The University of Minnesota’s agreement with Fairview Health Services is set to expire at the end of 2026.

The University of Minnesota Medical School is now exploring a possible future with Essentia Health, which it says is central to its “All Minnesota” vision to manage costs and expand access for patients.

“The fate and the future of the medical school and the practice is at balance,” said Dr. Jakub Tolar, the dean of the medical school, during Friday’s Board of Regents meeting. “This is a state of urgency, this is a state of crisis. This is a state where we need partners who are not fair-weather friends.”

University of Minnesota leadership described to Regents a lack of investment by Fairview at several facilities, including the Masonic Children’s Hospital and the University of Minnesota Medical Center (UMMC).

The University’s presentation to the Board of Regents stated Fairview has spent 2.3 to 3.1% at UMMC over the past three years, below what they described as a benchmark standard of 4.5 to 5.4%

“These are Fairview’s facilities they have not invested in and chose to not upgrade, putting our physicians and future training in a difficult place,” said University President Dr. Rebecca Cunningham.

In a statement, Fairview responded, “Since 2019, Fairview has invested an average of $54.2 million per year in capital improvements at UMMC, fully complying with the investment levels previously agreed upon by Fairview, the University, and UMP in our 2018 agreements. While capital constraints exist across the healthcare industry, Fairview has continued to invest strategically in system-wide improvements. Fairview remains open to selling its ownership stake in the CSC joint venture to the University and is prepared to engage in good-faith negotiations as the University considers its next steps. However, any agreement Fairview considers must prioritize the best interests of our patients, staff, and providers. Simply put, the University’s new conditions are not aligned with that priority.”

Fairview and the University are negotiating the future of the Clinics and Surgery Center Joint Venture (CSCJV), which is at UMMC, with an agreement set to expire later this year.

The CSCJV is a 50-50 partnership between Fairview and the University of Minnesota Physicians. The University wants to purchase Fairview’s half as part of its broader vision.

Earlier this month, the University made an offer to acquire Fairview’s interest in CSCJV. Fairview, however, questioned the terms of the proposal in a response letter, including a provision that Fairview forgive more than $100 million in debt the center owes to Fairview.

“We are committed to our patients and the faculty who practice in the CSCJV. Because you failed to meet the terms of our previous agreement, however, we clearly need to identify a different path,” said Joe Gaylord, the executive vice president and chief financial officer, in the letter.

During Friday’s meeting, University of Minnesota Executive Vice President for Finance and Operations Gregg Goldman briefed the board about that letter.

He confirmed they received the letter but said, “We are still waiting for Fairview to respond to hopefully sit down at the table and have those discussions.”