Colorado Attorney General Phil Weiser will hold a public meeting on Thursday, July 31 from 4 p.m. to 5 p.m. in the multipurpose room at the Estes Park Community Center, 666 Community Drive, Estes Park where residents can express their thoughts and concerns about the proposed acquisition of Estes Park Health with UCHealth.
Estes Park residents and other interested parties can also submit quesgtions, concerns, and information about the acquisition to the attorney general via a specially designated email address, UCHealth-EstesPark@coag.gov, until August 8.
Under the Colorado Hospital Transfer Act, § 6-19-201 C.R.S., the attorney general is obligated to review the transaction and ensure it will not result in a material change in the charitable purposes to which the assets of the hospital have been dedicated, and that assets don’t leave the state.
In making this determination, the attorney general must also consider whether there are reductions in the availability or accessibility of health care services in the communities served by the hospital.
According to a press release issued by the attorney general’s office, the proposed transaction must be evaluated to ensure that it is conducted legally and in a way that preserves the hospital’s mission and UCHealth ’s commitment to the health and wellness of the Estes Park community.
The public meeting on July 31 and the dedicated email address provide community members with an opportunity to have their voices heard and for the attorney general’s office to make an informed decision about the proposed acquisition.
History and background
In 1968, voters formed the Estes Park Hospital District, a special taxing district and the following year, Roger Knutsson, a long-time summer resident, donated $100,000 to the District as a memorial to his late wife Elizabeth. In 1972 the Elizabeth Guild Auxiliary was formed to raise funds for the construction of a hospital and in 1973 voters passed a $900,000 bond issue with 995 votes in favor of the measure to 266 votes against. Construction began on a 16-bed facility and the hospital was dedicated on April 15, 1975.
In 1981 an EMT and ambulance service was established. In 1982, voters approved a $2 million general obligation bond for a 60-bed nursing home. The Park Hospital District Skilled Nursing Facility opened on Jan. 23, 1984. It was renamed the Prospect Park Living Center when the hospital was rebranded in 1986 as Estes Park Medical Center. An emergency department wing was added in 1990 followed by a helipad in 1994. A birthing center was built in 1998.
In 2005, voters approved a $25 million bond issue to expand the hospital. Ground was broken in 2006 for a new lobby and front entrance, surgical services department, inpatient area, birth center, and outpatient clinics. In 2008, voters again approved a bond issue to expand the emergency department.
In 2018, the hospital again rebranded as Estes Park Health according to its website “to better reflect the continuum of care from the start-of-life to end-of-life.”
In 2021, during the COVID crisis, the nursing home closed followed in 2023 by in patient pediatrics and maternity care. The 2023 audit revealed an operating loss of nearly $11 million.
Voters tell board to seek an affiliation to save the hosptial
In May 2023, Park Hospital District voters gave the elected board of directors the authority to pursue what was described to the voters as an “affiliation” in order to save the local hospital which has been supported through a property tax for the past five decades.
Eighteen months later, on Oct. 16, the PHD board announced it had signed a letter of intent on Oct. 3 to affiliate with UCHealth, but details of the deal were not immediately disclosed, and the community was told the letter of intent and the details of the deal with UCHealth were privileged and would not be shared.
On May 6, the day that Park Hosptial District voters cast ballots in a local election for two new board members, the board of directors of EPH, released the LOI.
The Estes Valley Voice submitted a Colorado Open Records Act request with the attorney general for copies of the documents filed by UCHealth and EPH related to the pending acquistion. On June 30, we received copies of documents including a notice of integration and affiliation on UCHealth letterhead, dated June 10 and signed by Vern Carda, the Chief Executive Officer of Estes Park Health, and Elisabeth Concordia, President and Chief Executive Officer of the University of Colorado Health; a 150-page Health System Operating Lease Agreement by and among the Park Hosptial District, University of Colorado Health, and UC Health NewCo Hospital. Also received were a one-page certificate of public notice, a four-page resolution of the board of directors of Park Hospital District to authorized entering into definitive agreements with University of Colorado Health, and a one-page certificate of no material change in purpose.
Among the provisions of the deal with UCHealth, a new board appointed by UCHealth will be established which will have control over hospital policy. The Park Hospital District board will continue to set the mill levy but will no longer have any say in hospital policy.
EPH has agreed to a 50-year lease of the property for $1 per year, with automatic 10-year renewals unless either party elects to terminate at least two years prior to the scheduled expiration date of the lease and its renewals.
While designated as a lease, the lease is effectively a purchase agreement with representations and warranties from the parties and termination provisions similar to those contained in a business purchase agreement.
Funded debt of the PHD will be assumed by the new hospital entity and/or UC Health, but any other pre-closing liabilities, such as employment-related liabilities and medical malpractice liability, are not assumed by the new corporation.
The PHD agrees to give UCHealth the right of first refusal if the District receives an offer to purchase its assets, and the District also agrees not to compete with the services provided by the hospital.
In connection with the lease, the District will escrow $2 million of its funds to secure its compliance with representations and warranties. However, any amount left in the escrow will pass to UCHealth on the second, third, and sixth anniversaries of closing.
UCHealth will exercise authority and management over all Estes Park healthcare operations and will maintain control over the appointment of the new seven-member hospital board’s members. While the District may nominate two members, those nominations are subject to approval by UCHealth and may be removed by UCHealth at its discretion, at any time, with or without cause.
If UCHealth disapproves of three successive nominees, UCHealth may, in its discretion, eliminate the District representatives from the hospital board.
UCHealth appoints two members, and three members are appointed as community members. For the four-year period following closing, UC Health will give due consideration to historical members of the District board in the appointment of the community members.
UCHealth commits to expending $20 million for capital improvements and maintenance during the 10-year period following closing. Additionally, the hospital will evaluate its services in relation to community and financial needs for behavioral health, telehealth, and pain management.
UCHealth also agrees to use commercially reasonable efforts to retain the ambulance service.
UCHealth will annually report on the application of the tax revenues of the District and shall provide unaudited financial statements of the hospital.
The hospital will retain the CEO, CFO, CNO, and the senior director of support services for 18 months following the closing. The District commits to not decreasing tax revenues, all of which will be allocated to the hospital, except for an administrative portion of approximately $200,000 per year for board functions and public services.
If the lease is terminated within the first 10 years, the District will pay for post-closing capital improvements and the assumed debt. After 10 years, the District will pay for post-closing capital improvements only.