Denver Health operates at $32 million loss, 90 days cash on hand

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Denver Health operated at a $32 million loss in 2022 on a $1.4 billion budget, according to figures presented Thursday during the City Council’s 2024 budget hearings. What’s more, its cash on hand would only last 90 days, up from 75 days last year.

Denver Health treats the city’s medically indigent and often does not receive compensation for services. Not everyone who cannot afford to pay receives Medicare. Compounding the problem is a pandemic-related two-year freeze on Medicaid benefits has ended and some people are finding they no longer qualify for benefits. Those people still are coming to Denver Health for care, CEO Donna Lynne said.

Denver Health forecasts a $3 million loss for 2023. In 2023, uncompensated care costs exceeded $136 million. The city reimburses Denver Health for only a fraction of indigent cases. And while indigent cases continue to track up, payments from the city have remained flat. Since 2017, Denver Health has absorbed $136 million in uncompensated care.

“Denver Health cares for the needs of special populations in Denver such as the poor, uninsured, pregnant teens, persons addicted to alcohol and other substances, victims of violence, and the homeless - regardless of the ability to pay,” according to a presentation by Lynne. “The Lown Institute placed Denver Health on the honor roll for socially responsible U.S. hospitals, leading the nation in equity, value, and patient outcomes.”

More funding needed for mental health, substance abuse treatment

But socially responsible doesn’t pay the bills. Denver Health has capacity for 78 substance abuse and mental health inpatient beds, but currently only 50 are full. The problem is not a lack of demand; in fact, the opposite is true. But Denver Health can’t afford to staff more than 50 beds because they would lose money, Lynne said.

Denver Health has had difficulty keeping employees post-pandemic. Lynne said they lose employees to the university hospitals and places like Swedish Medical Center. At one point, Denver Health, which employs 8,100 people, had a 77% vacancy rate for nurses in the jails. Lynne said most of the hospital’s employees stay because they are dedicated to the mission, “but the mission doesn’t help at the grocery store.”

Council members expressed sympathy for Denver Health’s plight. While city officials can’t plug a $100 million funding gap, Mayor Mike Johnston said they can look in the budget for additional funding.

Council member Paul Kashmann reminded his colleagues that the mayor referred to the budget as “a moral document,” adding, “Don’t tell me what your values are, show me your budget and I’ll tell you what your values are.”