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Minnesota AG asks Sanford, Fairview health systems to delay merger

por John R. Fischer, Senior Reporter | January 31, 2023
Business Affairs
Minnesota Attorney General Keith Ellison is asking Sanford and Fairview health systems to push back the date of their planned merger.
Minnesota Attorney General Keith Ellison is asking Sanford Health and Fairview Health Services to push back their March 31 official merger date, saying that the deal is moving too fast and that the interests of the University of Minnesota are not being considered.

"It’s more important to do this right than to do it fast, which is why the parties’ existing timeline concerns us. As a result, we have formally asked the parties to delay the March 31 closing date and are awaiting their formal response,” said Ellison in a statement to KARE 11.

Sanford Health, in South Dakota, signed a nonbinding agreement with Fairview Health Services, in Minnesota, in November 2022 to merge into a $14 billion healthcare system of more than 50 hospitals. This includes the University of Minnesota Medical Center which, along with Fairview and the University of Minnesota Physicians, makes up Fairview Health Service.

But the deal has come under criticism from locals, as well as several unions, with many voicing their concerns at listening sessions held by Ellison’s office across the state.

Shane Brinton, healthcare director of the International Association of Machinists and Aerospace Workers, which represents about 400 healthcare workers in the upper Midwest, including 100 at Sanford, says these types of mergers “frequently result in higher costs for patients and what there isn't any indication of, generally, with these types of mergers, is any increase in the quality of the services.”

Out-of-market hospital acquisitions like this increase prices by about 17% more than unacquired, stand-alone hospitals, according to the Kaiser Family Foundation.

In a statement, Fairview said it was working with Ellison to provide his office with the information it needs about the deal. “This merger is about doing more for those we serve, and 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.”

Based in Sioux Falls, Sanford already operates 20 hospitals in Minnesota, and says the deal will create more “access to complex and highly specialized care” and “a broader range of virtual services.”

Fairview is a nonprofit that partners with the University of Minnesota and its medical center, and relies on university faculty physicians with its own independent group practice. It bought the medical center in 1997.

The university announced in early January that it is seeking to buy back the medical center and build another hospital, according to Kare 11.

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