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The University of Minnesota and Duluth-based Essentia Health are proposing a new nonprofit for academic medicine. The organizations say they will spend $1 billion over five years to build an “all-Minnesota health system solution.”

The U said much more work is needed to bring the proposal to fruition. Friday’s announcement said the new integrated health framework would re-invest in campus medical facilities, rural health care and increase access to elevated levels of specialized care.

Essentia Health employs about 15,000 people, including more than 2,200 physicians and advanced practitioners.

Dr. Rebecca Cunningham, the U’s president, said the new entity would expand the footprint of the university’s care delivery system. It would also serve the needs of the U’s current and future patients and educate the next generation of health care professionals across the state.

“We are talking about aligning the resources and strength of the health care delivery systems of Essentia and the University of Minnesota and we are beginning conversations with Fairview,” Cunningham said.

She added that the university is at an inflection point with the academic health center and they are exploring a third way to bring together a new nonprofit that will ensure stability so the medical school can continue to serve patients in Minnesota.

The university currently operates under a collaborative agreement with Fairview Health Services. That agreement ends next year. 

In December, the U announced a restructuring plan.

The U has long wanted to reacquire assets from Fairview Health Services, 

including the University of Minnesota Medical Center

Cunningham said now is the time to bring in stakeholders and partners to have conversation that would advance the next steps. “We would hope, as this advances, to have a bold vision in place before the end of 2026 when our current agreements end,” she said.

Essentia Health and the U have agreed on the alignment of resources, said Dr. David Herman, Essentia Health’s CEO. 

“The structure of this is yet to be determined,” he said. “We need new partners and new relationships to do that most effectively. As we have more discussions going forward with other partners, we will start to get more solid on that structure.”

A spokesperson for the U said that the university and Essentia have started a conversation with Fairview about the new proposal. 

Fairview said it learned within the last 24 hours about the university’s discussions with Essentia and has not received details on the concept.

“Over the last year, we have worked in good faith towards the university’s desire to purchase the academic assets,” noted Fairview in a statement. Today’s announcement by the university reflects a sudden change in their stated desire.”

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The University of Minnesota and Essentia Health are proposing a new nonprofit for academic medicine in Minnesota. The university currently operates under a collaborative agreement with Fairview Health Services. That agreement ends next year. 

University of Minnesota and Essentia announce new health care alliance

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