In funding crisis, Denver Health Medical Center wants voters to approve a sales tax
Times have been getting tougher and tougher in health care. It shows up in the copays, the bills and now Colorado hospitals are facing a crisis.
"Reimbursement is down everywhere partly because we have an increase in the number of uninsured patients across the country," said Denver Health's CEO Donna Lynne.
Lynne went before a Denver City Council committee Wednesday to ask them to advance a ballot question to Denver voters requesting a sales tax hike. The increase would be devoted to help pay cost shortages and would cost shoppers an extra 3.4 cents on a $10 purchase. It would mean an estimated $70 million to help meet the rising cost of running the services of the hospital, including emergency services, paramedics, clinics and other operations.
The hospital has seen a dramatic increase in indigent care. It is a safety net hospital that had a patient population of 280,000 last year with 1.3 million visits.
"You have this sort of intersection of things happening at the same time. Fewer people that have traditional employer insurance, more people on Medicaid or who are uninsured," said Lynne.
That has been partially the result of the public health emergency that came with the COVID-19 pandemic that expired in May of 2023. Those who were getting Medicaid insurance without re-certifying lost their insurance. Medicaid reimbursements cover about 85% of the cost of care, so some bleeds out there.
Hospitals have also had a tougher time with the removal of Obamacare mandates.
"We saw a big surge in 2010 of patients who newly had Medicaid, who followed the employer mandate that was part of the Affordable Care Act and so that kept a lot of hospitals going for a while," Lynne said.
And the economy has changed.
"We're also seeing a shift in our economy to a service economy and a lot of the service industry don't provide their employees with insurance," she said.
Add it up and Denver Health expects it will provide about $124 million in uncompensated care in 2025. Currently Denver gives the system $30 million a year, which is about 2.4% of its overall budget.
So Lynne told the council committee that if the initiative does not pass the results could be catastrophic. Hours might be shortened, clinics affected. Right now the hospital has 72 psych and substance abuse beds. They are not all open.
"Why? Not because we don't want to care for people but our reimbursement for psych and substance abuse is less than our cost. So we shrink that," Lynne said.
Chances are good that the committee will forward the request to the full council and the full council will place it on the ballot said District 2 Council Member Kevin Flynn. But he's wondering.
"So it pains me to have to say, where's the ceiling on our sales taxes?" said Flynn.
There are currently eight special sales taxes in the city. A hospital tax would add to that as well as two others under consideration for referral to voters.
"Combined the three that we're looking at, Denver Health and these other two would raise the city's sales tax in Denver to 9.65%. So where's the ceiling to this?" said Flynn.
He said he understands there is serious financial trouble for Denver Health.
"I'm not campaigning against this tax at all, I'm simply trying to be the canary in a coal mine about our overall sales tax rate," he said.
He believes there may be a case for a Denver metro-wide tax similar to the RTD tax, the stadium taxes voters have approved and the Science and Cultural Facilities District.
"Every hospital in the area has some level of indigent care that they're required to provide. And a metro wide approach might help to backfill those losses not just at Denver Health but those other hospitals as well," he said.
But that, too, he realizes is a tough sell to Denver metro area voters, even though Denver Health treats those brought in from outside the area, including at its lauded Level One Trauma Center.
"Our core mission is to serve the City and County of Denver," said Lynne.
