LETTER: Northfield Hospital & Clinics Board Sends Letter to U.S. legislators advocating against Medicaid cuts

Sen. Amy Klobuchar
Sen. Tina Smith
Rep. Angie Craig (District 2)
Rep. Brad Finstad (District 1)

We are writing to you as the Board of Directors for Northfield Hospital + Clinics.  Northfield Hospital + Clinics is an independent, rural, community hospital in southern Minnesota, and plays an important role in providing essential healthcare like birth services, cancer treatment, 24/7 Emergency and ambulance services, primary care, orthopedics, surgeries, and many more services.

NH+C patients come from many rural communities across District 1 and District 2. We’d like you to understand how proposed cuts to Medicaid in the reconciliation bill would impact the communities you serve.

Here is what your decision and those of your colleagues in Washington would mean.

• Removing Medicaid eligibility will not reduce costs; it will shift the cost of health care to providers like NH+C and will leave patients who forego care sicker.

Impact on patient care

• Without Medicaid coverage:
  • Uninsured residents will rely on the Emergency Department (ED) for care
  • Our ED will see sicker patients who put off care until it’s desperate
  • Our ED will see conditions (earache, strep throat) that could be treated more cost-effectively in
    clinic

Financial impact on NH+C

• NH+C is required by federal law to provide care to all patients who come to our Emergency Department regardless of insurance or not. But, there is no reimbursement for ED care for uninsured patients.
• Medicaid cuts that reduce eligibility, eliminate or limit benefits, and further reduce the chronic Medicaid underpayment rates threaten NH+C’s financial stability.
• NH+C is at risk of losing $7.5 million annual net revenue if proposed cuts become law.
• NH+C will be forced to cut services or raise prices for everyone else to balance our finances.

Some rural hospitals have a financial safety net as Critical Access Hospitals. NH+C is not a Critical Access
Hospital.

NH+C is a PPS hospital. Under the Prospective Payment System (PPS), hospitals receive a fixed payment
for each service, regardless of the actual cost of providing it. Critical Access Hospitals (CAH) receive
cost-based reimbursements for their services.
The CAH model improves access to healthcare in rural areas and reduces the financial vulnerability of
these small, rural hospitals. As a PPS hospital, NH+C relies on payment for our services as our only
source of revenue. NH+C does not get paid the way Critical Access Hospitals do, and can’t count on
the CAH safety net that benefits other rural hospitals.

Impact on local and statewide economy

• American Hospital Association estimates that for every $1 billion in Medicaid cuts nationally, Minnesota would lose $2 billion in economic activity over 10 years, and $56.9 million in tax revenue (federal, state, local).
• Minnesota would lose 14,733 jobs annually, including 1,455 hospital jobs, per AHA.
• NH+C employs 850 staff. Most live in MN Districts 1 and 2.

Impacts on rural healthcare

Medicaid is critical to rural hospitals:

• 16.1 million people living in rural communities are covered by Medicaid.
• 47% of rural births in the U.S. are covered by Medicaid, per AHA
• 65% of nursing home residents in rural U.S. counties are covered by Medicaid, per AHA

Source: American Hospital Association “Rural Hospitals at Risk: Cuts to Medicaid would further threaten
access”

From an economic standpoint and the hospital’s business perspective, it is preferable to keep Medicaid
coverage for your constituents across our communities. It is a lower-cost solution that promotes better
health outcomes and economic stability for the communities we serve in Districts 1 and 2 in Minnesota.

Thank you for your service and leadership.

Whenever we can be a resource for you, we’re very happy to help. If we can provide background and insight
that helps you with your work, feel welcome to contact us anytime.

Board of Directors, Northfield Hospital + Clinics

Michael Hemesath, Chair
Rick Estenson, Vice Chair
Sarah Carlsen
Katie Lane
Crystal Mulvihill
Jami Reister, MD
Fred Rogers
Jessica Peterson White