Denver Health could lose $85 million if American Health Care Act passes

When Robin Wittenstein steps into Denver Health Medical Center on Wednesday for her first day as the new CEO, she will be walking into a hospital facing a potential funding crisis.

Half of Denver Health’s patients are on Medicaid, meaning government dollars play a major role in the safety-net hospital’s budget. Already this year, Denver Health is trying to trim $48 million from its budget because of expected cuts to the hospital provider fee, a complicated mechanism to pay back hospitals for taking in poor and lowincome patients that has also become embroiled in state Capitol budget fights.

But the bigger threat, Denver Health leaders say, could come if Congress passes the American Health Care Act, the Republicanbacked plan to replace Obamacare and overhaul how Medicaid works. Peg Burnette, Denver Health’s chief financial officer, said the bill could mean a revenue hit in 2020 — when the bill’s more significant Medicaid provisions kick in — of between $50 million and $85 million.

“It would obviously throw us into the negative for operating income,” Burnette said.

If that happens, Burnette and Wittenstein said Denver Health will have to find places to cut back to keep from going broke. That could mean tinkering with employee benefits or scaling back new construction projects. Or it could mean slashing some services for patients.

“We’re going to have to look at all of the services we provide … and see how we preserve the core of our mission,” Wittenstein said.

As a safety-net hospital, Denver Health’s

core mission to is provide care for the city’s neediest patients, while also operating as one of the region’s premier trauma centers. Before the Affordable Care Act, the health law also known as Obamacare, nearly two-thirds of the patients who walked through Denver Health’s doors were uninsured or on Medicaid.

The Affordable Care Act, which expanded eligibility for Medicaid among other things, didn’t actually change that combined percentage. But it did shift its composition.

Prior to the law going into effect, 36 percent of Denver Health’s patients were on Medicaid and 27 percent were uninsured — meaning Denver Health was unlikely to receive any payment from the patient for the treatment provided. Since the ACA, though, 51 percent of Denver Health’s patients are on Medicaid, while 13 percent are uninsured, said Kelli Christensen, a hospital spokeswoman.

The shift has dramatically lowered the amount of “uncompensated care” Denver Health provides. And Denver Health has used the extra money to build new school-based health centers and a new primary care clinic, as well as add staff at community clinics.

Wittenstein said these moves are important because they allow Denver Health to treat patients more proactively, rather than just through costly emergency visits.

“It’s high quality and lower cost,” she said.

The American Health Care Act would phase out the Medicaid expansion while also capping how much money the federal government gives to states to pay for the remaining people still on Medicaid. The changes would save the federal government hundreds of billions of dollars over the next decade. The Colorado Health Institute has estimated that Colorado would receive $14 billion less in Medicaid funding by 2030 under the AHCA than under the current law.

If Colorado can’t find a way to replace that funding, Wittenstein and others worry that the cuts will ultimately filter down to hospitals, doctors and the patients they care for. No matter what, Wittenstein said the hospital will fight to make sure it has the resources to care for Denver’s neediest — even if it means she has to come into the job swinging.

“I feel very comfortable that we will have an opportunity to continue to tell the story of why the institution is important,” she said.