HCMC closure: Lawmakers weigh sales tax hike, state funding to save hospital

HCMC closing: Lawmakers weigh sales tax

Hennepin County Medical Center faces possible closure as it loses millions each month, and time is running out for lawmakers and hospital leaders as the financial crisis deepens. FOX 9’s Corin Hoggard has the latest.

MINNEAPOLIS (FOX 9) - Time is running out for lawmakers and hospital leaders trying to keep HCMC open as the hospital’s financial crisis deepens.

HCMC’s financial struggles

What we know:

HCMC has operated at a loss for eight of the past 10 years, mainly due to unpaid medical bills. Even a small increase in uncompensated care — just 2% from 2020 to 2024 — meant $60 million more in losses, pushing the total above $100 million each year.

"That demonstrates how vulnerable our hospital is to even seemingly small disruption in terms of uncompensated care," Abdi Abdiraham, Hennepin Healthcare CFO, told FOX 9.

The hospital expects to lose another $1.7 billion over the next decade because of recent Medicare cuts in the big federal budget bill. Many experts see HCMC’s situation as a warning sign for other hospitals.

"Some of the trends that you've just heard about in quite clear detail from the Hennepin staff are also beginning to affect other hospitals around the state," said Jan Malcolm, Governor’s Health Subcabinet.

Hennepin County is currently running HCMC and has already made cuts to programs and staff this year. Leaders are urgently seeking a reliable income stream to keep the hospital afloat.

Gov. Walz hopeful lawmakers can reach deal on HCMC

Gov. Walz says he's hopeful lawmakers can figure out a deal to save Hennepin County Medical Center as it faces a rocky future.

Local perspective:

Administrators want about a seven-fold increase to the nearly expired Target Field sales tax, proposing a 1% county sales tax to fund the hospital’s future.

"Hennepin County has proposed a 1% county sales tax, in part because a sales tax is a reliable revenue source that could be used to support a project of the size and scope needed for HHS's future," said Joe Matthews, Hennepin County CFO.

However, many lawmakers question whether Hennepin County residents and shoppers should bear the full cost. HCMC serves a much wider region, with more than 2,000 patients transferred from over 100 medical facilities outside the county last year.

"Over 1,500 patients for our core specialty service, including trauma, burn, hyperbaric medicine, renal transplant, ECMO stroke, and pediatric care were transferred in that capacity. And in total, about 40% of all transferred patients come from outside of Hennepin County, and about 30% of patients receiving care at HHS reside outside of Hennepin County," said Dr. Nate Scott, Hennepin Healthcare ER Doctor.

Several proposals at the Capitol would provide temporary state funding to prevent HCMC from closing.

Why you should care:

HCMC’s financial crisis could impact the entire state’s healthcare system, and lawmakers are under pressure, with less than three weeks left to find a solution.

The hospital’s fate could affect thousands of patients both inside and outside Hennepin County.

"I hope that we can find enough pieces from all of the bills to put something together, and I'm very optimistic that we will," said Rep. Danny Nadeau (R-Rogers).

Optimism remains, but the hospital’s future is still uncertain as the deadline approaches.