With the announcement on Thursday that Fairview Health Services and Sanford Health are discontinuing talks of a merger, questions emerged about the future of Fairview’s partnership with the University of Minnesota.

The two entities entered into an agreement in 1997. It expires in 2026, with the option to sign a 10-year extension in 2023. Neither the University of Minnesota nor Fairview provided information Friday about how they plan to move forward.

The University of Minnesota outlined a new vision for its future in January, just a few months after Fairview and Sanford announced the proposed merger.

“We must own, govern, and control the flagship healthcare facilities on our Twin Cities campus,” said Joan Gabel, who was the U of M president at the time.

She explained those facilities included the Masonic Children’s Hospital and the University of Minnesota Medical Center, which was transferred to Fairview as part of their initial agreement.

The University asked the Legislature for $950 million to support its goal, but the request didn’t move forward during the regular legislative session.

Governor Walz suggested there could be a special session to discuss the future of the University of Minnesota Medical School. However, his office didn’t respond Friday as to whether that is still a possibility.

Minnesota Nurses Association President Mary Turner was relieved when she heard the merger between Sanford and Fairview fell through.

“Every time these mergers happen, it feels like a bunch of these facilities close,” said Turner.

She is also now a Regent on the University of Minnesota Board of Regents. She said the partnership and potential purchase of the hospitals are at the top of the list for the Board to work on.

“Right now we’re looking at all sorts of options,” she said. “We are keeping all of our options open.”

Regent Ruth Johnson said in a statement Friday, “The residents of Minnesota benefit greatly from a strong and vital medical school at the University of Minnesota. This requires good clinical partnerships. We will focus our attention on ensuring that the University delivers on this mission now, tomorrow, and well into the future.”

As Attorney General Keith Ellison reviewed the Sanford-Fairview merger, concerns were raised about University of Minnesota facilities being controlled by an out-of-state entity. The Minnesota Legislature passed a bill to prevent U of M health care facilities from being owned or controlled by an out-of-state entity unless the attorney general determines it’s in the public interest.

“We have something to be very proud of here,” said Turner. “The University is a land grant institution, which means they are there to serve the public, and so right there, as a labor leader and an advocate to patients and people, I’m going to go with the institution whose mission is to serve the people of Minnesota.”

The failed merger between Sanford and Fairview could lead to important conversations between Fairview and the University of Minnesota, according to Tim Sielaff, an executive fellow at the Opus College of Business at the University of St. Thomas.

“When you get that close to such a significant split, I hope that raises some questions and opportunities for the two different stakeholders,” said Sielaff. “Maybe now is a time for the University and Fairview to figure out how they can really exploit the strengths of both of the organizations and create a different future for our communities.”

He suggests it could also be an opportunity for the University to branch out.

“The Fairview Health system does great work in the Twin Cities and surrounding areas. It has a solid primary care base which can allow the University to serve those patients well, but being constrained just by one health system is a bit of an issue,” said Sielaff. “How can the [University] think beyond the four walls of the Fairview system and think about how to partner really rigorously to delivery high value care for community members across the entire state?”

He added, “With Essentia and Marshfield [Clinic Health Systems] merging, that may create an opportunity for the University of Minnesota. Those systems do not have transplant services, do not have other quaternary services to serve their patients, so maybe there’s an opportunity there.”

There is a special Board of Regents meeting on August 1st, although the partnership is not on the agenda. The next regular meeting is in early September.

Medical School Dean Dr. Jakub Tolar said in a message to the Medical School Thursday:

“We learned late this afternoon that Sanford Health will not be proceeding with its proposed merger with Fairview Health Services.

The University of Minnesota Medical School and our faculty practice plan, M Physicians, are committed to one singular mission—providing exceptional, life changing care to patients through our clinical care, research and training of Minnesota’s next generation of clinicians. We do this through our faculty and the multitude of skilled and caring professionals working tirelessly throughout the M Health Fairview joint clinical enterprise, caring for patients at the bedside and behind the scenes.

Our commitment to the patients we serve and the wellbeing of our community is unwavering. Our work in our service lines and clinical domains continues to ensure our patients benefit from the power of academic medicine in every corner of Minnesota. As we move forward from here, we will continue to do our part to advance the health of Minnesotans.”

U of M Medical School Dean Dr. Jakub Tolar

State Rep. Tina Liebling (DFL-Rochester) said Friday in a statement:

“The end of the proposed merger of the Fairview and Sanford systems is welcome news. After the proposal was announced, many Minnesotans raised concerns that weren’t adequately addressed, including the future of the U of M’s health care facilities and medical school, which are key public assets. While the termination of the merger is a positive development, deep challenges remain in our health care system. Fairview’s financial stability is unclear, and the future of the partnership with the U of M remains uncertain.

“Legislators remain keenly interested in making sure that Minnesotans can access high quality, affordable health care and will do our part to ensure that patients and employees are protected.”

State Rep. Tina Liebling (DFL-Rochester)