On Friday, the University of Minnesota and Duluth-based Essentia Health said they are proposing creating a new not-for-profit Minnesota health care system that addresses the needs of the state, with a $1 billion price tag.

The press release says they are utilizing the strengths of both organizations for a framework to serve the needs of all Minnesotans while also envisioning future needs.

More specifically, they say that framework includes:

• Addressing the most urgent health care needs of the state in new ways — for today and for the future.
• Building on the strengths of the University of Minnesota and Essentia Health to lead and operate this new entity.
• Serving the needs of current and future patients and help educate the next generation of health professionals.
• Ensuring the future of academic medicine in Minnesota and essential financial support to the University of Minnesota Medical School. 

This vision is only in the early stages, and the school, which is in an agreement with Minneapolis-based Fairview Health Services that ends in 2026, says that they shared their future ideas with Fairview.

“We are at an inflection point in our relationship with Fairview Health Services that requires an urgent and innovative solution,” said University of Minnesota President Rebecca Cunningham. “We envision this model as a new path forward in our relationship, one that builds on the momentum all those at M Health Fairview have built and that continues to put patients first, consistent with our organizations’ shared priorities. We have begun conversations and invite further discussion with Fairview to bring this concept to life for Minnesota.

Fairview had planned to merge with Sanford Health, a South Dakota-based health system, but the merger was called off in July 2023.

Fairview provided this statement regarding the news of the proposed health care system:

Fairview became aware of the University’s discussions with Essentia within the last 24 hours and has not been provided with details on the concept. Fairview is an independent, nonprofit organization and decisions about our future will remain under the purview of our Board of Directors and leadership team.  As Minnesota’s largest healthcare provider, any decision we make must carefully consider our patients, employees, providers, and the broader community. 

Over the last year, we have worked in good faith towards the University’s desire to purchase the academic assets. Today’s announcement by the University reflects a sudden change in their stated desire. As we look ahead to determine next steps, our unwavering focus remains on delivering exceptional care and ensuring the health and well-being of Minnesotans. 

–Fairview Health Services

The Essentia Health CEO Dr. David Herman is hopeful about this proposal.

“This is the beginning of an exciting, ambitious — and critically needed — conversation about the future of care in our state,” said Herman. “Essentia Health has a long and committed partnership with the University of Minnesota. With nearly 70 percent of all Minnesota physicians having been trained at the University, we know that continuing to deliver excellent patient outcomes while building a sustainable healthcare future rests on the foundation of a strong medical school. These are key reasons why Essentia leadership has begun exploring opportunities to build a new framework for healthcare in Minnesota.”

The framework has more specific goals it aims to address:

• increasing costs;
• flat or declining reimbursement;
• limited access;
• critical workforce shortages;
• and structural inequities that amplify health disparities.

The investment price tag for this potential new nonprofit health care system is $1 billion over five years to get it created and started.

The press release says the money would be available by leveraging assets for the proposed system and philanthropic support.