MN Democrats say these ideas will control health costs, but medical providers opposed

Christopher Magan, Pioneer Press
·5 min read

Minnesota Democrats’ efforts to impose new rules on the health care industry have run into aggressive lobbying by some of the state’s biggest medical groups.

Democratic-Farmer-Labor Party members want more oversight of nurse staffing levels, drug prices, overall medical costs and health system mergers. Their effort to expand access to MinnesotaCare, the state insurance program for the working poor, also is facing some industry backlash.

All of these ideas remain pending as lawmakers scramble to finish the next state budget by Monday, when the Legislature has to adjourn.

Hospital and health system leaders say their sector is confronting the worst financial challenges in decades. They say half of Minnesota hospitals are losing money and all health systems face workforce shortages.

Caregivers and patient advocates counter that the changes are long overdue and will make health care more affordable and patient-centered. They also argue that the policies will help stop the flood of medical workers leaving the sector because of burnout and safety concerns.

Nurse staffing

After nearly a year of contentious negotiations with hospitals and health systems in 2022, the Minnesota Nurses Association turned its attention in January to pushing the “Keeping Nurses at the Bedside Act” through the Legislature.

The bill would require hospitals to create committees of caregivers and leadership to set staffing levels. The committee would make sure those standards were met and if they were not, staff could ask for an arbitrator to step in.

Nurses say staffing standards are needed because hospitals too often understaff and caregivers struggle to adequately care for patients.

Hospital leaders say these committees would give nurses too much control over hospital operations and superiors wouldn’t have the flexibility needed to meet fluctuating patients needs.

The Mayo Clinic is strongly opposed to the bill and has threatened to take billions in new investments out of the state if it is approved. Democratic leaders are considering a carve out for the Mayo and other hospital leaders say they should have a way around some of the most onerous regulations, too.

Medical costs

Mayo leaders also spoke out against a new health care affordability council that would be tasked with setting cost growth targets. Providers that exceed those targets would have to enact cost cutting plans and could face fines of up to $500,000 if they don’t address rapidly rising costs.

Minnesota would be the 10th state to implement such a council, if the measure is included in one of the the budget bills lawmakers are wrapping up.

Democrats and supporters of the panel say it will help rein in rising medical costs which have long outpaced inflation.

Republicans have questioned how forcing medical providers to pay big fines would help lower health care costs. Hospital leaders have pushed to have the penalties removed altogether.

Drug pricing

The commerce budget that cleared the House and Senate Wednesday includes a prescription drug affordability board that would limit how much Minnesotans pay for certain drugs and prohibit price gouging.

It would also cap copays for certain medicines that treat chronic diseases like diabetes.

“This is a huge victory for Minnesota families who are forced to pay huge sums of money for life-necessary medications and supplies like insulin, asthma inhalers and epi-pens,” said Rep. Michael Howard, DFL-Richfield, who was primary sponsor in the House.

Pharmaceutical Research and Manufacturers of America, or PhRMA, lobbied hard against the bill saying it will stifle innovation and arguing that lawmakers are targeting the wrong part of the industry if they want to control drug costs. They said insurers and pharmacy benefit managers keep billions in drug rebates and discounts that they should be passing on to patients.

“The bill threatens the patient-doctor relationship and injects bureaucrats into the evaluation of whether certain treatments are worth paying for,” PhRMA said in a statement. “It also does nothing to stop health insurance plans and their PBMs from making patients pay more for medicines than they do.”

Health care mergers

The announcement last year that Fairview Health Services wants to merge with Sioux Falls-based Sanford Health raised concerns with patient advocates and state regulators.

After a series of public meetings and an ongoing investigation by Attorney General Keith Ellison, lawmakers advanced a bill that would give the state more power over health care mergers.

Under the legislation, the attorney general could scuttle the deal if it is found to not be in the public interest because it could jeopardize access to care or result in job losses or wage cuts.

The bill would also require any charitable assets the organization received be returned to the state. In Fairview’s case, it could also impact the transfer of two teaching hospitals it operates under an agreement with the University of Minnesota.

Expanding insurance access

Democrats also are pushing forward plans to expand access to MinnesotaCare, currently the state-run insurance program for the working poor. MinnesotaCare operates on a framework similar to federal medical assistance plans and a bill at the Legislature would eliminate income caps now in place that limit who can purchase coverage.

Democrats argue expanding access to MinnesotaCare would give more people access to insurance. They say some are still shut out of the market because their incomes are too high but insurance premiums remain unaffordable.

Hospital leaders worry that expanding government-run health care will hurt their bottom line because state reimbursement rates for care are so low. That in turn could lead to higher costs for people on private insurance plans, opponents say.

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