A Denver ballot measure to raise sales taxes in the city to support the city’s safety-net health system appeared headed for passage late Tuesday.
Ballot Issue 2Q had 57% of the vote at 11:30 p.m. when Denver released its final batch of results for the night. The measure’s 57% yes to 43% no margin had remained consistent throughout the night. It needs 50% of the vote to pass.
The city said there are still about 100,000 ballots left to process, meaning that about 70% of the vote has been counted. Issue 2Q was ahead by about 30,000 votes at 11:30 p.m.
Denver plans to release its next batch of results at 5 p.m. Wednesday.
The measure proposed a 0.34% increase in the city’s sales tax rate — that’s 3.4 cents on a $10 purchase. It is expected to raise $70 million in its first year to fund Denver Health, which has seen its economic stability falter in the aftermath of the COVID-19 pandemic.
Denver Health CEO Donna Lynne said late Tuesday she is “cautiously optimistic” that the result will hold.
“To me this is an affirmation by the voters that they recognize the challenges that Denver Health has but also the contributions it makes to the community,” she said.
Denver Health serves a disproportionately low-income population in its hospital and through a network of community and school-based clinics. That means it sees a lot of patients covered by either Medicare or Medicaid, and it also cares for large numbers of patients who do not have insurance.
Both of those factors have helped contribute to the hospital’s falling behind financially.
The government health coverage programs don’t pay what it costs the hospital to provide care.
Meanwhile, Denver Health and other safety-net health care providers have been seeing larger numbers of uninsured patients in the aftermath of the pandemic as state Medicaid programs require people to prove they are eligible to remain covered. During the pandemic, federal rules prohibited states from disenrolling people on Medicaid, leading to huge rolls that are now shrinking.
Denver Health has also been caring for an influx of newly arrived immigrants, though providing care for that population has been less of a contributor to the health system’s struggles, Denver Health officials say.
The result is that the amount of uncompensated care provided by Denver Health has increased. It is estimated to hit $155 million in 2024, up from $60 million in 2020.
The hospital lost around $32 million on operations in 2022. It turned a roughly $9 million profit in 2023 due in part to some one-time boosts. Denver Health expects to lose about $8.5 million in 2024. As of June, the hospital had just a little over two months’ worth of cash-on-hand. (Best-practice standards usually call for around six months or more.)
Lynne has said the system would have to cut services and shrink to a more sustainable size if Ballot Issue 2Q does not pass.
She said Tuesday that the campaign had been a good opportunity to tell people about all that Denver Health does — including providing paramedic services for the city.
Denver Health receives some funding from the city budget, but Lynne said the amount is only about 2% of Denver Health’s revenues, compared to the roughly 10% that safety-net hospitals receive in other cities around the country. Approval of the sales tax would bring that funding percentage for Denver Health to 7%, she said.
“This gives us something that Denver Health has frankly never had,” she said. “It’s quite historic.”