U of M requests nearly $1 billion from state in first phase of reacquiring campus health care facilities

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University of Minnesota officials say they will be requesting nearly $1 billion from the state legislature for the first phase of their plan to regain ownership of the health care facilities on the Twin Cities campus and build a new hospital. They released the plan Friday morning and are expecting hearings on the request at the State Capitol.

According to the University of Minnesota, they are asking for an estimated $300 million in funds to acquire the school’s medical center facilities on the east and west banks, as well as Masonic Children’s Hospital and the clinics and surgery center. The money will also be used for the transfer of facilities, funding for union contracts, workforce needs and new leadership for the organization that would be operated by the university.

In addition, the school is requesting an estimated $650 million in operating costs, including payroll, supplies, professional services and more.

Although the initial estimates could change, the request still needs to be approved by the U of M Board of Regents, which is scheduled for March 10.

“We must forge a new path: one that centers on the needs of Minnesotans’ health care now and for decades to come. One that recognizes the economic benefits of continuing our best-in-class health care sector, including the education and training of future health care professionals. And one that recognizes the treatments and cures U of M researchers will discover,” Myron Frans, the senior vice president for finance and operations, said in a prepared statement Friday morning.

Currently, the estimated initial costs are at $950 million for the first phase. As previously reported by 5 EYEWITNESS NEWS, Frans had said the new hospital is a five- to 10-year project and is expected to cost more than a billion dollars.

Frans has previous called the initiative a “reacquisition” of the University of Minnesota Medical Center.

The U of M and Fairview Health have a partnership which transferred the University of Minnesota Medical Center to Fairview ownership in 1997. The terms of that partnership have been updated throughout the years, including an option for a 10-year extension in 2023. The current agreement expires in 2026.

In response to the University’s plan, Fairview sent the following statement to 5 EYEWITNESS NEWS:

Fairview is proud of the partnership we’ve had with the University of Minnesota since 1997. In that time, we have delivered unrivaled care for patients in our community. Since acquiring the East Bank hospital in 1997, Fairview has invested $911M of capital in our facilities on the University campus in addition to millions in academic support for the University’s teaching mission.

We have shared that we are open to discussing options for the University to purchase the medical center and other Fairview assets on its campus at fair market value. However, many important details from the announcement today remain unclear.

We’re disappointed that the University did not share anything about their new proposal when we met just a few days ago.  Health care is a complex and serious business with patients at the end of every decision. Negotiating the University’s proposal through the news media doesn’t allow for the thoughtful dialogue we need to develop the best possible plan to ensure stability for our staff and continuity of care for the patients we serve.  We remain committed to working with our staff – including the clinical faculty – to provide the highest quality care.

Fairview Health Services

RELATED: University of Minnesota to announce “new vision” for future of health system

University officials have also announced their opposition to a proposed merger between Fairview Health Services and Sanford Health. The companies announced their intent to merge back in March, however, that has since been moved to May.

RELATED: Fairview, Sanford delay merger deadline 2 months

5 EYEWITNESS NEWS Chief Political Reporter Tom Hauser will have more details on this story during Friday evening’s newscast.