Sanford Health, Fairview Health Services push back merger to late August

por John R. Fischer, Senior Reporter | April 10, 2023
Business Affairs
Sanford Health and Fairview Health Services will not merge until at least late August. (photo of University of Minnesota Medical Center, courtesy of M Health Fairview)
South Dakota’s Sanford Health has announced that it will not complete its $14 billion interstate merger with Fairview Health Services in Minnesota until late August at the earliest.

The healthcare systems, which have been in talks since November to merge into what would be one of the largest health systems in the Upper Midwest, said on April 3 that they were pushing back their timeline to better cooperate with Minnesota Attorney General Keith Ellison’s investigation, as well as to assuage concerns that the merger was moving too fast, according to the Star Tribune.

Additionally, they said they would issue a notice 90 days in advance of the closing, per a request from Ellison’s office, which is investigating if the deal is compliant with charitable and antitrust laws, but are still “confident in the benefits” the merger will have for patients and communities.

"We respect the thorough review underway by the attorney general's office and are honoring their request for more time as we continue work toward finalizing our combination,” said a spokesperson for both healthcare systems in a statement.

The combined system would have 78,000 employees in more than 50 hospitals, including the University of Minnesota Medical Center, which is owned by Fairview. The university opposes the merger because it would put Sanford, an out-of-state provider, in charge of the medical center, which trains 70% of the state’s doctors, and out of concern for how it may affect referrals.

Sanford has discussed selling the teaching hospital to the university, which has offered to buy it for $300 million and is seeking legislative support to help it in this endeavor, reported the Star Tribune.

Political leaders and union leaders also oppose the deal, saying that mergers like this often lead to higher costs for patients without improving service quality.

Ellison’s Office previously asked back in January for the date to be pushed back, but said that it did not specifically request it be pushed back to August, learning only about the decision on March 31.

In a statement, it said that "it is imperative for Fairview leadership to focus their attention on the critical issues facing the health system, including its declining financial condition and its relationship with the University of Minnesota."

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