M Health Fairview’s future unclear after Fairview-Sanford merger talks close

With the announcement Thursday that Fairview Health Services and Sanford Health are ending merger talks, questions arose about the future of Fairview’s partnership with the University of Minnesota.

The two entities entered into an agreement in 1997. It expires in 2026, with an option to sign a 10-year extension in 2023. Neither the University of Minnesota nor Fairview provided information Friday on how they plan to move forward.

The University of Minnesota outlined a new vision for its future in January, just a few months after Fairview and Sanford announced the proposed merger.

“We must own, manage and control the flagship health care facilities on our Twin Cities campus,” said Joan Gabel, who was the U of M president at the time.

She explained that those facilities included Masonic Children’s Hospital and the University of Minnesota Medical Center, which were transferred to Fairview as part of their original agreement.

The university asked the Legislature for $950 million to support its goal, but the request did not advance during the regular legislative session.

Governor Walz suggested that there might be a special session to discuss the future of the University of Minnesota Medical School. However, his office did not respond Friday to whether that is still a possibility.

Minnesota Nurses Association President Mary Turner was relieved to hear the Sanford-Fairview merger fell through.

“Every time these mergers happen, it feels like a bunch of these facilities are closing,” Turner said.

She is now also a regent on the University of Minnesota Board of Regents. She said the partnership and potential purchase of the hospitals is at the top of the list for the board to work on.

“Right now we’re looking at all sorts of options,” she said. “We’re keeping all our options open.”

Regent Ruth Johnson said in a statement Friday: “Minnesota residents benefit greatly from a strong and vital medical school at the University of Minnesota. This requires good clinical partnerships. We will focus our attention on ensuring the university delivers on this mission now, tomorrow and far into the future.”

When Attorney General Keith Ellison reviewed the Sanford-Fairview merger, concerns were raised about University of Minnesota facilities being controlled by an outside entity. The Minnesota legislature passed a bill to prevent U of M health facilities from being owned or controlled by an out-of-state entity unless the attorney general decides it is in the public interest.

“We have something to be very proud of here,” Turner said. “The university is a land-grant institution, which means they are there to serve the public, and so right there, as a leader and an advocate for patients and people, I will go with the institution whose mission is to serve the people of Minnesota. “

The failed merger between Sanford and Fairview could lead to important conversations between Fairview and the University of Minnesota, according to Tim Sielaff, an executive fellow at the Opus College of Business at the University of St. Thomas.

“Coming this close to such a significant split, I hope it raises some questions and opportunities for the two different stakeholders,” Sielaff said. “Maybe now is when the university and Fairview can figure out how to really leverage the strengths of both organizations and create a different future for our community.”

He suggests that it could also be an opportunity for the university to branch out.

“The Fairview Health system does a great job in the Twin Cities and surrounding areas. It has a solid primary care base that can allow the university to serve these patients well, but it’s a bit of a problem to be limited by one health system, ” Sielaff said. “How can (the University) think beyond the four walls of the Fairview system and think about how to really collaborate to deliver high-value care to community members across the state?”

He added, “With the merger of Essentia and Marshfield (Clinic Health Systems), it could create an opportunity for the University of Minnesota. Those systems don’t have transplant services, don’t have other quaternary services to serve their patients, so maybe there’s an opportunity there .”

There is a special board meeting on 1 August, although the partnership is not on the agenda. The next regular meeting is in early September.

Dean Dr. Jakub Tolar said in a message to the Medical School on Thursday:

“We learned late this afternoon that Sanford Health will not proceed with its proposed merger with Fairview Health Services.

The University of Minnesota Medical School and our faculty practice program, M Physicians, are committed to one single mission – to provide exceptional, life-changing care to patients through our clinical care, research and training of Minnesota’s next generation of clinicians. We do this through our faculty and the multitude of skilled and caring professionals who work tirelessly throughout M Health Fairview’s shared clinical enterprise, caring for patients at the bedside and behind the scenes.

Our commitment to the patients we serve and the well-being of our community is unwavering. Our work in our service lines and clinical domains continues to ensure that our patients benefit from the power of academic medicine in every corner of Minnesota. As we move forward from here, we will continue to do our part to advance the health of Minnesotans.”

U of M Medical School Dean Dr. Jakub Tolar

State Rep. Tina Liebling (DFL-Rochester) said Friday in a statement:

“The completion of the proposed merger of the Fairview and Sanford systems is welcome news. After the proposal was announced, many Minnesotans raised concerns that were not adequately addressed, including the future of the U of M’s health facilities and medical school, which are important public assets. While the termination of the merger is a positive development, deep challenges remain in our health care system. Fairview’s financial stability is unclear and the future of the partnership with the U of M remains uncertain.

“Legislators remain very interested in ensuring Minnesotans can access high-quality, affordable health care and will do our part to ensure patients and employees are protected.”

State Representative Tina Liebling (DFL-Rochester)