Budget woes force 100 job cuts at Hennepin County’s safety-net hospital

Hennepin Healthcare, the nonprofit that runs one of Minnesota’s largest safety-net hospitals, is cutting 100 jobs along with several medical services in hopes of closing a $50 million budget hole by the end of March.

Employees in affected service areas were notified Jan. 26 about job losses, the health system said, and will receive more details in the coming weeks.

Earlier this month, the new co-leaders at Hennepin Healthcare sent a message to workers saying job cuts and service reductions would be needed soon because of a cash-flow crisis.

This announcement was an abrupt departure from the message sent by the previous interim CEO at Hennepin Healthcare, who projected in December that health system operations in 2026 would break even.

“I called it ‘the budget of hope’ and knew that a couple things go wrong and we’re really in a hole — and then everything hits at once," Dr. Kevin Croston, who was named this month as interim co-administrator, said in a Jan. 26 interview. “It’s been a tragedy to watch.”

Hennepin Healthcare runs HCMC in downtown Minneapolis, the hospital formerly known as Hennepin County Medical Center.

The health system said it will close its chiropractic and acupuncture services along with a sleep clinic. Some older patients receiving senior and extended care, and patients needing pain treatments, will transition to other health care providers. And medical and surgical services for weight management will be reduced.

“These changes will result in a reduction in Hennepin Healthcare’s workforce and impact approximately 100 positions,” the health system said in a Jan. 26 statement.

Health system leaders went public last summer with their pleas for help, saying the taxpayer-supported nonprofit had lost money on operations in seven of the past eight years.

Optimistic budget assumptions publicized in December didn’t pan out, said David Hough, a former Hennepin County administrator who’s also serving as interim co-administrator.

One problem is that Minneapolis-based health insurer UCare, which is going out of business, suddenly stopped paying bills late last year for services already rendered to patients. That alone amounted to a hit of about $6.2 million a week in lost revenue, Hough said. But there have been other problems.

Hennepin Healthcare must revamp its “revenue cycle management” program, Croston said, for making sure it collects bills from patients and insurers that can afford to do so. The federal government’s immigration crackdown has played a role, too, by deterring patients from seeking care.