State calling on large Colorado hospitals to dip into reserve funds instead of raising patient costs

COLORADO (KRDO) -- Hospital transparency reports from the Colorado Department of Health Care Policy & Financing show that despite the pandemic, large hospitals and hospital systems saw steady growth in total profit.

The Colorado Department of Health Care Policy & Financing says hospitals store up their reserves as "days cash on hand," which means the total days a hospital could run with their reserve money if revenue suddenly stopped flowing in.

Marc Williams, Public Information Officer for the department, says the state of hospital reserves is very different for large hospitals than for smaller, rural hospitals.

Throughout the pandemic, they found that large system-affiliated hospitals like the UCHealth system benefited greatly from federal stimulus money.

Williams said because of the federal funds, they didn't have to tap into their reserves, so those reserves continued to grow.

The department is recommending that hospitals dip into their reserves instead of letting them continue to grow so that the hospitals can provide relief to patients.

UCHealth says the information shared by the Colorado Department of Health Care Policy & Financing (HCPF) is misleading and does not accurately represent hospitals’ financial environment and investments in Colorado’s health care workforce, research and community benefits, HCPF threatens medical care, quality and access for patients in the state.

UCHealth released a statement saying that hospitals' financial situation has changed significantly since 2021, and operating margins have dropped considerably because of inflation and wage increases. The statement went on to say that making financial or policy decisions based on HCPF’s dated and misleading information could be disastrous for our state and result in reduced access to hospitals, fewer clinical trials, reduced support for education to train future nurses and physicians, and even job losses.

UCHealth says the HCPF  uses old data, picks date ranges when investments increased, and uses methodologies that do not follow Generally Accepted Accounting Principles.