HCMC Doubles Profits in 2015

HCMC Doubles Profits in 2015

By Mathew Keller, RN JD

Mathew Keller, RN JD
Regulatory and Policy Nursing Specialist

Regulatory and Policy Nursing Specialist

Hennepin County Medical Center’s 2015 numbers are in, and many HCMC employees on the chopping block might be surprised by them. Despite HCMC’s public statements contributing layoffs to a “financial challenge,” 2015 was its second-most profitable year on record as the healthcare system pocketed $28.6 million in net income—up from $11.5 million in 2014.

HCMC’s MNA nurses are calling on HCMC CEO Jon Pryor to act with more transparency regarding these layoffs. This is not a good start for Dr. Pryor, who stated in an all-employee email on December 9, 2016, “if you’ve been paying attention to the media, you know that HCMC is not the only healthcare organization facing a financial challenge right now.” Only two months prior, the CEO had signed off on the financial report showing the huge 2015 net income increase.

MNA nurses also know that healthcare systems in general, and HCMC in particular, have been huge beneficiaries as the rate of healthcare insurance coverage has increased. More people covered equals more bills getting paid. HCMC, the state’s largest provider of charitable care, has seen its uncompensated care costs decline by more than 40 percent over the past several years, which has resulted in the savings of tens of millions of dollars.

While HCMC has not been forthcoming with the public or its employees regarding its 2015 profits, MNA obtained their IRS 990 Form financial report. It is, perhaps, unsurprising that HCMC has not gone public with these numbers in light of the large financial gains the healthcare system is showing, in comparison to its stated need to cut staff in order to save money.

HCMC’s 2015 financial report has other revelations as well, including hefty pay increases for executive staff, millions spent on lobbying (including lobbying the Hennepin County Board of Commissioners, who approved these layoffs), and further declines in the amount of charitable care the county hospital provides.

10 Comments

  1. This is disgusting. I worked there almost 35 yrs and this is the most deceitful administrative staff ever there. I used to e proud of our administration, but in the last years since Dr. Pryor’ appoinment ( by the way I was one of the nurses who helped train him😡 I used to trust the quality of care, but their new plan is get rid of the experienced staff as they cost too much. I still receive care there because I have several excellent MD’s, but as more leave, so will I

  2. What a big surprise that is. NOT. As healthcare becomes more corporatized, all the “little” people who put the suits at their desks with magnet status will be let go or will be cut back. We at ANW learned that in a big way over the summer. HCMC doubled their profits and yet say they are encountering “financial challenges.” H-m-m-m. ANW continues to expand and yet they too are encountering “financial challenges.” Let’s see–whose nose grew the longest?

  3. Just because they are non-profit doesn’t mean that they are not not profit driven! Follow the money 💰 people…huge bonuses to administrators that don’t deliver patient care, golden parachutes for executives, and top heavy management…just sayin’! Shame on HCMC!!! It is time for legislators to weigh in and strip these organizations of their nonprofit statuses and stop the financial hemmorhaging of this secret cash cow! The only reason the public is unaware of this travisty is because the boards of directors of hospitals and the media are pretty much one and the same. Many unethical individuals serving on multiple boards. Time to be done!

  4. I wish I had a “financial challenge ” like that.

  5. It would have been nice resources had been linked to the article

  6. Hi @Deanna– any of the red text indicates a hyperlinked source, there are several. Unfortunately there is no public source for the 2015 financials, so I’m unable to hyperlink to that.

  7. How do we get to see those numbers.

  8. Super important that there be more transparency. However, these are the 2015 numbers. Potential layoffs will be based on 2016 numbers. “In general” there was $9 million less in “uncompensated care” last year. However, for reasons not clear to me, HealthEast and HCMC did not share in this particular benefit from the ACA.

  9. @dave: under the old system, hospitals which served a disproportionate share of the poor received payments from the federal government; as the state’s largest provider of uncompensated care, HCMC received the bulk of those disproportionate share payments. Those payments have been reduced. So, HCMC still shares in the benefits of the reductions to uncompensated care, and in fact has cut its uncompensated care costs by over 40% since 2013, but that windfall is partially offset by the reductions to the disproportionate share hospital program. I saw partially because clearly they’re still making plenty of money… yes, these are 2015 numbers, but they only just came out now– and there’s no reason to believe that their revenue went down in 2016.

  10. I find this post fairly uninformed. The net income from FY 2015 has nothing to do with current financial performance for FY 2016. In addition, net income may not include one time large expenses that could greatly reduce the actual net profit. Hennepin cares for a disproportionately high share of Medicaid recipients, which is understandable given its safety net status. Medicaid reimbursement is significantly less than Medicare or commercial insurance, making it hard for safety net institutions to break even, let alone make a small profit. A hospital of this size likely has a operating revenue of over 1 billion dollars and “making” 10-20 million dollars shows just how razor thin their margins are. 2016 has been a very challenging year for many hospitals as reimbursement continues to decrease relative to the cost of providing care. Medical inflation (the cost increase of doing business) is the biggest threat to long term financial vitality of any healthcare system.

    The fact that Hennepin is talking about layoffs reflects just how bad 2016 has been for the healthcare delivery space in general. Many area hospitals are in similar financial struggles. Repeal of the ACA will just make this worse.

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