Financial pressures are forcing North Memorial Health to cut 103 jobs and outpatient mental health services at its flagship hospital.
Officials say the health care system at Robbinsdale Medical Center is struggling as more and more patients become eligible for government-backed health insurance, which costs less for services than private health insurance companies.
Additionally, North Memorial Health learned earlier this year that Hennepin County would eliminate a $22 million grant that helped cover 2023 costs.
The health system says it is currently working with about 3,400 mentally ill patients to find new outpatient care providers between now and the planned end date of Aug. 30. This reduction comes as demand for these mental health services has increased in recent years.
North Memorial Hospital also plans to eliminate its Level 2 Neonatal Intensive Care Unit in Robbinsdale, meaning the hospital's nursery will have the staffing and equipment to treat only newborns with normal deliveries. It means to do something.
“We are really at a stage where we are struggling to navigate the headwinds facing healthcare overall, but more importantly, the payer mix that we serve here in Robbinsdale. “We need to get through this,” North Memorial Chief Executive Officer Trevor Saworisch said. interview. “And it's reaching a tipping point.”
Robbinsdale Hospital has a significantly higher proportion of inpatients covered by low-wage Medicare and Medicaid government insurance programs than the statewide average, Sawallish said. Meanwhile, North Memorial's Maple Grove Regional Hospital had the highest commercial insurance coverage rate of any Minnesota hospital in 2022, according to state Department of Health data.
Private insurance companies are generally thought to offer the highest reimbursement rates for health care providers. Hospitals say Medicare payments are generally lower, followed by Medicaid and related state-federal program rates for low-income residents.
The Minnesota Nursing Association slammed the announcement, saying North Memorial executives are taking home big paychecks while nurses are also losing their jobs.
“Blaming patients who can't pay more for the critical care they need only highlights the true interests and motives of these executives, including those at North Memorial's more affluent suburban campus. , our highest-earning and highest-paying customers…” the union said. said in a statement. “These closures by North Memorial leaders follow a clear pattern: They are closing services that don't generate enough revenue, especially maternity and newborn care and mental health, because people can't afford to pay more for them and find alternatives. “It's about closing in the neediest areas that don't have easy access to care options.”
North Memorial Medical Center in Robbinsdale ranks as the 10th largest hospital in the state by number of patient beds in 2022. The health system also operates 25 clinics, primarily located in the west metro area, and an extensive emergency service, including 10 helicopters and 140 ambulances. Compatible vehicles.
The company employs more than 5,000 people.
North Memorial Health is the first Hennepin County-based health system to make significant job cuts in less than a year, following downsizing announcements at Allina (350 jobs) and Fairview (250 jobs) last year. This will be the third.
To varying degrees, all three health systems cited industry-wide challenges such as labor costs and a gradual lack of capacity, which means some patients are hospitalized longer than necessary. are doing. Analysts say the trend could cause hospitals to cut services such as mental health, obstetrics and pediatrics because these patients typically require fewer profitable surgeries.
In 2023, North Memorial Health reported an operating loss of $8.5 million on revenue of approximately $1.1 billion. This was an improvement from his $12.8 million operating loss the previous year. But last year's results included about $24 million in funding for care for low-income residents, which Hennepin County chose not to renew in January.
“I never said the county is the reason we're in trouble. The county didn't cause the problem…” Sawallish said. “But the fact that they canceled it puts our hospitals in a very precarious situation and in immediate danger.”
The 103 job cuts include workers in clinical and non-clinical roles, most of them related to the Robbinsdale campus. Reductions do not happen all at once.
For example, Robbinsdale's mental health outpatient services are scheduled to close at the end of August, impacting approximately 27 clinicians. “We are consulting with local partners throughout the community to identify alternative care facilities and providers for our current patients,” North Memorial Health said in a statement.
The timing of neonatal ICU changes is still under discussion. Infants expected to require more advanced treatment will be sent to other hospitals, such as Maple Grove.
“After this change, it will be a regular neonatal unit…” Sawallish said. “This is something we really want to keep in this community because we don't know when mothers and families will need us. But the census numbers are low and it's expensive, so we have to adjust. “That was one of the areas where we felt there was a need.” ”
In addition to layoffs, North Memorial Health is seeking to shore up its finances through a change in state law that would allow the hospital to participate in the Medicaid designated payment program. This could potentially free up more federal Medicaid funding to provide additional funding, as long as new funding comes from state or local governments.
Saworisch said a bill has been introduced to add North Memorial to the program, which currently covers the costs of Hennepin Healthcare in Minneapolis.
“If you look at who we serve and our service to the poorest zip codes, our population is very similar to other areas. [Hennepin Healthcare]”We're going to see a little more in the Medicaid system, but overall the government's payment structure looks to be about the same,” Sawallish said.
Nearly 50% of all patients admitted to Hennepin Healthcare in 2022 were eligible for Medicaid and related programs, the highest percentage of any hospital and the highest percentage of any hospital in the state, according to Department of Health data. This is higher than the average of 22%. At the time, North Memorial Hospital in Robbinsdale's Medicaid rate was 24.7%, while Maple Grove's rate was 19.6%.
Medicare paid for 52% of all patients admitted to North Memorial Hospital in Robbinsdale in 2022, compared with a statewide average of 44.7%, according to the Department of Health. That year, Medicare's share was 31.6% at Hennepin Healthcare and 23.4% at Maple Grove.
