13-02-2025
Fairview rejects proposed merger with University of Minnesota, Essentia
Fairview is rejecting a proposal to join forces with the University of Minnesota and Duluth-based Essentia Health to create a new nonprofit health organization.
In a letter to staff, Fairview Health Services CEO James Hereford and chair John Heinmiller said that while it is open to a partnership with the two organizations, "when it comes to a proposed merger between Fairview, the University, and Essentia – our answer is no."
They continued to say that they believe operating as an independent entity is its best path forward after Fairview confirmed in late 2023 that it would not be extending its partnership with the U of M – known as M Health Fairview - when it expires in 2026.
With the expiration looming, the university has been seeking a new partnership solution for the future, and announced last month an agreement had been reached with Essentia to create a new nonprofit that included a $1 billion investment from Essentia into the university's programs over the next five years.
But the U of M saw Fairview as another crucial partner in the proposal, having worked with the company since its merger in 1997 that saw Fairview buy the University of Minnesota Medical Center amid a financial crisis at the university.
But the relationship has become strained in recent years, with Fairview embarking on an attempted merger with South Dakota-based Sanford Health in 2023 that was opposed by the U and ultimately collapsed. Last year, the U launched an effort to buy back its hospital properties from Fairview, but has not been able to reach a deal with the company.
It submitted its proposal for a new nonprofit earlier this week, saying: "We propose to combine in a single, unified organization the clinical enterprises of the University of Minnesota, including its UMPhysicians, Essentia Health, and Fairview Health Services."
In its letter rejecting the merger, Hereford and Heinmiller said it's "essential" for Fairview "to maintain [its] independence," before adding: "Particularly where our mission, vision and values are not aligned with those of [the new nonprofit], we must be able to continue to make decisions about the care we deliver at Fairview."
The Star Tribune suggests that these concerns could relate to Essentia Health's portfolio including historically Catholic hospitals that have alternative views on providing abortion, contraception, and gender-affirming care.
But the proposal sent to Fairview said that while these Catholic facilities will continue to operate "consistent with the values and policies governing Catholic healthcare," Catholic policies "will not in any way govern activities at Fairview or University facilities or in University research, education, or other programs."
