Hospital systems in Colorado reported an improved financial year in 2024 after rising costs made for thinner margins the previous year.
Of the six hospital systems in the Denver area, only CommonSpirit Health, which owns the Catholic hospitals that formerly were part of Centura Health, reported it lost money on its operations at the national level. Operations include patient care and supportive services, such as parking or cafeteria sales, but not profits on investments.
CommonSpirit landed in the red by $581 million, or about 1.5%, in the fiscal year that ended in June. In the six months from July to December, it lost an additional $196 million on operations, though investments pulled it into the black.
The system’s financial performance was worse in the second half of 2024 than during the same period in the previous year. A spokeswoman declined to discuss CommonSpirit’s finances.
The other systems in the area, except for Denver Health, which said it broke even, posted profits at the national level. AdventHealth, HCA Healthcare and Intermountain Health didn’t release state-level numbers, but said their hospitals in Colorado and surrounding states didn’t perform as well as their nationwide profit margins would suggest.
2023 was a “pretty dire” financial year, and while 2024 improved slightly, most hospitals aren’t yet in a sustainable position, said Tom Rennell, senior vice president of financial policy and data analytics for the Colorado Hospital Association.
The average expenses to operate a hospital in Colorado rose about 7.4% last year, continuing a pattern of costs outpacing revenues, he said.
“At those levels, it’s incredibly difficult for (insurance) reimbursement to keep up,” he said.
Nationwide, hospitals averaged a 4.9% profit margin in 2024, according to Becker’s Hospital Review. Close to two in five hospitals lost money, though.
‘The outlook remains challenging’
HCA Healthcare, which owns the HealthOne hospitals, had the highest profit margin on operations of the systems that operate in Denver, coming out ahead by about 12.1% nationwide. HCA ended 2024 with a $5.76 billion profit, up from $5.24 billion in 2023.
Stephanie Sullivan, spokeswoman for HealthOne, said the Colorado hospitals lag behind the rest of HCA financially, though she declined to say by how much.
The state was less successful than many in keeping Medicaid recipients covered at the end of the COVID-19 public health emergency, has relatively high costs and is more aggressive than most in auditing Medicaid payments, she said.
“Although the legislature is working to address some of these issues, the outlook remains challenging,” Sullivan said.
AdventHealth wasn’t far behind HCA, with a roughly 11.6% profit margin on operations — close to twice its margin in 2023. It earned about $2.3 billion on its operations and about $438 million from investments and other sources of income.
The region that includes Colorado didn’t meet its goals in 2024, though it still has a “solid financial foundation,” AdventHealth spokeswoman Rachel Robinson said. She attributed the unspecified shortfall to the process of separating from CommonSpirit Health when Centura Health broke up in 2023.
UCHealth runs on a July-to-June fiscal year, rather than calendar years, so its numbers don’t compare exactly to HCA’s and AdventHealth’s. Its financial filings showed it earned about $514.1 million on operations, for about a 6.3% profit margin in the year that ended in June. It received another $691.6 million from investments. Both sources of income were up compared to the previous fiscal year.
UCHealth had a slightly lower margin for the six months from July to December, earning about 4.8% on operations, which was essentially unchanged from its profit margin for the second half of 2023.
A statement from the system said labor and supply costs stabilized in 2024, but uncompensated care continues to increase because people previously covered by Medicaid haven’t found new insurance.
“Ongoing federal Medicaid uncertainty poses additional financial hurdles for this year and next year,” UCHealth’s statement said.
Intermountain Healthcare had a $370 million profit on its operations, or about a 2.2% margin. It also reported almost $1.4 billion in investment income.
The region that includes Colorado, Wyoming and Montana lost money, however, spending about $156 million more than it took in on operations, the system said. Still, it was an improvement over 2023, when it lost about $227 million.
“Although Intermountain Health generated a positive operating margin, the Peaks region is still challenged by costs of providing care remaining higher than the payments received for care,” the system said in a statement.
Denver Health benefits from new tax
Denver Health roughly broke even on operations last year, and earned about $6 million in profit with investments included — a less than 1% margin for a system with a $1.5 billion budget. It succeeded in reducing how much it spent on short-term staff in 2024, but an increase in uncompensated care ate up most of those savings, controller Justin Helsper said.
The system has started receiving funds from a sales tax that Denver voters approved last fall, which should bring in about $65 million this year, chief financial officer April Audain said. The money will partially offset the uncompensated care the safety-net hospital provides and allow it to expand services such as mental health and addiction treatment, she said.
The sales tax will offer some increased financial stability, though not enough to offset Denver Health’s losses if the federal government made significant cuts to Medicaid, Audain said. Congressional Republicans have called for $880 billion in cuts to the insurance program over 10 years, though they haven’t released a plan.
Hospitals face financial challenges this year, including possible increased costs due to tariffs and an increase in uncompensated care if the economy takes a downturn, Rennell said. But Medicaid cuts are the most worrisome possibility, because hospitals would no longer get paid for emergency care they have to provide to people who lose their coverage, he said.
“That is the biggest looming threat,” Audain said.
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