Kaiser Permanente pledges up to $10M to struggling Colorado safety net system

Kaiser Permanente opened its wallet for a $10 million commitment to support a financially struggling Colorado safety net system, according to a Tuesday announcement.

Denver Health, a 160-year-old organization that provides preventive, primary and acute care to a third of the city’s population, had reported (PDF) more than $60 million in net losses during 2022 due in large part to contract labor costs and other operating expense increases that outpaced revenues.

Additionally, the safety net system said it has doubled its annual average uncompensated care from $60 million in 2020 to $120 million in 2022.

Due to these “unprecedented financial challenges,” Kaiser Permanente said it is funding a $5 million grant “to address the immediate need” at Denver Health. Additionally, the integrated care organization said it would offer up to $5 million more as matching donations as an incentive for others in the local community or industries “to step up to help Denver Health.”

"We are immensely grateful to Kaiser Permanente for their commitment to serving Colorado with this generous financial support," Denver Health and Hospital Authority CEO Donna Lynne said in the announcement. "None of us can imagine a city or a state without Denver Health. This community relies on us, and we need a coordinated community-wide effort to ensure we are sustainable now and into the future."

The organizations said the funds will help maintain access to care for underserved communities that rely on Denver Health, such as those with low incomes, people of color, immigrants, refugees and people without housing. The system has also been seeing new demand from those who delayed care during the pandemic as well as more patients presenting at the emergency department or other clinical settings in worse condition, they said.

State legislators had already fast-tracked a $5 million support payment to Denver Health in February. At the time, the system said it had about 80 days of cash on hand and could use the funds to help retain its clinical workforce.

"Denver Health provides broad, vital and responsive access to quality care for Medicaid members, the uninsured and many other Coloradans," Kim Bimestefer, executive director of the Colorado Department of Health Care Policy and Financing, said in the announcement. "I applaud the leadership of healthcare organizations who are stepping up financially to support Denver Health, and I encourage communities and hospitals across the greater Denver area to do the same in support of Denver Health as a pillar of our state's healthcare system."

Of note, Kaiser Permanente operates the largest nonprofit health plan in the state of Colorado and offers care through dozens of medical offices and a network of affiliated hospitals and physicians. While it counts support to Denver Health and other safety net care providers such as community-funded clinics as part of its broader mission, sustaining these providers also relieves strain on its own operations.

Across 2022, Kaiser Permanente said it invested $100 million in community support, charitable care and other programs benefiting Colorado residents. The organization as a whole reported a $4.5 billion net loss in 2022 but has so far bounced back with a $1.2 billion gain for the first quarter of 2023.