After a year of tension, HCMC has more diverse oversight and a healthier budget

Hennepin Healthcare System, the organization that runs HCMC, is headed into 2025 with a more diverse oversight board, a healthier budget and a better relationship with county leaders.

The improvements come after a year of tension between Hennepin County commissioners and leaders at the state’s largest safety-net hospital over finances, working conditions and overall transparency. Three members of the health system board have quit in the past year.

“We worked really hard to hear each other and to understand gaps in communication. This past year has been really helpful in getting us aligned and we are grateful for the partnership,” CEO Jennifer DeCubellis, said Tuesday after presenting the health system’s 2025 budget to commissioners.

“I’m optimistic. I think we’ve made progress,” Board Chair Irene Fernando said of the ongoing work between county officials and hospital leaders. “We’ve got to get this right. Health care is not working for a lot of people.”

Fernando led the push for county officials to dig deeper into the Hennepin Healthcare System budget and its operations. The effort began after a $127 million budget gap was revealed in late 2023 whennurses and other unionized workers raised concerns about benefits and working conditions.

The analysis also was driven by county leaders' desire to better serve the patients who most rely on HCMC. Many are people of color, immigrants or have low incomes and limited access to health care.

After a year of budget reports and joint meetings, the health system’s nearly $1.6 billion budget has a small operating margin projected for the coming year. Hospital leaders also have recommended five new board members, including workers and community members who better represent the demographics of the patients the system serves.

The County Board unanimously backed the budget proposal and the slate of new board appointees Tuesday. A final vote is expected Nov. 19.

Jeremy Olson-Ehlert, Janell Johnson Thiele and Mariah Tunkara, leaders of the Minnesota Nurses Association unit representing 1,661 nurses at HCMC, said in a statement that adding workforce representatives to the board was a good step. But they questioned why workers didn’t get to pick their board representatives instead of management.

“When labor and workforce seats are added to employer committees, the unions that represent the workers elect or select the candidates so that workers can choose those they trust to represent their views,” their statement said. “In this instance, however, that didn’t happen.”

They pledged to work with the new board members, but added that union members still have deep concerns about DeCubellis, who they say “continues to disrespect workers and undermine labor unions at every turn.”

Nurses and other unionized workers became so frustrated with hospital leadership in April they called for the County Board to take back control of the hospital. Commissioners never publicly supported that move.

The increased scrutiny from county leaders didn’t sit well with everyone in the hospital system’s leadership. But DeCubellis said the partnership helped hospital leaders find new ways the county can help the health system weather challenging times, especially for hospitals with a safety-net mission of serving everyone, regardless of their ability to pay.

For instance, county leaders have committed to a $10 million increase in uncompensated care funding for a total of $38 million annually.

“It is an ambitious budget,” DeCubellis said, adding that it was focused on providing more services to meet community demand. “Really going with a growth mindset versus trying to cut our way out of what is happening to health care.”

County leaders and the Legislature created Hennepin Healthcare System in 2006 to run HCMC, formerly known as Hennepin County Medical Center, and other county health clinics. The county still owns the facilities and pays for most infrastructure improvements.

Another big emphasis from the County Board was for HCMC’s leadership to better represent the patients it serves, who are about 70% people of color. The hospital is overseen by a volunteer board with 15 members from the community, including two seats for county commissioners.

The proposed slate of new board members, who would take office in January, would more than double the representation of people of color, bringing it to 60%. It is also the first time two employees who are not doctors would be on the board.

Hospital officials say the shift represents their dedication to health equity and inclusive representation. The proposed five new members are:

In October, the Hennepin Healthcare System board tapped Mohamed Omar to chair the oversight board. Previously, Omar served on the board’s finance, investment, audit and compliance committees.

He is Minnesota’s first Somali American hospital board leader.