The opening of a new southeastern metro hospital, Centennial, by the for-profit HCA chain this month underscores where medical centers get built in the area — and where they don’t.
HCA subsidiary HealthONE’s launch of 20-bed Centennial in a fast-growth area near Arapahoe and South Parker roads echoes the pattern set by other recent hospital builds, such as UCHealth and Children’s Hospital Colorado in Highlands Ranch, Centura in Castle Rock and UCHealth and Children’s again in Broomfield.
These communities are relatively high income, relatively low in Medicaid and uninsured patients, and surrounded by increasingly dense housing developments and employers with insurance plans seeking high-value services in orthopedics, gynecology, cardiac labs and more, according to advocates and U.S. Census figures. Centennial, for example, has a median household income of $109,324, while Denver’s is $68,592.
Where hospitals are not going, in a trend obvious to advocacy groups and health system critics, is to the underserved areas of metro Denver. They do not see gleaming new, specialty-rich hospitals going up in northeast Denver, or southwest of Alameda Avenue and Federal Boulevard.
“If you look at the new hospital construction, and there have been several, they are not in those high-need ZIP codes,” said Minnesota hospital finance analyst Allan Baumgarten, who issues reports on Colorado and other state hospital markets.
New hospitals get built where business studies show more high-income families and generous employer insurance, and fewer uninsured or patients with “undesirable” Medicaid and “less-desirable” Medicare, said Dr. Irene Aguilar, a former state senator and current member of the Denver Health and Hospital Authority board.
For relatively wealthy suburbs, Aguilar said, “research doesn’t show they have higher medical needs. So they are being built to a market, and not to a need.”
Centennial’s backers said the new facility, which is in the same complex where a HealthONE standalone ER sat and which includes Centennial Medical Plaza health offices, brings much needed overnight and specialty care to southeast metro neighborhoods. Primary care doctors at Centennial wanted more specialists for patient convenience, and specialists wanted a true hospital where they could perform day surgeries or include overnight observation stays, said Ryan Simpson, CEO of Centennial and Medical Center of Aurora to the north.
Asked if HealthOne had plans for new hospitals in currently empty ZIP codes, Simpson pointed to improvements to downtown HealthONE hospitals Presbyterian-St. Luke’s and Rocky Mountain Hospital for Children. He also said the HealthONE system serves a wide variety of incomes and neighborhoods through other hospitals including Swedish in Englewood and Medical Center of Aurora.
“We feel like we’re pretty well positioned with inpatient facilities across the metro area right now,” Simpson said. “We are evaluating how to expand outpatient services.”
Despite operating hardships on hospital staff and patients during the pandemic, and temporary reductions in elective surgeries to make room for coronavirus cases, parent company HCA increased profits in 2020. The company earned $3.75 billion in profits, or $10.93 a share, on 2020 revenue of $51.53 billion in 2020, up from $3.5 billion and $51.3 billion the year before.
Colorado’s other large hospital systems also earned healthy profits in recent years, according to a recent business group analysis of 2018 federal figures, though HealthONE/HCA is the only one that returns profits to shareholders. UCHealth, Centura and SCL Health are nonprofits, and retain any profits within their systems.
SCL Health is one system that made a major investment in central Denver neighborhoods, spending more than $600 million to rebuild St. Joseph in Uptown in 2014.
Baumgarten said underserved neighborhoods do not necessarily need a new hospital of their own so long as they have good access to primary care clinics, and if those clinics can refer them quickly and conveniently to the kind of specialty care centered in hospitals.
Denver Health has a busy downtown hospital serving a diverse mix of underinsured, Medicaid and Medicare patients, people who are uninsured, and those covered by employer-sponsored insurance. Denver Health also has a network of public clinics positioned throughout the city, and new mobile services to push vaccines and other basic services into more neighborhoods, though some patients with specialty needs would have to travel downtown.
Aguilar said Denver’s underserved neighborhoods don’t necessarily need more hospital beds, even as they clearly need more health services. The pandemic accelerated trends of patients leaving hospital beds for outpatient care or close monitoring at home via telehealth, she said, and Denver Health is expanding those services.
“I think the hospitals are being overbuilt for what the need is, right now,” Aguilar said.
HCA is one of the largest providers of discounted and charity care to the underinsured in the markets it serves, Simpson said. Simpson said one area the new hospital could lower costs for patients is in emergency visits.
When Centennial was a standalone ER, Simpson said, an emergency patient who needed more acute treatment would be transferred by expensive ambulance ride to Medical Center of Aurora or another full-service hospital. Now, most will stay at Centennial for further care.
“We believe we’ve been very good stewards of this area,” he said.
Michael Booth was previously on the board of directors of the Colorado Consumer Health Initiative, a nonprofit advocating for broader public health coverage.