North Shore Health CEO ‘disheartened and disappointed’ with state budget proposal

The latest Minnesota budget proposal from the Senate Human Services Committee left North Shore Health CEO Kimber Wraalstad “disheartened and disappointed.” 

Cuts in the healthcare industry are expected, though the impact of those cuts remains uncertain, especially for a rural hospital like North Shore Health.  However, the proposal Wraalstad referenced would cost North Shore Health $1 million per year.

Budget cuts have been a theme at the federal and state levels throughout the year.  The state of Minnesota must release a balanced budget each year, and the shifting policies and budget cuts at the federal level have left lawmakers forced to make cuts to the state budget to avoid a $6 billion deficit.

These budget cuts would exacerbate North Shore Health’s financial losses.  The hospital has routinely operated at a loss, but the 2025 hospital deficit is more than double that of 2024.

“One of the things to keep in mind is, when you do comparisons year over year, that’s a snapshot in time,” Board Chair Rand Wiitala told WTIP.

The complexities of healthcare finances pose challenges.  Programs such as Medicaid and Medicare, as well as insurance companies, do not fully reimburse hospitals for the services they provide.

“People kind of have this expectation that, well, you know, you bill me $100 for a lab test, and [the hospital] gets $100,” Wraalstad said.  “It does not work like that.”

Already facing the challenges of a rural hospital and proposed cuts, North Shore Health is also facing increased expenses, particularly for the nursing home.

“I also have real concerns that, in addition, they keep adding mandates,” Wraalstad said. “So you’re adding expenses to us and then reducing our reimbursement.”

Whether the proposed budget passes or not, it highlights the importance of the Swing Bed legislation Wraalstad has been working on for some time.

“We’re still working on that, and that’s still alive,” Wraalstad said.  “And what that can hopefully try to do is to mitigate some of the losses that are being proposed on the state side, but it won’t completely offset those.”

International Employees

North Shore Health is also monitoring the situation at the U.S. border, as the hospital employs several international employees.  Some are coming across the northern border in Canada, and others are flying from the Philippines and the Middle East.

While the hospital hasn’t had an incident with these employees at this time, they did recently instruct hospital staff how to interact with government officials asking about patients, residents, visitors, or employees.

“It’s absolutely disheartening that we have to have those conversations, but we are,” Wraalstad said.  “And I don’t expect concerns, but we’ve also worked with some of our staff too on getting permanent resident status, and that process continues to go on.”

Rural Health Community Assessment

North Shore Health and Sawtooth Mountain Clinic are hosting a presentation by Rural Health Innovations, LLC, a subsidiary of the National Rural Health Resource Center, which has been conducting a rural health community assessment.

The first public presentation was on Tuesday evening at the Grand Portage Community Center.

The last one will be held on Wednesday, April 30, at 10:00 a.m. in the Grand Marais Community Center.

WTIP’s Josh Hinke spoke with CEO Kimber Wraalstad and Board Chair Randy Wiitaala following the April 25 board meeting about the hospital’s financial situation, online meeting options, and other topics.  The audio of that conversation can be found below.

Josh Hinke April 30, 2025