In money-saving move, Mahnomen hospital shutters inpatient beds, keeps outpatient and emergency care

a hospital in northwestern minnesota
Mahnomen Health Center converts to a rural emergency hospital this week after financial difficulties.
Courtesy of Mahnomen Health Center

In what could be a harbinger of things to come for struggling rural hospitals, Mahnomen Health will transition its 10-bed hospital to a rural emergency center starting Wednesday.

The money-saving move effectively eliminates overnight stays at the federally designated critical-access hospital located in northwest Minnesota. Outpatient and emergency services will continue.

The hospital conversion takes advantage of a new federal incentive plan that went into effect this year. It offers rural communities an infusion of cash to keep their emergency departments open as long as they close inpatient services.

Becoming a rural emergency center will net Mahnomen’s hospital around $1.5 million annually, said administrator Dale Kruger.

“It was determined that designation would be a win-win for our community, for our hospital and for the health of our patients,” he said.

The hospital serves over 5,000 residents in Mahnomen County and on the White Earth Reservation. It’s jointly owned by the city and the county. Sanford Health manages it. In 2022, the hospital reported operating losses totaling 26 percent.

Located in the poorest county in the Minnesota, Mahnomen hospital frequently has empty beds and its unpaid patient debt is the highest in the state.

Still, the plan to eliminate overnight hospital stays came as a surprise to many in the community.

A man poses for a photo
Dr. Carson Gardner, medical director for the White Earth Public Health Department.
Mathew Holding Eagle III | MPR News

“It created some stress in our thoughts,” said Dr. Carson Gardner, medical director for the White Earth Public Health Department.

“We’re going to work together and make sure this doesn’t endanger the health of any citizens of White Earth lands or other citizens who share this land with us.”

Mahnomen Health is not alone in its struggle to keep its hospital afloat. More than a third of rural Minnesota health care systems were in the red in 2019, according to the Minnesota Department of Health.

Hospitals in Fosston and New Prague no longer deliver babies. In Fergus Falls, Lake Region Healthcare closed its inpatient behavioral health unit in February.

The Minnesota Hospital Association says access to care is being threatened across the state by a health care reimbursement system that does not meet hospital needs. In a statement, the association said the conversion to rural emergency hospitals “highlights the desperate financial challenges facing nonprofit hospitals across Minnesota.”

As part of its new designation, the Mahnomen hospital will have to comply with federal guidelines that limit patient care to 24 hours or less.

Critics say the restrictions make the hospitals little more than “Band-Aid Stations.” But Kruger doesn’t see it that way.

“Back in the '90s, 1999, when many hospitals became critical-access hospitals, they said, ‘Critical-access hospitals are nothing more than a Band-Aid Station.’ Well, now we’re here 25 years later, and critical-access hospitals are still here.”

A health center sign
Mahnomen’s hospital is converting to a rural emergency center to save money. The designation means it must transfer patients to outlying hospitals after 24-hours of care.
Mathew Holding Eagle III | MPR News

Closing inpatient beds to free up more federal funding could tempt many rural communities trying to save their hospitals, said Katy Kozhimannil, director of the U of M Rural Health Research Center.

“I do think that it is something that will be an appealing option in some communities in Greater Minnesota, as the financing of health care, especially in rural communities gets challenging,” she said. “I do see this happening more frequently.”

But she adds the success of the approach will depend on a strong network of transportation services between small hospitals that no longer have inpatient beds and bigger hospitals that do.

“I want to make sure that there is a place for folks to go. A rural emergency hospital can be that,” she said. “I also hope that the broader transportation infrastructure and basic community infrastructure is in place to make sure that it works.”

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