Colorado Hospital Association Statement on Colorado Health Market Analysis 2019

GREENWOOD VILLAGE, COLO. – Sept. 26, 2019 – In response to the recent data release Colorado Health Market Analysis 2019 by Allan Baumgarten, LLC, Colorado Hospital Association (CHA) issued this statement:

“As this report shows, many Colorado hospitals have improved profit margins in the past year. This is partially a function of Colorado’s strong economy and a focus on controlling costs, as we work on improved affordability,” said Steven J. Summer, CHA president and CEO. “While CHA has not verified Baumgarten’s data, findings from the Association’s most recent internal analysis show the number of Colorado hospitals below the national sustainability threshold of 4 percent has decreased from 50 to 47. Additionally, fewer hospitals (40 in 2017 as compared with 36 in 2018) are operating at a loss or negative margin. This means that some of the most vulnerable hospitals in our state have improved their overall financial condition. This is critical in an environment where we are seeking to assure access to quality health care across Colorado’s communities.

“This report is based on Medicare Costs Reports, which means that many of the reported margins, especially those for tax-paying and teaching hospitals are grossly overstated in this report. This is because taxes paid, graduate medical (teaching) expenses and the expenses associated with employed physicians are not reflected in these reports. So, many of the profit margins detailed in this report are significantly higher than the actual margins.

“It is also important to note that there continues to be wide variation in hospital margins throughout the state, which is a function of payer mix, services provided and local economic environment. While it’s easy to focus on the few hospitals with strong margins, it is troubling that despite Colorado’s Medicaid expansion, passage of the provider fee enterprise and strong economy, we still have many hospitals – most of which are rural – operating below levels required for sustainability. As hospitals focus on being part of the solution to health care affordability, we would be wise to avoid one-size fits all remedies that may put at risk those hospitals whose sustainability is already threatened by low margins.”

About Colorado Hospital Association

Colorado Hospital Association (CHA) is the leading voice of Colorado’s hospital and health system community. Representing more than 100 member hospitals and health systems throughout the state, CHA serves as a trusted, credible and reliable resource on health issues, hospital data and trends for its members, media, policymakers and the general public. Through CHA, Colorado’s hospitals and health systems work together in their shared commitment to improve health and health care in Colorado. Learn more at www.cha.com.

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