MINNEAPOLIS — Just months into a contract, the Hennepin County Board voted this January to terminate an agreement with North Memorial Health, which provided $48 million over two years for people struggling to pay their medical bills.
County commissioners passed the resolution 4-1 on Jan. 2, at the very end of a public meeting that lasted only 11 minutes.
Kevin Anderson, a Hennepin County Commissioner representing District 7, said he supports helping North Memorial patients in vulnerable financial positions. However, he said he ultimately voted to end the contract because of concerns about the structure and authority of the deal.
"We can't be a blank check for anybody who has these great needs," Anderson said in an interview. "They're operating in their best interest, obviously, but we also have to operate in the entire public's best interest. If we're using taxpayer dollars, it's best that taxpayers and the governing entity over that has more say of it."
With its flagship hospital located on the border of North Minneapolis and Robbinsdale, North Memorial serves some of Hennepin County's lowest-income residents and treats 20,000 Medicaid patients per year.
In May 2023, the county signed a deal with North Memorial to provide reimbursements largely for people on Medicaid, Medicare and other government assistance programs. Under the terms of the contract, which KARE 11 obtained under the Data Practices Act, the county committed $24 million to North Memorial in 2023 and another $24 million in 2024, setting a goal "to obtain better outcomes for residents, reduce hospital bed stays, and reduce disparities." The contract gave North Memorial the power to "determine eligibility" of patients, but the language of the deal also provided the county wide latitude to terminate the deal early.
In a statement, North Memorial said it was "disappointed" by the board's decision to end funding for the program in 2024. Last year, the health system said it lost more than $60 million in resources due to underfunding from Medicaid and Medicare programs, which have made up a growing percentage of patients in recent years. (North Memorial also operates a separate financial assistance program with "charity care.")
"This contract was vital to helping fund and support the healthcare needs of residents – especially those covered by government programs," a North Memorial spokesperson said. "The critical nature of this healthcare challenge only worsens with time, and we are determined to do all we can to take care of our community, but we will need help."
Hennepin County Commissioner Jeffrey Lunde, whose district includes North Memorial, was the only member of the board who voted to keep the deal alive. He said at last week's meeting that "the county needs to support people no matter where they are in the county."
"I believe that when the money is removed from the agreement, that North Memorial will do what businesses do, they have to right-size their operations," Lunde said. "It will be the people who can least afford it who will pay the price. I believe they tend to not have a voice, so I'm going to give them that voice today by opposing this motion."
By terminating the agreement, Hennepin County now possesses $24 million in funding that it could use toward other health-care purposes. A spokesperson for the county said the board voted to end the agreement "in part to re-focus county resources on other strategies, including those within its existing hospital and clinic system, Hennepin Healthcare."
Commissioner Anderson said the county already provides similar funding to county-owned Hennepin Healthcare for patients on government assistance. Although he said he has not seen any specific proposals to shift the North Memorial funding to Hennepin Healthcare, he said it might be an option.
"We have a lot of need in health care right now. HCMC is no exception," Anderson said. "We are experiencing a big additional need. We're not getting the reimbursement rates we really would need to see in order to get a good health-care system functioning."
Meanwhile, Anderson said he'd like to pursue a new agreement with North Memorial. The health system also said in its statement that "we are committed to continuing to work with the County through a new proposal submission to meet our shared goal of providing important health care services to the people of Hennepin County."
"We were trying to help them out," Anderson said. "I still want us to get to the point where we can get to a productive partnership."
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