Brice Burkhardt lives with chronic pain in his neck that he can’t afford to fix.
Two herniated discs have left him with severe muscle fatigue, loss of strength in his arm and back, and a “pretty good ache going on in my neck.” It makes it uncomfortable to be hunched over a computer all the time, which, as a commercial real estate broker, is often a necessity.
The only fix, he said, is to have the discs replaced. But without health insurance, surgery may be unrealistic.
Burkhardt said he’s been trying for a year to get health insurance, but because of his pre-existing neck injury, it would cost about $2,000 a month. “That’s almost $800 a month more than my mortgage,” he said.
Dr. Jeffrey Donner, his physician with the Colorado Spine Institute in Johnstown, has been working to find an affordable surgical option for Burkhardt. But like health insurance, it’s been hard to find.
Surgery at Poudre Valley Hospital or Medical Center of the Rockies — both part of UCHealth — would cost Burkhardt $100,000 as a private pay patient, according to the hospital’s estimates provided to the spine center and shared with the Coloradoan. That doesn’t include the cost for the anesthesiologist or surgeon. If Burkhardt had insurance, his insurer would be billed $120,000, but the hospitals give a $20,000 discount for cash payment, spine center practice director Luc Koldewyn said
Donner is working to get Burkhardt into High Plains Surgery Center in Cheyenne, Wyoming, a day surgery center affiliated with Cheyenne Regional Medical Center. Its administrator quoted $25,000 for the same surgery that would cost $100,000 at UCHealth.
UCHealth spokesperson Dan Weaver said self-pay patients rarely pay the quoted self-pay price. Depending on income, self-pay patients may be eligible for up to a 100% discount on care, he said. People who make between 250% and 400% of the federal poverty level would be eligible for a sliding scale discount.
He declined comment on the cost difference between UCHealth’s facilities and the Wyoming surgery center, but said the actual price may depend on how many nights the patient spends in the hospital, whether they experience complications and whether the quoted price includes pre-operation and follow-up appointments.
Across the country and in Colorado, health care systems are consolidating, buying up physician and specialty practices and investing millions in new buildings, while rising health care costs continue to dog patients, forcing some, like Burkhardt, to forgo treatment. Now a state report says health systems don’t need to charge as much as they are, and a proposal in the Colorado legislature seeks to provide patients relief by eliminating some health care facility fees.
Report says UCHealth is charging too much, but hospital system says numbers are misleading
Colorado Gov. Jared Polis has made reducing health care costs a cornerstone of his administration. Five new bills have been introduced in the legislature, including one that would ban health systems from charging facility fees and one that would hold nonprofit hospitals like Poudre Valley Hospital and Medical Center of the Rockies accountable for their community investments, something the IRS already requires of them to maintain their nonprofit status.
On the back of a recent report from the Colorado Department of Health Care Policy and Hospital Finance Association detailing hospital profitability, Polis repeatedly claimed hospitals overcharge patients, an assertion the Colorado Hospital Association vehemently denies.
The report called out UCHealth, one of the largest nonprofit health systems in the state, for amassing huge financial reserves based on what the report called higher-than-necessary prices paid by patients and employers over the years.
UCHealth, a nonprofit health system, could significantly cut its prices and still thrive financially, the report said. The health system had a total profit margin of 26.1% and a patient services profit margin of 8.5% in 2021, while Poudre Valley Hospital’s patient profit margin was 13.5% and its total margin was 45.1%.
Weaver called the report misleading in some areas and wrong in others. It included a $450 million loan from the Centers for Medicare and Medicaid “to get through the worst of the pandemic” as part of UCHealth’s income but ignored that the loan had to be paid back.
“Some of that funding was essential to us,” Weaver said. “We didn’t lay off any employees, we didn’t reduce benefits, the 401(k) match or additional support for employees. We spent millions to buy new lab equipment to process COVID tests for UCHealth and the state, set up testing centers and vaccination clinics. That money was important to stabilize us. But it was money we had to pay back. Counting a temporary loan (as income) just isn’t accurate.”
Poudre Valley Hospital’s actual profit margin was closer to 9.9% and its patient services margin about 5.2%, Weaver said. But it is currently down to about 4%, which the Colorado Hospital Association calls the point at which hospitals are sustainable.
A Colorado bill in the works could ban some facility fees. Here’s what they cover and how they work.
Colorado health systems face a new legislative battle over a potential ban on facility fees that they say will increase patients’ costs, decrease access to health care and threaten outpatient care.
House Bill 23-1215, co-sponsored by Fort Collins Rep. Andrew Boesenecker, would prohibit hospitals from charging facility fees for most outpatient visits or services that occur in their off-campus clinics: Think Poudre Valley Hospital’s Harmony Cancer Center or Medical Center of the Rockies’ outpatient infusion clinic.
The bill would also prohibit charging a facility fee for telehealth visits and for outpatient, diagnostic or imaging services that can safely be provided in a nonhospital setting.
A facility fee pays for clinic staff including nurses, nurses’ aides, billing clerks, receptionists, security personnel, IT specialists, housekeepers and other staff, but not doctors, Weaver said.
But “the confusion and ambiguity around facility fees prevent consumers from accessing needed care,” Boesenecker said. “Affordability is a major deterrent for many Coloradans, leaving many to hold off seeking care until there is an emergency. HB23-1215 is necessary to start holding hospital systems accountable for their hidden fees.”
The fee, which can be a surprise to many patients when they get their bills, is separate from what the doctor charges. Depending on patients’ insurance plans, they may have a copay or coinsurance amount, and if they haven’t met their deductible, they would have a larger out-of-pocket responsibility for the bill.
Here’s how a facilities fee generally works:
Once you book an appointment at a hospital clinic, like the Harmony Cancer Center, a staff member looks up your electronic medical record and connects with your insurance plan. When you arrive at the clinic, there might be a valet parking cars or someone shoveling snow from the sidewalk. You’ll walk past a security guard on your way in, stop at the registration desk, and get shown to an exam room where a nurse will take your vitals or perhaps draw blood, all before the doctor comes in.
All of those people are paid through revenue generated by a facility fee, Weaver said. A facility fee can range from nothing into the thousands of dollars depending on the patient’s care team and services provided.
Oncology clinics and infusion centers, for example, have a far larger team of people caring for patients, Weaver said. A procedure or outpatient surgery may include more than 20 nurses and staff members caring for patients in preop, in the operating room or procedure room, in the recovery unit, etc. A shorter or less intensive clinic visit would involve fewer staff members and have a smaller fee.
Many insurance companies have a contracted rate of $0 for virtual visits, he said. Colorado Medicaid does not reimburse for virtual visit facility fees, while Medicare pays about $26 for a virtual visit facility fee, but that will go away in a couple months.
According to Weaver, a facility fee for a lab service (depending on the type of test) could be as little as $25 or $30. Depending on length of time and type of visit, a standard visit with a physician or a physical therapy appointment could be between $70 and $110.
An oncology infusion, radiation treatment or a procedure would be more, because they require far more nurses, staff and others to care for the patient for a longer period of time, he said.
These types of facility fees may be thousands of dollars but vary based on insurance and type of service. Oftentimes, patients receiving an infusion treatment only receive a bill for the facility fee, because they’re not seeing a doctor for that visit, Weaver said.
That fee would cover the clinic’s appointment and registration staff, the pharmacy team preparing the chemotherapy, the nurses who prepare the patient’s IV line and monitor the patient during the treatment, the clinic infrastructure itself, anyone assisting the patient after their treatment, the cleaning crew and others.
If the facility fee goes away, “there would be no funding coming back to the clinic or hospital to cover nurses, security, the front desk,” Weaver said. “Zero reimbursement for the whole broad team and the clinic itself.”
And, the way the bill defines facility fee — including any fee intended to compensate the hospital or health system for its operational expenses — would preclude the hospital from just changing the name to something else, Weaver said.
“No matter what we call them, any fee that covers operational (including staff compensation) expenses would be prohibited,” he said.
Colorado Consumer Health Initiative says corporate hospital chains are merging and buying up clinics across Colorado, then turning around and charging unchecked facility fees because they own most of the facilities in town and consumers have nowhere else to turn.
The initiative reports that in 2021, one in five Coloradans received an unexpected medical bill in the previous year. Among those who received a surprise bill, more than a third struggled to pay their bills. The survey also found that among those who struggled to pay medical bills, more than half took on credit card debt and 39% were unable to pay for necessities like food, heat or rent.
“Coloradans should not be held responsible for paying hidden fees for medical care,” Boesenecker told Colorado Consumer Health Initiative. “These unexplained charges are a barrier to affordable health care that can drain a family’s bank account. It’s time to stand up for patients by demanding more transparency and lower costs.”
How UCHealth says it’s working to reduce costs
Health care systems have spent decades directing patients to outpatient and urgent care clinics as a cheaper alternative to the emergency department. Their efforts have worked.
Poudre Valley Hospital, Medical Center of the Rockies and Greeley Hospital combined had 29,456 hospital admissions in fiscal year 2021-22, which ended June 30. Comparatively, they provided 910,833 outpatient visits at their clinics and urgent cares, more than double the previous year. The increase can be attributed, in part, to people delaying treatment during the COVID pandemic.
UCHealth’s Medical Group saw an additional 1.1 million visits in 2022, up from 978,545 in 2020-21.
Weaver was unsure how many Northern Colorado clinics would be affected by the ban on facility fees, “but I can easily say dozens of clinics would be affected or at risk. The health system hasn’t put a dollar amount on it yet, but the Colorado Hospital Association estimates it would lead to about $9 billion in lost revenue and lead to the closure of some small, rural hospitals.
Weaver said health care costs are a concern for everyone, including health care systems.
“We have said for years health care is too expensive … that’s why we’ve opened community-based, freestanding services” that offer less expensive care and “partnered with insurance companies to put together high-performance networks with the goal of making health care more affordable,” he said.
It’s also important to look at the overall cost of care, not just actual prices, Weaver said. “If we can provide education to patients and direct them to urgent care or virtual care, it saves a significant amount of money. Care managers who work with patients to help eliminate or reduce trips to the emergency department or a hospital admission. If we can avoid those, we can save a whole lot more money than if solely focused on price.”
Improving preventive care can reduce avoidable trips to the emergency department and admissions, reducing costs, which can result in lower insurance premiums, he said.
Hospital acquisitions are happening across the state, and UCHealth is no exception
The Colorado Department of Health Care Policy and Financing report says hospital mergers and acquisition over the last decade have built “mega-systems” across Colorado, which have amassed billions in reserves. Count UCHealth among those mega-systems.
UCHealth was formed in 2012 when Poudre Valley Health System and University Hospital merged. A few months later, it leased Memorial Hospital in Colorado Springs and has grown its network ever since, buying up physician practices and hospitals. It also owns UCHealth Medical Group, comprised of 1,100 physicians and providers throughout the state.
In addition to its three Northern Colorado hospitals in Greeley, Loveland and Fort Collins, UCHealth has hospitals in Broomfield, Highlands Ranch, Longmont, Steamboat Springs and Colorado Springs. It has affiliations with hospitals in Gillette, Cheyenne and Laramie, Wyoming, and Sidney, Nebraska.
Donner’s practice is not part of UCHealth.
“I have no complaints about UCHealth, I think they’re trying to provide good health care,” Donner said. “We see, when they buy primary care physician groups and referring pain doctors and hire neurosurgeons … to keep all the business where they want it, which is in their hospital, it’s not so much cost-effective care.”
At the same time the state reported huge reserves among health-care systems, UCHealth Northern has embarked on large expansion plans to cope with the region’s growth.
Northern Colorado grew rapidly in the last decade, with Weld County’s population up more than 30% and Larimer’s up nearly 20%. Partly because of that growth, the state has fewer hospital beds per capita than the U.S. average, according to The Kaiser Family Foundation.
The U.S. averages 2.38 beds per 1,000 residents; Colorado has 1.91 beds, the eighth-lowest among all states and the District of Columbia. Poudre Valley Hospital currently has 300 beds; Medical Center of the Rockies has 193 and Greeley Hospital has 57.
“Many of UCHealth’s facilities are seeing very high census rates, and often they do not have a single available inpatient bed,” Weaver said. “Importantly, we are adding services that our communities and patients need, including 49 additional inpatient behavioral health beds. UCHealth has also added clinic locations, helping improve access to providers for our patients.”
Medical Center of the Rockies, Poudre Valley Hospital and Greeley Hospital have robust expansion and renovation plans in place for a total of more than $403.5 million, including projects that have recently been completed, that will add beds and upgrade facilities and be paid for from cash reserves.
Medical Center of the Rockies expects to break ground this year on a planned $280 million expansion that includes a five-story tower on the north side of the hospital to serve trauma-surgical, medical-surgical and surgical ICU patients, expand the hospital’s capacity from 187 to 283 with room to grow up to 319 beds, double the capacity of the emergency department and add a specialized cancer center.
Greeley Hospital is adding 34 beds. Poudre Valley Hospital is in the middle of a $76.5 million expansion and renovation to improve the hospital’s first and third floors focused on patient care; add a new heart and vascular care clinic and testing area; revamp surgical, imaging, gastroenterology and pulmonary areas; relocate the gift shop, coffee shop and chapel; and update hallways and the lobby.
UCHealth has made good on a promise
UCHealth made good on its promise last year to significantly drop the price of cancer drug Zoladex following a Coloradoan investigation that found it was charging more than 10 times what it paid.
UCHealth had raised the price from $2,322 in 2017 to $6,000 in 2018 and $9,424 in 2021. Quinn reached out to the Coloradoan after questioning the health system unsuccessfully about the price hikes.
After the Coloradoan’s investigation, Weaver said Zoladex was an outlier with a charge higher than other similar drugs. He apologized for the error and said UCHealth would be reducing the price, reaching out to patients who had been impacted and offering a refund.
Quinn was notified last April that the health system was reducing the price to $3,099 retroactive to July 1, 2021.
Weaver said this month he did not have the number of patients who were refunded, nor the total amount refunded by the health system, which is one of the largest in Colorado.
Quinn is still taking Zoladex and as of January, UCHealth was billing her insurance company $3,684 for one Zoladex injection.
Quinn’s story may have had a happy ending, but Burkhardt isn’t sure how his story will end.
“If I can’t get to Cheyenne, I will have to live with the pain unless I can find insurance,” he said. “It’s not a fun feeling. It’s frustrating.”
For him, the system feels unjust. “Insurance companies take advantage of you; if not them, then the health care provider takes advantage of you. They’re trying to make money but at a really high cost to us who try to do things right.”
Pat Ferrier is a senior reporter covering business, health care and growth issues in Northern Colorado. Contact her at email@example.com.