RiverView Health has had busy year so far, but there has been a lot of questions and concerns about rural healthcare with President Donald Trumps “Big Beautiful Bill” looking like it will be passed soon. There was good news in the Minnesota State special session in St. Paul, and more. We sat down with RiverView CEO Carrie Michalski recently to discuss how things are going over at RiverView and what is ahead for the future.
“It’s been a busy year, but it’s also been a great recruitment year for RiverView Health,” says Michalski. “The climate, I think, in healthcare just continues to be financially challenging, although we are improving our operating margin from what it has been.” The new RiverView Hospital building will celebrate its five-year anniversary this year. The five years haven’t been without financial challenges.
“When we went into that, we projected we would have three really really lean financially years coming out of that, just with new expenses and new depreciation of the building,” says Michalski. “That all happened, but that trough or negative margin for those three years was deeper than what we had projected because we didn’t project Covid and what the impacts of that would be when we were doing the building project.”
It wasn’t until recently that the operating margin started going in the right direction. “Year four is the year that we projected a turn on that, an improvement of our operating margin, and thus far we have four months to go in our fiscal year, but we are seeing that improvement over time, so that’s been good, that we’re on plan with our business year.”
RiverView has also been making itself a go-to by bringing on new doctors and even bringing back some favorites. “We’ve been excited about the recruitment at RiverView Health and the talent that we have been able to bring into the community. Dr. Sekundiak changed his employment arrangement. He’s a very talented orthopedic surgeon and does lower extremity work for us. We were so glad we could retain him,” says Michalski. “The addition of Dr. Parikh and the growth of our pain management services have been something we really value.”
Michalski made sure to mention that well-known family physician Dr. Erik Kanten is soon retiring, kind of. “We are preparing for Dr. Kanten, who has been in our community forever in family practice and OB to retire. He will be retiring from his full-time practice in July,” says Michalski. “And then coming back, this fall, to help RiverView Health out. We will see him around here one or two days a week starting this fall, so we will have more announcements for the community in that regard, and that’s going to be really great for us too.”
Michalski says several new physicians will also be joining RiverView in the near future. She says they are expanding their internal medicine team, which consists of physicians who specialize in working with adult patients ages 19 and over, and also adding a family practitioner.
“We are excited about all of the new physicians and just our ability to successfully recruit to our community,” says Michalski. “It’s big for RiverView Health and the patients we serve. It’s also a positive for Crookston and the region.”
There has been a lot in the news lately about the Big Beautiful Bill that Trump and his administration are trying to get passed before July 4. This has been a worry for rural hospitals, including RiverView. “We have been deeply concerned about some of the components of the Big Beautiful Bill and, in particular, reforms or changes that the Federal Government has been looking at and proposing to deal with Medicaid and how Medicaid is funded to states,” says Michalski. “This is deeply concerning because we have at any time 10-15% of our patient population that relies on Medicaid as a funding source for their care.”
Michalski says that Minnesota does not fund particularly well already with Medicaid, and that Medicaid is primarily a responsibility of the states, but that there is Federal investment and matching programs to states. “These matching programs that the Federal Government has with states are kind of what is being debated in the Big Beautiful Bill.”
Not everything that was put into the Big Beautiful Bill originally will make it to a vote, Michalski says. “Thursday of last week we saw Senate Parliamentarians rule that the way that the Federal Government wanted to reduce the spend on Medicaid, they were proposing to reduce or remove the ability for states to generate provider taxes, that are then matched by the federal government,” says Michalski. “There were cuts to those programs in the Big Beautiful Bill. The Big Beautiful Bill is a reconciliation bill, so it’s making small changes to previous legislation, and I’m not an expert on everything, of course, that’s why the parliamentarians in D.C. and their respective bodies are overlooking this.” The Parliamentarians ruled that a change to any state’s ability to have a provider tax that then supports Medicaid and is matched federally, such changes to that part of the legislation are not allowed in a reconciliation bill.
With the cuts to Medicaid being pulled from the reconciliation bill, if it is still a cut the government wants to make, they will have to do it in a different bill. “With their inability to cut Medicaid through the state provider tax, which was ruled last week, coming out of there, they are going to need another solution to get all of the goals they wanted to accomplish in the bill,” says Michalski. “At least short term, we feel like we have had a reprieve because there will need to be a free-standing bill to deal with Medicaid, and it will need more than just a simple majority to pass.”
Not only was it good news that the Big Beautiful Bill could not remove any Medicaid funding, but the end of the recent State Session also brought good news. “Minnesota, in our State Special Session, that just ended, we successfully advocated, the Minnesota Hospitals did, for actually an increase in the provider tax so that we could fully leverage the Federal Matching available,” says Michalski. “That’s just going to DC now for approval. We were at a real precarious place with this Big Beautiful Bill that was looking to eliminate that program when we just successfully advocated and made a decision through our legislature in Minnesota that, yes, Minnesota needs to invest more in Medicaid.”
If the provider tax increase goes through, it will reduce the Medicaid losses for RiverView Health in Crookston from about $3.5 million to about $1.2 million per year. “So we are still not going to be fully compensated for the cost of Medicaid care, but it really does a lot to stabilize the program, and it’s really important because we are continuing to see services that are no longer available for Medicaid recipients,” says Michalski. “Sometimes, when those services are no longer available for Medicaid recipients, they are no longer available to anybody because the service goes away completely.”
Michalski says it’s important to remember that almost everyone, if they thought about it, knows someone, whether a friend or family member, who relies heavily on Medicaid. It’s also important to realize that almost half of those on Medicaid are children. “These are not people who are on Medicaid who can’t work, or don’t work, these are children. Whether they were born with special needs or chronic conditions that are very costly and have needed the support of Medicaid, or if it’s a temporary situation in their family dynamics,” says Michalski. “Medicaid primarily serves children and the elderly. We are pretty passionate about protecting Medicaid, and it protects our local hospitals.”
