Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.
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Blowing up the governance structure for the state's largest safety-net hospital shouldn't be done in haste and without a thorough understanding of the consequences. It's regrettable that language like this needs to be put into law. But the Minnesota Legislature is commendably moving to do so in the last days of the 2024 session.
A Tuesday hearing at the Capitol put a welcome spotlight on the controversial call to dissolve the current nonprofit organization and/or its hospital board overseeing Hennepin County Medical Center (HCMC) and then return direct management to county commissioners. The Minnesota Nurses Association (MNA), a large and influential labor union, is leading the charge to do so, citing concerns about benefit cuts, transparency and staff retention.
As the Star Tribune Editorial Board noted in an April 13 editorial opposing the governance change, none of these challenges are unique to HCMC. Finances are precarious at medical centers in Minnesota and across the nation, with more than 70 hospitals statewide posting a collective operating loss of $419 million in the first six months of 2023. There have been job reductions at Allina and Fairview.
The MNA and other labor unions advocating for a return to direct County Board management have failed to make the case for how change would improve the situation — even though they may have the sympathetic ear of some county commissioners. The current hospital governance structure was created almost two decades ago in part because county commissioners were stretched too thin to oversee the sprawling medical center. Health care has become an even more complex business since then, requiring more focus and expertise — not less.
The MNA push is possible, however, because of a regrettable oversight in 2005 legislative language delineating the hospital board's authority and that of the county commissioners. The commissioners can dissolve the hospital board, but the statutory language doesn't require a reason — much less a good reason — to do so. Nor does it outline a process that includes careful consideration of the potential consequences, which is ludicrous for a hospital of this size and importance. This year's budget for Hennepin Healthcare, the nonprofit running HCMC, is $1.5 billion. The system has 7,300 employees, had 478 operating beds in 2023, and almost 93,000 emergency department visits that same year.
A last-minute bill, HF 5442/SF 5507, would address this and puts up sensible guardrails up to ensure due diligence and solid reasoning for any sweeping overhaul. County commissioners would still maintain the right to dissolve the board or nonprofit Hennepin Health Healthcare System, but doing so would require "sufficient evidence" of one of more of the following:
• A crime committed by the hospital board.
• A violation of certain ethical and legal duties by the hospital board.
• Repeated failure by the board to "act in the best interests of the corporation."
In addition, the county commissioners would have to provide 90 business days' notice before moving to dissolve the board, assess the legal and practical implications of doing so, and hold a public hearing. There would also be a formal process for the hospital board to defend itself.
The Editorial Board, which previously recommended legislation like this, strongly recommends strengthening this bill by adding another requirement: notification and review by the state Department of Health of any substantial governance changes. The state should have a role because of this vital interest: HCMC serves such large numbers of public medical program enrollees.
Testimony on Tuesday from Dr. Mary Seieroe, chief of dental and oral surgery, underscored the need for state review. Seieroe spoke about the disruption that an abrupt change in governance could cause. Many of the providers she works with remember what it was like to work directly for the County Board and have less-than-fond memories of it. Seieroe said these providers could easily go elsewhere, and she is worried that they will leave if there is institutional instability.
Some lawmakers on Tuesday aired another worthy idea: Consider expanding the hospital board to add a position representing nurses or other front-line caregivers. There are already doctors on the board and a representative who previously served as the political director for the United Brotherhood of Carpenters & Joiners of America. The University of Minnesota School of Nursing's dean is also a member. Two county commissioners sit on it as well: Marion Greene and Board Chair Irene Fernando.
Having a front-line caregiver voice who is not a physician would be a beneficial addition to the hospital board. It doesn't appear that state action is needed for this to happen, however. The hospital's current governance structure allows it.
The presence of two county commissioners on the community board also merits note. If things are as bad as MNA claims, doesn't that reflect on Fernando and Greene's effectiveness while serving in this capacity?
HF 5442 legislation has welcome bipartisan support. It is a pragmatic and timely fix, one that prevents county commissioners from potentially putting special interests before those of a vital medical center serving the entire state. The bill has undergone significant changes in the past few days. Legislators should strengthen and pass it before the 2024 session's end.
