During his State of the State address on Tuesday, Gov. Jared Polis took aim squarely at the state’s largest hospitals, stating it’s time to hold them accountable for record profits, paying zero taxes and “sitting on enormous reserves while overcharging customers.”

Polis stated: “Coloradans still pay some of the highest costs for healthcare, particularly hospital care. Sadly, we are among the top 10 states for hospital cost, price and profit. Let’s change that.”

On Wednesday, the Colorado Department of Health Care Policy and Financing added fuel to that fire, releasing reports covering the fiscal years 2014-2021 that it claimed showed those record profits.

The hospitals’ trade association and UCHealth fired back, claiming the reports use old data that doesn’t reflect the current environment.

Hospitals represent the largest component of the health care dollar, a statement from HCPF said, “so advances in hospital affordability is a top priority for the Polis-Primavera administration…Overall, the reports illuminate Colorado hospital profits, reserves (days cash on hand), the impact of the $1.2 billion in federal stimulus received in 2020, the gap between rural, independent, and mega-system financials and more.”

But the HCPF claims don’t reflect current realities, particularly the two past COVID-19 years and amidst record inflation, according to the Colorado Hospital Association and UCHealth.

CHA’s response called the HCPF reports “an outdated narrative.” A 2022 Colorado Hospital Industry Update shows Colorado’s hospitals “are facing a serious financial toll, with no further relief in sight. Hospitals have incurred unprecedented losses relative to pre-pandemic level – approximately $1.8 billion through August 2022. In addition, a majority of Colorado hospitals operate with unsustainable financial situations,” CHA said in a statement Wednesday.

Hospitals and health systems recognized the concern over health care affordability, the CHA statement said, and are working on it. “Those efforts are beginning to show progress, as data demonstrate that Coloradans spend significantly less on health care that others in the United States.”

But “by using outdated data, HCPF does not present a comprehensive picture and has very few substantive recommendations to improve access, affordability or quality of health care,” said Jeff Tieman, CHA president and CEO. “Instead, they recommend disrupting community relationships with hospitals and increasing hospital reporting burdens – neither of which improves health care. CHA invites HCPF to partner with us to make real progress on key priorities like supporting our health care workforce, providing sustainable Medicaid reimbursement, and improving affordability by cutting regulatory red tape.”

UCHealth also responded.

Dan Weaver, vice president of communications for UCHealth, said in a statement that HCPF’s information is misleading.

“By misrepresenting hospitals’ financial environment and investments in Colorado’s health care workforce, research and community benefits, HCPF threatens medical care, quality and access for patients in the state,” the UCHealth statement said. 

According to UCHealth, their hospitals’ financial situation changed significantly since 2021, and operating margins have dropped considerably because of inflation and wage increases.

“Making financial or policy decisions based on HCPF’s dated and misleading information could be disastrous for our state and result in reduced access for hospitals, fewer clinical trials, reduced support for education to train future nurses and physicians, and even job losses,” the UCHealth statement said. 

UCHealth disputed the claims in the HCPF report, stating that their operating margin in 2021 was 9.9%. In 2022, it was 5.2% and they project an operating margin of 3.3% for 2023.

“As HCPF has done in past reports, it uses old data, picks date ranges when investments increased, and uses methodologies that do not follow Generally Accepted Accounting Principles (GAAP),” UCHealth’s statement said. 

UCHealth noted a CHA report that said Colorado hospitals’ expenses are 21% higher than pre-pandemic levels, with staffing expenses up more than 26%

“Inflation has also increased the costs of the supplies, services and medications hospitals need to care for patients, resulting in significantly lower margins. The information that our policy makers act on must be accurate and current.”