Denver Health bailout: Sales tax increase likely headed to voters

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The City and County of Denver will consider increasing the sales and use tax to bail out Denver Health. The full council, which still needs to vote on the matter, would put the matter to voters in November.

The Safety, Housing, Education and Homelessness Committee agreed Monday to advance a plan to increase the sales and use tax by 0.34%, if approved by voters. The tax would raise about $70 million annually and help bridge the gap created by uncompensated care, according to bill sponsors Jamie Torres and Serena Gonzales-Guttierez.

The city sales and use tax currently is 4.81%. The increase would raise the amount paid in tax by 3.4% on a $10 purchase, council president Jamie Torres said.

Denver Health expects to provide $124 million in uncompensated care in 2025, according to Denver Health CEO Donna Lynne. In 2023, the loss was $103 million, she said. The city the past few years has made up about $30 million of that annually in payments to Denver Health, she explained. As a safety net hospital, Denver Health does not turn anyone away, she said. People experiencing homeless, migrants and others receive the same care anyone else would receive, Lynne said, regardless of their ability to pay.

Expenses skyrocket

Meantime, Denver Health has seen expenses rise 550% since 1996, Lynne said. About half of its patients, or 49%, are on Medicaid, Lynne said, and another 9% are uninsured.

“There is not a world I would live in that would see Denver Health not survive,” council member Shontel Lewis said in supporting the tax.

Council member Amanda Sawyer questioned the need for a 2% administrative fee that the city could retain from the collected tax. That amounts to $1.4 million per year, Sawyer said, which seems unnecessary.

Lynne said the hospital already has eliminated overtime and reduced employee benefits. Capital projects also have been deferred, she said, and travel budgets have been slashed.

Community panel offers ideas

Lynne said the hospital convened a community panel to produce recommendations for solving the uncompensated care shortfall. The panel recommended a dedicated funding stream, such as the sales tax increase, as well as an educational campaign so better explain to the community what the hospital does.

In addition to its main campus on Bannock street, Denver Health provides clinics in Denver Public Schools. Lynne said the sales tax money would help them prioritize preventive services, emergency and trauma care and mental health services. She said the hospital currently has 78 inpatient substance abuse and mental health beds but does not have the money to fill them.

Denver Police Sgt. Antonio Lopez Jr. told the council during a public hearing Monday that Denver Health saved his life after he was shot six times on the job. “Denver Health is a premier medical facility, and if ever needed they will save your life,” Lopez said. “If you make it to (Denver Health) with a pulse you will survive."