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How Minnesota’s hospitals and clinics are proposing to spend $50 million in state emergency funding

doctor's office
REUTERS/Mike Blake
How Minnesotans respond to the “stay-at-home” order issued by Gov. Tim Walz on Wednesday will determine where the state sends money from a pool of emergency COVID-19 funding, according to state health officials.

Just hours before state legislators vacated the Capitol to practice social distancing last week, they unanimously approved a bill establishing $200 million in grant funds for hospitals, clinics, long-term care centers, pharmacies and ambulance services that are fighting the pandemic. Of that total, the state is preparing to award $50 million to providers as soon as possible and another $150 million later this spring or summer.

The legislation is essentially the financial component of the Walz administration’s efforts to buy some time for the state’s health care system to expand testing abilities, bed capacity and stock up on supplies. 

The steps that the governor has been taking so far … are all designed to … lengthen the time period before we think hospitals and nursing homes and others are really going to see that influx of cases,” Diane Rydrych, the director of MDH’s health policy division, said in an interview Wednesday. “We’re trying to target the money that way, too.”

$50 million now, $150 million later

Since last week, when state legislators unanimously approved the $200 million bill, dozens of health care providers statewide have applied for a portion of the money to cover “high-priority” expenses between now and late May, Rydrych said. 

According to public health officials, health care providers in towns or cities where people have limited in-person interactions are less likely to need the state funding for COVID-19-related expenditures, which could include the creation of quarantine rooms and isolation beds, the purchase of ventilators for patients and protective gear for staff. 

Under the legislation’s guidelines, grants from the $50 million emergency fund can cover supplies and space but also staff overtime, hiring or training. Facilities that receive the funding must care for the uninsured without charge and must charge in-network fees even to patients insured out-of-network.

Diane Rydrych
Diane Rydrych
As of Tuesday evening, MDH staff had examined 150 applications for awarding the grant money, while an additional 100-plus applications were still waiting to be reviewed, Rydrych said. The submissions outline funding requests for a wide variety of uses, ranging from testing supplies to protective equipment for nurses and physicians to cleaning products. 

By the grant application deadline Wednesday at 11:59 p.m. Rydrych anticipated a total of 300 to 400 requests for the money. 

Project leaders will begin comparing submissions Thursday and work over the weekend, she said. The team is working in tandem with the state’s emergency response leaders and epidemiologists who are tracking the outbreak so that facilities in locations with the greatest demand for emergency help get it, Rydrych said.

“With limited funds from the state, we need to make sure it goes where it’s most needed,” said Rep. Tina Liebling, DFL-Rochester, who authored the legislation. “It may be where there are hotspots in different parts of the state that [MDH] need to respond to.”

In the same piece of legislation, lawmakers also created a separate grant fund of $150 million for health care providers to spend on less urgent needs to fight COVID-19 in future. MDH is planning to launch a new application process for that money next week.

“Depending on how this plays out and depending on how good we all are at staying home and distancing ourselves there could be a need for more than $200 million in the longer run,” Rydrych said.

Trying to avoid bottlenecks in Minnesota’s health care system

If Minnesotans didn’t limit their socializing, projections by the University of Minnesota show that the state would reach a peak epidemic in about nine weeks (late-May), with ICUs reaching capacity in early May. 

But if Walz’s latest order for people to stay home is successful, the modeling predicts that peak to be put off until early July, with ICUs reaching capacity around the second week of June.

That longer timeframe, Walz said, could give hospitals and clinics time to boost their supply of ICU beds for critically ill COVID-19 patients potentially expanding the total from 235 to 1,000 statewide. Without that level of care in hospitals’ ICU, the chances of someone with severe symptoms dying from the virus is much higher.

Dr. Rahul Koranne
Dr. Rahul Koranne
“The place we cannot get to is when someone can’t get that ICU care, (and) we see the death rates skyrocket,” he said in a live video announcing his “stay-at-home” order Wednesday.

Dr. Rahul Koranne, the president and CEO of the Minnesota Hospital Association, told reporters Wednesday that members are in the process of seeing where, and how, they could turn surgical beds into beds for critically ill COVID-19 patients. 

“At this point, we remain worried [about capacity] … and that’s why we are preparing hard,” he said. “Right now, what Minnesotans need to focus on is staying at home. … If we do that consistently as a society, as a state, then we can potentially push back the curve … and we might have more time.”

Creators of the state emergency fund — Liebling and Sen. Michelle Benson, R-Ham Lake — said they wrote the bill under a shared goal: to avoid bottlenecks in Minnesota’s health care system like those in New York and Washington state, the epicenters of the U.S. COVID-19 outbreak.

“We wanted to get the funds out the door right away so that we could prepare and not be caught short in a situation where the money didn’t come in until it was too late,” said Liebling, who chairs the House’s Health and Human Services Finance Committee.

Benson, who chairs the senate’s Health and Human Services Finance and Policy Committee, said while health care facilities began preparing for a “wave” of COVID-19 patients in Minnesota more than a month ago, the $50 million will help them pay off those extra expenses and remain financially stable. “[It’ll] help them stand up in the case that COVID becomes as bad here as it has in other places,” she said. “We don’t know where this is going to end up.”

From what she’s heard, money to fill shortages of personal protective equipment (PPE) — which can include gowns, N95 masks, goggles and gloves — is on the top of facilities’ wishlist. Benson has also heard requests for funding to cover temporary housing for health care staff who treated COVID-19 patients and don’t want to expose their families to the virus.

Legislators’ remote working will briefly stop on Thursday. They’re planning to reconvene in-person at the Capitol for a one-day session, when they will review a single bill containing additional policy and the latest budget requests by Walz to prevent the spread of COVID-19.

“There’s not a person I’ve spoken to who hasn’t pushed as hard as they ever have in their life to get our nurses and doctors the equipment that they need,” Benson said.

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