Minnesota Attorney General Keith Ellison asks Fairview, Sanford to postpone March 31 merger closing

Frederick Melo, Pioneer Press
Updated 4 min read
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Minnesota Attorney General Keith Ellison has asked Fairview Health Services and Sanford Health to postpone a scheduled March 31 closing date on their proposed merger, which would heavily expand Sanford’s Sioux Falls-based footprint into the Twin Cities.

Ellison’s office has not made public a letter it recently sent to the chief executive officers of both hospital networks, but the attorney general’s office released a written statement on Friday referencing concerns raised by the University of Minnesota, whose two teaching hospitals are owned and operated by Fairview. State lawmakers are expected to raise additional questions, he noted.

“We are conducting a thorough investigation of the proposed Fairview/Sanford merger and want to take the time we need to carefully consider Minnesotans’ best interests,” said Ellison, in the written statement. “The public hearings we have conducted thus far are providing helpful information, and the investigation extends far beyond them.”

“Currently, we are waiting for substantial information from Fairview and Sanford that we need to analyze, the University of Minnesota has indicated that this proposed merger is moving too fast and its interests have not been adequately considered, and the Minnesota legislature will soon begin its consideration of this issue,” he wrote. “It’s more important to do this right than to do it fast, which is why the parties’ existing timeline concerns us.”

March 31 closing date

On Friday, Fairview and Sanford officials released a joint written statement in favor of sticking close to the March 31 closing date, noting “every day we delay merging Sanford and Fairview is a missed opportunity to realize the significant benefits for our patients, our people and the communities we serve.”

Fairview, which is based in Minneapolis, and Sanford, the nation’s largest rural healthcare provider, announced in November their intent to merge, though critics have described the proposed transaction as more of an acquisition of Fairview by Sanford, which would serve as the parent company of the combined entity.

After a year, Fairview CEO James Hereford would step down, leaving Sanford CEO Bill Gassen in the driver’s seat, according to their joint announcement last year. Hereford has said Fairview is on financially shaky ground, a problem exacerbated by the pandemic, and will benefit from Sanford’s resources, though University of Minnesota officials have asked for greater clarity on exactly how.

“I’ve been transparent about the financial challenges we face,” said Hereford on Wednesday, during a community speak-out in Worthington organized by Ellison’s office.

Could U of M reacquire teaching hospitals from Fairview?

Ellison’s office fielded comments from members of the public this month during in-person outreach sessions in St. Paul, Bemidji State University and Worthington High School. The final speak-out is scheduled for 6 to 8 p.m. Tuesday at the Reif Performing Arts Center in Grand Rapids and will be broadcast in real time on the Minnesota Attorney General office’s Facebook Live website.

Held Jan. 10, the St. Paul hearing drew many voices from organized labor critical of how control by an out-of-state parent company will impact staffing and patient care, as well as patient and physician advocates on either side of the question. A Fairview spokesperson on Friday said people speaking in favor of the merger outnumbered opponents 2-to-1 at the Bemidji and Worthington events.

As a condition of the merger, university officials this month floated the possibility of distancing themselves from Sanford and the combined entity by re-acquiring two teaching hospitals from Fairview, which purchased the buildings from the U in 1997 for $87.5 million.

In his prepared remarks delivered at the Worthington event this week, Gassen said the contractual agreements between the three legs of the “M Health Fairview” partnership — Fairview, the University of Minnesota and the University of Minnesota Physicians group — expire in 2026, offering plenty of time to work out any outstanding questions about the fate of the university’s academic health center.

“Nothing – I repeat nothing – will change for the University of Minnesota as a result of this merger,” Gassen said.

Gassen informed the audience he had met with representatives of Ellison’s office to shadow physicians as they made patient rounds at Sanford Worthington, which is southwestern Minnesota’s largest medical center and serves more than 21,000 patients in the area. Ellison attended a similar facility tour in Bemidji a week prior.

Since joining Sanford’s community hospital system years ago, Sanford has invested more than $21 million in capital into the Worthington medical center, added physicians and expanded specialty outreach, Gassen said. That includes $3.4 million invested in 2020 alone for the Worthington Cancer Center’s linear accelerator, a radiation technology that delivers the equivalent of high-energy X-rays to a patient’s tumor.

“We have no plans to close facilities or reduce access to care as a result of this merger,” Gassen said. “Our history in other communities reflects our commitment to making the investments necessary to make care more accessible and equitable.”

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