Gov. Tim Walz announced Tuesday that former Minnesota Department of Health Commissioner Jan Malcolm will work with Minnesota hospitals to address financial challenges.
Walz appointed Malcolm as a senior advisor in the governor’s office and the health subcabinet, emphasizing the significance of this role due to rising hospital costs, especially at HCMC in Minneapolis.
HCMC, the largest safety-net hospital in the state, has already made cuts to five medical programs and reduced its workforce by approximately 100 full-time positions.
The hospital has also decreased its number of patient beds by 100, capping the total at 390. Hennepin Healthcare operates HCMC and said earlier this year that these measures were necessary to address a projected shortfall of $50 million by the end of March.
“Facilities like HCMC are simply too important to lose,” Gov. Walz said in a statement. “We will be working with the Legislature and local partners to find a path forward to preserve this critical statewide asset.”
Malcolm served as the commissioner of the Minnesota Department of Health from 1999 to 2003 and then again from 2018 to 2023. As commissioner, she oversaw a wide range of functions and programs aimed at maintaining and improving the health of all residents, including leading the state’s response to the COVID-19 pandemic.
In her new position, Walz’s office said Malcolm will collaborate with leaders from hospitals and health systems across the state to tackle financial challenges, enhance coordination between the state and hospital systems and develop recommendations for the governor’s office to support hospitals and ensure access to care statewide.
“Her leadership will help us bring providers, policymakers, and communities together to confront the challenges facing our hospitals head-on, strengthen our health care system, and ensure every Minnesotan can get the care they need when they need it,” Gov. Walz said in a statement.
Financial challenges at Hennepin Healthcare and other Minnesota hospitals are in part due to the Trump administration’s changes to federal Medicaid funding.
An immediate impact on Medicaid will result from changes to provider taxes and adjustments in how states partner with hospitals and other health care providers to finance their Medicaid programs. The Minnesota Department of Human Services said that the state could lose up to $500 million annually once federal funding cuts are implemented, due to decreased Medicaid payments.
These changes have reduced funding for hospitals that serve a large number of insured patients on Medicaid, more commonly known in Minnesota as Medical Assistance, highlighting the urgent need for state action to ensure ongoing access to critical care services.
