Denver Health says 2Q sales-tax revenue eased operating strain but warns Medicaid cuts could bite in 2027

Denver — Denver Health told the Health and Safety Committee of the Denver City Council on April 1 that roughly $65 million raised by the 0.34-cent “2Q” sales tax in 2025 helped avert deeper service cuts but did not eliminate a large uncompensated-care shortfall.

"It resulted in about a $65,000,000 increase in the revenue that comes to Denver Health," Donna Lynn, CEO of Denver Health, said during the presentation. Lynn and hospital finance staff explained that city MI payments (about $30.7 million) plus the 2Q tax together represent about 6% of Denver Health’s overall budget but that most of the hospital’s revenue still comes from Medicare, Medicaid and commercial insurers.

Why it matters: Denver Health serves patients from 61 of Colorado’s 64 counties and carries a large share of Medicaid patients, which the hospital says makes it unusually vulnerable to federal and state reimbursement changes. Lynn told council members the hospital used Medicare cost-report methodology to attribute 2Q spending and that most 2Q-funded items are ongoing personnel expenses, not one-time purchases.

The spending plan and results

Hospital leaders presented a five-bucket allocation of 2Q…