Hospital AdministrationPolicy & Law

Amid Budget Shortfall, Minnesota Hospitals Defend Spending on Economic Terms

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The current economic crisis that is afflicting many states, including Minnesota, renders no amount of negotiation trivial (or, even civil at times, for that matter) and is gripping many states in political gridlock. With a Democrat chief executive and a Repub controlled legislature, Minnesota is no exception. One of the state’s largest agencies — the Dept. of Human Services — is receiving the lions share of scrutiny as it is a major source of govt spending. It follows that, with the gridlock in St.

The current economic crisis that is afflicting many states, including Minnesota, renders no amount of negotiation trivial (or, even civil at times, for that matter) and is gripping many states in political gridlock. With a Democrat chief executive and a Repub controlled legislature, Minnesota is no exception. One of the state’s largest agencies — the Dept. of Human Services — is receiving the lions share of scrutiny as it is a major source of govt spending. It follows that, with the gridlock in St. Paul, a shutdown could be looming; that could have an enormous effect on state subsidized health care spending.

Not all healthcare entities in the state are bracing for the worst in the current legislative impasse amid a $5B budget deficit. Hospitals in Minnesota are proud to trumpet their contributions to a growing, if sputtering, economy.

In all, the state’s 148 hospitals generated $27.2 billion and created 214,108 jobs in 2009, according to the most recent data available from the Minnesota Department of Employment and Economic Development, which ran the numbers for the Hospital Association.

Hospitals in Minnesota, especially those in rural areas, may be huge economic drivers of activity, but the spending on healthcare — in the acute care setting — will always outpace the cost of care delivered in a strictly preventative sense. Including safety nets, which were created to attend to those with limited access to healthcare resources, many hospitals still account for heavy spending — eventually encroaching on the need for public matching funds to offset explosive growth in the cost of delivery. In troubled economic times, a balance is needed between spending in both the public and private sectors to ensure continued healthcare delivery in a fiscally sound fashion, not a reckless one. Apparently DHS leaders, reps from the MN Hosp. Assn., Governor Dayton, and lawmakers will be meeting to discuss their philosophical approaches to this glaring issue next week. | LINK

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