Sanford, Fairview say University of Minnesota may buy out flagship hospital, but U suggests ‘repurchase’

The merger between Sioux Falls, South Dakota-based Sanford Health, and Minneapolis-based Fairview Health System has been the subject of controversy in North Star State, with ownership of the University of Minnesota Medical Center proving particularly contentious.

Fairview acquired the university’s flagship hospital, also located in Minneapolis, in 1997. The agreement on the accession of organizations is calculated until 2026. The Dakotas and Minnesota will interfere with his mission to provide academic healthcare in Minnesota.

From the perspective of Sanford and Fairview

Sanford CEO Bill Gassen and Fairview CEO James Hereford made remarks about the proposed joint system at the January 10 Attorney General’s meeting, which was also attended by the university. Fairview shared these comments with Becker.

According to the documents Becker received, Mr. Hereford said Fairview Hospitals and Clinics will continue to operate with Minnesota-based management, hinting at fears that state taxpayers will fund out-of-state expansion of the newly merged systems.

“I want to appeal to those who called Sanford an outsider — a foreign organization from the Dakotas, unable to participate in the Minnesota healthcare ecosystem,” Mr. Hereford said. “The reality is that Sanford has been providing high-quality care to Minnesotans for almost two decades, with more than 7,000 dedicated employees at 20 hospitals and 70 community clinics, including Bemidji, Tief River Falls, Worthington and Luverne.”

In addition, Mr. Hereford defended the merger as a hedge against industry pressure.

“The status quo is not sustainable,” said Mr. Hereford. “The constant challenges and pressure to deliver health care require us to do things differently. We believe that together [Sanford and Fairview] can improve the experience for both patients and providers in a way that no single organization can do.”

When Mr. Gassin took the microphone, he turned to the university.

“It would be remiss if I did not recognize the unique role of the University of Minnesota in advancing medical research and teaching,” Mr. Gassin said. “Since August last year, we have been engaged in a productive dialogue with the university leadership to explore mutually beneficial partnerships to advance our common missions.”

“In the spirit of partnership, we considered all options,” continued Mr. Gassin. “This includes an opportunity for the University of Minnesota to buy out the academic medical center from the combined system.”

From the perspective of the University of Minnesota

At a January 10 hearing, Jakub Tolar, MD, dean of the University of Minnesota School of Medicine, said the university was not involved in planning the merger and therefore cannot reassure the public of its purpose.

Myron France, the university’s senior vice president of finance and operations, confirmed Dr. Tolar’s statement in an interview on Jan. 13. Becker.

Mr. France said Sanford and Fairview began their own talks in May and wrote to the university with a letter of intent to merge in August. He clarified that the university was not involved in the planning or development of the letter of intent.

“The new combined system, as we understand it, will be managed by a single board based in Sioux Falls, South Dakota,” Mr. France said. “This is the current status of the LOI, this is a single piece of advice.”

The university believes local control of its flagship hospital is necessary to fulfill its mission of providing academic medical care in Minnesota, Mr. France said.

“In order to maintain and maintain a strong academic health center with the University of Minnesota School of Medicine and our UMP physicians, the university’s position is that the traditional flagship assets on our campus must return to the control, ownership and management of the university, and that we must then enter into a strategic partnering with other systems — like Fairview or Sanford, whichever happens — to make sure we can deliver the benefits of academic health, research, and innovation to the rest of the people in Minnesota,” Mr. France said. .

When Becker asked Mr. Frans what obstacles might arise in the way of buying out the hospital. He said that this question suggests that there was a purchase from the beginning. He said the university was losing money on the hospital when it moved her to Fairview, but it wasn’t “sold.”

“The move to Fairview had a lot of bilateral promises, and one of those conditions was that the assets would be used to help fulfill the university’s mission of providing academic health care to the state of Minnesota,” Mr. France said.

“We are thinking more about this transfer and how we transfer these assets back to the university,” he continued.

Mr France said the university meets regularly with Sanford and Fairview and talks are “ongoing” between the three organizations.

Next Steps U

The reacquisition of the University of Minnesota Medical Center from Fairview will kick-start the “groundbreaking vision for MPact Healthcare” announced in a January 12 press release.

The new strategic plan highlights plans to “own, manage and control” flagship facilities and potentially build a new hospital alongside an existing medical center.

“[The flagship hospital] will be a bridge to the new hospital,” said Mr France. Becker. “We view reacquisition as Phase 1. Phase 2 is the investment in these properties to ensure they are at the right level of condition for the next number of years. And phase 3 is the transfer to the new hospital that will be built. in the medical district.

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