Hennepin County to retake control of HCMC, the state’s largest publicly funded hospital

Hennepin County commissioners voted 6-1 Tuesday to retake control of the nonprofit that runs HCMC and its clinics after years of budget problems, moving to prevent a closure of the safety-net hospital in downtown Minneapolis.

The controversial move dissolves the Hennepin Healthcare System board of community volunteers created in 2007 to oversee the hospital’s day-to-day operations.

The health system has lost money on operations seven of the last eight years, and some hospital officials suggested in June it may need to drastically reduce services or even close. Now, the commissioners and county staff will oversee operations at the state’s largest publicly funded hospital and its $1.6 billion annual budget.

“We don’t have time to lose here. We are in trouble. I won’t let this hospital close,” said Commissioner Angela Conley.

Hospital board members fought their removal, saying it will silence a diverse group advocating for patients who are primarily people of color. Board members have argued the hospital faces unprecedented fiscal challenges but does not have a governance problem.

“Our governance has changed, but our mission to support the most vulnerable in our community remains the same,” Dr. Tom Klemond, interim CEO, said in a statement Tuesday. “We will work closely with [commissioners] on a transition plan that best supports and preserves the vital work that we do, and centers patient care at every turn.”

The takeover is supported by many hospital workers who have criticized leadership’s financial management and said they have not addressed a variety of employees’ concerns.

Here’s what the changes could mean:

County officials have signed off on the Hennepin Healthcare board appointees and the hospital’s budget since the nonprofit was created in 2007.

Under the temporary takeover, the nonprofit will still exist, but the County Board will create a transition team tasked with stabilizing the health system’s finances including how to close a projected $35 million budget gap.

County taxpayers already financially support the hospital, helping to cover the annual costs of caring for patients who are uninsured and cannot afford to pay. Those expenses continue to climb and are expected to reach $100 million this year.

Hennepin County owns all the health systems facilities and is responsible for its debts. If the hospital cannot pay its bills, the county, and ultimately taxpayers, are responsible.

County leaders will also play a bigger role in the selection of the next hospital CEO. The previous executive, Jennifer DeCubellis resigned in March, and Klemond has led the health system since spring.

Patients walking into HCMC or any of Hennepin Healthcare’s clinics won’t see any immediate changes.

Commissioners have repeatedly emphasized their commitment to keeping HCMC open and maintaining its existing services the best they can. They’ve noted the hospital is not just important to the county, but to the entire state.

It’s the largest safety-net hospital in the Twin Cities that cares for everyone, regardless of their ability to pay. It’s also home to a Level I trauma center, a hyperbaric chamber and a poison control center, and it is where many new Minnesota doctors are trained.

County leaders don’t just want to keep HCMC going, they want to improve its facilities and services. Earlier this year, the County Board said they wanted to spend as much as $2.5 billion on a new inpatient building, mental health facility and other upgrades over the coming decade.

The impact on caregivers will play out over the coming months.

Union workers at HCMC have been pushing the commissioners to play a more active role in hospital oversight for more than a year. They’ve argued the health system board and hospital executives have not adequately responded to complaints about safety, working conditions, employee benefits, recruiting and retention.

Workers pushed the hospital board to open an independent investigation into allegations employees were discriminated and retaliated against if they raised concerns to management.

Union leaders have said they want leadership that is more transparent and accountable to the community and to taxpayers. They also want workers to have more say in how the hospital is run.