CommonSpirit, Essentia nix deal involving 14 North Dakota, Minnesota hospitals

CommonSpirit Health and Essentia Health have called off the potential sale of 14 hospitals and other clinics located in North Dakota and Minnesota.

The two organizations had signed a letter of intent at the top of the year to explore a deal involving Bismarck, North Dakota-based Catholic Health Initiatives' St. Alexius Medical Center and its associated critical access hospitals, clinics and living communities.

At the time, the organizations’ leaders highlighted a shared Benedictine heritage and rural community focus as conducive to a fruitful negotiation.

In a May 18 joint release, the systems again acknowledged the shared values but said they “were unable to come to an agreement that would serve the best interests of both organizations, the people we employ and the patients we serve.”

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“CommonSpirit and Essentia will continue to offer outstanding care in North Dakota and Minnesota. We’ve strengthened our relationship throughout this process and remain committed to possibilities in the future,” they wrote.

Earlier this month the Duluth News Tribune reported on a petition signed by nearly 700 healthcare workers from both organizations expressing concern about the deal. Citing a different acquisition from the previous summer, members of the Minnesota Nurses Association said they worried about staff shortages and other barriers to patient care that could arise from the sale.

Essentia Health operates 14 hospitals, 71 clinics, six long-term care facilities and other operations, many of which are Catholic. The nonprofit integrated health system serves patients in Wisconsin, North Dakota and its home state of Minnesota.

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The system reported about $2.2 billion in total revenue and a nearly $16 million loss for the fiscal year ending in June 2020. It also laid off about 900 employees, about 6% of its workforce, in the early months of the COVID-19 pandemic.

CommonSpirit Health is the largest Catholic health system in the country, operating 140 hospitals across 21 states and employing about 150,000 staff.

The system had combined revenues of almost $29.6 billion for the fiscal year ending in June 2020. Although it posted a $550 million operating revenue loss for the full year due to COVID-19, the system has since bounced back and last week posted a $539 million gain for its most recent quarter alone.