Retention bonuses for several senior executives at Memorial Health System — possibly in excess of $1 million — are turning into a big battle.

On Friday, Jeff Crank of Americans for Prosperity Colorado asked AFP members to contact the City Council and Memorial’s Board of Trustee to strongly oppose “golden parachutes” to the hospital’s top administrators.

“We’ve blown the whistle before about questionable activities and insider game-playing related to the debate Springs residents are having about future ownership and management alternatives for city-owned Memorial Health System,” Crank wrote in an email blast.

“Our concern this time is with the potentially huge ‘retention bonuses’ Memorial’s unelected governing board is planning to pay the system’s already well-compensated top administrators, for fear of losing their services before any final decision on Memorial is made.”

AFP’s members responded.

Councilman Bernie Herpin shared the following email thread with The Gazette after an angry Colorado Springs man threatened to share their email exchange with the news media.

“You are nothing but a lousy politician who is WRONG!”  Joseph Barcellos wrote in the email to Herpin.

Here’s the first email:

March 16, 2012
Colorado Springs City Council Bernie Herpin

Dear Bernie Herpin,

I am writing to express my strong opposition to a proposal to pay “retention bonuses” to senior Memorial Health System executives who might be thinking about bailing-out on their responsibilities before a final decision on the system’s future is made. Reports are vague about what those payouts might total, but I feel that any “golden parachute” of any size is unwarranted under the circumstances.

If these already highly compensated senior officials don’t see their responsibilities through to the resolution of this issue, they don’t deserve a dollar more than what we’re paying them now.
Memorial simply isn’t in a financial position to be giving away money. And part of the responsibility for that rests with those who would be on the giving and receiving end of these payments.

I also strongly urge City Council members to weigh-in on this issue, with an up or down vote, so I will know who to hold responsible for an unnecessary and wasteful misuse of patient dollars. Oversight responsibility for this enterprise still ultimately rests with City Council. And a refusal to weigh-in doesn’t just constitute a political dodge, but a dereliction of duty.

These issues are important and I urge you to consider my viewpoint. As the ultimate owner of this enterprise, my opinion needs to be heard.

Sincerely,

Joseph F Barcellos

Here’s the second email:

Thank you for your message on Memorial Health System (MHS).

We are currently going through the most significant change to MHS since it became a city owned hospital in the 1940s.

To allow MHS to achieve its full potential and become a destination healthcare system for all of Southern Colorado and the surrounding states, city council and a citizen led commission made the decision to lease MHS to another healthcare system. The bidding process attracted bids from several major healthcare providers. This interest in being associated with our healthcare system indicates the strength and potential of MHS. It also showed how the current MHS leadership team had improved MHS’ ability to provide excellent healthcare services.

As evidenced by the bids to take over the management of MHS, MHS is financially stable and is one of the best healthcare systems in the nation.

The city’s proposal review team selected Colorado University Hospital (UCH) as the winning proposal. They have since formed a partnership with Poudre Valley Hospital in Fort Collins. With the addition of MHS, UCH will have a healthcare system spanning the state. In addition, being associated with the University of Colorado Medical School, UCH will be aligning with the University of Colorado at Colorado Springs (UCCS) to open a medical school at UCCS and this will give MHS the opportunity to become a teaching hospital augmenting our existing nursing program associated with the Beth-El nursing program at UCCS.

During this period of lease negotiation and transition, it is important the MHS remain stable and continue to provide superior healthcare to our citizens – the owners of MHS. Since UCH will want to consolidate management between all their campuses, it is likely that some of the current MHS leadership team will be asked to resign. Knowing this, other healthcare systems are actively recruiting some of our team. If any member of our current leadership team were to leave during this critical period, the MHS Board of Trustees, which has the responsibility of ensuring that MHS continue to provide the best healthcare possible, believes this could adversely impact MHS’ ability to be the healthcare leader it has become under the current leadership. Therefore, they have proposed to offer these critical leaders an incentive to remain with MHS during this transition period. No retention pay will be paid if the executive leaves of his/her own accord, is dismissed for cause, or is retained by UCH. This is common practice in business where mergers are occurring or a contract is ending to maintain continuity and stability. The Colorado Springs City Attorney has determined that the MHS Board of Trustees has this authority. In fact, I believe they would be remiss in their responsibilities if they did not take steps to protect this valuable community asset.

The healthcare consultant that has been advising us during the bidding and proposal process stated it is possible to bring in “caretaker” management; however, the cost for such management is general three to five times more costly than the existing management personnel as they know this is a short term employment and they would not move to Colorado Springs. In addition, this temporary management team would not know MHS and would only serve to maintain the status quo and not continue the improvements that are ongoing within MHS. We also know that no one person is indispensable to the operation of any enterprise. However, it would be impossible for us to recruit a replacement given the short term nature of the position.

Therefore, the most cost effective manner to ensure that MHS continue to be an excellent healthcare provider in our community is to retain the current leadership team in place. Their value to MHS has been demonstrated by all of the healthcare providers who were willing to spend millions of dollars to associate with MHS. In addition, the lease arrangement with UCH must be approved by the voters. Should this not happen, we want to ensure that MHS is able to continue to provide the level of healthcare that we expect and demand from a citizen owned system. I believe any mass exodus of the leadership team would seriously impact MHS’ ability to function in this changing and competitive healthcare industry.

Sincerely,

Bernie Herpin

Council Member District 4

Here’s the third email:

Let us be sure of the facts Herpin!  We have an out of control bureaucracy that has failed in its fiduciary responsibilities. The Hospital board, appointed by our renegade and incompetent city council is politically motivated by the status quo. No accountability for the Executive level employees. Yes, they are the employees of this city, as are you! We the people have chosen a strong Mayor because our council, like the U.S. congress, fails to accept responsibility. Memorial’s financial failures are yours as well!

Don’t feed me your standard lies! You can not miss financially in this two hospital town. The quality of care also lags because of operational inefficiencies. You get on it or I will spend money in your district to assure your defeat! Just think we are in a depression and you have access to all kinds of qualified people around the globe to run the hospital. This process of moving Memorial to another organization is the most telling of the serious dereliction of duty demonstrated by the last several and the present councils. Open up the process and take responsibility or prepare to reap you bitter reward!

Joseph Barcellos

Here’s the fourth email:

Thank you for your reasoned and respectful reply.  By the way, I don’t respond well to threats.  If this council is doing such a bad job, why don’t you step up and serve.  I know it’s much easier to sit back and complain and make threats.

Sincerely,

Bernie Herpin

Council Member District 4

Here’s the fifth email:

Your response is now a matter of record. I will find a media outlet to cast you in the light that you deserve to be cast in. You are nothing but a lousy politician who is WRONG!  In the military we say lead, follow or get out of the way.

Since you are neither a leader, or a follower of the people’s will, get out of the way!  I will spend the legal limit to eliminate you from your position, and I will have my friends and associates do the same. Your bumbling response has resolved me!

Like any big government politician you have failed to address my charges, likely because you are not capable of doing so and you now have my determination to place any better more competent person in your spot. Of course you can resolve this and change your arrogant tone and demonstrate some reason and integrity in this matter.

As to your sincerity, I doubt it.

You  have been admonished again and I don’t sit back as you so wrongfully write!

Joseph Barcellos

Here’s the sixth email:

Mr. Barcellos,

I will save you the trouble of finding a media outlet and am forwarding this entire email string to the Gazette and Independent.

I tried to respond to your “parroted” message from Jeff Crank and AFP with the history of the MHS negotiations and why I thought it was necessary to maintain stability during this transition phase.

You responded with threats and insults.

I am proud of my public service.  Feel free to exercise your rights during the next election.  If elected officials responded to every threat of throwing us out of office, we would never make a decision.  I was elected to represent our citizens and to do what I think is in the best interests of our community.  I will continue to serve until I leave office.

Sincerely,

Bernie Herpin

Council Member District 4