Data from the state’s Department of Health Care Policy and Financing backed up what Gov. Polis said about hospitals this week. CHA said these numbers are not recent.
DENVER — Nonprofit hospitals don’t have to pay taxes.
In return, they are expected to invest money in the communities they serve.
During his state of the state address, Colorado Gov. Jared Polis (D) accused nonprofit hospitals of hoarding money and overcharging patients.
“Some large hospital systems are making record profits, paying no taxes, and holding huge reserves while overcharging clients,” Polis said Tuesday.
On Wednesday, the Colorado Department of Healthcare Policy and Financing (HCPF) released financial statements reports Which shows data on the financial affairs of the hospital.
the reports Display the number of spare hospital days in 2019, 2020 and 2021.
For example, UCHealth had 340 days worth of cash on hand (reserves) in 2019, 430 days worth in 2020 and 469 days worth in 2021.
“We applaud hospitals that have a solid financial footing,” said Kim Pemstever, HCPF executive director. “When reserves are excessive, it’s overcharging communities, businesses and families who shouldn’t be paying exorbitant prices.”
A UCHealth spokesperson said that as of today, the hospital has a cash reserve of 308 days worth.
As another example, Children’s Hospital Colorado had 321 days of cash in 2019, 333 days in 2020 and 358 days in 2021.
Higher cash reserves can help hospitals get a higher bond rating and better interest rates for borrowing money.
“We’d say somewhere near 300 days is enough to get an A, AA rating, so you can borrow at very attractive rates,” Pemstever said.
Colorado Hospital Association (CHA) CEO Jeff Tiemann said. “Higher inflation, higher expenses that are growing faster than their revenues and their patients are sicker.”
CHA recently released a Report This shows that, collectively, hospitals spent $1.6 billion in 2020 benefiting society.
Think of community benefit spending as how nonprofit hospitals manage not to pay taxes.
The bulk of the $1.6 billion in 2020 was spent on unpaid care and free and discounted healthcare.
Hospitals are required to hold meetings to hear how community members want the hospital to spend the money instead of paying taxes.
The country wants a better accounting of what is being asked for versus how hospitals decide to spend the money.
“Think about the tax money that might go toward it. They might go toward helping people with housing. They might go toward food insecurity. They might go toward mental health and substance abuse, which we often call behavioral health services,” Pimestever said.
“We really need more detailed reporting so we can really synthesize what is being invested in behavioral health and food and housing and so forth. We don’t get that much detail in our reporting,” Nancy Dolson said. Director of the Private Finance Division of the HCPF.
Bimestefer suggested that hospitals spend their money on cutting costs for patients.
“The huge systems, the university specifically, have been so focused on expanding, buying physician pools, building and buying hospitals, and that doesn’t necessarily benefit communities. Sometimes it’s good for access,” said Pemstever.
In an emailed statement, UCHealth made an exception from the state report:
As the HCPF has done in previous reports, it uses historical data, chooses time ranges for when to ramp up investments, and uses non-GAAP methodologies. Stock market volatility does not match income nor provide an accurate picture of financial health. Like anyone or An organization with investments in the marketplace, UCHealth experienced huge losses in the past year.Yet every dollar we make stays in Colorado and is reinvested in our patients, communities and employees.
The HCPF also suggests that nonprofit hospitals in Colorado do not provide adequate investment in community benefit or behavioral health support. In fact, the Lown Institute recently ranked UCHealth among the best in the country in social responsibility, societal benefit, value, and patient outcomes. In fiscal year 2022, UCHealth spent $1.1 billion on financial assistance, subsidized care, and other areas to directly benefit patients and communities, including $388 million in unpaid care. UCHealth is the largest provider of Medicaid services in Colorado, with approximately 25% of Colorado Medicaid patients being cared for at UCHealth. UCHealth also increased its investment in behavioral health services by $150 million, including adding 49 additional inpatient behavioral health beds, and providing tens of thousands of virtual and in-person behavioral health visits.”
The state frequently wants more accountability, Peemstefer said. She would like to see hospitals submit financial reports to the state on a quarterly basis.
“We really need tax experts to go and make an estimate of, is what they’re spending back into society, is that at least equal to the taxes they’re going to collect?” Dolson said.
“When I hear about increased reporting and transparency requirements, we’re open to seeing what that might look like, but I think there’s a lot more of that in place now,” Tiemann said.
He pointed to several new policies passed by the state legislature that are not yet fully implemented, so find out if more accountability is necessary.
“Seventeen major reforms in just the last few years. And it would be really smart for everyone to stop, figure out where we are, what works and what doesn’t, and what gaps still need to be filled before we pile on new policies that might not do much good.” And it could end up being an actual cost,” Tiemann said.
Tiemann said the financial data from the state reports released on Tuesday did not reflect the current situation hospitals are facing.
“Today, we’re challenged by an inflation situation that hasn’t been like this in decades. We’re challenged by massive workforce problems and shortages. We’re challenged by the regulatory burden. We’re challenged by the need to make sure we’re prepared for the next pandemic,” Temann said. Colorado hospitals don’t have a sustainable margin, which means their viability is an ongoing concern.”
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