Vail Health Says It’s in a Strong Financial Position Despite Report Detailing Headwinds for Rural Hospitals
Vail Health officials said the hospital is not in danger of closing despite showing up in a new report from a national health care policy center detailing financial troubles for rural hospitals. The report from the Center for Healthcare Quality and Payment Reform, is based on Medicare cost data. The data reveals that Vail Health experienced a 10% loss in its patient services margin and a 7.2% loss in its overall margin during this period. Despite these figures, Vail Health asserts that it is not at risk of closure.
Sally Welsh, Vail Health’s public relations director, pointed to the hospital’s strong financial footing. This year, Vail Health received an “A- (A minus) S&P bond rating with a stable outlook,” Welsh said. “Also, Vail Health has a very strong balance sheet and cash position.”
Welsh attributed some of the hospital’s recent financial losses to its community investments, which are beginning to turn profitable but still face challenges due to rising labor and inflation costs.
The Center for Healthcare Quality and Payment Reform’s report identified six rural Colorado hospitals at immediate risk of closure, but Vail Health is not among them. Harold Miller, the Center’s president and CEO, explained that hospitals at immediate risk typically have small budgets and limited assets, conditions Vail Health does not face. Vail Health’s total expenses in 2023 exceeded $300 million, far more than the budgets of most recently closed rural hospitals.
The financial challenges rural hospitals like Vail Health face are exacerbated by inadequate reimbursement from private health insurance plans and the increasing shift to Medicare Advantage plans, which often refuse services that traditional Medicare covers. This has contributed to significant financial strain on smaller hospitals, which rely heavily on Medicare and Medicaid reimbursements.
Despite these hurdles, Colorado has not experienced any hospital closures in recent history. Welsh, citing data from the Colorado Hospital Association, noted that 70% of hospitals in the state face unstable operating margins. However, Vail Health continues to operate, investing in long-term projects such as the upcoming Precourt Healing Center, slated to open in 2025, which will offer inpatient behavioral health services.
Ultimately, while rural hospitals continue to navigate financial instability, Vail Health remains confident in its ability to weather current challenges and continue providing care to the community.
