Front-range hospitals show financial strength, while Colorado’s rural hospitals and Denver Health struggle
FOR IMMEDIATE RELEASE
January 16, 2025
Media Contact
Marc Williams
Department of Health Care Policy & Financing
720-626-0801 (Cell)
Denver, CO - The Department of Health Care Policy & Financing (HCPF) has released its annual, statutorily required reports. These reports measure Colorado hospital profits, reserves, costs, expenses and the level of community benefit that tax-exempt hospitals offer their communities in lieu of paying taxes. Hospitals are critical pillars within the communities they serve, providing critical and lifesaving care. They are also the largest slice of the health care dollar, driving insurance premiums paid by Coloradans, employers and taxpayers. These reports provide the state, employers, Coloradans, and policymakers insight into the financial health of the hospital care system and ask questions Coloradans care about. Are hospitals financially healthy? What drives hospital operating costs? How are tax-exempt hospitals investing in their communities? Is the Colorado Affordability and Sustainability Enterprise (CHASE) reducing the cost shift from public health insurance programs to commercial insurance customers?
The 2025 Hospital Financial Transparency Report, using data hospitals report to HCPF, showed that much of Colorado’s hospital industry is healthy. However, the state’s rural hospitals and the state’s largest safety net hospital, Denver Health, many of which are supported by local taxpayers, are facing significant financial pressures. Colorado hospitals in aggregate reported $1.5 billion in profits in 2023. Those profits were concentrated in urban, nonprofit tax-exempt hospitals. In contrast, an increasing number of critical access, rural hospitals and Denver Health, saw negative total profit margins, with about one-third of Colorado hospitals operating in the red in 2023.
In aggregate, Colorado hospitals’ patient revenues grew by 4.8% from 2022 to 2023. Colorado hospitals faced higher expenses from labor costs, supply chain and inflation growth - narrowing operating profits in 2023. HCPF’s analysis did not find that Colorado’s uncompensated care costs grew at a greater rate than other operating expenses.
“These reports provide valuable insights for Coloradans into where their money is going within health care. Hospital revenue growth represents a rapidly increasing part of the overall health care dollar,” said HCPF Executive Director Kim Bimestefer. “The billion-dollar annual increase shown in this report is reflected in the insurance premium rate increases that Coloradans, employers and the state pay every year.”
Another element of the transparency reporting is the Community Benefit Report which highlights how much and where 46 Colorado non-profit, tax exempt, non-critical access hospitals invested their community benefit dollars in fiscal year 2022. These 46 hospitals invested $1.2 billion in community investment benefits, representing 7.2% of their 2022 patient revenues and an increase of $129.8 million or 11.9% above the community benefit spending reported in 2021. Approximately 59% of all community benefit dollars went to provider recruitment, education and training (PRET). Of the $721.8 million total for PRET, $566.2 million was reported from UCHealth hospitals.
Notably, almost all systems spend more on community benefit without including Medicaid shortfall amounts than their estimated tax exemption value, other than AdventHealth and CommonSpirit Health. The report points out opportunities for hospitals to better serve their community needs. This year’s report lists 15 hospitals (page 42) whose community investments do not align with their Community Health Needs Assessment’s (CHNA), which prioritized behavioral health needs.
The reports also provide insights into other forms of unreimbursed costs, specifically charity care and bad debt. With the exception of independent hospitals which for this analysis includes San Luis Valley Health Regional Medical Center, no hospital systems exceeded 3.0% of uncompensated care costs as a percentage of net patient revenue. Overall, independent hospitals and San Luis Valley Medical Center’s uncompensated care costs were 5.9% of their net patient revenues in 2022. Denver Health’s uncompensated care costs were 12.1% of its net patient revenue in 2022. Denver Health’s total uncompensated care costs are primarily driven by its charity care costs which accounted for 8.4% of its net patient revenue. For 2022, Denver Health had the largest value for charity care costs with $88.1 million. This is three-fold more than the next largest figure of UCHealth University of Colorado Hospital’s $24.0 million.
Additionally, the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE) was created as a result of the Colorado Healthcare Affordability and Sustainability Enterprise Act of 2017. The CHASE reduces uncompensated care for hospital providers and the need to shift those uncompensated costs to private or commercial payers; it does so by increasing reimbursement to hospitals and by reducing the number of uninsured Coloradans. The CHASE increases net payments to hospitals by collecting a healthcare affordability and sustainability fee from hospitals which then receives federal matching dollars to increase Colorado Medicaid as well as Colorado Indigent Care Program (CICP) payments to hospitals.
The CHASE, the hospital provider fee and the healthcare affordability and sustainability fee increased hospital reimbursement by an average of more than $430 million per year and substantially increased enrollment in Health First Colorado (Colorado’s Medicaid program) and the Child Health Plan Plus (CHP+). During the reporting period (October 2023 through September 2024), the CHASE provided more than $494.5 million in increased reimbursement to hospital providers. The CHASE provided:
- Health care coverage through Health First Colorado and Child Health Plan Plus for more than 427,000 Coloradans
- Transferred $194.1 million to the state General Fund as a result of an increase in federal funding
- Saved hospitals $178 million in healthcare affordability and sustainability fees in FFY 2023-24, for a total of $764 million over four years, by using an enhanced federal medical assistance percentage methodology
- Reduced uncompensated care costs and the need to shift uncompensated care costs to other payers
The combination of these reports is important to Coloradans for several reasons. They highlight how tax-exempt hospitals are spending their community benefit dollars and whether community needs are being met. They show the financial stability or stresses that hospitals are facing from the larger urban systems to our critical access and rural hospitals. Additionally, the reports show how the financials of Colorado hospitals have changed through rich historical data. These reports work to transform complex issues and make them digestible for Coloradans interested in the health care landscape of their state. Ultimately, these reports provide ample, hospital specific insights to help Chambers of Commerce, large employers, municipalities, and other community stakeholders insights to conduct productive conversations with hospital executives and hospital board members - conversations that can drive improvements in affordability, access to care, community benefit investments and other priority areas.
On February 13th from 7:30-8:45am MST, HCPF will be hosting a webinar to take a deeper dive into the three reports, provide greater context on their findings and answer attendee questions. Register here to join the conversation.
About the Colorado Department of Health Care Policy & Financing: The Department administers Health First Colorado (Colorado's Medicaid program), Child Health Plan Plus, and other programs for Coloradans who qualify. These health care programs now cover about one in four Coloradans. For more information about the Department, please visit hcpf.colorado.gov.