Don’t blow up HCMC’s governance

Opinion editor’s note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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We have immense respect for Minnesota’s nurses. But a dispute between their union and Hennepin County Medical Center (HCMC) over health insurance benefits and staffing is hardly sufficient reason to blow up this critical safety-net hospital’s governance structure or jettison its CEO.

It’s frustrating that this needs to be said and to have to advise that Minnesota legislators soon put sensible safeguards into state law to make it more difficult for Hennepin County commissioners to dissolve the board of community representatives currently responsible for the hospital system’s oversight and finances.

A recent news conference held by the Minnesota Nurses Association (MNA), which represents nurses at HCMC and across the state, put a regrettable, high-profile spotlight on the proposed governance change.

After months of criticism over working conditions and changes to health benefits, MNA leaders announced that they want Hennepin County commissioners to take back control of the medical center. Other HCMC unions have lent their support.

“We are here after months of inaction. We cannot keep nurses at the bedside under these conditions,’' said Jeremy Olson-Ehlert, who is an HCMC registered nurse and union leader.

“With higher labor costs and inflated expenses for services and supplies, more than 70 hospitals across the state collectively tallied an operating loss of $419 million during the first half of 2023,” the Star Tribune reported in November. There have been significant job cuts at Allina and Fairview.

The financial pressures are even greater at HCMC, which has a more challenging “payer mix,” meaning many of its patients rely on public programs that typically reimburse less for patient care than commercial health insurers.

Dissolving the community board overseeing HCMC and returning management to county commissioners wouldn’t magically fix this.

Hennepin is the state’s most populous county, and its commissioners’ responsibilities are broad. About 20 years ago, county commissioners recognized that oversight of the medical center required more focus and expertise.

A task force studied how best to do this. It recommended setting up a separate governance structure. That work led to the Hennepin Healthcare System board of directors, with an 11- to 17-member board managing the medical center. Two of its members are county commissioners.

“Just getting an important nurses’ pay raise approved by the County Board took months of irksome politics,” a 2004 editorial noted.

A 2003 editorial also described the limited flexibility of having HCMC directly supervised by county commissioners. “Under the current structure ... hospital executives must go to the County Board for every outlay exceeding $25,000, a political chore that hampers nimble and entrepreneurial management.”

There were solid reasons for the new governance structure, and there’s no compelling argument for switching back to the old model, especially when the business of health care has become increasingly complex. HCMC’s budget for 2024 is $1.5 billion.

It should be noted that the benefit cut appears to leave a plan in place that covers 90% of union employee costs, though MNA leaders disputed this in an interview. HCMC’s current community board may have erred, however, by too swiftly dismissing nurses’ concerns about the change.

While county data suggests nurse retention isn’t the problem that MNA claims, the hospital’s board should work to repair its relationship with nurses to prevent retention from becoming a problem.

An April 8 commentary written by Dr. Thomas Klemond, president of Hennepin Healthcare System’s medical staff, stated that county commissioners are considering the community board’s dissolution and termination of CEO Jennifer DeCubellis.

A statement on Thursday by current Hennepin County Board Chair Irene Fernando said Klemond’s claims were “inaccurate.” She added: “Further, I am not aware of any proposed action related to HHS governance, and there is no relevant action on our agenda for the next Board Meeting (April 16th).”

That’s reassuring, but state lawmakers should act. A 2005 statute outlines the county and hospital boards’ powers under the new governance model. County commissioners can resume hospital management with a two-thirds vote of the County Board.

State law should also require a compelling reason for that change, such as malfeasance by the hospital board, along with due diligence to analyze the impact.

Not requiring either of these was a mistake when the board was established. That left the door cracked open to self-serving special interests, such as a labor union, circumventing an otherwise solid hospital governance structure by taking their grievances to a more sympathetic and more politically minded County Board. That shouldn’t be an easy process, and it’s time to fix this oversight.