Duluth-based Essentia Health ends merger talks with Marshfield Clinic
Updated: 12:45 p.m.
Duluth-based Essentia Health announced Friday that it will not move ahead with a proposed merger with Wisconsin’s Marshfield Clinic Health System.
The two health systems had announced in October 2022 that they were exploring a merger. And last July, they announced they had signed an “integration agreement” to form a new regional health system with facilities in Minnesota, Wisconsin, Michigan and North Dakota.
But on Friday, Essentia and Marshfield said those merger talks have ended.
“We have decided that a combination at this time is not the right path forward for our respective organizations, colleagues and patients,” the two health systems said in a news release. “We will continue to seek opportunities for collaboration as two mission-driven, integrated health systems dedicated to sustainable rural health care. Our organizations have great respect for one another, and we each remain committed to strengthening the health of our communities as we deliver high-quality, compassionate patient care.”
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Essentia said Marshfield Clinic’s financial situation was “the primary factor in our decision to end discussions.”
In November, WQOW-TV in Wausau, Wis., reported that Marshfield was cutting executive pay and suspending its 401(k) match for employees amid financial issues.
“To be clear, Essentia’s finances are strong, and it is imperative we maintain that stability so we can continue investing in and enhancing care for our patients,” Essentia Health officials said Friday.
Essentia employs more than 15,000 people at its facilities in three states, including 14 hospitals and 78 clinics.
Another Duluth-based health system, St. Luke’s, is moving forward with its own merger plans. St. Luke’s announced in October that it had signed a “definitive agreement” to affiliate with Wausau, Wis.-based Aspirus Health. At the time, the merger was slated to be completed this spring, pending regulatory approvals.
Aspirus said it would “invest at least $300 million over eight years to fund St. Luke’s strategic projects.”
The two planned mergers had drawn the attention of Minnesota Attorney General Keith Ellison. His office had announced in October that it would review the proposals “to evaluate the transactions’ compliance with Minnesota law.”
State lawmakers recently gave the attorney general’s office greater authority to review whether such transactions are in the public interest.
Essentia on Friday said regulatory reviews were still underway and did not influence the decision to end merger plans.