Thirty-one Minnesota hospitals are in financial distress, meaning they have sustained negative operating margins, according to the Minnesota Hospital Association (MHA). Federal law HR 1, the “Big Ugly Bill,” is cited by MHA as a major driver of future financial strain for hospitals through Medicaid coverage losses, higher uncompensated care, and other policy changes.
Overall, MHA says HR 1 cuts $623 million in Medicaid funding annually from Minnesota hospitals, in addition to the financial losses these hospitals have already sustained.
Intensifying the distress are seven safety-net hospitals that are “at risk” of closure, service cuts, or layoffs within two to three years due to negative operating margins, according to the Centers for Medicare & Medicaid Services (CMS), as cited by Public Citizen. They are Hennepin Healthcare (Minneapolis), Range Regional Health Services (Hibbing), Lakewood Health System (Staples), Mayo Clinic Health System (Austin-Albert Lea), St. Gabriel’s Hospital (Little Falls), Lakewood Health Center (Baudette), and Mahnomen Health Center (Mahnomen).
St. Gabriel’s Hospital in Little Falls is “at risk” due to a negative operating margin of -23.4%, far below the state median of -2.3%, according to CMS. St. Gabriel’s also happens to be in central Minnesota’s Morrison County, the site of the annual Farm Picnic, co-sponsored by Minnesota COACT and Morrison County Farmers Union, allies of Health Care for All Minnesota (HCAMN).
The Picnic is an annual celebration of family farms and Main Street businesses that depend on their community hospitals staying open. As a result, organizers decided to have the 45th Annual Farm Picnic address the crisis facing at-risk hospitals, including St. Gabriel’s and Lakewood Health System in Staples, another at-risk hospital in the Brainerd area.
Considering the magnitude of the crisis in the region, Minnesota Farmers Union board member Linda Larson arranged for Rep. Robert Bierman, co-chair of the Minnesota House Health Committee, to address the issue at the Picnic. Having traveled to other areas to learn firsthand about the financial distress facing hospitals and nursing homes and the people they serve, Rep. Bierman said he came to the Picnic “to deliver some bad news, and the bad news is the Big Beautiful Bill.” He explained that as the bill aims to cut federal and state health care funding nationwide by more than $900 billion from Medicaid over a decade, many low-income adults who receive Medicaid will face new work requirements, stricter eligibility checks, and potential coverage losses. He also noted that “24 percent of Morrison County residents receive Medicaid.”
“What is Medicaid used for? It’s used for health care, and over 20 percent of the people that go to our local hospitals go there with Medicaid. Most of the money that goes to nursing homes is Medicaid, so when we cut Medicaid, we’re cutting help that people need when they’re sick. We’re cutting help that families need,” he said. “Medicaid is being cut because taxes are being cut for billionaires and large corporations.”
Following the August 23 Farm Picnic, the HCAMN Legislative-Policy / Indivisibles Healthcare Working Group collaborated with People for Informed Communities in Crow Wing County and Brainerd Lakes Area Indivisibles to organize an October 3 community forum in Nisswa, near Brainerd, for Senator John Marty to address his single-payer Minnesota Health Plan bill and his Patient Centered Care (PCC) bill.
As a stepping stone to the Minnesota Health Plan, the PCC bill would alleviate the $623 million annual Medicaid cut to hospitals by saving $1 billion annually, helping to offset the overall $2 billion annual cut to Minnesota Medicaid funding. The savings would come from terminating the contracts of the HMOs that have been managing Minnesota Medicaid since the 1990s.
Don Pylkkanen, Co-Chair, Legislative & Policy Committee
Dave Garibaldi, Co-Chair, Legislative & Policy Committee