Minnesota attorney general announces review of 2 proposed nonprofit health system mergers

Editor's Note: A previous version of this story inaccurately identified one of the mergers under review. The story has been corrected to identify the mergers under review as Essentia Health and Marshfield Clinic Health System and St. Luke’s Duluth and Aspirus Health. The Fierce Healthcare newsletter distributed Thursday, Oct. 5 also incorrectly identified one of the mergers under review.

Minnesota Attorney General Keith Ellison announced Tuesday that he is reviewing two pending health system mergers under a recently passed state law that gave his office additional authority to determine whether the deals are in the public interest.

The potential deals would create multibillion-dollar nonprofit entities.

The first is between Essentia Health and Marshfield Clinic Health System. Their merger would create a network of 3,800 providers and 150 sites of care, including 25 hospitals. The entity would serve over 2 million rural and mid-urban Midwest residents.

The second merger was announced in July and involves Minnesota-based St. Luke’s Duluth and Wisconsin-based Aspirus Health. That deal’s culmination would tally 19 hospitals, with a similar closing window of early 2024.

Ellison’s announcement came with a call for public input via a community meeting being held Oct. 25 and an online submission portal. The state’s head attorney said the feedback will be incorporated into his review and could shape potential improvements to public policy or regulatory measures.

"Every Minnesotan deserves high-quality healthcare that they can afford, access, and depend on, and every Minnesotan deserves the opportunity to provide input on healthcare transactions that affect them,” Ellison said in the announcement. “As I review these mergers to ensure they comply with state and federal law, I want to hear from the public, because Minnesotans’ thoughts and concerns are an essential part of our review.”

Ellison’s scrutiny has already contributed to a scuttled health system deal this year.

After convening public forums late last year, the attorney general’s requests for additional information triggered multiple delays for Sanford Health and Fairview Health Services’ hopeful 58-hospital merger.

Concurrent concerns from Minnesota legislators and Gov. Tim Walz eventually yielded a new law that gave the attorney general more power to enjoin and unwind any healthcare transactions determined not to be in the public interest. Sanford and Fairview called off the merger in late July due to the opposition from “certain Minnesota stakeholders.”

Ellison cited the “additional authority” granted to him by the state in this week’s review announcement.

Statements given to the press by Essentia and St. Luke’s welcomed Ellison’s review and reaffirmed the benefits their merger would bring to patient care in their communities.