Denver-area hospitals made nearly $1.3 billion in profits in 2024

Denver-area hospitals made nearly $1.3 billion in profits in 2024, but the large majority of that haul did not come from treating patients, according to a new report released last week.

The 28 hospitals in the seven-county Denver metro area made roughly $53 million in profit in 2024 from patient care. But other sources of income — which, depending on the hospital, may include investments, tax dollars, donations, and income from a federal prescription drug program — brought in more than $1.5 billion for the hospitals, helping offset additional expenses and delivering the heftier profit number.

The report is by Minnesota-based health care analyst Allan Baumgarten, who has been studying the Colorado hospital and health insurance markets for nearly 30 years. It was not released generally to the public — though Baumgarten sells the report on his website. Baumgarten compiled the data using documents known as Medicare Cost Reports that hospitals submit to the federal government.

Overall, the analysis shows the diversity of financial circumstances for Colorado hospitals, from a few large, highly profitable systems to smaller and independent hospitals just hanging on.

For instance, Baumgarten also looked at the finances of 29 hospitals outside the Denver metro area. Those hospitals, collectively, earned about $50 million in profit from patient care in 2024. But they saw much lower additional income — around $589 million — and their overall profits came out to about $690 million.

Hospitals in the Denver metro area provide significantly more care than those outside the region. Denver-area hospitals brought in about $13.9 billion in revenue from treating patients in 2024, compared with about $7.6 billion for the hospitals Baumgarten analyzed outside the metro area.

The report also shows the increasingly dominant position that UCHealth holds in Colorado’s hospital market. The system brought in more than $6.7 billion in revenue from treating patients statewide in 2024 — more than double that of its closest competitor.

UCHealth turned a roughly $138 million profit treating patients, according to the report, and had total profits statewide of about $1.2 billion. The system’s $689 million in profits for just its Denver-area hospitals made up more than half of total metro-area hospital profits, Baumgarten found.

In the Denver metro area, the AdventHealth and Intermountain Health systems lost money in 2024 — $68 million and $155 million, respectively. Denver Health also lost money, about $53 million, according to Baumgarten.

Hospitals owned by HCA HealthONE, such as Sky Ridge and Presbyterian St. Luke’s, made the second-most in profits among Denver-area hospitals: about $617 million. But, as a for-profit, HCA HealthONE must pay taxes on that, while other major systems in Colorado, including UCHealth, are nonprofit.

Presbyterian/St. Luke’s Medical Center, a hospital in the HCA HealthONE system in Denver. Photographed on Oct. 22, 2019. (John Ingold, The Colorado Sun)

Children’s Hospital Colorado’s hospitals in Aurora and Colorado Springs collectively lost more than $120 million treating patients in 2024. But other sources of revenue — Children’s receives robust philanthropic support among other sources — pushed total profits above $90 million.

Outside the Denver metro area, Banner Health was the only major system to lose money in 2024, about $20 million. Banner’s McKee Medical Center, which recently closed its emergency room as part of a transition to becoming a specialty hospital, led the way with $17 million in losses.

Baumgarten said that transition is instructive because it shows how many hospitals are trying to transform in order to make more money.

“The successful hospitals are the ones that are making the shift to more outpatient facilities, which have a lower cost structure and make them more profit,” he said. “That’s the challenge to small, rural hospitals that are not part of a larger system because it requires capital” to build the outpatient facilities.

Baumgarten’s report does not include most of Colorado’s small rural hospitals in its analysis. But of the nine rural and independent or locally controlled hospitals he did include, only one — San Luis Valley Health’s tiny Conejos County Hospital in La Jara — eked out a profit from serving patients.

That is in keeping with reporting by the Colorado Hospital Association, which found that 69% of Colorado hospitals —  and almost all of the state’s rural hospitals — have what the association considers to be an unsustainable profit margin from patient care. For the hospital association, that means the margin falls below 4%.

At the same time, Baumgarten found that total profits for Denver-area hospitals and for hospitals outside the metro area improved in 2024. Denver metro hospitals made a little over $1.1 billion in 2023, and hospitals outside the metro area made $529 million that year. Profits were even lower in 2022, as hospitals recovered from the COVID pandemic and the loss of one-time federal money.

But hospital profits still lag behind 2018, when Denver-area hospitals recorded a record $2.1 billion in profits.

Type of Story: News

Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.