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Hennepin’s crisis shows how exposed safety-net hospitals have become

A Hennepin County commissioner’s warning that Hennepin County Medical Center will close without state help is a stark example of the pressure building on safety-net hospitals as federal Medicaid changes approach.

2 min read
Hennepin's crisis shows how exposed safety-net hospitals have become

Executive takeaway

Safety-net strain will not stay inside safety-net hospitals, so every system should model what happens to its volumes and payer mix if a local safety-net provider falters.

Article

What’s happening in Minneapolis

Hennepin Healthcare, which runs HCMC, the Twin Cities’ main safety-net hospital, has posted operating losses in seven of the last eight years, Axios reported March 9. Three of every four patients it sees are uninsured or publicly insured, and unpaid patient bills rose 44% from 2023 to 2024. County Commissioner Jeff Lunde said that without the state funding being sought, the hospital is going to close. Commissioners want legislators to let them redirect a county sales tax, originally used to build Target Field, to support it.

Why other systems should pay attention

HCMC’s problems are local in detail but national in shape. The One Big Beautiful Bill Act will reduce Medicaid spending by about $1 trillion, add work requirements that will push some enrollees off coverage, and freeze state directed payment programs, which Axios notes effectively cuts payments to hospitals in 34 states. America’s Essential Hospitals projects uncompensated care could rise by $443.4 billion nationwide over the next decade.

Hospitals with heavy Medicaid and self-pay volume have little room to absorb that. Their trouble also spreads. When a safety-net hospital cuts services or closes, nearby systems inherit its trauma, behavioral health and uninsured patients, often without the public funding that supported that care.

What leaders should do

  • Model 2027 and 2028 under the new law. Project coverage losses in your market and the effect of directed payment limits on revenue.
  • Track self-pay and bad debt monthly. A rapid jump like HCMC’s 44% is an early warning, not a year-end surprise.
  • Map your dependence on the local safety net. Estimate the volume and payer mix that would shift to you if a public hospital nearby pulled back.
  • Make the public case early. Public and community hospitals should brief local and state officials on what they provide, with data, before a crisis forces the conversation.
  • Look for regional solutions. Shared services, transfer agreements and coordinated behavioral health capacity can lower costs across a market.

Archive entry for Mar 10, 2026, added Nov. 11, 2026.

Sources

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