The attorney general of Minnesota is wading into the strained negotiations over a potential $1 billion academic medicine deal between the University of Minnesota, Essentia Health and Fairview Health Services—in which the last of which has so far been resistant.
“Given the current status of the talks, the time pressure, and the importance of the public interest in getting this right, my office is taking a more active role,” Minnesota Attorney General Keith Ellison said in a statement.
In late January, Essentia and the University shared plans to form an “all-Minnesota health system solution,” which would take the form of a new nonprofit care entity.
The organizations said their vision would offer a new model to tackle healthcare costs and workforce issues in the state while also fleshing out medical facilities and patient access to the research university’s clinical trials. They said the proposal would be fueled by a five-year investment of $1 billion.
But the announcement also indirectly involves Fairview, which the partners said they would like to include in the arrangement. Fairview has run a joint clinical enterprise with the university, called M Health Fairview, since 2017, which is set to expire at the end of 2026 after the parties couldn’t hash out a new contract. Of note, Fairview has also owned the University of Minnesota Medical Center for more than 25 years.
In February, Fairview’s leadership told its staff that the organization is opposed to the new entity as proposed, and that something closer to a “strategic partnership” would be preferable in order for Fairview to maintain its independence.
Concurrently, the university sought to purchase Fairview’s 50% share of their clinics and surgery center joint venture to support the new entity, though that bid has also been rejected without a counterproposal, the university said.
In light of this, the state attorney general’s office announced last week “a new chapter in the negotiations” that will see the three parties reconvening their discussions under the guidance of a strategic facilitator.
The facilitator will be chosen by the office with input from the three parties, which have also agreed to pay for the facilitator’s services. These will involve establishing communications guidelines, plus milestones and deadlines for the discussions, while keeping in mind the state’s priorities of stable and sustainable patient care, employment and education, according to the office.
“The parties have tried to find a resolution in the past, and I commend their efforts; these are complicated matters, however,” Ellison said. “Importantly, the parties recognize the importance of these negotiations to the public interest and they welcome the chance for a fresh start.”
Ellison’s office holds the authority to enforce Minnesota’s antitrust laws as well as the authorization to seek court intervention should he determine whether a healthcare transaction is not in the public interest. The office noted that Ellison is not waiving these authorities or tipping his hand on any decision by involving the strategic facilitator.
The university, in a statement, said it supports Ellison’s involvement and looks forward to continued conversations with the other parties.
“This integrated approach is stronger with Fairview Health Services and Essentia Health as our partners,” it said.
Fairview runs 10 hospitals and employs more than 34,000 people. It’s less than two years out of a failed merger attempt with Sanford Health, a planned arrangement that raised red flags among local stakeholders and the University of Minnesota over concerns that an out-of-state entity would take control. At one point during those proceedings, the university requested nearly $1 billion from the state so that it could buy back its healthcare facilities from Fairview prior to the deal’s closure.
Essentia, meanwhile, runs 14 hospitals and employs more than 15,000 people. Last year, it scuttled a proposed merger deal with the Marshfield Clinic Health System, which would have created a 25-hospital entity.