North Memorial Health is continuing to hit the brakes on a proposed expansion at Maple Grove Hospital, saying plans won't move forward until the health system fixes financial challenges at its larger medical center in Robbinsdale.
Since 2019, North Memorial has talked about expanding its campus in Maple Grove including, at one point, a plan for 40 more staffed beds plus larger departments for emergency and neonatal intensive care patients.
But financial challenges continue to be a significant barrier to construction, said Trevor Sawallish, the North Memorial chief executive, during a Star Tribune interview this month.
Last week, the health system announced 103 layoffs and the closure of its outpatient mental health service in Robbinsdale due to relatively low payment rates from government-funded health plans as well as the end of a subsidy from Hennepin County.
"Our financial situation over the last many years has had us not moving forward with that [Maple Grove] project," Sawallish said. "And certainly we are at the point where it is not feasible, unless we find another way to kind of solve the problems that we've got at Robbinsdale right now."
Sawallish gave a similar message this month at a Maple Grove City Council meeting, where he stressed there's still a need to grow services in the community.
In particular, Maple Grove Hospital's emergency department was built to accommodate about 25,000 visits a year, but treated about 55,000 patients in 2023. While North Memorial has "different versions" of what an expansion could look like, plans are going to be on hold, Sawallish said, until economic problems are solved.
"[Maple Grove Hospital] is at the breaking point relative to the emergency department that was built for basically half the volume that we now are experiencing," he told the City Council. "We often, for mothers that are delivering in this community, are having to go 'on capacity' because we are full."
Going "on capacity" means the hospital is experiencing a lack of space due to a surge in patients or high-acuity patient needs, North Memorial says, adding that this situation is not unique to Maple Grove Hospital.
At these times, obstetrics providers are notified and asked to call Maple Grove Hospital before sending in a patient. Most of these providers deliver babies at other hospitals in the Twin Cities, North Memorial says, so a provider may choose to send a patient elsewhere for her delivery.
Over the years, Maple Grove Hospital has operated one of the state's largest obstetrics units while being one of the most profitable medical centers in the Twin Cities. Conflict with Minneapolis-based Fairview Health Services over expansion plans is one reason North Memorial bought out Fairview's ownership stake in the Maple Grove facility in 2022.
North Memorial's medical center in Robbinsdale, meanwhile, has seen financial challenges, Sawallish said, from recent growth in its share of patients covered by the Medicare or Medicaid public health insurance programs.
Hospitals often lose money when providing services for patients with Medicaid coverage. Medicare can be a financial challenge, too, although health economists say efficient hospitals can break even or make a small profit on patients with Medicare coverage. Commercial health insurers, meanwhile, typically pay higher reimbursement rates.
In 2022, Maple Grove had the highest share of commercial insurance coverage of any hospital in Minnesota, according to state Health Department data.
North Memorial Health also runs 25 clinics located mostly in the west metro and a large EMS service with 10 helicopters and 140 ambulances and other response vehicles.
