Sanford CEO raises possibility of selling teaching hospitals back to U during community session on proposed merger

Frederick Melo, Pioneer Press
Updated 6 min read
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To help a proposed merger with Fairview Health Services advance, Bill Gassen, the chief executive officer of Sanford Health, said this week that all options are on the table — including having Fairview sell the University of Minnesota’s teaching hospitals back to the university.

However, University of Minnesota Medical School Dean Jakub Tolar said Minneapolis-based Fairview and Sioux Falls-based Sanford have so far treated their proposed merger like a private transaction, rather than bringing the university into negotiations between the nonprofit health systems early on and placing the public impact front and center.

Tolar urged public officials not to allow the merger to move forward without weighing the repercussions of putting the university medical center — which trains more than 70 percent of Minnesota’s doctors and nurses — largely in the hands of an out-of-state company.

Meanwhile, Minnesota Attorney General Keith Ellison said his office — which regulates nonprofits and investigates monopolies for antitrust violations — is reviewing key questions around the merger with the expectation of issuing findings in early February.

Community input sessions

With the goal of soliciting public feedback on the proposed Fairview-Sanford merger, Ellison’s office held the first in a series of two-hour community input sessions on Tuesday evening in the Minnesota Department of Revenue building outside downtown St. Paul, drawing a packed audience numbering in the hundreds.

Labor advocates from the AFL-CIO and the Minnesota Nurses Association urged a halt to the merger, while physicians and social workers spoke out on either side of the question.

Some predicted consolidation and cost cutting at patients’ expense, while others praised Sanford for tailoring culturally-sensitive programs in Bemidji toward Native Americans in addiction recovery, among other Sanford efforts they said have elevated rural healthcare.

Subsequent speak-outs will be held from 6 to 8 p.m. on Jan. 17 at Bemidji State University, on Jan. 25 at Worthington High School cafeteria and on Jan. 31 at the Reif Performing Arts Center in Grand Rapids. Attendees wishing to speak publicly at the events can sign up at ag.state.mn.us.

Tuesday’s session

Here’s a selection of comments from Tuesday’s input session:

Kara Pratt, a nurse at St. John’s Hospital in Maplewood: “How does someone in Sioux Falls know what I should be doing for my patients on the East Side of St. Paul? Do you know about (Burmese immigrant) Karen patients? Do you know the diet Hmong people eat? … I will continue to give my patients the best care possible, but I can’t do that if I’m being given orders by someone 500 miles away.”

Dr. David Wilcox, a practicing family physician and vice president medical officer for Sanford Health of Northern Minnesota, which absorbed North Country Health Services in 2011. Speaking in support of the merger with Fairview, he sought to dispel fears that Sanford, as a parent company, would fail to offer gender affirming care: “Rural and urban healthcare suffers the same problems. I’ve personally given care to transgender patients and not been hampered by the merger.”

Minnesota Attorney General Keith Ellison: “This is a big deal to our state and to our community. … (Among the questions raised to date), how will the proposed merger impact Fairview and Sanford’s ability and willingness to provide reduced cost or free healthcare for eligible patients? Will the merger result in charitable assets leaving the state? Following Fairview’s acquisition of HealthEast (in 2017), facilities were closed and services were reduced. How is this proposed merger different? … These are just a few questions that have come across our desk. … At the end of the day, the position that the attorney general takes will be (based on) our interest in protecting Minnesotans.”

Fairview CEO James Hereford: “The status quo isn’t sustainable” for Fairview, which hemorrhaged money during the early days of the pandemic. “(The) trusted relationship between patients and providers is fundamental to who we are, what we do and it will not change. Both Sanford and Fairview have long had unionized workforces in Minnesota, and will continue to honor and respect our collective bargaining agreements. Our hospitals and clinics will continue to operate with leadership that is based here in the state. In fact, the merger will allow us to expand care and increase investment in Fairview facilities and people.”

Sanford CEO Gassen said that Fairview, which acquired two teaching hospitals from the University of Minnesota in the 1990s, could sell them back to the university at fair market value, or the merged health systems could pursue a joint venture or affiliate relationship with the university: “There are many ways our combined system can do more for more people in Minnesota. … When we say that patients will have access to better care, we mean it. Following our merger with North Country Health Services in Bemidji, Sanford Health invested more than $100 million to increase access to care, including mental health, cardiology, orthopedics and oncology. And after merging with Meritcare in 2009, we invested more than $1 billion in capital in the northwest part of the state to bring a Level 1 trauma center to Fargo-Moorhead, and bring a state-of-the-art community health system to Thief River Falls.”

Tolar, dean of the University of Minnesota Medical School: “Governance and control for the campus facilities is only one component of what it means to be an academic health system. The proposed merger should not be allowed to proceed unless and until Fairview and Sanford address all the interrelated needs of a fully functioning academic health system to ensure the university is in a position to serve the state with its full potential. It takes much more than a building. Ownership is not the central question. The issue is, how does Minnesota ensure that the charitable assets of nonprofit Fairview remain (dedicated) to the academic mission of the university?”

Chelsea Schafter, a nurse at Fairview Riverside Hospital in Minneapolis: “These corporate mergers often result in closures, something that Minnesotans with mental healthcare needs cannot afford. With just the closures created by the Fairview-HealthEast merger, I see the negative effects, with patients boarding for extended periods of time in spaces like the emergency room, which can be chaotic and not offer a therapeutic space for those experiencing a mental health crisis. I remain gravely concerned about what this merger will mean for the current handling of mental healthcare within the Fairview system.”

Gary Wertish, president of the Minnesota Farmers Union: “We see what consolidation and monopolies have done to our farm economy, and we see this the same way. The selling points are always the same — ‘it’s going to be more efficient, better services’ — and that’s not always true. What’s consistent is that the profits go to the monopoly, and not to local communities.”

Cliff Adams, nurse station tech at M-Health Fairview Riverside Masonic Children’s Hospital in Minneapolis and member of SEIU Healthcare Minnesota and Iowa: “Bigger does not always mean better. … This merger will not serve the people of Minnesota. It will take away the power of choice from so many Minnesotans.”

B. Kyle, president of the St. Paul Area Chamber of Commerce: “I’ve been well aware of Sanford Health for many years, and seen their civic engagement in communities they’re invested in, and admired their approach to healthcare, as well as their strong citizenship and their investment in their communities. … I’ve spoken to other large healthcare organizations within the region to get a sense of the healthcare community reaction and we agree, if such a merger makes healthcare more accessible, more affordable and of higher quality, we absolutely support such a move.”

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