Hospital executives this week helped block approval of a Colorado agency’s draft report that claimed hospitals across the state mismanaged their finances and reaped skyrocketing revenues while shifting more of their costs to insurers.
Executives of four hospitals, as well as a Colorado Hospital Association official, voted Tuesday not to accept the findings of a groundbreaking draft report that cast hospital systems in an unflattering light and raised significant concerns about many hospitals’ financial practices.
The move came during a meeting of the Colorado Healthcare Affordability and Sustainability Enterprise board, which oversees the state’s hospital provider fee. A Kaiser Permanente representative abstained, citing a recent conflict of interest, and another board member was absent. Without the support of a majority of the 13-member board, the draft report won’t be finalized or forwarded by the board to state legislators.
The draft report, which was released in January, claimed that hospitals failed to use the state’s provider fee — as well as Medicaid’s expansion under the Affordable Care Act — to charge insurers less. Instead, hospitals padded their bottom lines by charging insurers more, likely contributing to rising insurance rates across the state, the report said.
Across the state, hospital costs increased 60 percent from 2009 through 2017, from $9.1 billion to $14.5 billion, the report said.
But their incomes grew at an even faster pace — particularly from increased insurance payments. In that time, hospitals’ annual margins rose threefold, from $417 million to $1.2 billion.
In all, the report estimated that hospitals across the state could have saved insurers — and patients and policyholders — about $11.5 billion from 2010 to 2017 by operating in a more financially prudent way.
The Colorado Hospital Association claimed the findings were “biased.”
“All 11 findings are negatively directed toward hospitals,” said Chris Tholen, the association’s executive vice president. “Conclusions were forced to get a result that was predetermined.”
Executives with UCHealth, Centura Health, Swedish Medical Center and Pikes Peak Regional Hospital joined the association in refusing to accept the report’s findings Tuesday.
Still, health care experts say the report is credible. The Colorado Health Institute, for example, recently found that it “builds a convincing case” that hospitals’ actions caused insurance costs to rise.
An executive for Denver Health — considered the safety net hospital for the Denver metro area — was the only hospital representative to support the report’s findings Tuesday. She was joined by representatives from Sunrise Community Health, the Colorado Center on Law and Policy, Jaywalk and two representatives with the Colorado Department of Health Care Policy and Financing.
Marc Williams, a Colorado Department of Health Care Policy and Financing spokesman, said the agency’s leaders were “disappointed” but “we stand by the report.” He said the department may issue a finalized version of the report itself.
“It was not biased as the hospitals alleged, and, in fact, the data came from the hospitals,” Williams said. “So we’ll keep working on it — and working with them — to try to help all health care consumers realize lower prices.”