A Record of Putting Profits Before Patients

All Minnesotans deserve access to quality, affordable healthcare, and frontline workers in healthcare settings deserve safe and healthy work environments. But executives of Essentia Health are pushing decisions and priorities which reflect a corporate healthcare model, raising questions about how committed they really are to putting patients before profits.

Who is Essentia Health?

Essentia executives’ refusal to address staffing leads to strike authorization by nurses.
  • Essentia Health nurses in Duluth authorized a strike after overwhelmingly rejecting Essentia’s contract offer which nurses said did not address staffing issues. Commenting on Essentia’s offer, a Duluth nurse said, “The hospitals left us with no choice. . . We can’t handle another three years of one nurse taking care of eight, nine or even 12 patients at once. Neither can our patients. How many more patients have to sit in their own stool because nobody can answer their call light?”[1]
Essentia executives acquire Virginia hospital, try to undercut nurse contracts.
  • Nurses in Virginia, Minnesota held an informational picket to draw attention to takebacks Essentia executives were proposing. Virginia Regional Medical Center was previously a city-owned hospital that was acquired by Essentia Health in January of 2013.[2] Following their takeover of the hospital, Essentia offered health insurance that “. . . has less coverage while costing more.”[3] While Essentia was seemingly focused on shifting insurance costs to workers, nurses were focused on advocating for patient safety and adequate staffing levels in the hospital.
Essentia hospital criticized for turning away patients with severe mental illnesses.
  • An Essentia Health hospital in Brainerd was criticized for turning away certain patients with severe mental illnesses from its psychiatric units. Patients who received court orders for mental healthcare were turned away, with Essentia claiming they would “. . . only take in patients who voluntarily sought treatment to its 16-bed psychiatric unit.”[4]
Costly expansion contributes to lower S&P rating for Essentia.
  • S&P Global lowered Essentia Health’s rating on debt “. . . due in part to the health system’s plan to invest about $675 million on a replacement hospital in Duluth.”[5] While still not complete, the health system’s investment in its Vision Northland project increased to some $900 million by 2020.[6] Rating agencies such as S&P tend to lower their ratings for businesses when there is increased concern about their ability to meet current financial obligations.
Healthcare workers file charges of Unfair Labor Practices against Essentia and set to strike, citing concerns with short staffing and community care.
  • Members of Service Employees International Union (SEIU) working at Essentia Deer River overwhelmingly rejected Essentia’s offer during contract negotiations and authorized a strike over Essentia’s alleged Unfair Labor Practices.[7] A maintenance worker at Essentia Deer River who served on the worker’s bargaining team had the following to say about negotiations, “The strike isn’t just about us as staff being shortchanged, it is about our whole community being shortchanged. We are a small, close-knit community. When something happens here half the town shows up to support each other. SEIU members overwhelmingly voted going on strike because we want to fix the long-term problems facing our facility so our hospital is here in our community long-term. But management has refused to acknowledge that the majority of our members are underpaid, which is leading to understaffing that hurts both staff and patients.”[8]
Essentia executives spend hundreds of millions on expansions while opposing fair nurse wages.
  • In the same year workers bargain with Essentia over compensation, executives at Essentia purchase mall real estate to the tune of $3.2 million while “Essentia is already involved in extensive plans to revamp its medical campus downtown, investing about $675 million in new facilities and $125 million more to renovate existing ones over the next several years.”[9]
Essentia executives’ expansion displaces residents while Duluth faces an affordable housing crisis.
  • Essentia health purchased property in Duluth’s Central Hillside neighborhood with plans to raze the existing housing there to make room for additional parking.[10] Local leaders expressed concern over the loss of affordable housing in Duluth as “[r]ent has steadily increased over the last decade, and the waiting list for public housing increased by nearly 500 people last year, according to the Housing Indicator Report. Meaning, over 2,200 people are on a waiting list for affordable housing in the city.”[11]
Duluth nurses highlight staffing concerns at hospitals.
  • Registered nurses at St. Luke’s Hospital and Essentia’s St. Mary’s in Duluth met with press to voice their concerns about staffing levels at their hospitals. Nurses expressed concerns “. . . about what they say is a shortage of nurses and nursing assistants in their facilities.”[12]
Essentia Health management furloughs clinical staff amid pandemic.
  • Despite the stresses the COVID-19 pandemic put on patients and healthcare, Essentia elected to begin furloughing clinical workers in Duluth.[13]
Essentia executives pour millions into expansion project.
  • Essentia executives put $900 million into a new hospital tower as part of its Vision Northland Project, “. . . a $100 million increase from previous estimates.”[14] Despite technically being a not-for-profit hospital, this building expansion is the largest private investment in Duluth’s history, and about $100 million in state money is supporting the project as well.[15]
Essentia executives acknowledge “critical staffing shortages” and shorten quarantine period for workers exposed to COVID-19.
  • Despite state recommendations for quarantining after COVID-19 exposures, Essentia shortened the quarantine for exposed workers, citing “critical staffing shortages.”[16] While healthcare workers have long identified the staffing crisis in hospitals, shortening quarantine periods and sending workers who may spread the virus to patients and coworkers is hardly the remedy to provide adequate staffing.
Minnesota Department of Health found Essentia Health leadership failed to investigate an alleged abuse complaint and report a serious physical injury.
  • “A Minnesota Department of Health investigation found that Essentia Health’s long-term care facility in Virginia failed to investigate an alleged abuse complaint as well as report a serious physical injury.”[17] The 2019 investigation by MDH found that the Essentia facility “failed to complete a thorough investigation to assure residents were safe, following a complaint of potential abuse.”[18]
Essentia acquires Moose Lake hospital and management disregards previous labor agreement.
  • Nurses at Moose Lake Hospital submitted a demand to bargain with their new employer Essentia Health, after Essentia notified nurses that it “. . . intends to disregard the [previous] contract and unilaterally implement work and benefits changes. . . “[19] With Essentia’s takeover of the hospital, registered nurses had to re-bid for their current jobs, faced changes to those jobs, and had significant degradations to benefits including lost benefit time, eliminating their cap on low-need hours, and increased health insurance costs.[20]
Essentia acquires Moose Lake hospital and management disregards previous labor agreement.
  • In January of 2021, Essentia Health and Colorado-based CommonSpirit Health announced their intent for CommonSpirit’s CHI-brand hospitals in North Dakota and Minnesota to join Essentia Health.[21] Nurses expressed concern that “the acquisition [would] result in less access to patient care.”[22] A Mercy Hospital nurse who saw her hospital partner with Essentia the previous year said, “Ever since the takeover [by Essentia], we’ve lost numerous staff, causing shortages in how we care for patients.”[23]
Executives continue to pursue mergers and acquisitions despite staff layoffs.
  • While just a year prior Essentia laid off 6% of its workforce, citing $100 million in losses during the early months of the COVID-19 pandemic, Essentia continued to attempt to expand its operations. In June of 2020, Essentia completed its takeover of Mercy Hospital in Moose Lake.[24] In early 2021, Essentia and CommonSpirit “. . . signed a letter of intent to bring two dozen Catholic Health Initiatives-branded [part of CommonSpirit] under Essentia ownership. . .”[25] Essentia declined to comment on the details of the acquisition, such as the number of employees that would be affected or the potential costs of the deal.
High executive compensation for Essentia CEO, executives comes under fire by nurses.
  • Nurses at hospitals across the state of Minnesota draw attention to executive compensation, alleging that while hospitals in Minnesota are technically not-for-profit, they operate like profit-seeking corporations with executive salaries to match.[26] While nurses throughout the state are being offered an 8% pay increase spread out over the next three years, executives like Essentia Health’s CEO David Herman “. . . received $2.7 million in total compensation in 2020, a 61% increase from 2019.”[27]


[1] Chen May Yee, “Duluth nurses set the stage for 24-hour strike,” Star Tribune, August 10, 2010 https://www.startribune.com/duluth-nurses-set-the-stage-for-24-hour-strike/101035874/

[2] Charles Ramsay, “Hospital Picket,” Mesabi Daily News (Minnesota), October 25, 2013

[3] ibid

[4] Brian Arola, “Hospitals strained by ailing mental health system,” The Free Press (Minnesota), November 12, 2017

[5] Christopher Snowbeck, “Rating Agencies Split on Fairview’s Outlook,” Star Tribune, September 11, 2018

[6] Brooks Johnson, “Duluth hospital tower delayed,” Star Tribune, September 16, 2020

[7] “Deer River health care workers set to strike,” Grand Rapids Herald Review (Minnesota), December 31, 2019

[8] ibid

[9] “Essentia purchasing former Younkers store,” Duluth News-Tribune (Minnesota), February 11, 2019”

[10] Kelly Busche, “Medical district development may demolish housing in Duluth, while the city faces a housing crisis,” Duluth News-Tribune (Minnesota), September 12, 2019

[11] ibid

[12] John Lundy, “Hospitals understaffed, Duluth nurses say,” Duluth News-Tribune (Minnesota), March 30, 2019

[13] Brooks Johnson, “Developments,” Star Tribune, April 7, 2020

[14] Brooks Johnson, “Duluth hospital tower delayed,” Star Tribune, September 16, 2020

[15] ibid

[16] Mark Reilly, “Health systems, facing shortage, ask workers to cut Covid-19 quarantines short,” Minneapolis / St. Paul Business Journal, November 9, 2020

[17] Kelly Busche, “Minnesota Department of Health investigation: Virginia long-term facility failed to investigate, report injustires,” Duluth News-Tribune (Minnesota), June 16, 2020

[18] ibid

[19] “Minnesota Nurses Association Nurses Demand Essentia Negotiate Moose Lake Hospital Contract,” Targeted News Service, July 9, 2020

[20] ibid

[21] Laura Butterbrodt, “Almost 700 health care workers sign petition expressing concerns about Essentia acquisition of CHI facilities,” Duluth News Tribune, May 5, 2021 https://www.duluthnewstribune.com/newsmd/almost-700-health-care-workers-sign-petition-expressing-concerns-about-essentia-acquisition-of-chi-facilities

[22] ibid

[23] ibid

[24] Brooks Johnson, “Essentia acquiring CHI medical facilities,” Star Tribune, January 9, 2021

[25] ibid

[26] Max Nesterak, “Minnesota nurses attack hospital executive pay ahead of union negotiations,” Minnesota Reformer, June 1, 2022

[27] ibid