Minnesotans live in a state that consistently ranks near the top in health care measures. The percentage of Minnesotans who are insured is among the highest in the nation; clinical measures of health are above average; Minnesota's per-capita costs have never been high compared with national averages. Nonetheless, it is unsustainable for an increasingly large percentage of our resources to be devoted to health care.
Minnesota's enviable health rankings arise from a number of causes. Our state has a relatively strong economy with high levels of employment. Employers have provided comprehensive health coverage, and taxpayers provide generous public programs. We are also home to world-renowned medical education and research institutions, such as the Mayo Clinic and the University of Minnesota.
Many might also point to the fact that much of the health care in Minnesota is provided by hospitals and insurers that are classified as nonprofit.
This leads to two questions. The first is whether a high-performing health care system should be exclusively composed of nonprofit organizations. The second is whether Minnesota hospitals and insurers actually fulfill the kind of mission that would justify nonprofit status.
We believe the answer to both questions is no. When carefully examined, Minnesota's largest health care entities are hiding behind some very small nonprofit fig leaves.
Minnesota has always had a small number of insurers, with five covering more than 90 percent of the local market. The number of hospitals is also shrinking. Changes to payment systems and a transition to seeing more care provided at outpatient locations have put financial pressure on many Minnesota hospitals. This has led to significant consolidation. Minnesotans now receive care from hospitals that have morphed into a dwindling number of complex health systems, as in the acquisition of Park Nicollet by HealthPartners.
These health systems are big business in Minnesota. After subtracting government-run facilities, 72 percent of Minnesota hospitals are classified as nonprofit. According to the Star Tribune's 19th Annual Nonprofit 100, nonprofit health systems, hospitals and insurers comprise 19 of the 20 largest nonprofit organizations in Minnesota and take in 92 percent of the overall revenue among the top 100.
The top 15 among these organizations generated enough revenue in 2013 to rank them among the 50 largest publicly held companies headquartered in Minnesota. State taxpayers are generously subsidizing entities that, in certain cases, generate more revenue than Fortune 500 companies.