FOR IMMEDIATE RELEASE 
 
Media contact: 
Hospital Association 
(303) 913-9808 
Julie.Lonborg@cha.com 
 

 

Colorado Hospital Association Statement on Cost Shift Report Release 
 
 
GREENWOOD VILLAGE, COLO. – Jan. 23, 2020 – Colorado hospitals recognize that the cost of health care for
many Coloradans is unsustainably high and are actively working on solutions for improving affordability.

Cost shift exists because of chronic underfunding of state and federal public health care programs – namely
Medicare and Medicaid. Cost shift in Colorado continues to be an issue, largely due to these factors:
•

Government payers, that pay less than what it costs to provide care (Medicare 70%, Medicaid
77%) now cover more than 60% of Coloradans who receive hospital care. The aging of
Colorado’s population has driven significant growth in Medicare, which now under
reimburses hospitals by 30 cents for every dollar spent on care.

•

Particularly over the past decade, uncertainty and instability in the market and in state and
federal public policy is driving hospitals to be fiscally conservative in order to ensure access to
high quality care in the future.

•

It’s true that many Colorado hospitals have improved profit margins in the past year. This is partially a
function of Colorado’s strong economy and unprecedented population growth. Much of the
improvement referenced in today’s report came as Colorado’s vulnerable hospitals improved their
overall financial condition and are operating closer to the national sustainability threshold of 4%.
Margin improvement is also due to hospitals working to control their costs as they work to address
affordability and operate during a time of great uncertainty. This is critical in an environment where
hospitals are seeking to assure access to quality health care. There also continues to be wide variation
in margins throughout the state, which is a function of payer mix, services provided and local
economic environment.

•

It’s also important to remember that the profitability numbers being cited are highly inflated as they
do not take into account many expenses such as taxes, hospital-owned physician practices, and
training the next generation of providers.

This report is distracting from the unintended, yet predicted, consequences of the state’s own policies. For
example, the state’s reinsurance program – touted as saving consumers 20% on average – has also caused
prices to increase for some consumers, and now the state is attempting to unlawfully force hospitals to pay
$40 million dollars one year early. This has the potential to endanger the care hospitals provide in some
communities across the state.
Lastly, the data in this report does not reflect the work of hospitals to reduce the cost of care for Coloradans
since Governor Polis took office, including funding the state’s reinsurance program and providing relief to
Colorado consumers through 2019’s legislation eliminating surprise billing, among other efforts. The most
recent report from the Commonwealth Fund shows Colorado ranking 9th best in the country for health
insurance premiums.

 Hospitals have been good partners in addressing costs with the Polis administration and are disappointed that
the state doesn’t acknowledge its role in driving cost shift. The under-reimbursement by government payers
has driven cost shift by more than $1 billion increase since 2010.
Colorado needs solutions that improve affordability of care; these solutions should be approached carefully –
CHA and its member hospitals are working with Colorado’s legislators to create such solutions.
 
About Colorado Hospital Association
Colorado Hospital Association (CHA) is the leading voice of Colorado’s hospital and health system community.
Representing more than 100 member hospitals and health systems throughout the state, CHA serves as a trusted,
credible and reliable resource on health issues, hospital data and trends for its members, media, policymakers and
the general public. Through CHA, Colorado’s hospitals and health systems work together in their shared
commitment to improve health and health care in Colorado.
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