Merger with the U and Essentia? Fairview says ‘no’
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Fairview Health Services said Wednesday it is not interested in a merger with the University of Minnesota and Essentia Health.
The U and Essentia back a plan that would create a nonprofit entity and had invited Fairview to be part of the discussion. The university promised that it and Duluth-based Essentia will spend $1 billion over five years to build an “all-Minnesota health system solution.” Fairview officials say they “have worked diligently to understand the goals of their proposed combination and articulate Fairview’s own needs in any future partnership.”
Fairview owns health care facilities on the U campus, including the teaching hospital for the university’s medical school. In a letter to employees Wednesday, Fairview President and CEO James Hereford said they still want “resolution on sale of the academic assets.”
The letter also states that Fairview wants to maintain its independence in operating the hospitals and clinics that not only serve patients but also provide training grounds for medical students.
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The university currently has an agreement with Fairview that ends next year. In December, the U announced a restructuring plan.
Hereford noted that care should continue, ideally by an “independent nonprofit organization.”
“It is important to note, at no point will the mission of the University of Minnesota Medical School be abandoned,” Hereford said, in the letter co-signed by John Heinmiller, the chair of Fairview’s board.
“We agree that the medical school is an essential component of the health care ecosystem in Minnesota — and that Fairview should not be alone in supporting their mission. Essentia has now indicated a willingness to support the University. We believe this is a good development. As we have said, our current level of financial support for the medical school is unsustainable.”
In a statement to MPR News, the U said it is “hopeful there is opportunity to build a bold, shared solution that best meets the needs of patients and Minnesota — both now and in the future.”
In a Minnesota Senate health committee meeting Wednesday morning, university President Rebecca Cunningham testified along with Essentia CEO David Herman. Cunningham noted that Fairview was invited to be part of the enterprise.
“Our proposal includes University of Minnesota physicians and University of Minnesota clinics and surgery center,” Cunningham said. “We’ve also invited Fairview Health Services to join us in forging this new identity as a reset in building a new day on the work that has been done in the past, so that together we can create an integrated and seamless system of care.”
The U president then clarified that the relationship with Essentia would be “fundamentally different” from the “joint clinical enterprise” it has with Fairview “which is very transactional.”
In a U-Essentia proposal from Monday that was sent to Fairview, “Newco,” as the entity is being called, would have a shared governance of six directors each from Fairview, the university and Essentia and four members appointed by the board.
Newco would own and operate the “legacy” facilities currently run by Fairview and Essentia as well as the U’s clinics and surgery center. Physicians would be controlled by the U, and services “functionally integrated with Newco.”
Cunningham and Herman said the plan is aimed at boosting rural health care in part by training medical students outside the Twin Cities, which could lead them to staying there. Herman said that consolidation of medical services by Essentia was primarily due to staff shortfalls.