Minnesota’s hospitals and health systems are facing significant financial pressures that threaten access to care across the state. When hospitals struggle financially, patients may find it harder to get the care they need, where and when they need it.
The core problem is a gap between what it costs to provide care and what hospitals are paid. As more patients are covered by government programs – now roughly 64% of hospital visits, and over 70% at some facilities – these losses continue to grow.
At the same time, hospital expenses continue to rise. Workforce costs make up about half of all hospital expenses and have grown significantly, with some hospitals reporting double-digit increases in labor costs. Supply and service costs have also risen sharply, further straining budgets.
Minnesota is not alone, similar pressures have led to hospital closures and loss of services across the country, with nearly 30% of U.S. rural hospitals now at risk.
If these financial challenges continue, Minnesotans may experience:
Rural communities face a particular vulnerability. These hospitals often serve populations with higher rates of government insurance coverage, sometimes over 70% of patients, and have less bargaining power with private insurers due to lower patient volumes. Six rural hospitals in Minnesota have closed since 2005, part of a nationwide wave of 199 rural hospital closures.
The ripple effects extend beyond health care. Hospitals are often major employers in their communities, and closures can lead to job losses and economic decline. For patients, losing a nearby hospital can mean longer travel times for emergency care, a critical factor when every minute counts.
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