Three House proposals emerge to stabilize HCMC as operating losses project to $1.7 billion over next decade

The state’s flagship trauma care and safety net hospital is in trouble and desperately looking to the Legislature for solutions to waylay potential permanent closure.  

Hennepin County Medical Center, Minnesota’s largest emergency department and trauma center, has projected operating losses up to $50 million in 2026 and up to $1.7 billion over the next decade.

Multiple hospital and county leaders presented to the House Health Finance and Policy Committee Tuesday, emphasizing the dire nature of this situation. Lawmakers also presented three potential solutions for HCMC but no action was taken.

Up to this point, multiple factors have led to where HCMC is now:

• uncompensated care increased from $40 million in 2020 to $104 million, of which $24 million in 2024 was provided to patients who live outside Hennepin County;
• rising costs for labor, equipment and supplies have exceeded revenue inflation; and
• multiple events compounded the hospital’s financial problems including the 2023 end to the federally declared public health emergency during COVID-19, a 2024 Change Healthcare ransomware attack, patient’s loss of insurance from Medicaid enrollment changes and the collapse of UCare.

Jan Malcolm, senior advisor on hospitals and health systems to the governor’s office, said HCMC is not the only hospital struggling. But the nature of the hospital’s financial structure paired with a “perfect storm” of events has placed HCMC in immediate jeopardy.

The hospital system as a whole is also anticipating an added financial burden when HR1, the “One Big Beautiful Bill,” goes into effect at the end of the year, and will add restrictions to Medicaid coverage that will leave more people uninsured.

Healthcare financial systems are akin to a Jenga tower, built over years without much attention to its foundation, Malcolm explained. “Now the pieces are being pulled out by a lot of different actors for a lot of different reasons without regard to the loadbearing pieces, if you will, of that Jenga tower.”

HCMC does not turn patients away, regardless of whether they have health insurance. Last year, 130 facilities statewide, 109 of which were outside Hennepin County, transferred patients to HCMC. It also serves patients across the region, treating patients from Michigan, Illinois, Wisconsin, Iowa, North Dakota and South Dakota last year.

This is why losing the hospital would have a ripple effect, not just across the entire state, but throughout the region, said Dr. Nate Scott, an emergency physician at Hennepin Healthcare. “This is because adults and children with complex wounds or burns, oftentimes require specialty care that HCMC offers and is otherwise unavailable in the Upper Midwest.”

Multiple proposals to bolster HCMC’s finances have been discussed this session, but on Tuesday, three of the committee’s members presented their own proposals.

• HF4841, sponsored by Rep. Esther Agbaje (DFL-Mpls), would increase a 2007 Hennepin County sales tax used to fund construction of Target Field from 0.15% to 1% and allow revenue from the tax to also go toward county healthcare facilities like HCMC;
• HF4892, sponsored by Rep. John Huot (DFL-Rosemount), would temporarily use the state’s General Fund surplus to help cushion HCMC while the hospital and state work to resolve funding issues; and  
• Rep. Danny Nadeau (R-Rogers) presented a yet-to-be-numbered bill that would dedicate $250 million from the General Fund each year to go to HCMC and North Memorial Hospital. After five years, the amount to HCMC would decrease as the hospital is expected to work toward cost efficiency. The bill would also require the governance of the Hennepin County Hospital Board to transition to 80% membership with professional education and experience working in health system and safety net hospitals.