HealthPartners, Park Nicollet to merge

Time is right
HealthPartners President and CEO Mary Brainerd will be the CEO of the new nonprofit formed by the merger of HealthPartners and Park Nicollet Health Services.
MPR Photo/Lorna Benson

Two key players in Minnesota health care have announced they want to merge.

The boards of directors for HealthPartners and Park Nicollet Health Services said Thursday they signed an agreement to combine operations. If approved by federal regulators, the agreement would go into effect January 1. The new nonprofit would be a health care delivery and finance organization named HealthPartners with 1,500 physicians.

The move puts HealthPartners and Park Nicollet among a growing trend of strategic partnerships between insurers and hospitals, said Director Stephen Parente of the U of M's Medical Industry Leadership Institute.

"My sense is this is the first of other types of alliances and partnerships that will occur not just in the Twin Cities but nationally," he said. "This actually sort of is a peek at the future of what a combination of these payers and delivery systems combined is going to look like. And if anything I think it allows this combined unit to be much more effective at what they might've been just on their own agenda -- and could even become more so than they actually are national trend-setters."

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The current Park Nicollet clinic system mostly serves the western side of the metro area. HealthPartners covers the eastern side, into western Wisconsin. HealthPartners CEO Mary Brainerd would continue as the new company's chief executive officer, while Park Nicollet's CEO, David Abelson, would lead the combined organization's delivery system, named the Park Nicollet HealthPartners Care Group.

In a joint statement, HealthPartners and Park Nicollet said nothing will change for patients and their healthcare plans. Parente said the U.S. Department of Justice and Federal Trade Commission will likely approve the merger, although there may be lingering issues.

"I think there's going to be a larger strategic question over time that quite honestly DOJ and the Federal Trade Commission have not really fully considered which is, you know, do we really want to have this super system of insurers combined with delivery systems commanding entire markets -- maybe the entire market -- not just two or three of these -- because I think that's the longer term trend," he said.

The combined operations will include Park Nicollet Methodist Hospital in St. Louis Park, four HealthPartners hospitals, and a system of medical and dental clinics across the Twin Cities and western Wisconsin. The two nonprofits say they don't plan to close any locations or impose layoffs.

The Minnesota Nurses Association reacted to the news cautiously.

"One size does not fit all," said Walter Frederickson, RN, the organization's executive director. "Each health situation is unique and can require a multitude of resources at any given moment. Simultaneously, patients deserve a basic standard of care, and enough RN staffing to be able to anticipate crises as they emerge on each shift."