Mayo Clinic-vs.-Legislature standoff worries Rochester businesses
Jeff Kiger, Post-Bulletin, Rochester, Minn.
4 min read
May 8—ROCHESTER — Rochester businesses worry that they might end up the losers in Mayo Clinic's "bold" $4 billion standoff with the state.
In an email to legislators and the governor last week
, Mayo Clinic stated it would cancel Minnesota investments equal to "four times the size of the investment in U.S. Bank Stadium," if two health care bills — the Keeping Nurses at the Bedside Act and the Health Care Affordability Board — pass as written.
The email was made public by the Minnesota Reformer.
Given that "four times the size" of the U.S. Bank Stadium adds up to $4.4 billion, Rochester area businesses are watching this staredown between giants very closely.
While the email did not specifically name any Rochester investment projects, local people are already calculating what possibly billions of dollars could mean for their businesses and the community.
Kathleen Harrington, the interim executive director of the Rochester Downtown Alliance and former member of Mayo Clinic's government relations team, is very familiar with Mayo Clinic lobbying and Mayo Clinic. She was on the front lines of the passage of the Destination Medical Center legislation.
"Sometimes it takes bold action to get bold reactions," she said. "This is about the collective impact of what is happening in the capitol of Minnesota that's going to affect cost of and access to health care, not just here in Rochester, but across the entire state. I think it shows how critical this is to health care in Minnesota. Sometimes one organization can have a significant impact by shining a bright light."
Once news about the ultimatum broke, Harrington immediately began fielding phone calls and emails.
"Very concerned businessmen and women from downtown have been calling and saying, 'What do we do here? We believe in the Mayo model of care... We hear it all the time from our customers who love Mayo who keep coming back," she said with an acknowledgment that downtown Rochester businesses benefit directly from Mayo Clinic's presence.
While the Mayo Clinic email alluding to the possible $4.4 billion did not detail if that represents one year or 10 years of investment, the number is certainly large even for an organization that reported $16.3 billion in revenue in 2022.
Mayo Clinic has two major Rochester projects representing an estimated $321 million investment under construction — $201 million for the proton beam treatment center expansion and $120 million for the Anna-Maria and Stephen Kellen Building.
While Rochester remains the heart of Mayo Clinic, the health care giant has been making big investments in its Florida and Arizona campuses as well as international projects in London and Abu Dhabi.
John Eischen, executive director of the Rochester Area Builders, explained the value of having Mayo Clinic spend its dollars on local projects. He pointed out that Mayo Clinic projects accounted for 279 Rochester building permits in 2022 with 87% of that work being performed by local contractors.
Those projects were valued at a combined $197.9 million, based on the permits. Eichen then used a national standard of every $1.92 spent in non-residential commercial construction resulting in $4.33 of economic impact to calculate a $446.4 million local boost from just those construction projects.
"As always, the positive local economic influence of Mayo Clinic construction investment is significant," he concluded.
Conversely, proponents of the Keeping Nurses at the Bedside Act and the Health Care Affordability Board bill say these bills are significant to nurses, patients and Minnesota health care in general.
"The Keeping Nurses at the Bedside Act is designed to retain nurses and improve staffing to protect and improve patient care. Every patient, at every hospital in the state, deserves to know they will receive safe and high-quality care when they walk through the door of a hospital," wrote Minnesota Nurses Association President Mary C. Turner.
Mayo Clinic leaders are asking for its facilities to be exempt from the Bedside Act. In an email to employees about the dispute on Friday, CEO Dr. Gianrico Farrugia and others described the opposition to the bills and the need for such a dramatic threat.
"In short, these bills render Mayo Clinic unable to fulfill its mission," wrote Farrugia and his team in the note.
The big question is what will happen next. Harrington believes the end result won't be as simple as one side winning.
"I think what this will drive is rethinking some of the provisions and re-examination of the collective impact," she said. "I don't think it's black and white. I think there's a lot of gray here. And this is an opportunity to find that gray middle."
Rochester Area Economic Development Inc. President John Wade added that this situation could still be worked out in a positive way.
"We in the business community, like Mayo, are very hopeful that a resolution is forthcoming that will avert this potential crisis to our economy and allow Mayo to continue to grow and expand and to serve the patients that they care most deeply about," he said.
