Duluth nurses and providers sound the alarm as Essentia pockets tax breaks, cuts patient care  (Page 2)

FOR IMMEDIATE RELEASE

Contact: Shannon Cunningham
(c) 651-269-1418
shannon.cunningham@mnnurses.org

(Duluth) – May 20, 2025 – Earlier today, frontline healthcare staff and community members in Duluth raised urgent concerns about declining patient care and unsafe staffing levels at Essentia Health — even as the not-for-profit system receives millions in tax exemptions meant to benefit the public.

Since the 1950s, hospitals have had a public health mandate to give back to their communities with the savings major tax breaks give them. Yet, a new report by the Minnesota Nurses Association and National Nurses United found that major Minnesota hospitals, including Essentia Health, are breaking their bargain with the public. Money for Nothing? How Minnesota’s Not-for-profit Hospital Systems Profit from Their Tax-Exempt Status shows taxpayers are getting shortchanged, and publicly funded hospitals are leveraging a taxpayer benefit to bolster private profits.

This isn’t new. A 2022 New York Times article reported that “[i]n recent decades, many of the hospitals have become virtually indistinguishable from for-profit companies, adopting an unrelenting focus on the bottom line and straying from their traditional charitable missions.”

In 2023, Essentia opened a $900 million hospital overlooking Lake Superior. Yet in the preceding years, its charity care declined, and local providers including nurses and Advanced Practice Professionals such as Physician’s Assistant’s (PA’s) and Nurse Practitioners (NP’s) were stretched thin, “floated” without notice to unfamiliar sites, and even asked to sleep in hospital morgues due to inadequate lodging. Despite Essentia paying very little income, property, sales or other taxes, staff retention is suffering amid worsening working conditions and patients are facing delays in care.

“This isn’t about dollars and cents. It’s about stability and safety in our healthcare system,” said Kim Volkart, an RN at Solvay Hospice House. “Essentia is choosing growth over care. The public deserves to know.”

Essentia and St. Luke’s received $680 million in federal, state, and local exemptions between 2018 and 2022, yet returned only a fraction of that in charity care. Despite being Duluth’s largest employer, Essentia gave back less than 16% of the value of its tax exemptions as charity care in that period, according to the study.

“This is over $586 million that should have been delivered to our communities in terms of charitable care or alternatively could have been collected in taxes. Over five years, the city of Duluth alone has lost an estimated $38 million in property tax revenue from Essentia and St. Luke’s, at a time when governments have navigated budget crises, school cuts, and reduced city services,” said MNA ​​President Chris Rubesch, RN. “These tax breaks were meant to support Duluth families, not fund corporate expansion.”

As centers of care, hospitals have a duty not only to their communities, but also to their staff. Without staff, patients would not get the care they need. Yet, Essentia has refused to negotiate with Advanced Practice Providers for nearly a year, violating federal labor law. Instead, it has tied key providers to restrictive noncompete agreements, which create barriers to accessible, affordable care in local communities. Meanwhile, patients — particularly those with chronic illnesses and mental health conditions — face longer wait times, reduced appointment options, and the loss of provider relationships critical to consistent care.

“These providers are our neighbors. They live here, raise families here, and care for patients here, but they’re being pushed to the edge while Essentia refuses to even come to the bargaining table,” said Kelly Higgins, an Advanced Practice Provider with Essentia’s East market. “Patients and providers both deserve better.”

Several groups of clinic nurses have affiliated with the Minnesota Nurses Association citing concerns over proposed wage structures and limited participation in decision-making processes. Concurrently, hospital nurses engaged in contract negotiations have been met with proposals that would revise overtime policies and grant management broader authority in scheduling with reduced accountability requirements.

The Minnesota Nurses Association is calling on city leaders, lawmakers, and taxpayers to demand transparency and accountability from Duluth’s largest employer.

“If Essentia wants the benefits of tax-exempt status, it must meet its obligations to the people of this community,” said Julie Flotten, an RN at Essentia’s 1st Street Clinic. “Anything less is money for nothing.”

With over 17% of Duluth residents living in poverty and a median income well below the state average, the call is clear: invest in care, not profits.

The Twin Ports Hospital contract between Essentia Health and MNA expires on June 30, 2025.