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A less rosy state budget forecast isn’t an excuse for state lawmakers to punt on the University of Minnesota Medical Center’s future.

State coffers were stuffed with a $17.5 billion surplus when the University of Minnesota rolled out aspirations last January to build a $1 billion state-of-the-art Medical Center, one at least partially funded by tax dollars, on its Twin Cities campus.

Almost a year later, the U is still pursuing this ambitious vision — and should be. Hospital systems across the nation, particularly those based at universities, are retooling for next-generation medicine, one that will be shaped by artificial intelligence and other technological leaps. The U’s Medical Center is also at a crossroads after an unsuccessful merger pursued by its clinical partner, Fairview Health, with an out-of-state health system spotlighted Fairview’s finances and tense relations with the U.

U officials are now back with a more detailed plan, revealed earlier this month, that calls for $60 million to $80 million in yearly state funding beginning in fiscal 2025 as part of its long-term plans to improve care and training and modernize facilities. But the state no longer has that historic surplus. Instead, it’s facing a more modest $2.4 billion surplus requiring careful management.

Some lawmakers may be tempted to use these tighter purse strings as a reason to punt once again in 2024 on the U Medical Center’s future. That is not acceptable, a point that needs to be driven home as the 2024 legislative session approaches in February.

This is a state powered by medical care and technology. A thriving academic health center at the U — one that brings in millions in research grants, fuels medical technology entrepreneurship and is responsible for training 70% of physicians here — is integral to Minnesota’s future. This is the time to invest to ensure prosperity and good health for generations to come.

The state’s fresh financial challenges will require innovation on the part of lawmakers and the Walz administration to make this a reality. Fortunately, a gubernatorial task force led by Jan Malcolm, one that is aiming to ensure “nation-leading health professions education,” has been weighing the state’s options.

The U presented its updated academic health vision at a task force meeting earlier this month. The plan, to its credit, appears to take into account the state’s less rosy financial outlook. It also notes “current levels of Academic Support from Fairview will not continue past 2026,” underscoring the need for swift, farsighted action at the Capitol.

Fairview acquired the U’s teaching hospitals in 1997, with the terms of the partnership updated periodically. The arrangement has included funding from Fairview to support academic medicine. This year, that support comes to at least $100 million, the Star Tribune reported in November. That’s vital funding for training medical professionals.

Fairview has repeatedly stated that it can no longer afford the investment, and in November it announced that it did not wish to extend the U partnership past 2026. However, talks between Fairview and the U continue, which is commendable.

The fraught relationship between the two, especially after the proposed merger, made it tempting to urge the U to sever ties with Fairview and replace its longtime partner with a web of new relationships with other providers. But doing so would be a massive undertaking. While the U does need to strengthen its ties to other providers, forging a different path with Fairview is sensible.

State lawmakers especially need to take heed of Fairview’s affordability warning and urgently consider an updated model to pay for medical education. State involvement is warranted given the U Medical Center’s economic importance and its central role in providing care to Minnesotans.

The Star Tribune Editorial Board also notes the U hospitals’ public mission as an argument for public dollars. The Medical Center plays a vital role in caring for medical assistance patients, a public service when reimbursement is generally less than that provided by private health plans. In 2022, 31% of the University of Minnesota Medical Center’s patient admissions were enrolled in medical assistance or MinnesotaCare, according to state Health Department data. For comparison, the percentage for Mayo Clinic hospital patients was 11.8%.

The new U plan admirably lays out some innovative funding options that would supplement state dollars or provide targeted funding. One promising approach would generate additional federal dollars through “intergovernmental transfers.” That would require support from the Minnesota Department of Human Services to implement.

The U plan also notes that some other states provide higher reimbursements for academic medical providers with high volumes of medical assistance patients. Following that example would help cover the costs of caring for this population while providing the resources for teaching and training.

Those are worthwhile options to consider. Tapping the state’s provider tax to provide targeted funding for the U Medical Center is a logical consideration as well. So is looking to the state’s private health insurers, which profit from administering medical assistance programs.

The staunch support of two former governors — Mark Dayton, a Democrat, and Tim Pawlenty, a Republican — for a new U hospital and other major capital improvements speaks volumes. High-profile leadership also is needed from Gov. Tim Walz as the state takes crucial next steps to stay at medicine’s cutting edge.

— Minneapolis Star Tribune