Commissioner says HCMC could close as expenses continue to rise
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Minnesota lawmakers received an update Wednesday about the financial challenges facing one of the largest healthcare systems in the Twin Cities.
During a hearing of the state’s Senate Health and Human Services Committee, lawmakers were briefed on HCMC’s financial situation. Hennepin Healthcare operates HCMC, which is both an adult and pediatric trauma center and a teaching hospital.
The safety-net hospital has already cut five medical programs and about 100 full-time positions, and reduced its number of patient beds by 100, capping the total at 390. Hospital administrators have also frozen retirement contributions, eliminated over $1.2 million in travel expenses and paused $24 million in infrastructure projects.
These measures were implemented to address a $50 million budget shortfall projected by the end of March.
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Hennepin County Commissioner Angela Conley provided a financial update on Hennepin Healthcare during the hearing and reiterated that the health care system continues to face significant financial challenges. These include a projected $100 million loss in uncompensated care and a $1.7 billion reduction in Medicaid revenue over the next 10 years.
“Hennepin County cannot afford to absorb those costs, nor can we increase our property tax levy enough to even cover those costs without revenue to replace the ongoing losses,” Conley said. “The hospital will not remain open.”
Sen. Melissa Wiklund, DFL-Bloomington, is chair of the Senate Health and Human Services Committee. She emphasized that the state cannot afford to lose any more hospital services. Wiklund highlighted the urgent need to address Hennepin Healthcare's financial situation and said this must be a priority in the current legislative session.
“The absence of HCMC will cause a huge strain on the rest of our metro hospitals and metro trauma care,” Wiklund said. “We know that the loss of this would be so significant to the whole metro area and greater Minnesota, and for all the people who depend on coming here for specialized care.”
Hennepin County Commissioner Jeffery Lunde, who also chairs Hennepin Healthcare’s Hospital Board, told MPR News that Hennepin Healthcare has reached a critical point.
“We've hit the moment where the ability to cover the losses has exceeded the ability of Hennepin County property tax owners to pay for it,” he said. “We're asking the state not for money. We're asking for permission to repurpose a ballpark sales tax.”
The existing sales tax currently serves to pay off the bonds for Target Field’s construction debt, which Lunde said is expected to be settled by 2027. He added that Hennepin County needs legislative approval to repurpose these funds as a health care tax to cover costs.
“If we do not get approval for the tax, HCMC will be closing. There isn't a question,” Lunde said. “We cannot raise Hennepin County property taxes to cover the gap.”
Listen to the full conversation with Hennepin County Commissioner Jeffery Lunde by clicking the player above.
