Three of six Denver-area health systems had strong financial years in 2024, according to a new report — but that’s a picture those hospitals say is skewed or false.

Much of that difference comes from which numbers are examined. The 2025 Colorado Health Market Review primarily focuses on total profits, which increased compared to recent years for most health systems in the state, said Allan Baumgarten, a health care consultant and the report’s author.

He argues that excluding income such as investments, government grants and philanthropy understates hospitals’ true resources.

“2024 was a great year for investments,” Baumgarten said.

But the Colorado Hospital Association and most of its member health systems emphasize the margins hospitals earn on patient care and the services that support it, such as the cafeteria or paid parking.

As of June, about 70% of hospitals in Colorado had an unsustainable operating margin, which the association defines as below 4%, Colorado Hospital Association spokesman Dan Mager said.

“Operating margin — the metric CHA reports on — is a much more accurate representation of hospital finances because it highlights the difference between the actual cost of providing patient care and the reimbursement hospitals receive for providing it,” he said in a statement.

Baumgarten’s report found total profits, before taxes, rose about 14% for Denver-area hospitals, to a combined $1.3 billion.

UCHealth had the largest profit, at about $1.2 billion, followed by HCA HealthOne, at $616.8 million, and CommonSpirit Health, at $222.2 million. HCA HealthOne is the only for-profit system in the state, meaning it pays taxes on its income.

UCHealth spokesman Dan Weaver said the system focuses on its operating margin, which is what it earns from patient care and other core functions. In the fiscal year that ended in June, UCHealth had about a 4% operating margin, he said.

“We’ve always said that investment income should not be included because it is volatile, and because those are unrealized gains that may disappear in the next year,” he said in an email.

2024 profits also may have been artificially inflated because the federal Centers for Medicare and Medicaid Services had to make a lump-sum payment to hospitals they undercompensated through a prescription drug program, Weaver said.

HCA HealthOne spokeswoman Stephanie Sullivan said she hadn’t seen the report, but analysts often mistakenly conflate the local hospitals with all of HCA, or include allocations from the corporate office to the Colorado hospitals that inflate their apparent financial performance.

Colorado facilities face more challenges than the company as a whole because the state has been aggressive in recouping Medicaid payments, she said.

“The uncertainty both statewide and federally contribute to the challenges hospitals are facing,” she said in a statement. “Coupled with rising costs that are outpacing much of the country, the health care industry across Colorado is experiencing difficult financial conditions.”

Three systems in the metro area had an unprofitable 2024, according to the report: Denver Health, which lost $52.9 million; AdventHealth, which lost $68.6 million; and Intermountain Health, which lost $138.3 million.

Intermountain Health said much of the loss reflects the on-paper depreciation of the old Lutheran Hospital in Wheat Ridge, which it replaced in late summer 2024. It also faced increased costs and a higher need for charity care.

“Despite the financial headwinds we’re experiencing, we remain committed to improving access to high-quality care at an affordable cost in the communities we serve,” Intermountain said in a statement.

Denver Health has struggled financially for years, though it came close to breaking even after receiving cash infusions from the state in 2023.

Most systems had a mix of profits and losses from their individual hospitals. HCA HealthOne was the exception, with all of its hospitals making money in 2024.

Except for Intermountain Health, all of the systems had less impressive profits — or bigger losses — when looking solely at their operating income. None of them moved from black to red, or vice versa, depending on which type of income a person analyzed.

Denver-area hospital systems’ profits and losses, 2024

AdventHealth: $68.6 million loss, -4.5% margin
CommonSpirit Health: $222.2 million profit, 9.2% margin
Denver Health: $52.9 million loss, -4.1% margin
HCA HealthOne: $616.8 million profit, 21.3% margin
Intermountain Health: $138.3 million loss, -6.5% margin
UCHealth: $1.2 billion profit, 17.9% margin

Source: 2025 Colorado Health Market Review

Despite some struggles, the Denver-area hospitals are relatively well-positioned to absorb an increase in uninsured patients, Baumgarten said. Most projections show an increase in the uninsured rate next year, unless Congress acts to extend higher subsidies for people who buy on the individual marketplace, with more losing coverage in 2027 as stricter Medicaid eligibility rules kick in.

“I think the challenges are significant,” he said. “I think the large systems are going to do fine.”

The report also included a small number of independent hospitals, including Boulder Community Health and National Jewish Health in the Denver area; San Luis Valley Health’s two hospitals; and seven facilities scattered from La Junta to Grand Junction.

All but two had at least small profit margins in 2024.

It left out the state’s smallest and most remote hospitals, however. Those are the facilities that will struggle most in the coming years, since they already have a hard time coming up with the capital to make improvements or attracting providers as they start seeing more uninsured patients, Baumgarten said.

In general, rural people are more likely to have coverage through Medicaid or the individual marketplace than urban customers, meaning the hospitals that treat them are more exposed to upcoming policy changes, he said.

“All of this adds up to more and more people coming in the door without an insurance card,” he said.

As rural hospitals face increasing financial troubles, more of them will likely entertain large health systems as suitors, Baumgarten said. When a small hospital becomes part of a chain, it suddenly has the bargaining power to get rates it previously couldn’t from insurance plans, he said, pointing to the example of Estes Park Health recently deciding to affiliate with UCHealth.

“You can say, ‘Which do you prefer, higher prices or the demise of a rural hospital?’” he said.

Estes Park Health will benefit from some efficiencies, such as the ability to buy supplies at UCHealth’s bulk rate, but it also will take on additional costs to provide employee benefits on par with the rest of the system, Weaver said. In recent years, Estes Park Health stopped offering obstetric services, closed its affiliated nursing home and eliminated other specialty care.

While taking on a hospital that loses money can appear altruistic, balance sheets tend to improve once the rural facility gets paid at rates the system typically collects, Baumgarten said. And the health system can benefit in other ways, such as having a broader patient population to draw on for research and increasing referrals to their urban campuses for patients of the newly acquired hospitals that need more complex care, he said.

“Sometimes it’s portrayed as rescuing a vulnerable hospital, but I would not say UC(Health) or CommonSpirit are doing this out of the goodness of their charitable hearts,” he said. “I would say they have solid business reasons.”

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