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Hospital Association Shares Troubling News

A recent report from the Minnesota Hospital Association (MHA) noted that Minnesota’s hospitals and health systems are facing a severe financial crisis. Thirty-one hospitals, nearly 25% of all hospitals in the state, currently meet formal financial distress criteria. Statewide, hospitals are losing services, staff and the ability to serve their communities. Nineteen hospitals have been forced to discontinue labor and delivery services, leaving patients in Greater Minnesota with up 70 mile drives for basic services. Hospitals are facing a systemic crisis and numerous factors point clearly to a worsening situation.



A recent report from the Kaiser Family Foundation (KFF) cited the number of Americans without health insurance rose by more than 1.3 million in 2024, reaching 26.7 million people — the first increase in more than five years. Worsening this trend, the Congressional Budget Office projects that over 14 million additional people will lose coverage by 2034 due to changes to Medicaid and the ACA Marketplace that were included in the 2025 reconciliation law-related federal administrative changes. KFF data show that over 80% of uninsured Americans are in low-income working families, nearly four in 10 delay or forgo needed medical care due to cost and 62% carry health care debt.

“Every person who loses coverage is a patient who will still need care — but will arrive at our hospitals sicker and without the ability to pay,” said Rahul Koranne, MD, MHA president and CEO.

As federal policies continue to deepen this crisis, Minnesota is being disproportionately penalized for having expanded Medicaid and uncompensated care at safety-net hospitals. The MHA has issued several recommendations to policymakers to address this crisis These include:

• Pass SF 3769 to protect the 340B drug pricing program.
• Establish a statewide hospital support pool.
• Address the chronic underfunding of public health programs.
• No new mandates on hospitals already in crisis.

Despite irrefutable evidence of a system in crisis, not unexpectedly these potential stop-gap measures face political challenges. “We need lawmakers to have the will to act now — before more hospitals reach the breaking point and more Minnesotans lose access to the care they need.” said Koranne.

Fairview Proposes 189,600 - Square-Foot St. Johns Hospital Expansion

MHealth Fairview recently submitted a proposal to the city of Maplewood that detailed a 189,600-square-foot expansion to its existing 370,000-square-foot St. John’s Hospital at 1575 Beam Ave. E. The project features a new four-story addition that will connect to the current building. To ensure uninterrupted care during construction, the hospital’s main entrance and emergency department entrance will be temporarily relocated. The loading dock will also be expanded with an extra door to support increased deliveries and material flow. The exterior design will incorporate brick, metal and stone panels that complement the existing structure, while both interior and exterior lighting will be upgraded to energy-efficient LED systems designed for safety and dark-sky compliance.

In addition to the building expansion, the project will include removing the existing parking structure and relocating a portion of the existing surface parking spaces, replacing a deteriorating retaining wall and improving pedestrian circulation along St. John’s Boulevard. Existing access points to the site will remain the same, and post-construction entry points to the emergency department and the hospital main entrance will be in the same general location. During construction, temporary changes will be made to both the emergency and main entrances to facilitate portions of the project. Additional sidewalks will be constructed to improve access throughout the campus. The proposed addition is focused on the southwest corner of the campus, and the overall design is in keeping with the existing campus, and neighboring buildings. The Maplewood City Council is scheduled to review the request in mid-April and will post meeting minutes when available. Numerous documents, such as storm water management, landscape plans, parking and traffic studies, floor plans, etc., were submitted with the proposal. Presumably, construction timelines will be made public pending approval.

Trump Policies Reducing Government Public Health Workforce

A recent study conducted by University of Minnesota School of Public Health (SPH) showed a disturbing increase in the number of government employees leaving the public health care workforce. Using data collected by the U.S. Census Bureau and the Bureau of Labor Statistics, the study tracked employment patterns and trends among health care and behavioral health workers at local, state and federal agencies. It examined more than 25,000 individuals in government positions between 2015 and 2025 and followed whether they remained in government roles, moved to jobs in other sectors or left the labor force altogether.

At a time when the United States faces an expanding array of public health challenges — from an aging population and rising mental health needs, to chronic disease, the opioid crisis, infectious disease threats and persistent health disparities — the study shows that the public health workforce responsible for responding to many of these challenges is losing workers at increasing rates.

Government-employedhealth professionals play a crucial role on the front lines of the U.S. public health system and deliver care to millions of people at public hospitals, local health departments and major federal systems such as the Veterans Health Administration. The government public health workforce faces mounting pressure from federal workforce reductions and program cuts.

Key study findings included:

• Departures are increasing. Exits from government employment rose noticeably in the most recent data from October 2024 through July 2025, which ties growing workforce instability to the beginning of the second Trump Administration.
• Federal workers saw the biggest change. Historically, federal health care and behavioral health workers had the lowest exit rates. Their likelihood of leaving government employment recently, however, climbed to about 8%.

“Reducing the government health workforce threatens the ability of public health systems to meet the needs of people across the country,” said Nichole Fusilier, MPH, a researcher with SPH’s Center for Public Health Systems. “Government health workers provide essential services in communities nationwide, and when that workforce becomes less stable, it can ultimately affect access to care, especially for vulnerable populations. At a time when demand for health care and behavioral health services is expected to grow, policymakers should be thinking about how to strengthen and expand these jobs, rather than see further reductions in the workforce.”

Blue Cross Posts $353 Million 2025 Loss

In its annual report, released April 1, Blue Cross and Blue Shield of Minnesota (Blue Cross) claimed a combined $353 million in operating losses on $10.4 billion in fully insured premium revenue for 2025. This represents an operating margin loss of approximately 3%. Blue Cross paid $9.8 billion for members’ medical and pharmacy services in 2025, or nearly $27 million in claims on a daily basis. This represents an increase of $1.7 billion in claims spending over the year prior. 

Unfavorable performance in federal and state government health programs — particularly in Medicare Advantage and Medicaid — were the primary drivers of the operating losses. Contributing factors include increasing costs and utilization of specialty medications (including GLP-1s) and hospital inpatient services. In the Medicare market, ongoing federal regulatory challenges — including reimbursement levels where rates for payers have not kept pace with rising cost and usage trends — intensified financial pressures and market volatility.

At the local level, ongoing cost pressures led to multiple carriers in Minnesota either reducing benefits and geographic service areas, dropping plan offerings or withdrawing from Medicare completely. Due to this unprecedented market disruption, Blue Cross experienced a significant influx of Medicare enrollments in 2025. This rapid expansion in membership came with additional requirements to expand operational and administrative capabilities.

The same volatility existed in Medicaid, where large enrollment gains contributed to operational losses in the administration of PMAP (state Medicaid) and MinnesotaCare claims.

“While I have the utmost confidence in our ability to provide financial stewardship in a very challenging environment, it is imperative for us to make significant changes in how we fulfill our nonprofit mission over the long term,” said Dana Erickson, president and CEO of Blue Cross and Blue Shield of Minnesota. “For nearly a century, Blue Cross has been here for Minnesotans. That history shows how we can successfully navigate challenges and deliver long-term stability for our state, our communities and all of our stakeholders.”

Total enrollment for the year exceeded 3 million, the highest level of membership in the 93-year history of the organization. 

Allina and Winona Health form Heart Care Partnership

 Winona Health and the Allina Health Minneapolis Heart Institute recently announced a new partnership that will expand cardiovascular expertise in Winona and surrounding southeastern Minnesota communities. Minneapolis Heart Institute cardiologists are now seeing patients on the first floor of the Winona Clinic. Appointments are available on the second and fourth Monday of each month, making it easier to get comprehensive heart care in Winona. The partnership is designed to meet the needs of Winona Health’s patients by delivering in-person clinic days supported by a full spectrum of cardiovascular services and care coordination.

“This collaboration strengthens our commitment to keeping high-quality care in our community,” said Amanda Ciszak, MSN, BSN, RN, associate vice president of primary care clinics, Winona Health. “Working with Allina Health Minneapolis Heart Institute enables our patients to see cardiology specialists right here in southeast Minnesota. This collaboration helps your Winona Health care team stay connected to your care.”

“We’re excited to partner with Winona Health to make heart care more convenient for families across the region,” said William Katsiyiannis, MD, president, Allina Health Minneapolis Heart Institute. “From prevention and diagnosis to advanced treatment, our goal is to deliver excellent cardiovascular care locally and provide seamless access to the broader Allina Health Minneapolis Heart Institute network when needed.”

The Institute is a leader in cardiovascular innovation, research and care delivery through clinical trials and publications. It trains 4,000+ providers annually, and is consistently rated “High Performing” by U.S. News & World Report. Allina Health is a network of more than 90 clinics, 12 hospital campuses, 13 retail pharmacies, specialty care centers, home care and emergency medical transportation, providing care from birth through end-of-life. Winona Health is an independent, community-owned, nonprofit health care system. For more than 130 years, it has cared for individuals and families through all stages of life from birth through end of life. Services include primary and specialty care, hospital care, senior living and hospice. Guided by a local volunteer board, Winona Health is committed to providing high-quality, patient-centered care for the community it serves.

Essentia Health Breaks Ground on Fosston Emergency Department Expansion

Essentia Health has recently broken ground on new construction that will add more than 5,500-square-feet to the existing emergency department at its hospital in Fosston, Minnesota. Essentia Health-Fosston is a Level IV trauma hospital that provides 24/7 emergency care in a rural region. The $12 million project will include additional treatment space, rooms designed for behavioral health patients, and a new ambulance bay to improve patient flow and access.

“As a critical access hospital serving a rural region, Essentia Health-Fosston plays an essential role in providing timely, high-quality care close to home,” said Dr. Stefanie Gefroh, Essentia Health West Market president. “This new emergency department will help us better meet the needs of patients and families in Fosston and the surrounding area. We are proud to continue investing in this community and the people who depend on us every day.”

Essentia Health-Fosston was recently named a 2026 Top 100 Critical Access Hospital by the Chartis Center for Rural Health. The redesigned department will address space constraints and improve privacy and safety for patients and staff. The facility currently supports emergency services alongside walk-in care and same-day primary care access, in addition to more than 20 specialty services.

“This is an exciting day for our hospital and for Fosston,” said Mike Curtis, Essentia Health-Fosston administrator. “Our team cares for patients around the clock, and this project will give them a larger, more efficient space designed to support excellent care.”

Kraus-Anderson is serving as the project’s construction partner. The company said it will coordinate work to limit disruptions to hospital operations during construction. “Kraus-Anderson is proud to partner with Essentia Health on the Fosston Emergency Department expansion, a project centered on improving patient care, supporting staff, and strengthening access to critical services in the region,” said Tracy Pogue, Kraus-Anderson director of business development. “Our team is committed to engaging regional trades while delivering this work with thoughtful planning, clear communication and a focus on maintaining uninterrupted hospital operations throughout construction.” The project is scheduled for completion in summer 2027.