Good Question: Which of the state’s rural hospitals are most threatened by proposed $500M budget cuts?

Author: John Tomasic - April 14, 2017 - Updated: April 14, 2017

Yuma, a farming hamlet of 3,200 near the Nebraska border in Colorado. (AP Photo/Brennan Linsley)
Yuma, a farming hamlet of 3,200 near the Nebraska border in Colorado. (AP Photo/Brennan Linsley)

This year’s Colorado budget so far includes what amounts to a $500 million cut to state hospital funding. It’s a frightening sum that threatens to deeply slash rural health services and to shut down some rural hospitals altogether.

The proposed cuts will be a centerpiece of debate at the Capitol in the remaining three-and-a-half weeks of the legislative session.

On Friday, House Speaker Crisanta Duran, a Denver Democrat, visited one of the top at-risk facilities in the state, Lincoln Community Hospital, located about 90 minutes southeast of the Capitol.

What are the other hospitals most at risk?

It’s a complicated question, explained the Colorado Hospital Association’s Julie Lonborg. She was speaking from the road, driving home from the Lincoln Community hospital tour.

Much will depend on a hospital’s operating budget, the kinds of services it provides, the patients it treats and the kinds of insurance those patients carry — and so on.

The budget cuts are aimed at hospitals that treat low-income Coloradans on Medicaid health coverage plans. Those hospitals depend on the state hospital provider fee, which is collected from all of the hospitals across the state, then matched by the federal government, and then distributed back to hospitals, in part directly — according to a formula tilted toward hospitals that serve low-income patients — and in part indirectly through distributions to Medicaid health insurance policies.

“We can say formally that there are eight to twelve hospitals at risk financially. Some of our member hospitals don’t want us putting it out there that they’re on the list. Others do,” Lonborg said.

“These are hospitals at-risk for cutting back services, shutting down other services, there will be certain kinds of patients they won’t be able to serve anymore, some are dropping planned upgrades or remodels — and some of them are at risk of closing.”

The names of some of the rural hospitals on that list have been widely reported, they include Lincoln Community Hospital, Delta County Memorial Hospital, Conejos County Hospital and the San Luis Valley Regional Medical Center.

Non-rural hospitals that serve a high percentage of Medicaid patients are also bracing for major changes. They include Denver Health Medical Center, the University of Colorado Hospital, Children’s Hospital and Centura Health’s Longmont United Hospital.

By most accounts, the Conejos County and San Luis Valley hospitals are in real danger of shuttering.

Lonborg added that closings won’t happen overnight.

“Not on Day One — you know, the Legislature wraps and then the hospital closes their doors,” she said. “It will take a year or so, and then any reserves would be gone.”

It has been difficult during the legislative session to drill down and determine which hospitals face the greatest threat.

The state Department of Health Care Policy and Financing refers to a memo drafted by the Legislative Joint Budget Committee. The memo includes an appendix of hospitals and the dollar amounts they would lose under the proposed cuts.

But the figures don’t often match with what you hear referred to at town hall meetings or in the lobbies of the Capitol. Indeed the figures can vary wildly.

Is Denver Health facing a $4 million budget cut or a $17.4 million cut?

Definitely not the latter, Lonborg suggested. She described the Budget committee memo as “fairly rough” and cautioned against citing any of its figures for print.

But if the JBC numbers mean anything at all, The Statesman can report that, in the event proposed state budget cuts remain unchanged, resources might be severely depleted for health services at hospitals in Garfield, Logan, Moffat, Pueblo and Routt counties.

Lonborg noted that a statistic important to include in discussion on the hospital cuts is that they will be a rural and an urban problem. She said that in Colorado, 28 percent of rural patients and 21 percent of urban patients are on Medicaid.

John Tomasic

John Tomasic

John Tomasic is a senior political reporter for The Colorado Statesman covering the Colorado Legislature.

One comment

  • Bette McFarren

    April 17, 2017 at 10:32 am

    Thanks, Larry. I am pretty sure Arkansas Valley Regional Medical Center is at risk. They are cutting the nursing home facility out and the city of La Junta is trying to figure out a way of financing a nursing home.

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