Public ownership, private control

It started with a community resource in danger.

In the early 2000s, Memorial Medical Center was losing money at an unsustainable rate. Services were at risk. Confidence in the city’s long-term healthcare facility was slipping. Local leaders faced a question.

The solution: an agreement reached in 2004 that remains a core piece of healthcare in Doña Ana County today.

Instead of giving up control, the City of Las Cruces and Doña Ana County held onto ownership of the hospital. The land, the buildings, the identity would all remain a community resource. But the day-to-day operations would shift to a private operator.

Through a long-term lease (40 years), the hospital was turned over to a company that would manage everything from staffing to services to finances. In return, that company paid $150 million up front — money local governments could invest back into healthcare and community needs.

It was a bold compromise: public ownership, private operation.

A hospital that belonged to the people but was run like a business. The ownership stake was, and still is, a 50/50 partnership between Doña Ana County and the City of Las Cruces.

There were strings attached. The agreement wasn’t simply about dollars. It included expectations that key services would be protected — emergency care, women’s health, and access for those who couldn’t afford treatment. Even under private management, the hospital was meant to function as a community resource.

For a time, it worked. The financial bleeding stopped. The hospital stabilized.

Two decades later, that same deal still shapes conversations in city council chambers and county commission meetings. The tension between public ownership and private control has become a collision of business reality and community expectations.

That tension has reached a critical point in the relationship between the operator, LifePoint Health, and the city and county.

While government entities are asking for more accountability, Memorial released a statement saying it is meeting its obligations.

“Memorial Medical Center has been working in good faith to address the questions and concerns of the City of Las Cruces and Doña Ana County for many months, and we were surprised and disappointed by today’s press conference and lawsuit,” the statement says. “We strongly believe that we are not in breach of our agreements, and we have been committed to forging a collaborative path aimed at the common goal of ensuring our community has access to the care they need.”

City and county officials point to two main concerns: capital improvement spending and the hospital’s commitment to provide care for uninsured patients.

Memorial has access to the county’s indigent care fund to offset those costs, but without documentation, officials say they cannot verify the hospital is meeting its obligations.

On March 23, Doña Ana County and the City of Las Cruces held a joint news conference announcing a Notice of Breach tied to agreements with Memorial Medical Center, operated by Lifepoint Health.

Leaders said the action followed months of attempted communication and opportunities for voluntary compliance.

“The city and the county were promised that the residents in our community that could not afford care would receive care and that MMC would provide at least the same level of indigent care for the life of the contract, which is 40 years, as existed in 2004,” said Las Cruces city attorney Brad Douglas. “That is the floor. This became a more prominent issue when one of our community advocates, Yoli Diaz, began providing specific examples of patients who were indigent who were being denied care at the hospital.”

County attorney Cari Neill said MMC is expected to help uninsured patients seek coverage or identify alternative funding sources before turning to the county’s indigent care fund as a last resort.

“Sometimes they do that and sometimes they write it off as bad debt,” Neill said. “But they're not even doing that like they should. Some of the people that we've heard from recently, rather than helping them get signed up for some sort of indigent care, they offered them essentially the equivalent of a credit card where they would have really high interest in a payment plan, or they didn't even do that, they just sent the bill to collection.”

Douglas said the agreement also requires MMC to invest 4–5% of net profits, minus bad debt, into capital improvements.

“Their position is that they have done that,” Douglas said. “Our response is, ‘Well show us,’ and their reply is basically, and I'm oversimplifying this a little, ‘Just trust us.’”

Officials have requested a forensic audit to verify those expenditures. According to Douglas, Lifepoint and MMC have not agreed.

Doña Ana County Commission Chair Manuel Sanchez said the city and county are open to renegotiating the agreement, but only after requested documents are provided.

“In fact, I think it was back in 2019, Memorial Medical Center gave a presentation to the county commission and the City of Las Cruces because they did at the time want to entertain a renegotiation of the lease agreement because they didn't agree with the amount of capital expenditures that were required,” Sanchez said. “We at the county were open to that. We suggested that we work with the city of Las Cruces to create an advisory board to work with them on negotiations. And then they stopped. They decided that wasn’t the direction they wanted to go.”

So what ends the stalemate?

In the same statement, MMC added:

“We have attempted to discuss the city and county’s latest requests for weeks – even as recently as last week – and continue to be rebuffed.”

“I'm not going to speak for the county, but I believe we're aligned.” Douglas said, “The best outcome would be a revised contract… You cannot get out of that by saying, ‘Well, technically we comply.’”

Neill said MMC has 30 days to respond to the filing, though she hopes it doesn’t come to that.

“The truth of the matter is… This could be over today,” she said. “He’s exactly right. This could be over right away by them just doing what we have been asking them to do for the last 18 months.”

Memorial said it remains committed to a resolution.

“We are proud of our team and the work we are doing to build healthcare services in this region… We remain dedicated to finding a positive way forward as quickly as possible.”

City and county leaders say litigation is not the preferred path — but a necessary one to ensure commitments made to the community are met.

Residents can review previously released information through the City of Las Cruces Public Records Center.