A few years ago, the Hospital Provider Fee was all people were talking about at the Capitol. During that time, the media called it “Colorado’s biggest political battle.”
While the “fee” was first created in 2009, legislators moved it outside of the General Fund (without voter approval) in 2017, meaning it wouldn’t count toward our state revenue cap under the Taxpayer’s Bill of Rights. And since then, it has virtually disappeared from discussions. Nevertheless, the Hospital Provider Fee might be more relevant today than ever because it touches on two of the most important policy debates of this session: transportation funding and the “public option.”
For background, the Hospital Provider Fee is a charge that hospitals place on patients when they stay overnight. It doesn’t show up as a line-item on your bill, but it’s there. This money is then sent to the state. Next, the state receives matching federal funds. Finally, whole amount ($1.6 billion annually) is sent back to the hospitals.
This is one of the main ways our state budget continues to skyrocket, even as we vote down tax increases. Moving the Hospital Provider Fee outside of the General Fund allows legislators to spend an extra $600 million in brand new revenue each year. Revenue that supporters of this initiative promised would be the solution they’d been looking for to fix our roads, especially in rural Colorado.
So, did they actually follow through and take a large chunk of this new revenue to fund a long-term plan to fund road improvements? Of course not. Over and over again, they have decided to spend that money on other priorities – while claiming our transportation needs will have to wait until taxpayers approve a tax hike.
It’s completely disingenuous. So, next time a legislator brings up the need for a new funding source, ask them what’s happening to the money they get each year from enterprising the Hospital Provider Fee.
The second issue is how the Hospital Provider Fee impacts the debate over the “public option.” Last month, as part of his push for a “public option” health care system, Governor Polis tweeted out “Colorado hospitals are making record profits overcharging patients…And they aren’t passing along those savings to Coloradans.” He then posted a chart showing profits-per-patient in 2009 (the year the Hospital Provider Fee started) versus 2018.
Colorado Hospitals did make $2 billion in profit last year. But for some reason, instead of talking about the $1.6 billion going to the hospitals because of the Hospital Provider Fee, the Governor went straight to promoting his “public option” – which would add even more government control to our lives.
Legislators are largely responsible for creating the situation we are in, and then say the only way it can be fixed is by having bureaucrats take over more of our health care system. This is exactly how big government works.
If the Governor is serious about lowering costs, he should go after this fee – which costs us money when we stay at the hospital and costs us money in taxes. What he shouldn’t do is support a “public option” plan that would price fix, cost-shift, and make our health care system worse.
Whether it’s transportation funding or the “public option,” discussions about the impacts of the Hospital Provider Fee should remain front-and-center.
Michael Fields is Executive Director of Colorado Rising State Action.