Statement on Proposed Hennepin Board Action to Dissolve the HHS Board
Recent discussions have made it clear that in order to ensure the hospital remains open, direct operational oversight and expedited decision-making are necessary. The proposed action is about ensuring operational continuity of the last public safety net hospital in Minnesota – HHS management has identified the operational risk of hospital closure at the end of 2025, and the HHS Board has prioritized workforce reductions and program divestment as its primary solutions. In service to the continued operations for the hospital, I will be voting in favor of the proposed action when the time comes.
History
Hennepin Healthcare System, Inc. (HHS) is the last public safety-net hospital in Minnesota and is a vital component to the health and well-being of Hennepin residents, Minnesotans, and the broader region. HHS previously operated as Hennepin County Medical Center (HCMC) when it was still a department within Hennepin County Government, and therefore under the oversight of the County Board. The Hennepin County Board is made up of seven democratically elected officials, each representing a district of approximately 190,000 residents. Hennepin County’s total population is about 1.3 million residents and makes up 22% of Minnesota’s population.
In 2005, the Legislature passed legislation to enable the creation of HHS as a public subsidiary of Hennepin County. In 2006, the County Board voted to establish HHS as a subsidiary corporation, which made HHS a legally distinct entity from the County. In 2007, HHS began operating under the HHS Board – by statute, membership consists of “between 11 and 15 directors. Two of the directors on the board of the corporation must be county commissioners currently serving as elected officials on the county board who are chosen and may be removed by a majority vote of the county board.” HHS Board members are identified via the HHS Executive and Governance Committee, recommended by slate to the HHS Board, with ratified approval from the County Board.
In 2019, I joined the Hennepin County Board with a clear and consistent vision to expand health access and methodically improve health outcomes for all residents. I have served on the NorthPoint Health and Wellness Center Community Board of Directors throughout this time, and I am proud of the County’s investment in North Minneapolis through the $90M expansion of world-class Federally Qualified Health Clinic (FQHC) and NorthPoint’s continued success. During my seven years as a Commissioner, the County has also expanded funding and services for Healthcare for the Homeless (another Hennepin FQHC), as well as greater investment in public and behavioral health programs across the County.
I joined the HHS Board in early 2020, right before the global health emergency. During this time, the County Board received federal funds that were distributed toward housing stability and shelter, public health, small business relief, education, employment opportunities, income programs, and justice efforts to reduce disparities. And because the County Board firmly supports healthcare workers and health access for residents, we allocated $61.5M of COVID relief to HHS in addition to budgeted funding levels. In 2022, the County Board further prioritized Health Access by identifying it among our top three priorities for federal legislative advocacy. Our focus led to significant funding for HHS via the Medicaid Directed Pay program, as well as reduced pharmaceutical expenses through 340B legislation and other legislative efforts to reduce administrative burden.
Recent financial pressures for HHS and the County
By Minnesota statute, Hennepin County must pass its maximum levy each September for the following calendar year – and the final levy must be voted each December within a final budget. For example: In September 2025, the County Board must approve the total amount it may collect from property taxes during the 2026 Budget year (max levy), with the 2026 Budget formally approved in December 2025 (final levy). In order to be planful with taxpayer dollars and compliant with the State of Minnesota, Hennepin County must be aware of financial pressures no later than August of each year.
Throughout 2024, the County Board and HHS Board worked to align governance processes, calendars, deadlines, and deliverables – primarily an achievable 2025 HHS Budget and a 2025 Joint Calendar, both approved December 2024. In parallel, the County Board established guidelines regarding HHS Board membership to be more representative of workers and patients in October 2024, with ratification of an HHS Board Slate in November 2024.
Despite jointly passing a 2025 HHS Budget, several factors arose throughout the past seven months that mandate greater attention and financial problem-solving – including the need for the County to advance payments for uncompensated care and an unbudgeted request of a $30M loan from the County. Regarding the loan request, the County Board instead approved the direct purchase of up to $15M of life-safety medical equipment on July 29, 2025 – these unbudgeted funds are in addition to existing financial commitments.
At a Joint meeting of County and HHS Boards held on June 12, 2025, the HHS CEO stated that the hospital was at risk of closure at the end of 2025. This was an alarming statement that has since been repeated by the HHS Chair and management. Since then, I have not observed the planning and speed necessary from the HHS Board to mitigate closure – with their main request being to increase County funds, but lacking robust information from HHS management and the governance due diligence from the HHS Board that are commensurate with the scale of financial need.
HHS must remain open and operating
As a subsidiary, Hennepin County holds financial responsibility for HHS and its future – and I care deeply about the continued operations and long-term success of HHS, its mission, workforce, patients, and community. I am proud to have advocated for greater financial contributions since joining the County Board in 2019.
For example, Hennepin County invested a total of $227.8M to HHS in the 2024 budget year: $28M in budgeted uncompensated care, $10M in supplemental uncompensated care, $33.1M in Capital expenditures, $4.8M in IT expenses, $4.2M for additional workforce health insurance expenses, $121M via Hennepin Health (County-owned Managed Care Organization), and $26.7M in county purchased services for HHS.
Additionally thanks to broad legislative advocacy, HHS began receiving significant funds in 2022 through the Medicaid Directed Pay program, which is only possible because HHS is a subsidiary of the County. While we do not yet have 2024 numbers, HHS received an additional $139.6M in 2023 and $89.1M in 2022.
For the last 18 months, Hennepin County has worked to receive financial information from HHS Board and management in order to ensure financial sustainability and good governance. Unfortunately these efforts have not been met with the robust information that matches the scale of need in order for the hospital to continue serving patients at a level acceptable to residents, workers, and patients.
However even with significant increases in government support (County contributions and Medicaid Directed Pay program), HHS has still experienced an operating net loss for seven of the past eight years. This is not sustainable and merits further inquiry in order to stabilize HHS and ensure its operational continuity. Recent discussions have made it clear that in order to ensure the hospital remains open, direct operational oversight and expedited decision-making are necessary.
For these reasons, we arrive at the proposed County Board Action
On July 29, 2025, Hennepin County introduced a Board Action that considers returning operational oversight to the County Board on an interim basis, in order to financially stabilize the hospital and steward public funds. The consequences of HHS closure are too severe, and such a risk can only be overcome with operational oversight in order to move expeditiously and resolve financial needs and implement operational improvements.
The proposed action would establish the Hennepin County Board as the interim HHS Board for the hospital, meaning the hospital will continue operations without disruption. By temporarily serving as the HHS Board, Hennepin County would have the financial and operational oversight necessary to ensure the long-term success of HHS. This would be a meaningful action to ensure the hospital stays open, limits workforce impacts especially to frontline staff, continues to serve those in need, and remains financially viable for decades to come.
I support the Board Action because it will ensure continuity of care, allow for increased governance oversight during a time with mounting financial pressures, and prioritize residents and workers so HHS can truly live up to its promise of “exceptional care without exception.”
Clarifying the Narrative
Despite outside claims, the County Board has not discussed or taken an action on HHS governance since 2006.
In 2024, prominent misinformation was spread that asserted “Commissioner Fernando’s motive to dismantle HHS” with an emphasis on an alleged governance action from the County Board. Since then, I have been consistently described as absent, disengaged, and incompetent as an HHS Board member. This misinformation was untrue and never substantiated, and the assertions about my character and work performance are inaccurate.
In the 2025 calendar approved December 2024, HHS was scheduled to complete its 2026 Budget proposal at the HHS Board meeting on July 23 – with formal presentation to the County Board at the County/HHS Quarterly Briefing on August 7. The HHS Board delayed its meeting from July 23 to August 6, where it would be anticipated for the HHS Board to discuss and approve a 2026 Budget proposal.
This action is not about feedback to the HHS Board. I am grateful to all HHS Board members who have served since 2007, with special thanks for those I served alongside since 2020 as we led through a global health emergency. These volunteer members dedicate countless hours and attention in service to the HHS mission and community. I also extend sincere gratitude to the current HHS Board and Chair Omar for their service, passion, and expertise.
This action is about ensuring operational continuity of the last public safety net hospital in Minnesota – HHS management has identified the operational risk of hospital closure at the end of 2025, and the HHS Board has prioritized workforce reductions and program divestment as its primary solutions. In service to the continued operations for the hospital, I will be voting in favor of the proposed action when the time comes.