Hennepin County commissioners weighing HCMC takeover

Hennepin County commissioners are ready to take a more active role in the oversight of HCMC after years of financial losses threaten its future.

The County Board took the first step Tuesday of retaking control of the downtown Minneapolis hospital and its related clinics by introducing a resolution to dissolve the Hennepin Healthcare System board.

It takes five votes, a super-majority of the seven-member County Board, to remove the current panel of community volunteers, hospital leaders and county officials that oversees the health system.

Commissioners plan to hear community input and debate the proposal at their next meeting Aug. 5. A final vote on governance of the health system and its $1.6 billion budget is expected Aug. 12.

County Board Chair Irene Fernando, who also sits on the hospital board, said it was clear the community’s largest safety-net hospital has mounting financial problems. She noted that health system leaders have repeatedly said layoffs and service cuts were likely if a projected deficit of $36 million isn’t addressed.

“The hospital has identified a crisis,” said Fernando, who noted that some hospital leaders have suggested HCMC could close if its finances are not stabilized. “In times of crisis, more oversight is necessary. Now is the right time to have the conversation.”

Fernando added county leaders were committed to keeping the safety-net hospital operating and that residents deserve to know how taxpayer money was supporting HCMC.

Last week, health system leaders raised an alarm about the hospital’s finances in an interview with the Minnesota Star Tribune. They said the growing number of patients who are underinsured or have no insurance are driving losses and the hospital has lost money on operations seven of the last eight years.

Budget troubles have been a source of ongoing tension between the County Board and hospital leadership. But Hennepin Healthcare officials have resisted calls for the county to retake control of the hospital and commissioners have not publicly debated it.

In a statement, Hennepin Healthcare leaders said they are reviewing the implications of the county taking over the health system, a proposal that comes at a time of “unprecedented financial challenges requiring immediate, difficult decisions.” County leaders are aware of those circumstances and “actively involved in decision making regarding our current financial crisis.”

“While we strive to be responsible stewards of our resources, the structure of our nation’s health care system makes it difficult to sustain our mission as a safety net provider,” the statement said.

The prospect of a county takeover of the health system was welcomed by members of the Hennepin County Association of Paramedics and EMTs, (HCAPE), which is one of several unions to call for more county oversight amid budget and staffing challenges.

In a move that could be a sign of things to come, the County Board voted 5-1 Tuesday to purchase $15 million worth of medical equipment for HCMC. Hospital leaders have said they put off buying the equipment last year to help the health system budget, but patient care could suffer if certain purchases were not made soon.

HCMC leaders had asked the county for a loan, but commissioners worried the hospital would not be able to repay it. The money to purchase the equipment will come from the county’s capital budget rather than savings.

County officials are in the process of developing a budget plan for the coming year that will include support for the health system. This year, county taxpayers were expected to contribute $40 million toward uncompensated care at the hospital, but that will not cover the growing costs, which are expected to near $100 million.