Colorado hospitals didn't pass billions in savings to consumers, state report finds

The Colorado Department of Health Care Policy and Financing found that expansions in health insurance coverage did not result in hospitals shifting less cost to commercial payers.

For the report, department officials analyzed data from the Colorado Health Institute, the Center for Improving Value in Health Care, the Kaiser Family Foundation and the Colorado Hospital Association.

The department concluded that increased Medicaid payments to hospitals, less bad debt, less charity care write-offs and lower uninsured rates didn't lead to hospitals to shift less cost to other payers. This came as hospital costs grew 58.7 percent from 2009-17, while adjusted discharges only grew 14.2 percent, according to the report.

"The impact of the Colorado hospital trends on consumers suggests that rising hospital costs and margins have contributed to rising insurance premiums," according to the report. "Actual hospital cost growth trends and actual hospital margins contribute to commercial cost shift and hospital overcompensation, more so than Medicaid or Medicare under-compensation."

The report identified "rapid cost growth" as a major factor contributing to the cost shift. The department argues hospitals could have passed a significant amount of savings, approximately $7.9 billion, to commercial consumers from 2009-17.

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