems that do serve them.
But, until and unless more people are adequately insured, great hospitals need to donate as much care as they are able.
Memorial becoming part of a system not dedicated to serving all patients would be devastating to the community and, not least, to the lives of the people who depend on Memorial Health System.
58

• Neither UCH nor Poudre Valley formally have such “safety net” duties as part of their missions. However both have historically been extraordinary providers of charitable care.
• UCH provided well over $300 million in uncompensated care to people unable to pay in its most recent fiscal year. That was equivalent to 11.4% of its charges. Poudre Valley’s contributions amounted to 10.4% of its charges.
» They do this, again, not because they have to, but – as strange as it may sound in today’s corporate climate – because it is the right thing to do and because they are both financially strong enough to do it.
Both believe it would be the absolutely wrong thing to do to compromise Memorial’s contributions to its community, whether or not it joins the new “University of Colorado Health System”.
• For obvious reasons, both UCH and Poudre Valley strive to obtain payment for their services even as they acknowledge and compensate for the situations when a patient may not have the means or adequate insurance to cover the real costs of their care.
• Given the current uncertainties of health insurance reform it is difficult to determine what the next 40 years will bring. Any fundamental changes that might result to Memorial’s current charity care policies would be undertaken only with the input of the local board and the community stakeholders.
• State support. Neither the University of Colorado Hospital nor Poudre Valley Health System receive any financial support from the state’s general fund.
• UCH is a participating provider in Colorado’s medically indigent insurance program. As such, it is required by Colorado Statute to provide four dollars worth of medically indigent care for every three dollars that is distributed to UCH from the state’s medically indigent program. Historically, UCH far exceeds this requirement annually.
• As one of the two named systems in the Colorado Statute creating the Colorado Indigent Care Program,
UCH is clearly seen as a leader in the provision of this important category of care. UCH continues to actively participate in this program even when funds from the state and the federal government are not received.
In recognition of the high volume of uncompensated care UCH provides, we – like Memorial Health Systems,
Children’s Hospital Colorado, and Poudre Valley Health systems – are also designated as a Medicaid disproportionate share hospital. The pattern of care leading to this shared designation highlights just how important each of these systems believe this work to be.
b. Meet the Current and Future Healthcare Needs of the Community
In our vision of truly partnering with Memorial Health Systems, the City of Colorado Springs and the surrounding areas, UCH envisions supporting Memorial as it builds upon its legacy and position in the community.
UCH and its partners have long been tightly woven into the communities they serve. They do so first by carefully tracking and even anticipating their patients’ health needs, which frequently are also influenced by non-medical economic, social, educational and even cultural forces. Part of the art of caring for a community is continuing to align expensive and often difficult-to-get health care resources with the changing needs of its patients.
59

One aspect of this ongoing alignment is participating in, and listening to, grassroots and civic groups at every level of the community. This is especially important in the Colorado Springs area where there is such a high concentration of current and retired military families. One of the unique strengths UCH brings is our long standing commitment to participating with TRICARE. UCH is a part owner of TriWest and is the largest TriWest provider in the state. We are also the officially designated network administration for the TriWest network in Colorado. This vast experience in treating patients in the defense community allows us to stay closely connected to their needs so that we can deliver customized health care. We strive to be involved in their activities, listening as well as doing proactive outreach so that we can continue to serve this important group of patients in a meaningful way.
PVHS in particular is a national model of a true “community hospital” that has evolved organically along with the geography it serves.
• It is now almost impossible to imagine PVHS in any other setting than Northern Colorado. We know the same thing can be said of Memorial; that it so accurately reflects its home counties that it is impossible to imagine it elsewhere.
UCH understands that, and we are committed to allocating the resources to enhancing this legacy.
We embrace the following community health methodologies:
• Programs, services, and strategies are based on community needs assessments and other credible, reliable health needs monitoring sources.
• Evidence-based and best practice programming is the basis for health, wellness, living well with chronic conditions, safety, and injury prevention.
• Only offer classes and programs that are professionally designed and led are offered.
• Clinically-trained technicians perform all of our preventive screenings.
• Motivational interviewing techniques are the cornerstone of our health education and lifestyle counseling approach.
• Appropriate referrals to partnering providers, community resources, and other services, treatment, and care are made.
• Programs are rigorously evaluated to determine their health impact.
• Collaboration with community partners and coalitions is a required to ensure we are not wasting resources on duplication of programs.
• Programming is gender- and age-appropriate as well as culturally sensitive and client-centered.
As noted above, community health is more than just a medical issue. It involves prosperity, education, the health habits of its people, and more. UCH and its affiliates in this proposal all have a strong record of bringing new investment, educational reach, public service energy and economic development to their communities. The impact of a well functioning and regionally integrated health system on the economic environment cannot be underestimated.
60

• A recent study of the Anschutz Medical Campus showed that the campus has a total state economic impact of
$2.05 billion through direct campus expenditures and indirect effects.
• Memorial Health Systems’ partnership in this expanding network of care can be expected to have significant positive impacts on the economic environment of Colorado Springs.
• In addition to direct lease payments, the infusion of capital dollars, margin sharing, and the enhanced opportunities for employment, development, research, collaboration will serve to benefit both the city and the surrounding areas. c. Operate Facilities Consistent with IRS Rules/Procedures and Colorado State laws defining tax exempt criteria
UCH and its affiliated respondents historically have fully complied with IRS Rules/Procedures and Colorado State laws defining tax exempt organization operations.
d. Participation in Government Programs
Ꮾ Participation in Medicare, Medicaid, TriCare, and the Colorado Indigent Program
Ꮾ This commitment could only be amended to reflect changes in laws, rules, regulations, payment systems, demographic needs or prevailing practices by other similarly-situated nonprofit health care systems.
We would unequivocally commit that Memorial Health System will continue its participation in Medicare, Medicaid,
TRICARE and the Colorado Indigent Care Program.
• This commitment would be modified only to address changes in laws, rules, regulations, payment systems, demographic needs or prevailing practices by other similarly-situated nonprofit health care systems.
• As described in previous sections, the commitment to serving the underserved is a central component of the approach of UCH and its partners.
a. Retention of current Health System employees
Ꮾ Describe commitment to retain Health System employees post-transaction consistent with Section 6.2(b) of the Draft Health System
Operating Lease Agreement
UCH will commit to retaining Health System employees post-transaction consistent with Section 6.2 (b) of the Draft
Health System Operating Lease Agreement.
We recognize that the draft lease agreement is designed to protect employees through the first six months of inclusion in the University of Colorado Health System. But we expect not only to retain the qualified talent currently in place well beyond six months, but to add staffing and employment and career advancement opportunities.
Higher quality, different staffing levels. Our staffing models are built to maximize value which is a combination of cost and quality. Thus our models are built not just to maximize efficiency, but to ensure the highest quality of care is provided efficiently. This is how UCH and its partners have achieved unusually high outcomes. Not all hospital systems take the value approach and their quality scores reflect this choice. As quality of care goals are lifted, so are staffing and investment levels to ensure that the staff have the tools and abilities to meet the highest standards of care.
61

The potential.
UCH, Poudre Valley, Children’s Colorado and CU all have recent records of creating jobs, even during the recent recession and sluggish economic growth throughout the country.
• Employment at UCH alone has hit 4,515, up from approximately 3,600 in June, 2007. The addition of its new
$67 million integrated electronic health record system accounted for more than 100 new jobs.
• The current expansion projects on the Anschutz Medical Campus created another 2,500 construction jobs.
Once completed, its new 12-story inpatient tower and the expansion of the Anschutz Cancer Pavilion will result in another 1,400 permanent, high-paying jobs.
• Even before the new construction is finished, the hospital’s clinical services are growing at a rate that UCH expects to add another 135 permanent positions each year.
• The Anschutz Medical Campus overall accounts for more than $2 billion in economic activity, and now boasts total employment of 17,800 people.
• Including activities both on and beyond the Anschutz Campus, UCH and Children’s Hospital Colorado support up to 36,000 jobs, for a total state economic impact of more than $4.5 billion
While it is obviously not possible to credibly predict the precise impact a newly invigorated and enhanced Memorial
Health System will have on the Colorado Springs’ economy, our experience demonstrates that similar well-run, efficient, high-quality health care and research organizations can have a transformative impact on a community’s job creation.
Ꮾ Demonstrate staffing plans to achieve economies of scale.
At the operational unit level, UCH employs best-in-industry productivity and budgeting methodologies. These processes encourage growth and align incentives for achieving economies of scale. UCH has best-in-class workforce management tools and uses these in conjunction with patient acuity, quality standards and cost efficiency standards.
Our tools are scaled to optimize staffing to produce the highest quality of care at the most efficient cost. UCH would work collaboratively with the management and staff at Memorial to implement and refine these processes.
System-wide efficiencies in shared services such as quality and patient safety, supply chain management, revenue cycle, managed care contracting, human resource management, legal services and information systems will be developed and deployed throughout the system as appropriate.
New and innovative approaches to contracting, continuum of care, and accountable care organizations, among others, will be collaboratively developed utilizing expertise from throughout the system. Approaches to services that are possible given the scale of the University of Colorado Hospital System will be evaluated for future consideration.
62

a. Local Services
Ꮾ Describe commitment to ensure that, subject to patient choice, all medical services for which there exists a capability at the Health
System shall be performed locally rather than at outlying, tertiary care facilities, whether or not owned or controlled by respondent’s organization.
UCH and its affiliates will exercise their best efforts to enhance and expand the depth and breadth of clinical services available at Memorial Health System’s facilities.
Medical services for which there exists an equivalent capability shall be performed at the Memorial Health System’s
Colorado Springs’ facilities, subject to patient choice and physician orders.
To the extent that UCH and its affiliates engage in any new or expanded heath care services in El Paso County, they will be integrated into and used to reinforce the success and service capacity of Memorial, rather than to create clinical facilities independent of Memorial or the new, Colorado-based University of Colorado Health Care System. b. Outreach to Outlying Medical Facilities and Health Centers
Ꮾ Describe commitment to support outreach to outlying medical facilities and other health centers to ensure that residents of El Paso
County have continued access to the highest quality medical services.
Colorado Springs has an enviable existing network of medical facilities, primary care providers, community health centers and other providers who, in turn, have had meaningful and rewarding relationships with Memorial Health
Systems.
These community providers are and always have been an important reason for Memorial’s reputation and past success. UCH and its partners – including its newest ones in Colorado Springs - are fully aware of how crucial these providers are to building a new southern hub of the University of Colorado Health System.
In recent years, a large number of physicians have either sold their practices or switched hospital allegiances. We know this has been the experience, too, at Memorial, and that it has lost some considerable talent.
We would hope to re-earn their allegiance and relationship by helping them with the best of technology, resources, continuing medical education (CME) opportunities and support to practice medicine in this very volatile time in
American health care.
That means exercising sensitivity to competitive concerns and duplication of services and a commitment to work with all providers and facilities in the area to create a comprehensively effective, efficient, civil and rewarding professional experience for providers as well as for patients.
We especially look forward to working with high volume Medicaid and CHP+ providers such as Peak Vista and
Colorado Springs Health Partners, as these patient groups make up a significant portion of the patients served at
Memorial Health Systems.
It is, moreover, our expectation that any expansion of Memorial as a member of the new University of Colorado
Health System, in the Colorado Springs area will be well coordinated with the existing providers in the community as well as city officials.
We want to address candidly and emphasize one issue that is sometimes sensitive. Some academic medical centers and their faculty have the reputation for being arrogant, and for believing that all clinical services must be delivered on the Academic Medical Center model. The University of Colorado Health System does not subscribe to that view. We know that a “one size fits all” approach does not work. On the contrary, we understand very well
63

that the successful model at Memorial Health System must continue to rely primarily on the dedicated cadre of community-based physicians, along with individuals to be recruited to enhance some specialty areas. We intend to be respectful, welcoming, and collaborative with these community physicians. A strong collaboration of communitybased medical staffs and academic medical center faculty will provide the greatest model for success. No one will be required to obtain faculty appointments, however those opportunities will be offered to qualified physicians who desire some category of participation.
a. Quality Measurement
Ꮾ Describe commitment to develop and implement a proven plan for clinical quality measurement utilizing national and regional benchmarks and accountability
UCH is very familiar with the utilization of both quality of care measures and financial dashboard metrics. We are willing to use both at Memorial, and to report appropriately to the City.
University of Colorado Hospital (UCH) has an integrated patient safety program which includes the departments of
Clinical Excellence & Patient Safety (aka: Quality and Outcomes), Professional Risk Management, Infection Control and the Medical Staff Office. These departments are under the leadership of one Director. UCH is committed to providing leadership to develop a partnership with Memorial Hospital that will work toward integrating the patient safety programs that will leverage the best practices that exist within each system.
UCH has created effective team models for steering patient safety initiatives. These teams include medical staff, nursing, quality, risk management, care coordination, coding, ancillary support services and others as appropriate for the task at hand. The teams analyze data, identify opportunities for improvement, develop performance improvement processes and implement education and training to all professional staff throughout the organization.
The focus of these patient safety initiatives include; but is not limited to; 30 day re-admissions, infection prevention,
National Patient Safety Goals, AHRQ Patient safety Indicators, mortality, etc. Many of these components are also measured as part of national and regulatory benchmarks as referenced under section 5c.
UCH believes using this approach lends itself to the development and implementation of centers for excellence in specific clinical areas.
b. Staff Development
Ꮾ Describe commitment to develop and implement a proven plan for improvement of the medical staff, nursing staff and non-physician practitioners with corresponding education and training programs, including development and implementation of centers for excellence in specific clinical areas.
UCH has as its mission, vision and values the education of professionals in training to become healthcare providers at all levels of practice, as well as those who are working professionals and must engage in continued learning.
UCH fully funds professional development through a robust program of leadership training, as well as extensive clinical training and continuing education to create a total learning environment. UCH commits that the same level of investment in staff development will be provided to MHS as it becomes a participating provider in the University of
Colorado Health System.
Examples of staff development programs include:
Partnerships with Human Resources to offer leadership curriculum: core curriculum for emerging UCH leaders.
Unique use of VP and Director experts to instruct in 44 courses including:
64

• Buddy to Boss
• Capacity Management
• Crucial Conversations
• Finance for Non Financial Managers
• Leading Change
• LEAN Process Improvement
• Legal Concepts for Managers
• Managing for Inspired Performance
• Managing for Service Excellence
• Performance Management
• Selecting Talent
• Transformational Leadership
Professional Resources Clinical Training and Development
• Inter-professional continuing education consistent with the 2010 report from the Institute of
Medicine Redesigning Continuing Education in the Health Professions , which recommends that in order for a practice to remain cutting edge, practitioners from all disciplines should be learning continuously together in a partnership to promote teamwork and collaboration. Consistent with this national recommendation, UCH is now partnering with all disciplines on many initiatives, including this as a sample:
» Annual Palliative Care Conference
» New Fundamentals of Critical Care Support Course for MDs, RTs, and RNs, recently receiving preliminary accreditation from the Society of Critical Care Medicine post a recent site visit.
» Annual Rocky Mountain Research and Evidence-Based Practice Symposium, now in its 22nd year, which draws disciplines as far ranging as pharmacy, nursing, RT, MDs, PTs and Social Work to present podium and poster sessions on quality outcomes and research studies.
» Inter-professional Grand Rounds Monthly
• Offered 1,121 hours of inter-professional short continuing education sessions on inpatient units and in ambulatory clinics. Examples are drug updates, MD short lectures on new treatments and procedures and lunch and learn sessions attended by over 800 participants from all disciplines.
• UCH is an American Nurses Association Continuing Nursing Education Provider. Last year UCH provided over
55 ANCC-approved CNE courses for over 1,500 clinical nurses from all levels and types of specialty practice.
• Over 1,500 hours of life support training provided for over 900 participants this past year including BLS, PALS,
ACLS, NRP, Burn Life Support and Trauma certification.
• Over 5,000 hours of clinical training, include device updates, telemetry updates, product changes and basic procedure updates and training.
• Maintain an institution database to ensure all preceptors across the inpatient and ambulatory and procedure areas are certified to be well educated preceptors who reflect the high standards of practice and the Hospital mission, vision and values. Over 900 employees are in this database as certified with basic and advanced training.
65

• Significant on line training for all personnel through our Healthstream learning platform. As an example, clinical
RNs take over 27 specialty courses on line annually.
• Use of on-line professional courses such as the AACN Critical Care Course, which includes study sessions,
Emergency Nurse Association course for basics, the American Organization of Operating Nurses Basic
101 course and the ENA Triage course. Others are conducted face to face, such as the Biotherapy and
Chemotherapy Oncology Nursing Society course for certification of all who administer chemo.
• Our APNs as well as our MD’s instruct in many courses, such as Bariatic Care and Neuro Assessment. Neuro assessment is taught by our APN Tracey Anderson, who was just award a national Magnet Nurse of the Year award and a top APN in the country award.
Research and Evidence-Based Practice is the foundation of our professional practice at UCH, regardless of discipline. All professionals are expected to know how to search for the literature, attend a course and participate in a journal club. Over 60 inter-professional journal clubs were held in the past year across all services in the hospital, attended by Advance practice RNs, RNs, PT, and MDs.
Courses available to any provider at UCH are:
• Getting Started in Research
• Intermediate Evidence- Based Practice
• How to Develop a Zoomerang and other Survey tools
• How to Display Data with Graphs and Charts
• Searching for the literature
Shared Leadership Structure is a well developed part of our Magnet Work Environment
• There is an advance practice nurse council which meets monthly and includes journal clubs and continuing education offerings.
• We have 8 Champions of Change Teams:
» Skin Champions, Vascular Access Champions, Evidence-Base Practice Champions, Diabetes Champions,
Hand off Communication Champions, Palliative Care and End of Life Champions, Pain champions and Fall
Champions.
» Members are inter-professional providers. For example, our fall prevention team has an MD, an engineer who manages bed repairs, rehab, nursing, unlicensed support personnel, and others, all working together.
» This is our model for change and improvement.
School of Medicine Departmental Grand Rounds and Continuing Education
Physician staff development and continuing education is integral to the University of Colorado Health System environment. Each Department in the SOM provides monthly Grand Rounds and regular continuing education activities. This active learning environment supports professional development, lifelong learning and maintenance of certification for all medical staff.
Clinical Nurse Specialists and Educators
The University of Colorado Hospital’s Department of Professional Resources employs 21 Clinical Nurse Specialist and Educators,:11 of these individuals hold a Master’s Degree in Nursing, and19 hold national certification in their clinical specialty. The Clinical Nurse Specialist and Educators function within a centralized/decentralized model
66

permitting maximum efficiency and effectiveness in their supportive roles. These individuals are managed by a
Masters prepared Board Certified Nursing Professional Development Specialist in the Department of Professional
Resources which is directed by a doctorally prepared Board Certified Nursing Executive Administrator.
Post-baccalaureate Nurse Residency Program
Our nationally accredited Nurse Residency Program is an evidence-based program for newly licensed postbaccalaureate acute care nurses. University of Colorado’s ten year commitment to the development and implementation of this nationally recognized program has resulted in improved nursing retention (99% 1 year and
95% 2 year retention rates), with half of its participants over the last 10 years still employed in direct patient care throughout the UCH system.
Nurses Improving Care for Health System Elders
The University of Colorado Hospital is a member of NICHE (Nurses Improving Care for Health System Elders), a national initiative based at the Hartford Institute for Geriatric Nursing at New York University. The program aims to facilitate the infusion of evidence-based geriatric best practices throughout institutions to improve nursing care for older adult patients. As part of NICHE, UCH nurses and nursing assistants are trained in geriatric-sensitive areas to improve the care of hospitalized individuals age 65 and over. The NICHE program seeks to effect changes in nursing practice that will benefit older hospitalized patients and ultimately achieve patient-centered care for older adults.
UCH offers a 12-bed Acute Care of the Elderly, or nursing unit.
Bariatric Surgery Center of Excellence
The University of Colorado Hospital recently hosted a site visit to seek the American Society for Metabolic and
Bariatric Surgery (ASMBS) Bariatric Surgery Center of Excellence® (BSCOE) designation. The BSCOE program is designed for facilities and surgeons in the United States and Canada, and is the world’s largest center of excellence program for bariatric surgery.
The Beacon Award
The University of Colorado Hospital’s Neuro Intensive Care Unit recently submitted application for the Beacon Award for Excellence. The American Association of Critical-Care Nurses (AACN) created the Beacon Award to recognize individual units that distinguish themselves by improving every facet of patient care. For patients and their families, the Beacon Award signifies exceptional care through improved outcomes and greater overall satisfaction. For critical care nurses, a Beacon Award can mean a positive and supportive work environment with greater collaboration between colleagues and leaders, higher morale and lower turnover.
Patient Resource Center and Patient Education
Our Patient Resource Center hosts over 5, 000 annual visits and Hospital providers have developed over 200 Care
Notes developed and specialty books developed for services across the hospital. UCH provides an active patient education committee that is inter-professional.
c. Development and Implementation of Centers of Excellence in Specific Clinical Areas
UCH employs a comprehensive multidisciplinary process that would be further developed in partnership with
Memorial Health System. This ongoing strategic and business development effort requires a disciplined, highly participative process to develop plans for centers of excellence in specific clinical services. Once these centers of excellence have been identified, an ongoing process for implementation and refinement of the plans is required.
To illustrate the process that could be utilized in partnership with Memorial Health System, a brief review of the UCH process is instructive. A multidisciplinary team of physicians, nurses, local community members, academic faculty and other clinicians along with administrative leadership would be formed as a steering committee. This group would follow a specific approach to reviewing the external and internal environments to determine the strengths, weaknesses, opportunities and threats based on the current operating environment.
67

Specific clinical service lines would be selected for the development of comprehensive business plans. Based on the results of this detailed planning process, select clinical service lines will be prioritized and selected as centers of excellence. It is important to note that all clinical service lines are encouraged to develop annual business plans whether or not they are designated as a center of excellence.
The detailed business plans at the center of excellence level are then rolled into the annual capital, operating and marketing plans for the system. Through this process, the centers of excellence are provided the resources identified in the business plan development process. An annual review of plans is completed to ensure that necessary activities are proceeding on schedule.
This process is critical to the development of a growing and thriving health system.
Ꮾ Describe commitment to needed capital improvements, including a. Funding of Annual Capital Improvement Fund
Ꮾ The annual funding of a Capital Improvement Fund in an amount equal to or greater than the Health System’s depreciation expense for the immediate preceding year.
UCH expects that infrastructure and strategic capital will be a vital element of Memorial’s future success and is committed to supporting the required investments. Information technology investments will be made to ensure
Memorial is operating on the appropriate technological platform to facilitate the delivery of high quality, outcomes driven, patient care. UCH expects to invest capital spending equal to 100 percent of depreciation as an average over a five year period for routine facility and equipment needs. As noted in Commitment 7(a), those and other strategic capital investments will be provided based on the capital allocation process of the system-level targets established to maintain and improve credit strength.
We expect that this process will provide Memorial with strategic investment dollars for initiatives with the greatest patient needs, clinical efficacy, and/or a high expected return on investment. However, it is important to note that capital support will be available based on the needs identified by local leadership and evaluated by the respective
Colorado-based boards. In national systems capital funds generated locally often migrate to out-of-state hospitals, corporate offices, or stockholders.
b. Replacement Costs
Ꮾ Agreeing that replacement costs used as old assets are taken off the books.
UCH will commit to replacing assets as they are removed from service and taken off the books of Memorial Health
System. This commitment is contingent on the timing of normal activities that take place in the capital acquisition process.
The system has the capability to meet those ongoing costs. As noted in previous sections, the proposed transaction will have de minimus impact on UCH or University of Colorado Health System’s credit profile, credit rating and future ability to access capital.
The respondents believe Memorial’s inclusion in the system will enhance its future access to capital through the opportunity to derive operating synergies. In addition, the capital markets place significant emphasis on the size of an organization in determining credit rating. The combined organization, including MHS, will have pro-forma operating revenues of $2.1 billion as of fiscal year ended 2010. The table below highlights the key financial metrics:
68

Credit Rating (S&P/Moody’s)
Unrestricted Cash and Investments
Operating EBIDA
F iscal
Y ear
e nded
12/31/2010
A-/A3
$301.0 million
$58.8 million
Credit Rating (S&P/Moody’s)
Unrestricted Cash and Investments
Operating EBIDA e stimated
F iscal
Y ear e nded
12/31/2011
>A/A2
$1.4 billion
$329.4 million
On a pro forma basis, University of Colorado Health System, including MHS is projected to generate more than $2.9 billion of incremental capital capacity by fiscal year 2021.
c. Coverage for Research and Development Projects
Ꮾ Ensuring coverage is provided for approved R & D projects.
An annual comprehensive capital budgeting process will be developed that includes representation from key stakeholders at Memorial Health System, including physicians, nurses, other clinical personnel, and administrative leaders. All research and development projects recommended by that process and approved as a component of the annual capital budget will be included in the capital and financing plans.
d. Growth Initiatives
Ꮾ Providing funding of approved growth initiatives intended to maintain facilities, equipment, and other capital items at a world-class level.
UCH will fund approved growth initiatives intended to maintain facilities, equipment, and other capital items at a world-class level. UCH will partner with Memorial Health System to establish an integrated strategic financial planning process similar to the process currently utilized by UCH. This process integrates the strategic plan with the annual capital and operating budget process to ensure a comprehensive and integrated approach to funding decisions- both capital and operating.
Maintaining a disciplined process in this regard is critical to maintaining the creditworthiness of the organization.
Creditworthiness, in turn, ensures that capital funds will be available for worthy projects prospectively.
e. Insurance
Ꮾ Obtaining and maintaining appropriate insurance to cover any losses to capital items.
Insurance coverage for property, plant and equipment is included in the comprehensive insurance and risk management programs of UCH. Assets that are components of Memorial Health System will be included in these comprehensive programs and appropriate insurance coverage will be obtained and maintained.
69

Ꮾ Describe commitment to ensure that the following actions will be subject to the approval of the City Council: (a) any sale, sublease, transfer or other disposition of all or substantially all of the assets of the Health System; (b) any proposed closure or change in acute care status of any facility of the Health System; or (c) a merger, consolidation or other change in control in which a party other than the City assumes control over the Health System.
Ꮾ The City may condition its approval of these transactions upon any terms and conditions that it deems appropriate, including the condition that payments be made to the City from any net proceeds resulting from such transactions or that any acquiring party agree to be subject to these restrictions for future transactions.
UCH commits that the following will be subject to approval of the City Council: (a) any sale, sublease, transfer or other disposition of all or substantially all of the assets of Memorial Health System; (b) any proposed closure or change in acute care status of any hospital facility of Memorial Health System; or (c) a merger, consolidation or other change in control in which a party other than the City assumes control over the Memorial Health System. This commitment should not be interpreted to relate to the admission of new members or participants into the University of Colorado Health System.
Ꮾ Describe commitment to (a) maintain existing relationships with the medical staff of the Health System, including (b) consideration of maintaining existing bylaws, rules and regulations, credentialing plan, and (c) exclusive contracts with local physicians for the provision of services, including anesthesia, emergency medicine, radiation therapy, radiology, pathology and neonatology.
Memorial Health System has a large and well respected clinical staff. The due diligence materials describe 729 active members of the Medical Staff. This includes a full complement of primary physicians, medical and surgical specialists, podiatrists and dentists. Of these, 688 of the Medical Staff members are Board Certified. These documents define the Medical Staff Bylaws and the Credentialing Plan. With the new University of Colorado Health
System partnership, decisions about the amending the Medical Staff Bylaws, the Credentialing Plan and the granting of admitting privileges will remain in the control of the Memorial Health System and its Medical Staff.
UCH commits to (a) maintain existing relationships with the medical staff of the Health System, including (b) consideration of maintaining existing bylaws, rules and regulations, credentialing plan and (c) exclusive contracts with local physicians for the provision of services, including anesthesia, emergency medicine, radiation therapy, radiology, pathology and neonatology so long as such contracts are compliant with existing laws and regulations.
The medical staff at Memorial Health System may be asked to amend their bylaws to accommodate new programs, services or affiliations that become available as participating providers in the University of Colorado Health System.
These commitments are subject to due diligence on the reasonableness of the terms of existing physician contracts.
70

a. Maintenance of Existing Clinical Services
Ꮾ Describe commitment to expend significant financial resources to maintain existing Health System clinical services at activity levels no less than those being provided immediately prior to the transaction or such other level that the new operating company Board reasonably deems necessary or appropriate consistent with the pledge to maintain the historic charitable purposes of the Health System.
UCH and the University of Colorado Health System will commit to making Memorial Health System a fully integrated participating health system of the developing System. We aspire to deliver world class quality of care throughout the expanded system and this level of complete financial integration ensures that the best decisions are made for the entirety of the system, including Memorial.
This includes the commitment to expend significant financial resources to maintain existing Memorial Health System clinical services at activity levels no less than those being provided immediately prior to the transaction or such other level that the University of Colorado Health System Board reasonably deems necessary or appropriate consistent with the pledge to maintain the historic charitable purposes of Memorial Health System. An annual capital and operating budget will be developed collaboratively with clinical and administrative leadership at Memorial. This process, combined with business and operating plans developed at the clinical service line level, will ensure that the clinical services provided are appropriate and responsive to the needs of patients and their families.
b. Meeting Community Needs
Ꮾ Describe commitment to expend significant financial resources to meet the current and future health care needs of the community consistent with your vision for health care in Colorado Springs
UCH will partner with Memorial Health System to serve the health care needs of the community of Colorado
Springs and the expanded service area of Park, Teller and Freemont Counties. At all times care models will be based on the best interests of the patients and their families. UCH will expend significant financial resources to maintain and expand the range and sophistication of clinical services at Memorial.
Through our partnership with the University of Colorado, University of Colorado Colorado Springs, and the clinical and public health programs provided through the University of Colorado School of Medicine, the University of
Colorado Health System can call upon a strong network of supports to assess and address the community’s needs. c. Future Growth
Ꮾ Describe commitment to expend significant financial resources to grow the Health System’s current complement of clinical services with demonstration of financial ability to do so.
UCH will fund approved growth initiatives intended to maintain and improve the clinical programs, facilities, and equipment at Memorial Health System. UCH will partner with Memorial Health System to establish an integrated financial strategic planning process similar to that currently utilized by UCH. This process integrates the strategic plan with the annual capital and operating budget process to ensure a comprehensive and integrated approach to funding decisions, both capital and operating. As noted elsewhere, we see Memorial Health System as an anchor system in a growing network in Southern Colorado.
UCH, PVHS, and Children’s are all top performing organizations from a financial perspective. This is evidenced by their strong operating performance as well as their balance sheets. This financial strength is also reflected in the organizations’ creditworthiness as evidenced by each respective entity’s ratings from Moody’s Investor Services,
Standard and Poors, and/or Fitch Ratings (See Attachment D). It is anticipated that Memorial Health System will also grow and perform at a level that will preserve and strengthen its financial performance and credit worthiness over time.
71

Ꮾ Describe commitment (a) not to compete with the Health System and (b) to afford the Board of the Health System the right of first refusal to participate in the new health care services initiated by respondent within an agreed-upon geographic area beyond its current market area.
UCH will commit not to compete with the Health System and to afford the Board of Memorial Health System the right of first refusal to participate in new health services initiated by the respondent within an agreed upon geographic area beyond its current market area.
This commitment is made with the City’s understanding that UCH and its affiliated respondents are currently providers of significant health services throughout the State of Colorado.
Ꮾ Describe commitment to develop a fully integrated health system and strategies that are currently beyond reach of the Health System and that are possible with respondent’s involvement to deal with (a) evolving payment systems, including (b) a well-designed strategy for
Accountable Care Organization readiness.
UCH and the University of Colorado Health System will enable Memorial Health System to take advantage of the strengths of each organization as a whole and establish a competitive advantage currently beyond the reach of any individual affiliate, including that which Memorial Health System could achieve on its own. The University of Colorado Health System will provide its affiliates, such as Memorial, the resources to compete under evolving payment systems in the current health care reform environment through integrated financial leadership and the collaboration of thousands of physicians strategically located at inpatient and outpatient facilities throughout the region. Advantages of participation in the University of Colorado Health System include:
• Participation in the health trust established by UCH, CU and University Physicians Inc. (UPI) would be explored, and if legally permissible, MHS would be included. This trust is organized around many of the principle components of accountable care organizations. These partners have years of experience in collaborating to provide the highest quality health benefits at a reasonable cost to employees and their dependents.
• UPI has significant experience participating with the State of Colorado Medicaid ACO project through the
Colorado Access Regional Care Collaborative Organizations (RCCO) located in three of the seven regions statewide.
• UCH and CU recently submitted a Letter of Intent to the Centers for Medicaid and Medicare Services (CMS) committing to participate in the bundled payment initiative under model 4.
• UCH is well situated to be a leader in the global payment arena having operated select global payment arrangements for years with its fully-integrated faculty, University Physicians Inc.
• Economies of scale accrue to the group in purchasing and contracting, as well as other areas. Its well accepted that savings will be absolutely necessary under the payment reforms to come and the new University of
Colorado Health System will provide one avenue to not only gain from group economies but to learn best practices from each other.
• The analytics and continuous quality improvement initiatives that a financially integrated group can provide will be crucial to the success of these payment reform initiatives.
There are many other evolving payment systems where these strengths and an integrated financial approach will be crucial to success. These include Medicare’s value-based payment system, other private ACO endeavors, the Center for Improving Value in Health Care (CIVHC) and Colorado Regional Health Information Organization
(CORHIO) initiatives, commercial health insurance partnerships, among others.
72

• In addition to operational advantages, the integration of these health systems will make the University of
Colorado Health System a sought after leader in the region offering significant advantages over any other provider. Some of the highlights include:
• UCH, PVHS, and CHC have numerous “center of excellence” designations from the major health plans in the market. These program designations would be extended to Memorial Health System as appropriate.
• The University of Colorado Health System and its affiliates all participate in a variety of payor-initiated quality programs. Building the strength of the Memorial Health System into these efforts would be a significant differentiating advantage to the System
• An outstanding medical education system – access to a wealth of CME courses for the Memorial Health
System medical staff as well as increased access to residents and fellows through the University of Colorado
Health System.
• Access to world class clinical research for patients
• The market benefit of having a well positioned network of the region’s best providers
Ꮾ Describe commitment to maintain a primary regional or national hub/headquarters in Colorado Springs.
Memorial Health Systems will maintain the strong physical presence in Colorado Springs it has always had. In fact, the University of Colorado Health System would expect that presence to grow as ties and collaborative activities with the University of Colorado – Colorado Springs and Memorial’s wide existing network of community and provider involvement evolves.
The model of the new system foresees that each of the component communities and administrations will exercise considerable control over local health care services. Such control cannot and should not be exercised remotely.
For those and many other reasons, the headquarters for Memorial Health System will remain in the Colorado
Springs area.
Ꮾ Describe commitment to support (a) undergraduate and (b) post-graduate health services education programs, including providing opportunities for clinical practice and residency programs.
UCH and our partners view health services education as a key component of building a strong health system, both now and in the future. To this end, UCH is committed to supporting a continuum of health service education programs in Colorado Springs. This includes both an institutional and a financial commitment to creating a branch campus of the University of Colorado School of Medicine as well as expanding programs to enhance and extend the existing resources dedicated to undergraduate training, and expanding clinical post-graduate and residency training.
The addition of a branch campus of the CU SOM to Colorado Springs will have benefits that will accrue to existing clinical staff in the area as well as to new students.
CU SOM supports the lifelong educational spectrum of the Memorial provider population. Since the School is the only allopathic school of medicine in the state of Colorado, it views its mission as responding to the needs of physicians throughout the state. Educational programs through the University of Colorado School of Medicine (CU
SOM) add an extra dimension to the skills and experience contributed by UCH, PVHS and Children’s. Specifically, these educational programs can:
73

• improve the knowledge and skills of practitioners through emphasis on lifelong learning;
• improve the quality of healthcare services;
• contribute to solving the workforce shortage of physicians and other health care providers;
• and make the health system a more exciting and enriching place to work.
As described in the financial proposal, the University of Colorado Health System is committing $3 million annually for the next 40 years to support the development of a branch campus of the CU SOM. The University of Colorado
Colorado Springs (UCCS) has agreed to partner with the CU SOM to provide the branch campus with in-kind support in the form of student financial aid counseling, wellness services, and IT support, as well as library access and office/administrative space for faculty and staff. This further enhances the financial commitments to this important project. School of Medicine administrators have met with UCCS leaders multiple times both in
Colorado Springs and at the Anschutz Medical Campus to discuss mutual strategic and operational goals related to his campus expansion. A fundraising campaign for the branch campus would be led by the CU Foundation with
Colorado Springs leaders in support. The El Paso County Medical Society (EPCMS) is working with the School of
Medicine on efforts to recruit community physicians for the branch campus via their Medical Student Support Task
Force. The School of Medicine is an active member of the Medical Student Support Task Force along with Peak
Vista, Rocky Vista University, Memorial Hospital, and Operation 6035 (Regional Leadership Forum) .
A single Education Office within the school oversees undergraduate medical education, graduate medical education, continuing medical education, the child health associate/physician assistant program, and the doctor of physical therapy program; this administrative structure encourages the development of programs and services for physicians and other providers from initial training through their entire careers. Also administratively within the Education
Office are the Center for Advancing Professional Excellence (CAPE), a state of the art center for simulation and standardized patients, and the Academy of Medical Educators (AME), a service organization designed to enhance the skills of medical educators. CAPE and AME provide services to faculty, physicians and other providers in the community as they work to gain new skills and enhance existing knowledge and skills.
Once the branch campus is underway, the opportunity to expand Graduate Medical Education programs (residents and fellows) exists. These programs would only be developed if there is interest on the part of the community
(including physicians) and there would be no adverse impacts on other existing programs. It should also be noted that there are opportunities to develop curricula that are “non-traditional” – for medical student physician training as well as opportunities for inter-professional training with the Beth-El College of Nursing and Health Sciences and other health professional schools and programs.
With this new partnership Memorial would also become an important clinical site to train medical students and other health professionals. University of Colorado Colorado Springs (UCCS) leadership also feels that it is important that Memorial Health System has a strong continued and ongoing teaching mission. The majority of nurses that are educated at UCCS and southern Colorado community colleges receive their clinical training at Memorial. The School of Medicine currently admits 160 medical students, 44 physician assistant students, and 60 doctor of physical therapy students each year. The school also sponsors 82 residency and fellowship programs with 899 residents and fellows currently enrolled; University of Colorado Hospital, Denver Health, Children’s Hospital Colorado, and the
Veterans Administration Hospital are major teaching affiliates.
CU SOM community contacts in Colorado Springs include 152 alumni and 122 faculty. CU SOM has students participating in rotations at Memorial Hospital in their Infant, Child and Adolescent and Women’s Care clerkships.
Other rotations in Colorado Springs include Rural and Community Care and Operative/Peri-Operative Care. The educational relationship with the Memorial Health System is formalized through an affiliation agreement that expires
March 2012.
74

The practicing physician plays an essential role in the education of health professional students. CU SOM depends on preceptors throughout Colorado to guide and educate its students. A number of studies have found that physicians report that precepting increased their enjoyment of the practice of medicine, encouraged them to keep more up to date with the medical leadership and provides great personal fulfillment. Thus physicians believe that maintaining a relationship with an educational program improves both knowledge (and hence quality of care) and satisfaction. CU SOM depends on the activities of these providers, including 30 current preceptors in Colorado
Springs. These physicians supervise students in the Foundations of Doctoring curriculum, a program that introduces medical students to clinical medicine in the first year of medical school, and continues to provide clinical experience and mentoring to students throughout the educational process. Through this partnership, additional opportunities for physicians in the Colorado Springs community to participate in precepting and teaching of clinical students will be created.
A faculty appointment is often required in order to become a preceptor. This ensures both physician competence and quality. The appointment process typically entails an application, curriculum vitae and letters of reference. A faculty appointment may provide greater visibility to that individual within the community as well as recognition for their specialty. No one would be required to obtain faculty appointments or participate in any teaching or precepting. However, these opportunities will be offered to qualified physicians who want to participate in these programs.
The CU SOM Office of Continuing Medical Education and Professional Development, which is accredited with commendation by the Accreditation Council for Continuing Medical Education (ACCME), is prepared to assist the Memorial Health System in efforts to guide physicians and other healthcare providers in both maintenance of licensure and maintenance of certification.
CU SOM has the existing infrastructure to support the lifelong educational spectrum of the Memorial provider population. Maintenance of licensure is a responsibility of practicing physicians, and health systems often assist in this process. Colorado is currently one of only five states without a continuing medical education requirement for maintenance of licensure. However, the Colorado Medical Society anticipates finalizing a framework for
Maintenance of Licensure in 2012, with initial legislation in 2013. Thus provision of continuing medical education will become increasingly important to Colorado Springs providers. Similarly, maintenance of specialty board certification requires continuing education as well as practice based programs in quality and safety.
In additional to increasing knowledge and skills of providers, educational programs also contribute to the future healthcare workforce. Colorado Springs is facing a physician shortage, compounded by the nearly one-third of area physicians that will be retiring within the next ten years. Colorado Springs is one of the largest communities in the
United States without postgraduate training programs. A recent study indicated that 47% of active physicians are practicing in the same state where they completed Graduate Medical Education (GME) training. Almost 60% of
Colorado residency and fellowship trainees remain in Colorado to practice. In 2010-11, the SOM had 899 residents and fellows, and the addition of such programs to Memorial Health Care could significantly impact the supply of physicians to the Colorado Springs community. Similarly, physician assistants and physical therapists in training in the Colorado Springs community are likely to remain there for future practice.
The partnership of Memorial with the University of Colorado Health System and the University of Colorado holds the potential to develop additional life-sciences oriented educational programs at the undergraduate and graduate levels.
This will help with workforce recruitment and retention, and potentially with technology transfer and economic development as well.
75

Ꮾ Describe commitment to provide information technology that will meet all federal and state requirements for funding and participation in evolving payment structures while being compatible for participation with the CORHIO health information software.
This an age in which sophisticated communications between providers and their patients are central to the provision of accountable, high-quality, safe care. These communications are also a key component of efficient hospital operations.
University of Colorado Health System sees adopting advanced information systems as critical for all its partners.
This focus on advancing the technological infrastructure to support the delivery of the highest quality of care is something that UCH and our partners have demonstrated over the years. Over the last two years, UCH has committed over $69 million to overhauling its information technology systems. The UCH system is two years into a three-year project to adopt and make operational a new integrated electronic health information system that is replacing 55+ separate electronic records systems. Although all of these systems were considered “state of the art” by themselves, they were not able to communicate with each other and as such, were not providing the utility required by UCH.
After an exhaustive eighteen month evaluation process, UCH selected the leading Epic Systems integrated clinical core systems model adopted by leading academic medical centers, large health systems, and children’s hospitals.
Epic proved to be the best integrated system available. It is considered a best-in-class system by most healthcare information systems experts’.
The Epic system includes enterprise-wide Electronic Medical Records (EMR), revenue-cycle-related systems including registration, scheduling, billing, HIM, ambulatory EMR, Inpatient EMR, Computerized Physician Order
Entry (CPOE), Pharmacy, Radiology, Perioperative Services and many others. It also incorporates a patient portal,
Health Information Exchange (HIE) capabilities and a community provider portal. This system provides a strong foundation for meeting evolving federal and state requirements such as meaningful use and ICD-10, among others.
UCH has also consolidated all Enterprise Resource Planning systems into a single Lawson system.
Additionally, with Epic and an enterprise integration engine (Ensemble) in place, UCH is positioned to connect to both Epic’s Health Information Exchange (HIE) network (CareEverywhere) and CORHIO through standard interfaces. Both the ERP systems architecture and the EMR systems architecture have been built with scalability and growth in mind.
UCH expects to assist Poudre Valley in their implementation of the Epic and ERP systems and we are committed to working closely with Memorial to evaluate the adoption of these tools within their health system.
Ꮾ Describe commitment to continue to grow, support and enhance industry-sponsored and NIH-funded clinical trials at the Health System.
UCH, the School of Medicine and the University of Colorado Cancer Center are the most active – and most successful – institutions for both public and private research funding in the region.
The School of Medicine (SOM), in part through its relationship with the National Institutes of Health, has well more than a half century of experience in advanced research and, ultimately, pushing the frontiers of science forward. In fiscal year 2011, the SOM brought in more than $400 million in research funding. It ranks sixth among the country’s
80 public medical schools in attracting research funding. At the present time, there are 804 clinical trials taking place on the Anschutz Medical Campus.
76

The CU SOM, the University of Colorado system and UCH are the major public sources of both pure and applied research on the Front Range and throughout Colorado. For patients and providers, that also means they are the major suppliers of the clinical trials that give both precious hope to patients and advances in the science and art of medicine.
The University of Colorado Health System is consciously designed to provide patients and their providers outside of the Denver metropolitan area ready access to these often life-extending and life-improving trials. The trials, moreover, historically draw patients to the hospitals and practices where they are located, and we would expect that, as they become increasingly available at Memorial, they will greatly raise Memorial’s profile as well.
Helping patients and providers. Access to this remarkable amount of research funding and world class facilities in which to work have played key roles in allowing both UCH and Children’s Hospital Colorado to achieve outcomes in many areas well above state and national averages. Five-year survival rates in most stages of breast and lung cancer cases treated at UCH, for example, exceed state averages by as much as 30 percent.
Helping the world.
Colorado Clinical Translational Sciences Center (CCTSI) is a collaborative effort between
University of Colorado Anschutz Medical Campus, the University of Colorado at Boulder, six affiliated hospitals and health care organizations and multiple community organizations. As it codifies and spreads knowledge and new treatments, it currently brings in some $15 million in research support to the university. CCTSI is one of only 60 such enterprises in the United States, and is pointed at turning research discoveries into improved patient care and public health.
The School of Medicine would welcome the addition of Memorial providers in any of these programs and would be prepared, on request, to assist in the training of staff and the implantation of the necessary regulatory activities that would be required by state and federal entities. Patients at Memorial Health System would be actively recruited to enroll in any clinical trials that might be appropriate.
Adding Memorial’s portfolio of clinical trials to those at UCH, Children’s and Poudre Valley Health System would, we believe, create a wider network of new opportunities for researchers that would be unmatched in the state.
Ꮾ Describe commitment to provide funding to address the public health needs of Colorado Springs, which may include, without limitation, substance abuse treatment, obesity, general behavioral health and immunizations.
In evaluating the public health needs of Colorado Springs, the presence of Fort Carson and the high concentration of both active and retired military the Memorial Health System service region constitute and extremely important consideration. A recent report “People Sustain the Mission: Sustaining Human Capital at Fort Carson” authored by garrison commander, COL Robert McLaughlin, describes “an unprecedented level of stress” and the challenges of meeting the health and mental health needs of soldiers and their families. At the same time, the report describes a very impressive array of innovative programs both “Inside the Gate” and “Outside the Gate” that the military has put forward to address those needs.
Despite the impressive array of already initiated programs, a huge amount of work remains to be done to support both active duty and retired military in the Colorado Springs/Fort Carson area. A recent report by the Pikes Peak
Area Council on Governance (PPACG) makes the following recommendations
• Continued development of and updates to the Network of Care and encouraging use of the Network of Care for ongoing care coordination.
• Continuation of the role of the Colorado Defense Mission Coalition to assist with regional communication, collaboration and information-sharing.
77

• Completion of a strategic plan for the Military System of Care to identify critical services, partners and funding opportunities to establish a more coordinated care approach to serving soldiers and family members with behavioral health and social services needs.
• Continued and enhanced partnerships with Fort Carson, TriWest, and others to monitor trends and address gaps in service.
• Identification of long-term funding mechanisms to support the Network of Care, Military System of Care and other efforts to collaborate and serve Fort Carson Soldiers and family members.
UCH and its partners are well-positioned to assist Fort Carson and the Pikes Peak Area Council on Governance to address the needs identified in their strategic planning document. UCH is a part owner of TriWest and together with Memorial, are by far the largest TriWest providers in the state. UCH is also the officially designated network administrator for the state of Colorado. The proposed University Health System partnership will commit to working with Fort Carson and the PPACG to develop a more coordinated, comprehensive and cost-efficient network of care that leverages all associated funding opportunities.
In addition, based on community feedback and as evidenced by the strategic plan above, there remains a large unmet need for better access to high quality coordinated behavioral health and social services. UCH through its
SOM affiliate, the University of Colorado Depression Center, has already begun to engage the behavioral health and psychiatric leadership of Fort Carson around assessing the strengths and unmet needs of the existing programs.
Through several on-site visits, the Fort Carson mental health leaders and the Depression Center faculty jointly identified the following areas for improvement and assistance:
1. Better case management, coordination of care, and oversight of inpatient length of stays at outlying behavioral health facilities.
2. Assistance with deploying evidenced-based suicide prevention program.
3. Training support for clinical staff around evidenced-based psychotherapies.
4. Technical assistance with deploying Fort Carson’s new community-based delivery system for integrated behavioral health and primary care services.
5. Help coordinating access to outpatient behavioral health services for members who are accessing care
“Outside the Gate” and in the extended service area.
6. Assistance with developing research and program evaluation strategies to assess and document the clinical effectiveness and financial impact of each new program as they get rolled out.
The University of Colorado Depression Center has identified senior faculty members (Marshall Thomas M.D., Alexis
Giese M.D., Frank DeGruy M.D., Michael Allen M.D. and Cheryl Chessick M.D.) who have extensive experience and expertise in each of these areas. The Depression Center and its faculty are eager to assist Fort Carson to develop programs that will help it reach its goals of improving the health and mental health of the soldiers and their families.
In order to describe the needs of the broader community, the El Paso County Department of Health and
Environment published a report to the community entitled “Life, Death, and Disease in El Paso County, Colorado”.
Though now five years old, this comprehensive report profiles the population demographics, disease prevalence trends, and causes of morbidity and mortality for El Paso County compared to the rest of Colorado and the nation.
As in other parts of the state, cancer, stroke, diabetes, obesity, violence, and mental health issues are described as costly and preventable causes of disease and premature death. This report is unique, however, in attempting to provide tools to the community to address its public health needs. The report also describes a multitude of already existing El Paso County-based health and preventive health initiatives. The new UCH partnership acknowledges and respects how much is already being done as we seek to bring new resources and synergies to the table.
UCH is committed to supporting services that address the public health needs of Colorado Springs and its service region in a manner that builds on and expands what already exists. UCH, Poudre Valley Health System and CHC
78

provide such services to local, statewide and regional communities. In pledging this commitment, we are mindful of Memorial’s past and current involvement in a wealth of public health-oriented activities. Our goal will be to continue Memorial’s focus on health promotion, prevention and treatment targeted toward identified community health needs. To this task we will bring the combined resources, expertise and experience of the UCH, University of
Colorado and our other partners and affiliates.
In planning our public health-oriented offerings, we will partner with local community agencies to develop programs, services and strategies that are consistent with self-identified community needs across the region. In the past, the
El Paso County Department of Health has aligned it goals with the Healthy People 2020 national health goals and objectives. Based on those goals and current reports of the region’s health needs, we have identified some priority areas for partnerships in public health activities. In addition, we are cognizant of the importance of serving the needs of both active duty and retired military. Several branches of the University of Colorado and the UCH affiliates have public health programs and national centers of excellence directed at the issues that align with these priorities.
Below we describe a partial list of prioritized needs and suggest matching UCH affiliate programs that might partner with Memorial Health System and the Pike Peaks community to help meet those needs:
• Weight loss, nutrition and physical activity programs – Although lower than the national rates, El Paso County’s obesity rates are higher than state rates.
» Anschutz Health and Wellness Center- Under the direction of James Hill PhD., the Center provides innovative, state-of-the art research, education and patient health and wellness program. The Center’s mission is to empower individuals, communities and organizations to make sustainable changes to achieve healthier lifestyles so that high obesity rates and chronic disease no longer reflect the way we live as a society. Some of the programs that the Center has developed include America On The Move, Colorado
Weigh, Colorado Nutrition Obesity Research Center, and Colorado Obesity Research Initiative.
• Education and prevention programs for diabetes, stroke and other cardiovascular problems – El Paso County has substantially higher stroke rates than Colorado as a whole
» The Barbara Davis Center for Childhood Diabetes is one of the largest diabetes programs specializing in type
1 diabetes research and care (for both children and adults) in the world.
» UCH Diabetes Care Program and UCH Cardiac and Vascular Centers are both programs recognized as some of the best in the country by U.S. News and World Report . Both programs have subcomponents focused on prevention.
» CU School of Public Health, led by Dr. Richard F. Hamman, a Professor and Founding Dean, is a leading researcher in diabetes prevention in youth and in the effects of the environment on pregnancy and childhood growth.
• Substance abuse prevention and intervention programs – Although El Paso County’s alcohol and drug use rates are generally similar to state rates, substance abuse has major impact on the county’s health and safety.
» The Addiction Research and Treatment Services (ARTS)is the clinical program of the Division of Substance
Dependence, Department of Psychiatry at the University of Colorado School of Medicine. Its mission is to save lives and improve the quality of life for persons struggling with substance abuse and dependence, through the application of empirically supported treatments. ARTS has an array of inpatient and outpatient treatment programs which include Peer 1, Synergy, The Haven (for pregnant women and their babies),
Outpatient Women’s Treatment Program, Synergy Adolescent Services, CrossPoint, and Medication
Assisted Treatment Clinics. In addition, the Department receives $4.7 million per year from National Institute of Substance Abuse to fund research.
» Center for Dependency, Addiction and Rehabilitation (CeDAR) is a world-class residential addiction and cooccurring disorder treatment facility. CeDAR is the only such program in the country that is embedded in an academic medical center. CeDAR’s programs include residential treatment, family programs and aftercare.
79

• Child abuse prevention – The citizens of El Paso County rated child abuse along with substance abuse as one of their top health prevention priorities.
» The Kempe Center for the Prevention and Treatment of Child Abuse and Neglect creates programs that treat abused children, trains future professionals and researches new methods to heal these innocent victims.
The Kempe Center houses a prominent team of experts on the issues of child abuse and neglect. The
Center trains, educates and supports thousands of professionals throughout Colorado and nationwide.
• Depression, PTSD, Traumatic Brain Injury, and Suicide Prevention – El Paso County has higher adolescent suicide rates than Colorado rates, while rates for persons in other age groups are similar to other parts of the state. Overall, Colorado suicide rates are very high compared with other states. El Paso County is also affected by the high rates of suicide and PTSD in the active duty military population.
» University of Colorado Depression Center is part of the National Network of Depression Centers. It is a nationally recognized center of excellence committed to improving the lives of people with depression and mood disorders through clinical excellence, innovative research, community programs and education. One area of focus for the Depression Center is community-based suicide prevention programs.
» Denver Veterans Administration Hospital (VAH) Regional Mental Illness Research Education and Clinical
Center (MIRECC) focuses on studying suicide with the goal of reducing suicide in the veteran population.
Current studies include working with Fort Carson soldiers to assess the incidence, course and sequelae of traumatic brain injury (TBI) and use of hyperbaric oxygen to treat persistent post-concussive symptoms.
» Denver VAH PTSD Program provides extensive outpatient and inpatient treatment programs to assist veterans with PTSD. In addition to clinical care, the University of Colorado School of Medicine faculty members are also actively researching new treatments and the relationships between PTSD, TBI and suicide.
• Immunizations – A review of official records conducted by the county health department found substantial discrepancies between parent’s beliefs that their children are up to date on immunizations versus their actual immunization status. Colorado immunization rates are low compared with other states, and, based on this review, El Paso County immunization rates are lower than Colorado’s average.
» Colorado Children’s Immunization Coalition (CCIC) is a statewide non-profit that works to ensure that the children of Colorado get the vaccinations they need. Many University of Colorado School of Medicine faculty members are very actively involved with these and other community efforts promoting increased rates of childhood immunization. Dr. Robert Brayden, Associate Professor of Pediatrics, currently serves as president of the Board of Directors for CCIC. In addition, CHC and SOM faculty such as Steve Poole M.D.,
Steve Berman M.D., and Jim Todd M.D. have been instrumental in developing and maintaining Colorado’s
Statewide Immunization Registry on behalf of the Colorado Department of Public Health and Environment.
Other SOM faculty members, like Alison Kempe M.D, are performing research that compares populationbased versus practice-based methods of increasing immunization rates.
The above pairings of identified community needs and UCH partner resources are a partial and preliminary list of some of the new connections and initiatives that could be facilitated by the proposed University of Colorado Health
System partnership. The exact details of each initiative would need to be negotiated with local Colorado Springs community stakeholders. However, it is well known that the development of innovative clinical programs leads to public health improvement and it is with this focus that the University of Colorado Health System would approach these initiatives.
80

Ꮾ Describe commitment to improve the Health System’s access to (a) professional liability and other insurance, (b) supply chain management, and (c) other shared corporate infrastructure to materially reduce the Health System’s operating cost.
UCH is committed to providing the Memorial Health System with improved access to (a) professional liability and other insurance, (b) supply chain management, and (c) other shared corporate infrastructure to materially reduce the
Health System’s operating cost.
UCH and its affiliated respondents have comprehensive risk management, professional liability and other insurance programs. By including Memorial Health System in the University of Colorado Health System, all of the partners will improve the cost and efficiencies of these programs. These costs saving will be reduced through both group purchasing as well as diversifying the risks across larger risk pools. UCH, CU, and UPI have also developed an innovative self-insurance trust that began operations in July 2010. In its first year the trust saved over $1.1 million for its participants. The trust has comprehensive efforts in place to pull from the participants’ vast experience in public health, pharmacy management, care management, wellness and disease prevention. Each participating employer has partnered with the trust to implement programs focused on wellness and disease prevention for their employees.
UCH Supply Chain operates a sophisticated, multi-disciplinary approach to supply expense management. Through three products committees, co-chaired by supply chain and clinical leadership, UCH ensures that our system has the right products, at the right time, for the best price. These same processes would be brought to the partnership with
Memorial Health System.
The procurement process is fully automated from requisition to payment, offering tight controls and efficiencies for our clinicians, procurement, and accounts payable staff.
Supply locations are fed via a just-in-time, low unit of measure program, that facilitates inventory control and limits stock-outs and expired supplies. Automated point of use systems are used to track supply usage and ensure appropriate charging.
Synergies to be gained through a partnership with Memorial Hospital include pricing efficiencies through increased buying power (supplies, services and capital) as well as an overall ability to add additional supply locations into an already efficient and low cost procurement solution. UCH and their affiliates each have established strategic objectives around controlling supply and services expenses within acceptable benchmark ranges. Senior management teams across the system are committed to making short-term and long-term improvements in the supply-chain processes across and within organizations. During this process, management is dedicated to identifying savings and applying the necessary resources to support both physicians and non-physicians in achieving a seamless supply and service delivery model. The goal is not simply to reduce item specific costs, but rather to reduce overall costs inherent in the items themselves, how they are delivered, and when they are delivered. By working together, our facilities can strengthen the supply-chain processes, create the scale necessary to demand greater discounts, and improve overall synergies in managing the functions collectively.
The University of Colorado Health System together with Memorial Health System would consolidate on a primary group purchasing collaborative. Synergies can be gained via improved tier pricing (more volume). In some cases
UCH pricing is at best tier already, and these discounts would be extended to Memorial Health System under the partnership.
81

Over the past three years, UCH has documented from $5 million to $6 million in supply expense savings and nearly
$14 million in savings, cost avoidance and added values in capital and purchased services. Evidence of UCH’s success can be seen in the Supply Expense Management rankings with the University HealthSystem Consortium, where over the last three years UCH has moved from 19th, to 8th, to 4th among the leading academic medical centers in the country.
A comprehensive approach to developing partnerships with Memorial Health System and the University of Colorado
Health System will take place as soon as UCH is selected as the partner for Memorial Health System. Shared infrastructure will be developed to include:
• Clinical Quality and Patient Safety will share best practices gained through Baldrige, University of Colorado
Health Systems Quality and Patient Safety, etc.
• Continuum of Care will assess current state in the face of changing reimbursement and health care reform
• Human Resources
• Workforce Strategies to align productivity management systems
• Human resource policies and procedures to align as practical and beneficial
• Evaluate benefit plan designs including medical, dental, PTO, and others
• Review and evaluate retirement plan design options
• Recruitment synergies assessment
• Explore talent management and human capital system consolidation
» Information Technology
• Identify areas for synergies from both short and long-term integration
• Contract negotiating strength and consolidated capital purchasing plans
» Marketing and Communications
• Develop a plan to brand the organization and its partner systems
• Develop joint marketing plans
» Physician Relations
• Develop regional plans for physician recruitment and retention
• Develop regional plans for physician management services organization offerings
» Financial Systems
• Explore potential general ledger consolidation
• Evaluate banking relationships for savings and efficiencies
» Revenue Cycle
• Explore potential revenue cycle consolidation
82

• Share best practices for front, middle and back end processes
» Supply Chain and Group Purchasing Organization
• Assess and develop plan to maximize supply chain processes
• Assess and develop plan to maximize group purchasing powers
• Assess potential warehouse consolidation
» Manage Care Contracting
• Develop system and regional contracting office
• Develop new products that are responsive to healthcare reform and the changing environment
» Air and Ground transportation
• Assess potential for system wide transportation strategy
» Service Line Development
• Develop business plans around key service lines and how entities will interact
• Develop regional centers of excellence
» Outsourcing and Contracting- evaluate for synergies
• Environmental Services
• Waste Management
• Security Services
• Parking
• Blood Products
» Capital Capacity
• Assess overall combined entity capital capacity
• Optimize debt and financing strategy
» Operating and Capital Budget
• Consistent timeline and processes
» Investments
• Develop appropriate allocation models
• Explore potential to lower management fees through larger asset base
• Develop policy and procedures for investments
83

Ꮾ Describe commitment to expand the Health System’s fundraising, including through grants, contracts and gifts to support its clinical, educational and research missions.
Each of the regional hubs of the new University of Colorado Health System will maintain its own independent fundraising and development arms, and dollars raised locally will remain in their communities for community use.
We are committed to the continued independence and local focus of the Memorial Health System fundraising efforts. If our experience and the experience of other fundraising organizations are any guide, we believe the
Memorial Health System fundraising efforts will be enhanced by its new, stronger association with academic medicine. We see the system affording each of the independent philanthropic operations the same sort of systemwide leverage afforded to the hubs’ clinical, operational, provider, employee and patient programs.
Experience at many institutions teaches that philanthropy is much more successful when a hospital moves beyond offering only clinical programs, however excellent, and adds a meaningful component of research, teaching, and training. We can thereby help Memorial attract more philanthropic dollars that can be dedicated locally to the expansion and enhancement of Memorial.
A record of success in fundraising.
Development and grant work at three of our organizations – the University of
Colorado Hospital, The Children’s Hospital Colorado and the University of Colorado – lend significant support to the education and research work being done at the University of Colorado health science schools, and by the faculty members and researchers working at our hospitals’ various locations.
• The University of Colorado Hospital Foundation is five years old, the youngest of fundraising groups represented in this document. Its Grateful Patient program and a series of unique events have already contributed significantly to such high-profile projects such as the expansion of the hospital’s cancer pavilion, research and patient support in its dominant solid organ transplant center, prostrate and breast cancer research, expansion of cardiovascular services and research and, of course, patient care.
• The University of Colorado Foundation is historically the major source of the hundreds of millions of dollars flowing from grants and donations into the university’s research, buildings and education. In 2010, it raised some $92 million in gifts and grants to support causes from Alzheimer’s and breast cancer research to scholarships at the University of Colorado Colorado Springs campus.
• The Children’s Hospital Colorado Foundation, in turn, has long been one of the foremost fundraising organizations in the region, supporting the innovative care at the 5th-ranked children’s hospital in the United
States as well as research into the tiniest corners of fetal health. With assets (as of 2009) of $178 million, it gathered gifts of $24.9 million that year, and disbursed some $16.4 million in grants and support.
• Philanthropic work at the Poudre Valley Health System Foundation traditionally has had a mission much like the
Memorial Health System Foundation. The Poudre Valley Health System Foundation, in turn, has long had a strong community focus, supporting programs and services at both Poudre Valley Hospital and Medical Center of the Rockies as well as funding local research projects.
84

Ꮾ Describe commitment to preserve the legacy, identity and brand of the Health System.
The University of Colorado Health System recognizes the important history and legacy of the Memorial Health
System and its hospitals. Throughout the 20th century and up to the present day, Memorial has played a crucial role in the health and health care of the people of Colorado Springs and southern Colorado. Starting with its founding in
1904 as a 30-bed nursing staffed hospital, its role in the ‘20’s and ‘30’s treating tuberculosis, influenza, and crippled children, its purchase by the city in 1943, and its eventual development into a sophisticated comprehensive multisite medical system, Memorial has played a vital role in the Colorado Springs community.
In recent years MHS has received many awards including: Colorado Patient Safety Coalition Award (2010), Top 100
Cardiovascular Hospitals (2008), Outstanding Achievement Award for the Oncology Service Line, Colorado Springs
Business Journal “Best Of” Awards, (2008) and many others. In addition, MHS is recognized throughout Colorado for its service line excellence in cardiology, oncology, critical care and rehabilitation services. These public awards coupled with generations of grateful patients and families have created an invaluable brand identity for Memorial.
The University of Colorado Health System will commit to preserve and extend Memorial’s brand and legacy. The
University of Colorado Health System will work with the local Board to evolve Memorial’s brand, identity, and business as a crucial partner and the University of Colorado Health System’s southern Colorado hub.
Ꮾ Describe the commitment to report each year to the community a report which shall include :
UCH believes in the importance of keeping the community and other stakeholders well informed of their activities.
We expect to develop a true partnership with the people of El Paso County and one way of doing this is to be as transparent as possible with our activities, plans and ongoing challenges. The proposed community reporting process will be a good vehicle with which to engage in a continuous dialogue with the community around important issues related to the Health System as well as the overall health of the community and the state.
In that vein, UCH will commit to provide a report at least once each year to the community which shall include, at a minimum, the following items: (a) information regarding the health, public health and social welfare needs of the El
Paso County, Colorado community and an analysis of whether the Health System satisfied these needs, including whether the Health System provided sufficient health care practitioners to provide services for clinical areas within the community that were previously underserved, either alone or in partnership with other community agencies;
(b) the level of charity care and other community benefits provided by the Health System; (c) demonstration that the commitments of the University of Colorado Health System set forth in the definitive agreements have been satisfied, including a discussion about new or changed services brought to the Colorado Springs community; (d) information regarding continued and new partnerships developed with community charitable, public health and social service providers; (e) an annual quality report, including patient/employee/physician satisfaction scoring; (f) information regarding the Health System’s Board, including discussion about the composition and background of the Health System’s Board members; (g) information regarding the Health System’s financial condition, including its general financial condition, compliance with all financial benchmarks in the definitive agreements and a high level overview of its position in the market, significant changes in the health care environment and how the Health
System will respond to these changes; (h) information regarding whether the Health System has complied with the terms and conditions of its organizational documents and the definitive agreements; and (i) other compliance reports required by the Colorado Springs City Council. UCH will work closely with the City Council and Task Force to develop the details of these reports to data available in customary hospital systems and to ensure that the information provided is of real value to the community.
85

We anticipate that the specific requirements of the report and the needs the community wants to have addressed will evolve over time as the partnership deepens and health reform continues. UCH will work closely with the City
Council and other stakeholders to modify these requirements as appropriate. It is also important to note that given the rapidly changing health care environment, there are various competitive forces in play. In order to best position
Memorial Health Systems and the UCH partnership for long term success, it may be necessary and advisable to keep some key strategic and financial information limited to a smaller group. However, this should not be interpreted as an attempt with withhold information but rather to protect the strategic advantage of the system in a way that would ultimately benefit the community.
Ꮾ Describe commitment to maintain relationships with local vendors, so long as products/ services can be provided at comparable cost and quality to alternative vendors and to maintain a plan to enhance in other ways the economic vitality of Colorado Springs.
UCH plans to continue the Memorial Hospital System’s current materials management and purchasing policy in maintaining relationships with local vendors. Memorial’s policy states a preference for working with local companies, but allows for competitive bidding from vendors outside the area. The reasonable goal is to secure competitive prices from a reasonable number of qualified bidders, while supporting local companies.
This is similar to UCH’s policies, which also have led to long-lasting, mutually supportive relationships with many vendors and distributors in its primary service areas. We believe that the current policy strikes an appropriate balance between Memorial Health System’s role as a responsible steward of its finances and a contributing member of the Colorado Springs business community. We recognize it as a productive policy, and would continue it.
Ꮾ Describe commitment to maintain and pursue partnerships with local charitable, philanthropic, public health, military and social services organizations in a manner that leverages the capabilities and resources of the El Paso County community as a whole.
Our commitment to maintaining and pursuing local partnerships recognizes the strength of El Paso County as a whole, the vigor of its community organizations and institutions and the importance of the Memorial Health System as a regional health care leader. We recognize and will support the vital role of local health and social services organizations such as AspenPointe Behavioral Health Services, Pikes Peak Community Health Centers, The
Community Partnership for Child Development, The Resource Exchange Inc., Pikes Peak Hospice and Palliative Care
Inc., El Paso County Public Health, El Paso County Department of Human Services and the School Districts within El
Paso County. In addition, recognizing the importance of the health of our current and former military families to the
El Paso County area, we will prioritize collaborative efforts with the health care facilities at Fort Carson, the Air Force
Academy, and the other military organizations in the region.
UCH, PVHS and Children’s have a long and successful history of partnering with the charitable, philanthropic, public health, military and social services groups in the region, state and our respective communities. We are experienced in identifying the unique capabilities of each community agency and organization and bringing these strengths and resources to bear as we work collaboratively to address community needs.
We expect most of the public health-focused activities listed in the response to Commitment 18 to be conducted as partnerships with other state and local groups. In addition to these activities, we will partner with the local community to increase the proportion of eligible individuals who are enrolled in health insurance coverage. Given the high volume of uncompensated care provided by Memorial, we believe that active collaborative efforts to address this issue will benefit not only the community, but also the hospital system’s ongoing financial viability.
In support of this priority, we plan to continue MHS’s work with the Community Health Partnership, an organization whose membership includes Peak Vista Community Health Centers and all major health care providers in the
86

area. The Community Health Partnership recently assumed responsibility for managing the Regional Collaborative
Care pilot program for Medicaid recipients in the Pikes Peak Region. We also plan to work closely with groups such as the Latino American Health Network and the Black Leadership Forum on strategies to address health care disparities in minority populations.
We recognize that it will be important to seek partnerships with the many charitable and philanthropic institutions that are part of the Colorado Springs community. Colorado Springs not only has a large number of local charitable organizations but serves as the national headquarters for the United States Olympic Committee, Junior Achievement and Young Life. It will be important to work with and support local philanthropic organizations such as The El Pomar
Foundation, Pikes Peak Community Foundation, Memorial Health Systems Foundation and Pikes Peak United Way.
We will also partner with local community agencies to seek new funding that supports local programs from The
Colorado Health Foundation, Caring for Colorado and the Colorado Trust.
Feedback from the Colorado Springs community has emphasized the importance of the United States Olympic
Committee (USOC) within the Pikes Peak Community. UCCS already has scientific collaborations with the USOC.
The enhanced University of Colorado Health System partnership will afford additional clinical and research support to the USOC. Clinical supports could include sports medicine, behavioral health and hard to find specialty services
(for example, assistance with vocal cord dysfunction which is common in high performing athletes). In addition, the new partnership would afford research opportunities for work with other University of Colorado campuses on performance psychology, exercise physiology, sleep physiology, nutrition science and the effects of altitude on athletic training and performance.
Another very important group of local non-profits that will benefit from this increased collaboration the University of Colorado Health System collaboration are the local Colorado Area Health Education Centers (AHECs). The
Colorado AHEC program is coordinated via a central office on the Anschutz Medical Campus. It is directed by Dr.
Jack Westfall, an Associate Professor of Family Medicine. The Colorado AHEC program is committed to providing education and training to increase the number and quality of health care professionals working in underserved and rural communities throughout Colorado. The Colorado AHEC subcontracts with six regional local area
AHECs (separate 501(c)(3)s) to provide services to the communities in each of six regions throughout Colorado.
The Memorial Health System is a major health care provider for at least three of those six regions: the Central,
Southeastern, and San Luis Valley AHECs.
The Central Colorado AHEC serves the Colorado Springs region. This AHEC has been an active collaborator with the local health care community and is a member of the Community Health Partnership. The Central Colorado
AHEC has participated in practice-based research networks and community based quality improvement activities.
For example, over the last five years the Central Colorado AHEC has collaborated with the community to develop a health care screening and self-awareness tool that has been deployed in Home Health settings. The Central
Colorado AHEC is also very active in healthcare workforce development for its region. This has involved hosting and precepting a variety of health care professional students (pre-M.D., R.N., P.A., Pharm.D., P.T. and D.D.S.) in local health care settings. In the upcoming years, an increased focus on these kinds of programs coupled with the educational initiatives described in Commitment 15 will help address the anticipated health care work force shortages at a regional level.
87

Ꮾ Describe commitment to include the Health System and its medical staff in managed care contracts and networks in which respondent participates.
As the major academic medical center serving the residents of Colorado, UCH is committed to providing and facilitating access to care for the resident’s of our region through our participation in managed care networks.
Therefore, UCH will commit to include Memorial Health System and its medical staff in managed care contracts and networks in which we participate to the full extent possible. Today, UCH, PVHS, CU, and CHC participate with all of the major commercial payers in Colorado as well as with regional payers such as Colorado Access and Rocky
Mountain Health Plans.
Prospectively, UCH is committed to developing new and innovative programs to meet the changing healthcare environment. UCH will partner with Memorial Health System and its medical staff in innovative solutions and health care products. For example, UCH and CU recently submitted a letter of intent to participate in the CMS Bundled
Payment initiative under Model 4. CU through University Physicians Inc., is already a provider under the Colorado
Medicaid Accountable Care Collaborative program. UCH believes that there will be other opportunities in the commercial sector to offer innovative products with the potential to steer new patients to all partner health systems.
Ꮾ Describe commitment to assist military in trauma proficiency and readiness.
UCH and its partners are committed to working with the military personnel and installations across the state with a special focus Fort Carson and the Colorado Springs community. Our longstanding commitment to TriWest ensures that we have a unique understanding of the needs of those who are serving or have served in the military and their families. Many SOM faculty members have served in an active duty military service branch, the National Guard, or the Reserves. We understand the critical importance of having a military that is fully trained and capable of managing both acute and chronic trauma. We look forward to the opportunity to expand our interactions with the
Armed Forces. We see this opportunity to increase our partnership with our Armed Forces as both a responsibility and a privilege.
Supporting our military personnel and their families can take multiple forms: clinical care, network development, training and preparation and research on treatment and prevention. UCH and its partners have nationally renowned expertise in many areas that are of vital importance to the military such as disaster preparedness, the effects of high altitude on troops, toxicology, traumatic brain injury, PTSD and suicide prevention. As described below, we have numerous programs that are already working with local and national military units. We also have faculty and staff who are focused on research that will enable the fields of emergency medicine, trauma medicine and behavioral health medicine to advance in areas that are of particular relevance to the military.
At UCH we are proud of our level II trauma center which provides the highest quality of care to any and all patients who arrive in the emergency room. The UCH Emergency Department treats more than 700 trauma patients each year. The faculty and staff of the Department of Emergency Medicine work closely with the local fire department and serve as the co-medical directors for Aurora Fire Departments. This includes overseeing quality of care, clinical training, and participating in disaster preparedness.
The Department of Emergency Medicine at UCH houses the state’s Disaster Management Action Team (DMAT) which is the team sent out in the event of a terrorist attack or natural disaster. This team is led by faculty in the
CU School of Medicine, the recognized experts on managing clinical trauma care. UCH and the CU SOM have also created the Center for Disaster Education which provides training on emergency preparedness for hospitals, clinics, nursing homes, and community centers. This is funded in part by a $500 million grant from the Colorado
Department of Public Health and Environment (CDPHE).
88

The Department of Emergency Medicine and UCH work closely with local military agencies to put on disaster training drills. We offer clinical expertise as well as logistical support and use of our facilities for the drills. Through the partnership with Memorial Hospital Systems, we hope to expand these activities to a larger number of military personnel. We believe that by formally linking MHS with the University of Colorado Health System, additional collaborative opportunities will emerge that will further this important work.
UCH and the Department of Emergency Medicine run the region’s only Burn Center verified by the American
Burn Association and the American College of Surgeons. This specialized skill set ensures that UCH is capable of providing the highest quality care to any patient experiencing a significant burn. We are committed to continue to offer these important services to our community and to the region. Having access to this level of specialized care in
Colorado allows our military personnel who need this care to receive it close to home.
Our partnership with the CU School of Medicine (CU SOM) connects UCH to one of the nation’s leading research institutions studying the impact of altitude on the human body, the Altitude Research Center. This group has a very close relationship with the Armed Forces. It provides training and support on the impact altitude on the human body which is important for soldiers preparing to deploy to Afghanistan. The Altitude Research Center (ARC) has nationally recognized expertise in treating and preventing altitude related illnesses. The center has over $4 million in
Department of Defense grants to study the genetics, causes and preventative treatments of altitude illness.
The ARC has a particular focus on optimizing performance in high altitudes and this research provides important information to the military as they work to ensure our troops can perform their best in difficult conditions. This focus on high altitude performance optimization has also led to a strong collaboration between ARC and the US Olympic
Training Center in Colorado Springs. Several researchers at ARC are collaborating with clinical physiologists at the
Olympic center to study the impact of altitude on athlete performance.
The director of our Emergency Department, Dr. Benjamin Honigman, is nationally renowned for his work on the effects of altitude on the human body and was part of the statewide team that developed the state trauma system.
The UCH Emergency Department is specially trained in handling nuclear disasters and is the primary destination for decontamination and treatment of any nuclear contact in the region. The Department includes a strong focus on injury prevention. Faculty and staff have run a very active injury prevention research and training program that includes community based education and training. Other research conducted in the department includes cardiac resuscitation, an in-house resuscitation lab, and screening for suicide risk in the emergency room, among many others.
In serving military personnel, it is equally important to deal with psychological trauma as it is to deal with physical trauma. The CU SOM provides strong programs that target the psychiatric problems that are common in military and veteran populations. The SOM faculty provides staffing for the Denver Veterans Administration Hospital
(VAH) which has extensive clinical programs to treat and prevent PTSD, TBI, Depression, Suicide and the other psychological sequelae of deployment and combat exposure. The Denver VA Mental Illness Research, Education and Clinical Center (MIRECC) has a primary focus on reducing suicidality in military and veteran populations. To this end, the MIRECC has extensive research programs in suicide prevention, PTSD, homelessness, serious mental illness, and substance use disorders.
Of particular note is the fact that Dr. James Kelly, a CU SOM Professor of Neurology and Rehabilitation, is currently on leave of absence from CU while he serves as the Director of National Intrepid Center of Excellence (NICoE) in
Bethesda, Maryland. NICoE is a component center of the Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury. NICoE seeks to be a national leader in advancing world class psychological health and
TBI treatment, research and education.
As mentioned in C18, the CU Depression Center is working to develop programs that support the mental health and well-being of the military and their families. These efforts include programs for suicide prevention, depression treatment, integration of mental health and primary care and family focused interventions. The UC
Depression Center is also working with Dr. Jay Shore of the CU SOM to develop new telemental health services for Coloradoans who are having difficulty accessing mental health services. Dr. Shore is the psychological health portfolio manager and a subject matter expert for The U.S. Army Medical Research & Materiel Command,
(USAMRMC) working on telemental health through its Telemedicine & Advanced Technology Research Center
89

(TATRC). Dr. Shore also leads the Native Veteran Domain for the Department of Veterans’ Affairs Veterans Rural
Health Resource Center Western Region.
Through a new partnership with Memorial and the Colorado Springs community, the University of Colorado Health
System looks forward to continuing and expanding our support of the military and those who have served our country. This partnership will support the individual achievements of each system while each draws additional strength from the whole. In so doing, we will be able to improve the health and health care of the people and communities we serve.
In closing, we are pleased and excited to offer this proposal. This is a time of rapid change in health care. Health care delivery systems are trying to deal with the tension between the desire and importance of keeping health care local and the opposing pressure for the size and breadth that will bring market clout and operational efficiencies. We feel that this creative partnership accomplishes both goals and is a win for the University of Colorado Health System partners, Memorial Health System, the people of Colorado, and the people of Colorado Springs.
This proposal to include Memorial Health System in the University of Colorado Health System offers numerous benefits both to MHS and the people of Colorado Springs, including:
• An opportunity to participate as the southern hub of a best-in-class, Colorado-based, diversified health system
• Mission alignment and infrastructure support from two of the state’s highest functioning non-profit health systems who serve both the private and public sector
• An enhanced connection with the University of Colorado which will increase educational opportunities for the health care work force, provide access to research and clinical trials, and stimulate the regional economy
• Close affiliation to the state’s only academic medical center accompanied by a commitment and resources to develop a branch University of Colorado School of Medicine Campus in Colorado Springs
• Relationships that are uniquely positioned to develop the network of services and address gaps in care for the military and TRICARE service members
• Substantial financial and other resource investment in Memorial Health System and the Colorado Springs community
• Commitment to support the public health of the community
• Maintenance of Memorial Health System local control, legacy, identity and brand.
The document contains UCH’s good faith effort to respond to the questions posed in the request for proposal.
Naturally, UCH has not yet had the benefit of due diligence, or a full understanding of Memorial and its programs or needs, or discussions with management. Thus, the statements here are good faith expressions of an intent to achieve terms and commitments consistent with what is presented here. But no such statements are legally binding, and they do not constitute an “offer’ susceptible to an “acceptance.” Legally binding obligations would arise only under a final definitive agreement. Likewise, UCH and its partner institutions which join in supporting this proposal have described in good faith here their programs, finances, capacities etc. None of this constitutes representations or warranties, and the only representations and warranties to be relied upon are those that may be set forth in a final definitive agreement.
90