Fairview, Sanford push health systems merger plan back to at least August

Two person talks before hearing start
Dr. Jakub Tolar, Dean, University of Minnesota Medical School (L) speaks with Bill Gassen, Sanford Health, President and CEO (R) before a March hearing regarding the proposed merger between Sanford Health Fairview Health Services. Sanford and Fairview say they'll take more time with the proposal.
Stephen Maturen for MPR News

Fairview and Sanford Health said Monday they are pushing back their target deadline to merge.

The two health care companies originally set an end-of-March goal but reset to May 31 amid pushback from Minnesota Attorney General Keith Ellison, and calls for the state to exclude the University of Minnesota from the merger.

The attorney general’s office, which has been investigating the proposed merger, sent out a statement Monday saying his office had learned last week that “Fairview leadership has decided to postpone its plans to merge with Sanford.”

Fairview officials, however, say they're just moving the date out and still intend to pursue the merger. The target date could be set, at the earliest, for Aug. 31.

“The University appreciates the additional time for consideration and review of this important decision,” a U statement read.

The two health care giants first made public their plans to combine in November. Since then, there have been concerns raised by union leaders, legislators and others about how the merger would affect health care access in the state, including how it might impact the University of Minnesota’s teaching hospital.

In mid-January, the U proposed a plan to reacquire the hospital, and other on-campus buildings, from Fairview. Leaders at the University have repeatedly said that until this and other questions about partnerships are resolved, the merger should not move forward. 

Several legislators echoed concerns about the timeline, and some have drafted legislation that would add more oversight to health care transactions, like mergers. If passed, the bill would task the state Health Commissioner with reviewing the transaction, in consultation with the attorney general.

It would also require a health system “organized as a charitable organization” that merges with an out-of-state entity to return charitable assets received from the state to the general fund. The bill text explicitly includes the M Health Fairview University of Minnesota Medical Center.

Additionally, a new bill introduced Monday would further restrict the sale of the university's flagship medical facilities "only to the Board of Regents of the university or to a wholly controlled subsidiary of the regents of the university." If passed, it would also appropriate funds to aid in the acquisition and operation of these facilities.

The attorney general’s office said Sanford and Fairview have agreed to give at least a 90-day notice before any new target closing date — which Fairview and Sanford affirmed — and that the office would continue to investigate issues around the merger and Fairview’s financial health.

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