Kaiser Permanente donates up to $10 million to stabilize Denver Health

Denver Health will receive up to $10 million from Kaiser Permanente to help financially stabilize the city’s safety-net hospital, and a campaign is on to get other Colorado health systems to match some of that donation.

The initial grant, announced Tuesday, includes $5 million that Denver Health can use any way it deems necessary. The other $5 million from the managed care network is available as matching funds, if the hospital can raise that much from other donors.

Denver Health lost $32 million in 2022, though it’s expected to break even this year, CEO Donna Lynne said. A hospital needs about a 4% profit margin to cover expenses like improving its buildings, she said.

There’s no deadline to raise the money, though Lynne said she hopes the hospital can claim Kaiser’s match this year.

Mike Ramseier, president of Kaiser Permanente in Colorado, said other health systems also would do well to help shore up Denver Health, which sees a disproportionate share of uninsured patients.

There’s no affiliation between Denver Health and Kaiser Permanente, though Kaiser members can use the hospital’s emergency services.

“A strong safety net benefits our entire community, and Denver Health needs our help now,” he said.

Lynne, who took over as CEO in the fall, said the hospital and its clinics provided about $120 million in uncompensated care in 2022, which was roughly double the amount it didn’t get paid for two years earlier. That’s due to a combination of factors, including sicker patients and the rising cost of providing care, she said.

“The community as a whole relies on us,” she said. “We need to be sustainable.”

In February, the state legislature appropriated about $5 million to help Denver Health cover immediate expenses. The city of Denver provides about $30 million a year toward the hospital’s budget.

Lynne said Denver Health has been able to reduce some of its costs by limiting the number of traveling nurses it hires as the hospital has been able to better retain staff. Denver Health also recently had to stop taking new uninsured patients from outside the city for non-emergency care, she said.

“We take care of patients that a lot of other hospitals don’t want to see,” she said. “My hope is to start working with those other health care organizations to get the match.”

Kim Bimestefer, executive director of the Colorado Department of Health Care Policy and Financing, said at a news conference announcing the donation that a recently passed bill on hospitals’ community benefit spending made it clear that donating to safety-net providers like Denver Health is allowed.

Nonprofit hospitals have to demonstrate that they offer community benefits, such as free or discounted care, or programs to meet people’s other basic needs.

“Reasonable investments by tax-exempt hospitals into Denver Health will benefit our most vulnerable and the entire community,” she said.

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