Minnesota attorney general asks Sanford Health, Fairview Health Services to delay 58-hospital merger

The Minnesota attorney general’s office has formally asked Sanford Health and Fairview Health Services to postpone the March 31 closing date of their proposed merger as it seeks more information on the repercussions of the deal, Chief Deputy Attorney General John Keller said during a public meeting held Wednesday evening.

The Midwest nonprofit health systems had announced their 58-hospital merger plans in November, saying at the time that joining together would expand care quality and access across their rural and urban markets. The resulting organization would employ nearly 80,000 people.

Speaking on behalf of Minnesota Attorney General Keith Ellison, Keller said the office was still “waiting for substantial information from the parties that will help us analyze the situation.”

He told meeting attendees that the office wasn’t prepared to share specific results from its ongoing internal investigation. So far, the office has received and is working its way through more than 3,500 comments from the public through online forms and public meetings, of which Wednesday’s meeting was the third of four.

The University of Minnesota, which has hospitals owned by Fairview, has also told the attorney general’s office that the proposed deal was moving too fast and that its interests “have not been adequately considered,” Keller said. Additionally, Minnesota’s state legislature is preparing to hold its own hearings on the proposal.

“All of these factors point to the need for careful consideration and discussion. It’s more important to do this right than to do it fast, and that’s why the parties’ existing timeline concerns the attorney general’s office,” Keller said at the top of the public meeting. “As a result, we’ve formally asked the parties to delay the March 31 closing date and we await their formal response.”

Keller said the office is still welcoming feedback and concerns from the public about how the deal might affect employees, regional health services, insurance rates, “civil and human rights” to receive healthcare, the state’s teaching hospital and “Minnesotans’ identity, given that an out-of-state entity could control this important in-state institution.”

The office is also conscious of and investigating market conditions, changes to the provision of charitable care and potential closures of existing locations, with Keller noting the shuttered services that followed Fairview’s prior acquisition of fellow Twin Cities system HealthEast.  

"While March 31 is a target date, we are working closely with the Attorney General’s Office to ensure they have the information needed to evaluate this merger," Sanford and Fairview said in a joint statement provided to Fierce Healthcare. "This merger is about doing more for those we serve, and every day we delay merging Sanford and Fairview is a missed opportunity to realize the significant benefits for our patients, our people and the communities we serve.  This merger is also about taking critical steps to provide the necessary financial sustainability to serve Minnesota communities for generations to come."

Minneapolis-based Fairview Health Services employs 31,000 people across 11 hospitals as well as dozens of clinics, pharmacies and other facilities. It boasts a network of over 5,000 doctors thanks to the HealthEast merger and partnerships with University of Minnesota Health specialists.

Headquartered in Sioux Falls, South Dakota, Sanford Health describes itself as the country’s largest rural health system with nearly 48,000 employees, 47 medical centers, 224 clinics and hundreds of other facilities. It serves over 1 million patients and 220,000 health plan members, according to its website, and each year logs 5.2 million outpatient or clinic visits, nearly 83,000 admissions, about 128,000 surgeries and procedures and roughly 195,000 emergency department visits.