Legislature will take up bills to help western Wisconsin communities facing loss of two hospitals

Legislation that would redirect $15 million to help hospitals and health care providers in the Chippewa Valley step in to pick up services lost when two hospitals in the region close this spring will go before the state Legislature this week.

Two bills — AB-1078/SB-1014 and AB-1077/SB1015 — will authorize the state Department of Health Services (DHS) to make grants for emergency departments at area hospitals in response to the closings, scheduled for this spring, of Sacred Heart Hospital in Eau Claire and St. Joseph Hospital in Chippewa Falls.

The state Senate is scheduled to take up the measures at its floor session Tuesday and leaders in the Assembly have proposed them for its Thursday floor calendar.

Sacred Heart and St. Joseph are both slated to start laying off employees March 22 and close about 30 days thereafter. The hospitals are part of Hospital Sisters Health System (HSHS) based in Springfield, Ill.

Along with the hospitals, 19 clinics operated in partnership with Prevea Health, based in Green Bay, are also closing. As many as 1,400 employees will be let go, according to state notices filed with the Department of Workforce Development (DWD). The region includes 26,300 Medicaid members, according to DHS.

After the closings were announced in late January, Gov. Tony Evers and officials from Wisconsin’s health, labor and insurance departments met with leaders in Eau Claire earlier this month. DWD and the West Central Wisconsin workforce development board have held job fairs and organized information sessions to detail state support for dislocated workers.

On Feb. 9, Marshfield Clinic announced it would more than double the number of labor and delivery beds at its Marshfield Medical Center-Eau Claire facility.

Republican state legislators representing western Wisconsin districts introduced the two bills Feb. 9, fast-tracking them through public hearings and committee votes on Feb. 14. The money would come from a $15 million allocation in the 2021-23 state budget that was never spent on a planned western Wisconsin behavioral health expansion by HSHS.

“HSHS leaving the Chippewa Valley will have a significant impact on our area,” said Sen. Jesse James (R-Altoona) in testimony submitted at the public hearing. “Last year alone, both HSHS [emergency] departments saw over 22,000 patients. There will no longer be an emergency department in Chippewa Falls, requiring ambulances to travel at least 13 additional miles during times of crisis, but for rural areas, it will be much longer.”

HSHS never followed through to request the expansion funds, James testified, leaving the $15 million in the state Building Trust Fund, requiring direct authorization from the legislator to be reallocated.

The bill specifies the money be used for emergency department capital spending. Testimony from DHS recommended an amendment to the legislation that would allow it to be used for other purposes, however.

“DHS is especially concerned about a loss of care for patients with ongoing care needs, pregnant women, and those with mental health, behavioral health, and substance use disorders; who were served by HSHS in this capacity,” said DHS legislative director HJ Waukau in a memo submitted to both the Senate and Assembly health committees at the public hearings. 

Expanding the terms for using the money, Waukau said, would allow DHS and the Legislature “time to work with stakeholders to identify the most pressing needs and remaining gaps in services as remaining healthcare providers work with HSHS and Prevea patients to transition care.”

Two Democrats whose districts are part of the region were vexed by the introduction of the Republican legislation. Sen. Jeff Smith (D-Brunswick) and Rep. Jodi Emerson (D-Eau Claire) released a joint statement saying they were not consulted despite discussions across the aisle about possible legislative responses to the hospital closures.

“I was just really disappointed that all the Republicans had been having negotiations and leaving Jeff and I out on this,” Emerson said in an interview last week.

In the committee votes last week, most Democrats voted against the legislation. Emerson, who is not on the Assembly health committee, said she wanted to see the funds not limited to capital expenses. “What we need is money to be able to get staff on board fast to expand these other places,” she said.

Emerson said the hospitals’ closures were unexpected in the region, although St. Joseph “had been kind of struggling for a while.” The Chippewa Falls hospital has had a heavy mix of uninsured and underinsured patients as well as patients covered by Medicaid, she said.

Eric Borgerding, president of the Wisconsin Hospital Association, said while the short-term support in the legislation was welcome, hospitals have longer-term challenges for which the two closings are a potential warning sign.

Hospitals with larger numbers of patients covered by Medicare and Medicaid are subject to greater strain because the programs don’t reimburse hospital costs adequately, Borgerding said in an interview Monday. An increase in Wisconsin Medicaid reimbursements included in the 2023-25 state budget now in effect was a welcome improvement, but it will take the full two-year budget cycle for its effect to be felt, he added.

Borgerding said that many nonprofit hospitals, including the HSHS facilities in Eau Claire and Chippewa Falls, are providers of broader safety net services.

“HSHS was supporting behavioral health and substance abuse treatment — by the ways, services that, depending on the payments, are operating in the red from day one,” Borgerding told the Wisconsin Examiner. Increasingly nonprofit hospitals support “a whole host of things that people don’t typically think of as what goes on inside the four walls of the hospital — but in fact health systems today are supporting all of those things.”

The COVID-19 pandemic and subsequent increases in costs for labor, drugs and other expenses have added to the strain, he said, “at a time when reimbursement is far behind.”