Under funding shortfalls, Minnesota's healthcare system could reach breaking point
One of the state's largest hospitals, Hennepin Healthcare, is in danger of closing, but it's not just that one.
Thirty percent of Minnesota hospitals are losing millions of dollars a year, and an industry organization says the problem is only going to get worse.
"There's a structural problem in how hospitals are getting paid. The math is not mathing," said Dr. Rahul Koranne, the president and CEO of the Minnesota Hospital Association.
Among the math that is not adding up — as much as 70% of Hennepin Healthcare's patients are on government programs like Medicare and Medicaid. Medicaid is only paying 68 cents on the dollar for the cost of care. Medicare is paying 80 cents on the dollar. Then, 10% of patients do not have any insurance.
In 2024, Hennepin Healthcare had $90 million in uncompensated care — that's up from about $64 million the year before, a 40% increase. Hospitals around the state face the same numbers, and eventually, patients will pay the cost.
"The only way to do it is to really, you know, is to expect the commercial payers to pay more, which is why all of our bills are going up," said Koranne.
Koranne says it's going to get worse because of the federal Medicaid cuts coming in 2027. The Minnesota Department of Human Services says 140,000 Minnesotans will lose their coverage.
It's another blow in a snowballing cycle of higher costs, fewer insured and fewer places to get care for patients throughout the state. Thirty-one hospitals around the state are in the red. Koranne says one solution is to make the for-profit sectors of the health care industry pay more — specifically, in his view, the pharmaceutical companies.
"These are the pharmaceutical companies, the trillion-dollar for-profit pharmaceutical companies that are making billions in dollars of profit," said Koranne.
At the Capitol, nurses and physicians at Hennepin Healthcare have urged lawmakers to provide the hospital a lifeline. One proposal includes extending a local sales tax funding Target Field to help close the gap.