Fairview, Sanford Health announce plan to merge

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Two major health systems in Minnesota have announced a plan to merge.

Tuesday, Minneapolis-based Fairview Health Services and Sioux Falls-based Sanford Health announced an intent to combine and create a new health system.

The companies say the proposed merger would allow them to provide more equitable health care and benefit people from rural to urban and Indigenous communities across the region.

While the plan isn’t yet a binding agreement, the companies say their governing boards have both approved moving forward with the plan to organize under an integrated health system, which isn’t expected to be completed until next year.

“Our organizations are united by a shared commitment to advance the health and wellbeing of our communities,” Sanford Health President and CEO Bill Gassen said in a statement. “As a combined system, we can do more to expand access to complex and highly specialized care, utilize innovative technology and provide a broader range of virtual services, unlock greater research capabilities and transform the care delivery experience to ensure every patient receives the best care no matter where they live.”

“With Sanford Health, Fairview Health Services has found a partner that shares our midwestern values and our commitment to affordable, accessible and equitable care delivery,” Fairview Health Services President and CEO James Hereford added. “Our complementary capabilities mean that together, we are uniquely positioned to improve clinical outcomes, develop new care delivery models, expand opportunities for employees and clinicians across our broader operational footprint, and apply our combined resources to positively impact the wellbeing of our patients and communities today and for decades to come.”

Sanford is the largest rural health system in the country while Fairview is one of Minnesota’s leading health care providers. Together, they operate 56 hospitals and about 600 care sites.

The organizations say they will remain nonprofit entities and each maintain their own regional presence, leadership and boards but would operate under the parent company name of Sanford Health. Additionally, Gassen would serve as president and CEO of the combined system with Hereford serving as co-CEO for one year after the deal is closed.

A spokesperson for the Minnesota Attorney General’s Office told 5 EYEWITNESS NEWS, “We are aware of the proposed merger between Fairview and Sandford. We have opened an investigation into the proposed transaction’s compliance with charities and nonprofit laws. We are also evaluating any possible effects on competition along with state and federal partners.”

The University of Minnesota, which collaborates with Fairview as part of its M Health Fairview partnership, gave the following statement to 5 EYEWITNESS NEWS on Tuesday:

“The healthcare mission of the University is at the heart of our commitment of service to Minnesota. We educate the state’s clinicians to meet Minnesotans’ healthcare needs, we do the research that discovers new cures and treatments and we work with Fairview and other health providers to bring our doctors directly to patients throughout Minnesota.

With this in mind, the University has and continues to raise critically important and hard questions of Fairview and Sanford as we assess the potential combination. We have three core questions the remain unanswered, focused on:

• How a combination would respect the University’s land grant mission and critical role in the healthcare provided to patients at our flagship campus facilities and around the state;

• Fairview’s and Sanford’s commitment to respecting the independence of our faculty in the vision outlined for a combined organization, and;

• How these plans address Fairview’s financial challenges.

Until those questions are answered, the University cannot fully assess what this possible combination might mean.

We will continue to focus on our land grant mission to serve Minnesota and we will remain vigilant to that mission as we evaluate how these proposed changes can meet the needs of the University and the Minnesotans we serve.”

University of Minnesota

Meanwhile, nurses with the Minnesota Nurses Association put out the following statement Tuesday afternoon:

“MNA Nurses strongly oppose these proposed corporate mergers by our hospital CEOs at the same time as they continue to close hospitals, pay millions to themselves and other top executives, and deny nurses and patients the resources needed to ensure safe staffing and quality patient care at the bedside.

“In the last three years, M Health Fairview closed two hospitals in the middle of a pandemic, including the state’s only dedicated COVID-19 hospital, at the same time CEO James Hereford took a 90 percent raise to more than $3.5 million in annual compensation. Sanford health paid a $49.5 million golden parachute to their disgraced CEO after he spread medical disinformation. And Essentia Health CEO David Herman took a $1 million raise in 2020, to now make more than $2.6 million each year.

“As the CEOs of M Health Fairview, Sanford Health and Essentia continue to withhold the resources needed to ensure safe staffing and quality patient care at the bedside, they have repeatedly made clear that their priorities are firmly focused on corporate expansion and their own bottom lines. Nurses have one concern: to ensure quality care for our patients. That starts at the bedside and extends to our communities. Corporate mergers and healthcare monopolies threaten to increase costs for patients and often result in hospital and clinic closures.

“Minnesota nurses oppose these mergers and demand a seat at the table in merger talks to ensure that the best interests of the community and nurses are included in decisions that will affect care access and quality of care. Essentia, M Health Fairview and Sanford must commit to full financial transparency as the health chains budget for corporate acquisitions over patient care; hospital CEOs must also commit to keep all community healthcare facilities open in the event of any merger or acquisition.”

Ericka Helling, RN, MNA Chair – M Health Fairview Southdale; Ami Tillemans, RN, MNA Chair – M Health Fairview West Bank; Dawn Remus, RN, MNA Chair – M Health Fairview West Bank; Jessica Mistic, RN, MNA Chair, Sanford Bemidji Medical Center; Jessica Eck, RN, MNA Chair, Sanford Bemidji Medical Center; Jodi Walker-O’Beirne, RN, MNA Chair, Sanford Bemidji Medical Center; and Chris Rubesch, RN, MNA First Vice President, Essentia Health