JULY 18, 2023:
MINNEAPOLIS (AP) — A merger that would have created one of the largest health service companies in the Upper Midwest has been scrapped.
Minneapolis-based Fairview Health Services and Sioux Falls, South Dakota-based Sanford Health announced Thursday (July 27, 2023) that they would not proceed with the merger they had been discussing since late last year. It would have created a system with more than 50 hospitals and about 78,000 employees.
This is the second time in a decade that the two companies considered a merger but failed to complete it, the Minneapolis Star Tribune reported.
The latest attempt drew fierce opposition at the University of Minnesota, which has a partnership with Fairview. The university sold its teaching hospital to Fairview in 1997 and opposed the idea of an out-of-state entity owning the University of Minnesota Medical Center in Minneapolis. The merged system would have been based in Sioux Falls, South Dakota’s largest city.
Statements from the two companies’ CEOs stated that without support from stakeholders, it was determined that the merger couldn’t move forward.
The companies first considered merging in 2013 but met with strong political opposition.
Minnesota lawmakers this spring gave the state attorney general additional power to scrutinize health care mergers, including the Sanford-Fairview proposal.
The affiliation between Fairview and the University of Minnesota includes financial support from Fairview for the school’s academic medicine mission. This agreement continues through 2026, but both parties have an option to signal by the end of this year if they want to end the partnership. Fairview has said the current agreements are not financially sustainable.
NOVEMBER 16, 2022:
Sanford Health, the largest rural health system in the United States, and Fairview Health Services, one of the leading providers of health care in Minnesota, have signed a non-binding letter of intent to combine and create a new health system. Together, the combined system will bring together Sanford Health’s experience serving rural populations with Fairview Health Services’ experience in serving urban populations across complementary geographic footprints. The combined system will be uniquely positioned to provide more people access to high-quality, equitable health care, accelerate population health and value-based care, and drive clinical innovation to benefit rural, urban and indigenous communities across the Midwest.
“Our organizations are united by a shared commitment to advance the health and wellbeing of our communities,” said Sanford Health President and CEO Bill Gassen. “As a combined system, we can do more to expand access to complex and highly specialized care, utilize innovative technology and provide a broader range of virtual services, unlock greater research capabilities and transform the care delivery experience to ensure every patient receives the best care no matter where they live.”
“With Sanford Health, Fairview Health Services has found a partner that shares our midwestern values and our commitment to affordable, accessible and equitable care delivery,” said Fairview Health Services President and CEO James Hereford. “Our complementary capabilities mean that together, we are uniquely positioned to improve clinical outcomes, develop new care delivery models, expand opportunities for employees and clinicians across our broader operational footprint, and apply our combined resources to positively impact the wellbeing of our patients and communities today and for decades to come.”
The combined system will:
- Drive value through quality care and improved outcomes;
- Support health equity;
- Improve the patient experience;
- Help support more affordable care in the communities we serve;
- Provide opportunities for continued employee growth and clinical advancement; and
- Foster a culture of innovation that enables us to recruit and retain the best and brightest across our operational footprint.
Sanford Health and Fairview Health Services will remain nonprofit entities, each with their own regional presence, leadership and regional boards in the markets they serve. Upon close of the transaction, the name of the parent company will be Sanford Health. Sanford Health CEO Bill Gassen will serve as President and CEO of the combined system, and Fairview Health Services CEO James Hereford will serve as Co-CEO for a period of one year post-closing.
The governing boards of both health systems have approved proceeding with necessary steps, such as due diligence and review processes, with the goal of organizing Fairview Health Services and Sanford Health under a single integrated health system. The intention is for a definitive agreement to be signed and the closing of the transaction is anticipated in 2023, pending antitrust and other necessary reviews and closing conditions.
Sanford Health, Fairview Health Services and their partners are committed to ensuring the patients, residents and communities they serve continue to have access to exceptional care from their clinicians during the completion of this process.
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