The Front Range’s largest safety net hospital is struggling to subsist and Ballot Issue 2Q would infuse Denver Health with $70 million a year.
The cost of shoring up this critical health system would be a .34% sales tax which translates to a little more than $.03 on every $10 someone spends on non-grocery food items in the City and County of Denver. It’s an investment this city’s voters can make for the future of health care.
Denver Health has long been one of the best trauma hospitals in the state — the place you want an ambulance to go when tragedy strikes — but it serves the state in other ways. The mom and baby unit delivers one in three children born in Denver. The quasi-governmental entity also operates primary care and mental health clinics in our schools, neighborhoods, and jails. It runs ambulances and hires our EMTs. It has dental clinics and provides vaccines.
The hospital has operated at a net loss over the last three years, although for the past two years, the new CEO, Donna Lynne, has managed to tighten the belt and solicit enough emergency funds to stay in the black — just barely. In 2022 the hospital reported a $58 million loss and in 2023 the hospital came out ahead by $11 million.
The driving factors of this fiscal crisis have been increased costs associated with rising wages and inflation, and increased uncompensated care from homeless individuals, South American migrants, and the thousands of Coloradans who were kicked off of Medicaid this year. The hospital receives state, federal and city of Denver payments for patients who cannot pay, but those payments have remained fairly stagnant for many years.
Denver Health needs a dedicated revenue stream so it can remain a thriving force for public health in our community.
For the past five years, The Denver Post editorial board has taken a conservative stance on sales tax increases, urging voters to not create new programs using the city’s limited ability to increase sales taxes.
But Denver can still afford one more sales tax increase, and this proposal is not for a new, untested, and ungovernable venture. Denver Health is one of the state’s oldest institutions. At one point it was a city agency before it became independent and it historically made its budget work by tightening its belt in lean times and expanding only when prudent.
Donna Lynne has a proven track record of leadership. She ran Kaiser Permanente in Colorado before becoming the state’s lieutenant governor under John Hickenlooper. She has pledged that the hospital will disclose exactly how the new sales tax revenue is spent during its annual “Report to the City.” The ballot language limits how the money is spent to five main categories of care: emergency, primary, mental health, pediatric, and substance abuse recovery. Additionally, when Denver City Council members voted 12-1 to refer this measure to voters, they included language stipulating that the city’s annual $30 million contribution to Denver Health would not be reduced in response to the new tax, although other economic factors could cause a reduction.
Denver Health’s financial security benefits the entire region. The hospital serves people from across the state, not just the metro area, so it is fitting that a sales tax that is paid by not only Denver residents but also visitors be the funding source for operations.
Some of the money will allow for the expansion of the hospital’s mobile clinics into parts of the city that are underserved, but most of the new dedicated revenue stream will help prevent layoffs, improve retention of staff, and prevent potential reductions in services.
However, Colorado’s elected officials cannot rest on their laurels even if Ballot Issue 2Q passes. Two other major reforms are needed.
Colorado collects a fee from patients for every night spent in a hospital and uses that fee to get federal matching dollars for Medicaid payments. Those matching dollars are then sent to hospitals through an opaque equation that must be revised based on hospitals’ needs. If the Colorado Healthcare Affordability and Sustainability Enterprise Board won’t adjust the formula, state lawmakers must force their hand.
Second, Colorado lawmakers can tighten requirements for “nonprofit” hospitals to spend more of their required “community benefits” helping other hospitals and medical providers with their uncompensated care. Nonprofit hospitals should be helping to backfill their regions’ uncompensated care before they spend the money on other purposes. Kaiser Permanente set the precedent for this in 2023 when it donated $10 million to Denver Health and started a fundraising effort this year for the Denver Health Foundation.
Health care in America is broken. Everything is too expensive while our healthcare workers are often overworked and underpaid. Even the best medical providers can struggle financially and there are deep flaws with Medicaid, Medicare, and all private insurers.
But one thing we can fix, this November, is ensuring that Denver Health has the resources it needs to serve the Front Range for years to come.
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