Fairview, Sanford CEOs testify before skeptical lawmakers

The top executives of Minneapolis-based Fairview Health Services and South Dakota-based Sanford Health say they’d still like to complete a proposed merger by March 31, but ran into Minnesota lawmakers and others who think that’s far too fast for such a complex merger.

“I’m still left with the question…what is the rush?,” said Rep. Tina Liebling, DFL-Rochester, chair of the House Health Finance and Policy Committee. She co-chaired a joint hearing on the merger between her committee and the House Commerce Committee.

“We have to ensure that Minnesota’s access to care is not restricted and that costs are not driven up by this proposed combination,” said Commerce Committee chair Rep. Zack Stephenson, DFL-Coon Rapids.

Fairview CEO James Hereford testified about the importance of completing the merger quickly.

“Health care delivery is in crisis in this country. It is fundamentally changing,” Hereford said. “Our merger with Sanford means we can spread the cost of innovative new technologies across a broader care delivery system. And it gives us the ability to lower our cost structures in areas such as medical technology, pharmaceuticals and information technology.”

Sanford CEO Bill Gassen echoed those comments and assured lawmakers the Fairview partnership with the University of Minnesota Medical Center would not change.

“Including the level of funding, clinical partnership and the teaching mission,” Gassen said. “The affiliation agreement will continue to be governed by a local, Minnesota-based regional board.”

But the U of M Medical school dean Dr. Jakub Tolar made it clear the university opposes the merger. “We will oppose this at this time,” he told lawmakers, citing a lack of control over how the new health system would be managed. “The governance of the system will move to a board without university representation.”

Despite assurances the deal can be completed quickly, Minnesota Attorney General Keith Ellison says he’s not convinced and wants to hear from the health systems about why they say the proposed merger can’t be delayed.

“We believe at the state Attorney General’s Office that March 31st as a target date is too ambitious,” Ellison testified.

Along with skepticism from the U of M, the attorney general and lawmakers, the Minnesota Nurses Association also voiced opposition even though the Sanford CEO said all union contracts would be honored.

“We cannot afford more corporate health care in Minnesota especially not from an even bigger corporation with even less connection to our community,” said Kara Pratt of the Minnesota Nurses Association.

Attorney General Ellison will host one more public hearing to get public input. He says 4,000 Minnesotans have already submitted comments about the proposed merger.

State lawmakers will also hold a hearing on a bill this week that could make it more difficult to complete the merger.