Record $25 million gift will help upgrade Abbott Northwestern surgery, critical care capabilities

A historically large donation is financing Allina Health's historically large expansion of surgery and critical care services in Minneapolis.

The foundation of Best Buy founder Richard Schulze will announce Thursday that it's committing $25 million to Allina's 10-story expansion of Abbott Northwestern Hospital in Minneapolis. The donation is the largest in Allina's history and will support a project that is just underway — with webcams showing the demolition of a parking garage to make room.

"Normally we're not big proponents about investing money in hospitals," Schulze, 82, said in an interview ahead of Thursday's announcement. "[But] I'm a big believer in what's going on at Abbott Northwestern."

The billionaire businessman said he was drawn to support Abbott Northwestern for its work expanding critical care, a high-intensity specialty that treats life-threatening illnesses and injuries.

Thirty large operating suites will replace some of the cramped confines in the hospital and make space for new surgical technology and techniques. The new tower will include four floors of single-patient rooms, replacing older rooms.

The donation reflects a pivot by Schulze's foundation away from funding research on regenerative medicine — the search for treatments that restore function in damaged organs and tissues — and toward health care access. Recent donations include $5.5 million to Children's Minnesota for its neurosciences program and $20 million for a new heart and stroke center in Naples, Fla., which will collaborate virtually with Allina's experts in Minnesota on patient care.

"We do invest in areas where we think there's a high probability of success. Unfortunately [research has] not been a winning formula for us so we've moved more in the direction of health and wellness … treatment of patients," Schulze said. "We think treatment for patients with a wide variety of conditions is a better way to spend our money."

The funding is a boost for Allina, which like many hospital systems is facing financial challenges even as it upgrades its flagship Minneapolis hospital and other facilities. The provider reported a $148 million loss in the second quarter of 2023 on the operation of 12 hospital campuses and more than 60 primary care clinics across central Minnesota and western Wisconsin.

Financial woes prompted the health system earlier this year to delay plans to replace its Cambridge, Minn., hospital.

Schulze said it may be risky to invest in a struggling health care organization, but, "anything you're doing in the world of medicine today is risky."

The addition of inpatient beds, other than psychiatric beds, requires a state health review followed by a legislative waiver to Minnesota's hospital construction moratorium to prevent wasteful excess capacity. The Abbott expansion is the largest construction project in Allina's history, but didn't require review because it will replace existing beds.

Allina's board voted in 2022 to authorize $1.2 billion in spending through bonds and other funding mechanisms to build the tower.

Abbott is licensed for 972 beds, making it Minnesota's third largest hospital by inpatient capacity, but only 638 beds were in use in 2021, according to the most recent state data.

Allina leaders are scheduled to offer more details at a groundbreaking Thursday afternoon for the project, which will be part of a broader reorganization of the Abbott campus. An expanded parking ramp will open south of the hospital campus, which will be redesigned with new roadway entrances and underground walking tunnels to connect the buildings, according to plans filed with the city of Minneapolis.

Mark Dienhart, chief executive of the Edina-based Richard M. Schulze Family Foundation, said the foundation may end up doling out more money to hospitals in Minnesota and Florida, where Schulze now lives.

"He wants to see the positive results from what he gives away in the here and now ... rather than betting on something very complex happening," Dienhart said of the shift away from funding research. "I wouldn't be surprised to see these kinds of things continue."