Item Description:
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Approval of the 2025 Hennepin Healthcare System, Inc. Financial Plan as submitted by the Hennepin Healthcare System, Inc. Board of Directors
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Resolution:
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BE IT RESOLVED, that the Hennepin County Board of Commissioners approves the 2025 Hennepin Healthcare System, Inc., Financial Plan, including operational and capital budget, as submitted by the Hennepin Healthcare System, Inc. Board of Directors.
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Background:
Under Minnesota Statutes § 383B.908, the Hennepin County Board of Commissioners has certain reserved powers over Hennepin Healthcare System, Inc. (HHS), one of which is the power to approve the corporation’s annual budget. On October 23, 2024, the 2025 HHS operating and capital budget was approved by the HHS Board of Directors and is now recommended by the HHS Board for approval by the Hennepin County Board of Commissioners.
HHS’s 2025 budget includes Hennepin Healthcare, Hennepin Healthcare Research Institute, and Hennepin Healthcare Foundation.
The organization is focused on aligning resources to mission, vision, and values as well as assuring quality of and access to care. To achieve this, focus will be on the expansion of campus safety, staffing stabilization, elimination of health disparities, increased patient access and throughput in the operating, therapy and inpatient areas.
The HHS 2025 budget anticipates providing approximately 132,000 days of hospitalized care to 17,600 patients discharged from inpatient care. Additionally, patients will seek care through 882,000 outpatient services. This includes approximately 13,000 patients treated in HHS operating rooms.
The 2025 budget contains margin improvement initiatives, including revenue cycle enhancements, patient growth and throughput, alignment of staffing to volumes, premium pay, and non-staffing expense savings.
The 2025 budget anticipates spending $1.57 billion and generating almost $1.59 billion in revenues, resulting in a $16.7 million operating margin. With the addition of County funded capital, the budgeted cash flow margin is $98 million. This margin will primarily fund Capital expenditures and debt repayment. This includes $24M of routine capital expenditures, $25M of asset preservation, and $20M of space improvements.
The final portion of the HHS Budget is the projected revenue HHS receives from the County pursuant to the Uncompensated Care Formula. It is projected that this formula will produce $38 million in payments during 2025.
recommendation
Recommendation from County Administrator: Recommend Approval