Colorado governor criticizes hospitals for ‘overcharging’ patients

Democratic Gov. Jared Polis faulted hospitals for high costs while making record profits. The Colorado Hospital Association says many hospitals have negative operating margins.

Colorado Gov. Jared Polis said it’s time to hold hospitals accountable for the high costs they are passing onto patients.

Colorado’s hospitals say many are struggling to stay afloat.

In his annual State of the State Address Tuesday, the Democratic governor said hospitals are charging too much even as they sit on large reserves.

“Sadly, we are among the top 10 states for hospital cost, price and profit. Let’s change that,” Polis said in his address. (Here’s a transcript and video from Colorado Public Radio.)

“Some large hospital systems are making record profits, paying zero taxes, and sitting on enormous reserves while overcharging customers,” Polis said. “Meanwhile, they are consolidating providers, which drives up costs and leaves fewer options for Coloradans.

“It’s time that we hold them accountable. First and foremost, that means stop overcharging patients,” he added.

He also called on nonprofit hospitals to work with their communities to provide mental health and maternity care services, and to support other efforts to address the social determinants of health, including food and housing insecurity.

Colorado’s hospitals say their financial picture is much more disturbing than the governor’s assessment.

Days before the governor’s address, the Colorado Hospital Association released an annual report outlining the financial struggles of the state’s healthcare providers.

Many are operating with negative margins, with expenses surpassing revenues, the association says. More than half of Colorado’s hospitals are in “unsustainable financial situations,” the report states.

Through August 2022, Colorado hospitals have lost a cumulative $1.8 billion since the beginning of the COVID-19 pandemic, according to the report.

Like hospitals around the country, Colorado hospitals are struggling with higher labor costs, which are 26% higher than pre-pandemic levels, the association says. Due largely to increased expenses for staffing and medical supplies, the state’s hospitals have seen a $2 billion increase in total expenses.

While Colorado hospitals are seeing fewer patients, they are seeing patients with more serious illness, which is also a trend being seen around the country. Nationwide, hospital leaders said they are dealing with sicker patients requiring longer hospital stays. Healthcare leaders say many patients have delayed seeking healthcare in the pandemic, and now they are showing up in hospitals with more advanced illness.

In Colorado, the length of stay for patients rose 14% in 2022, the association said. Meanwhile, inpatient and outpatient surgeries remain lower than pre-pandemic levels.

In a statement accompanying the group’s report, Jeff Tieman, president and CEO of the Colorado Hospital Association, said the state’s policymakers need to be aware of the serious financial difficulties hospitals are facing.

“Almost three years into the pandemic, hospitals continue to meet their missions and provide life-saving, accessible care for patients and communities,” Tieman said in the statement. “At the same time, they are managing staff constraints, financial pressures, and growing regulatory burden.”

Colorado’s governor has been focused on hospitals. Last year, he signed a law designed to protect patients from surprise medical bills and ensure Colorado hospitals were complying with federal price transparency law.

“This is a great step in improving the healthcare system to ensure affordable, high-quality care for all Coloradans and saving people money,” Polis said last August.