If University of Minnesota opposes Sanford-Fairview merger, it can buy back teaching hospital, execs say

Sanford and Fairview executives say the University of Minnesota can always buy back its teaching hospital in Minneapolis if the U doesn’t support a massive merger between the two health systems.

Bill Gassen, CEO of Sioux Falls-based Sanford Health, floated the idea Tuesday night in St. Paul at the first of four public meetings about the proposed merger convened by Minnesota Attorney General Keith Ellison.

Jasin said Health Systems has been in talks with the U since August and wants the partnership to continue. But he said all options are on the table.

“This includes an option for the University of Minnesota to buy back the academic medical system from the joint system,” Jasin said. “In the end, it’s the University of Minnesota’s decision to make.”

Fairview acquired the University of Minnesota Medical Center in 1997, when the teaching hospital was struggling financially.

With public comments Tuesday, Sanford and Fairview showed their willingness to push the deal forward with or without the league, starting leaders Expressing concerns last year.

The current proposal would create a health system of about 78,000 employees. It will be based in South Dakota and operate more than 50 hospitals, including the University of Minnesota Medical Center.

As a crowd of more than 100 people at Tuesday’s meeting quietly listened to Jassen, they applauded loudly as Dr. Jacob Tollar, dean of the University of Minnesota Medical School, asked crucial questions about the merger proposal.

The deal, as currently being floated by Sanford and Fairview, Tollar said, treats the university and its academic medical mission as a side issue rather than a central component of the merger. He urged Ellison, state lawmakers and the public to focus instead on what it would mean to combine teaching, research and patient care in the United States.

“We’re here today to ask you not to develop this combination until Fairview and Sanford work with the university [to] Tollar said, “Tackle and solve how we will continue to use all of our public resources in the service of Minnesota. Before you is not a special treatment but a general question for the future of public academic medicine in Minnesota.”

He added, “Sanford and Fairview developed their proposed business merger without involving the university. We are not involved in the planning of this merger and so cannot give you or the public assurances that the general purpose will be achieved.”

Sanford Health and Minneapolis-based Fairview Health Services attempted to merge in 2013, but state political concerns spoiled the deal.

Fairview and U jointly market medical services under the M Health Fairview brand. University physicians treat patients through the Fairview Hospitals network. This year, Fairview is providing more than $83 million to support the U.S. health care mission, which includes teaching, research, and patient care.

In December, the University of Minnesota’s president and its board of governors raised concerns about the proposed merger, which they described as motivated by financial interests.

fairview reported an operating loss of $248.5 million during the first nine months of last year. The health system suffered several years of operating losses that matched the increased financial contributions of the United States, but university officials rejected any The suggestion that the affiliation was behind Fairview’s financial troubles.

In a note to employees Tuesday afternoon, Fairview CEO James Hereford said the idea of ​​the U buying back its teaching hospital is just one of many options being discussed and no decisions have been made.

“We appreciate that such an outcome would have implications for many teams in our system,” Hereford said in the memo.

If U wants to buy the medical center, negotiations will be required to determine a fair market value, according to a Fairview spokesperson.

But in a statement released Tuesday to the Star Tribune, the university noted that the original sales agreement did not give U the right to buy back the hospital in the event of a merger or other change of control in Fairview. Therefore, there are no contractual terms that require a fair market value to be determined, Yu said.

“With respect to the charitable assets held by a Minnesota nonprofit, the key question is not ownership, but rather the charitable purpose to which it is dedicated—in this case, sponsorship by the University of Minnesota and [University of Minnesota Physicians] “This purpose is reflected in the public funds constructed for the hospital and the academically affiliated care provided since 1997,” Yu said in the statement.

Ellison’s review of the merger proposal includes whether it complies with state law on charitable assets as well as any implications for competition. It was the only meeting to contribute to the Twin Cities. The next three are scheduled this month for Greater Minnesota.

Sanford said that if the merger goes as planned this year, it is willing — absent a new agreement — to continue funding academic medicine at U until the current long-term deal with Fairview expires at the end of 2026. What happens after that? , however, is one of the big unanswered questions with the proposed merger.

since it was Announced in NovemberUnion health care workers have raised concerns about integration.

Ahead of a meeting Tuesday evening at the State Revenue Department building near the Capitol, leaders and members of four labor groups in opposition spoke. The groups holding the press conference were SEIU Healthcare Minnesota & Iowa, Minnesota Nurses Association, Minnesota Farmers Union, and MN AFL-CIO.

Leave a Comment