Financial Challenges are Growing for Colorado Hospitals

What You Need to Know:
The financial and operational impacts for hospitals over the past four years have been staggering and continue to build. Facing an intense combination of growing expenses, changing patient utilization, new state and federal regulatory requirements, and increasing administrative and reimbursement challenges from health insurance companies, hospitals are facing strong financial headwinds.  

Hospitals need to earn at least 4% operating margin after accounting for expenses to remain sustainable and continue providing care for their community for years to come. In Colorado, hospital margins have fallen significantly since the start of the pandemic, with the average statewide margin now at about 3%.

What hospitals are seeing:

  • Hospitals need to earn at least 4% operating margin after accounting for expenses to remain sustainable and continue providing care for their community for years to come.
  • More than 70% of Colorado hospitals operate with unsustainable margins. That means:

Hospital Closures

Discharge Backlogs

Reduced Access to Care

Increased Costs

Reduced Services Lines

Further Distance to Care

  • Expenses for Colorado hospitals continue to rise at near double-digits, surpassing national and local inflation rates.
    • Labor expenses have increased 30%+ since 2019.
    • Supply expenses have increased 35% since 2019.
  • Patient utilization of hospital services has changed significantly, with higher lengths of stay and fewer discharges. That could mean:
    • Patients are sicker.
    • Options for discharging patients to other levels of care (like skilled nursing or rehab facilities) are fewer/harder to find.

Coloradans deserve access to affordable, quality care, close to home. Colorado hospitals are committed to serving their communities, but they are facing significant financial burdens. As policymakers consider new laws and regulations, they must first consider the impacts of the hundreds of new laws enacted in recent years and the financial health of Colorado’s hospitals.

CHA Contact: Joshua Ewing, CHA vice president of government affairs | [email protected]

Additional Resources

Colorado Hospital Industry Update - Q3 2023

3rd Quarter 2023 Financial and Utilization Trends

Colorado Hospital Industry Update - Q2 2023

2nd Quarter 2023 Financial and Utilization Trends

Colorado Hospital Industry Update - Q1 2023

1st Quarter 2023 Financial and Utilization Trends

Interested in learning more? Visit CHA’s pages on hospital financials to read more about how hospitals get paid and what hospitals are doing to make care more affordable.