Jun 5, 2024 - News

Denver Health hopes tax increase can help its finances

Illustration of a hand in a doctor's coat stopping a dollar EKG line

Illustration: Sarah Grillo/Axios

Denver Health's ability to provide optimal care may rest on the public's appetite for a tax increase.

Why it matters: The money could prevent cutbacks for Denver Health, which is struggling to cover costs fueled by a significant rise in patients, and usher the largest change to funding in its 164-year history.

Driving the news: The hospital wants voters to approve a .34% sales tax increase which would raise roughly $70 million annually to cover operational costs for emergency, mental, pediatric, primary and other health care.

  • That amounts to 3.4 cents on a $10 purchase, per city documents.

What they're saying: Denver Health CEO Donna Lynne told council members on Wednesday that the measure's failure would be "catastrophic" and lead to service cuts.

State of play: Without additional funding, the hospital may consider rolling back hours and closing some of its clinics, many which reside in historically underserved areas. It's already paused hiring for positions, hospital spokesperson April Valdez tells us.

  • Lynne said most of its care is provided at 10 satellite clinics, in addition to its main campus on Bannock Street.

Context: Denver Health's status as a safety net hospital — primarily serving people without insurance or on Medicaid — means it provides treatment even when people can't afford it.

  • The system provided care for roughly 280,000 patients through 1.3 million visits last year, per the hospital. It's seen a 550% increase in patient visits since 1996, a year before it became independent from the city.

Friction point: Denver Councilmember Kevin Flynn said he worries about "burdening" residents and visitors with additional taxes.

  • Three tax increases may be decided this fall that, if successful, Flynn said would raise the city's sales and use tax above 9.5% (it's currently 8.81%).

By the numbers: Last year, the hospital reported spending $102.6 million in uncompensated care — more than twice what it spent five years ago at$42.1 million, city documents show.

  • Denver's government additionally gives the hospital $30.7 million annually to help cover costs.

The bottom line: The money generated by the sales tax would only be a portion of Denver Health's roughly $1.4 billion annual operational budget, but officials say it would go a long way toward helping it stay afloat.

What's next: The full council must decide whether to put the tax hike to voters this fall.

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