Mayo Clinic threatens to pull billions in investments over proposed legislation

Mayo Clinic has given Minnesota Gov. Tim Walz and state lawmakers an ultimatum over two bills that aim to increase nurse staffing levels and rein in health care costs: Gut the bills or the nonprofit hospital will pull billions in planned investments out of the state.

In an email to DFL legislative leaders and Walz’s office on Wednesday, a Mayo Clinic executive said the non-profit is reconsidering its plans for new facilities and infrastructure that are “four times the size of the investment in U.S. Bank Stadium” — a $1.1 billion project. And their decision is “time sensitive” and will be made in a matter of days.

“Because these bills continue to proceed without meaningful and necessary changes to avert their harms to Minnesotans, we cannot proceed with seeking approval to make this investment in Minnesota. We will need to direct this enormous investment to other states,” Kate Johansen, vice chair of external engagement, wrote in an email obtained by the Minnesota Reformer.

Mayo Clinic, the state’s largest private employer with over 48,000 workers, has been spearheading a decade-long redevelopment effort in Rochester to turn the small southern Minnesota city into the “Silicon Valley of medicine,” helped by hundreds of millions in public money.

In 2013, the Mayo Clinic also made a last-minute threat that it would bring billions in investments for Destination Medical Center to another state if lawmakers didn’t contribute $500 million toward the project. The public money has thus far been matched by about $1.25 billion in private investment.

Mayo Clinic did not respond to a request for comment on what specific project they plan to take out of state if the two bills pass in their current form, but the email to the governor said it would be privately funded.

The two bills Mayo wants dead are the Keeping Nurses at the Bedside Act and the creation of the Health Care Affordability Board. Both are currently in the final stages of negotiations between House and Senate leaders, who are ironing out differences between their health and human services bills before sending it to the governor’s desk.

The hardball lobbying comes after months of debate and behind the scenes negotiations with hospital leaders, which have yielded over a dozen significant changes to the nurse staffing bill, according its author, Rep. Sandra Feist, DFL-New Brighton.

“I was surprised to see that email,” Feist said. “Because I had been working diligently with Mayo for many weeks to identify language that would address their concerns without gutting the bill.”

Mayo’s proposal — an exemption that would cover virtually all hospitals in the state — would gut the bill, Feist said.

Asked about Mayo’s ultimatum after a bill signing ceremony on Friday, Walz said he believes a compromise is possible.

“We’ve always supported making sure that our nurses are supported, have what they need. We also understand that Mayo Clinic’s a unique entity where it’s focusing globally on it,” Walz said.

The Keeping Nurses at the Bedside Act (HF1700/SF1651), backed by the nurses’ union, would require hospitals to form committees made up of nurses and other hospital staff to create “core staffing plans” that include the maximum number of patients each nurse can typically safely care for. Eight other states have similar requirements, while California and Massachusetts have more stringent, government-mandated nurse-to-patient ratios.

The nurses’ union says the bill will reduce burnout and lead to better patient care, while hospital leaders have warned the bill would force them to shutter hospital units and turn away patients. Under the bill, the health commissioner must also develop a public grading system to judge how well each hospital complies with its staffing plans.

Committees that could set minimum safe staffing levels have the potential to foil Mayo Clinic’s vision to expand automation in health care, relying on machines to perform many of the functions nurses do now, while a public grading system could tarnish the hospital’s sterling reputation.

The second bill (HF2202/SF2002) Mayo Clinic says needs to be scrapped aims to tackle the ongoing problem of skyrocketing health care costs — likely to worsen as the population ages — requiring ever increasing portions of the state budget to care for people in need.

“This bill is extremely problematic and poses a huge threat to the well-being of Minnesota’s health care system as drafted,” the email from Mayo Clinic says. “It must be removed from the HHS omnibus bill and consideration for Mayo to move forward with the previously stated investment.”

The bill’s author, Rep. Liz Reyer, DFL-Eagan, said she’s making revisions to the bill but hasn’t received much feedback from any hospital representatives.

“It would have been nice to hear concerns after the bill was introduced in February. It’s not like it’s not been public,” Reyer said. “We could’ve had a lot of productive conversations.”

Reyer said a number of other states have created similar boards and pointed to Massachusetts, which has reported lower-than-average growth in commercial health care costs.

The possibility of alienating one of the state’s crown jewels and losing investments that would create high-paying jobs could sink the bills in the final days of the legislative session.

Yet at least some Democratic lawmakers say they’ll hang tough.

“I don’t respond well to ultimatums no matter who they come from,” said Rep. Tina Liebling, DFL-Rochester, who is a member of the committee negotiating the final details of the large health and human services bill. “I appreciate that Mayo has concerns … as legislators we try to balance concerns.”

Democratic Sen. Erin Murphy of St. Paul, a registered nurse who authored the nursing bill in the Senate and once served as executive director of the nurses union, said an exception was unacceptable, and that the bill is in its strongest form since the nurses’ union began advocating for legislation addressing low staffing levels in 2008.

“It’s frustrating that an institution rightfully known for incredible care is using their power and resources to block a policy that would make patients safer,” Murphy said.