Fairview and the University of Minnesota plan rebrand with eight-year deal

Two years after failing to pull off a high-profile merger, the University of Minnesota and Fairview Health announced plans Monday for an eight-year partnership to share their expertise and generate more money for academic medicine and research.

Leaders of the organizations lauded the plans to expand their existing partnership, which provides the U and its physicians with a broad referral network of Fairview patients — as well as financial support for its medical school — and provides Fairview with the U's expertise in rare and difficult-to-treat conditions.

"Together, we will provide better and more comprehensive care to Minnesotans," university President Eric Kaler said in a statement.

One goal is to streamline and simplify patients' access to everything from primary care to specialty clinics and to put the entire organization under one brand name. While subject to negotiation, the name likely will be "M Health Fairview" and be used at Fairview's other hospitals and clinics, including facilities it added through a merger with HealthEast last year, said Fairview Chief Executive James Hereford.

"We want to present a common face to the market," Hereford said, and not a combination "that begs the question, who are you and how do you relate to these other entities?"

Governing boards for Fairview and the U last week approved a "letter of intent" to negotiate and plan to vote on a final agreement in August or September. The deal would last through 2026 and include a 10-year option beyond that.

The letter calls for an increase in clinical revenue, which Fairview provides to support the medical school and research, from $22 million this year to at least $35 million by 2022. The final number is five times the current support level, said Dr. Macaran Baird, chief executive of University of Minnesota Physicians, which represents the U's academic physicians and is also part of the deal.

The additional funding, which would come through increased patient care and efficiency on both sides, would help restore the reputation of the U's Medical School, which fell out of the top 30 in research grants from the National Institutes of Health. Patients also would benefit, Hereford said, because increased investment in research could result in discoveries in genetics and personalized medicine.

The U stemmed financial losses in 1997 by selling its teaching hospital to Fairview. While closely aligned ever since, their relationship has been strained at times. In 2015, leaders of Fairview and the university physicians announced their intent to merge into a single organization called M Health and to phase out the century-old Fairview brand. Those talks fell apart a year later, and university leaders openly discussed aligning with different clinics and hospitals.

Baird said new leadership has brought a fresh approach and trust and a realization that both sides could gain through a closer partnership, but not a complete merger.

Jeremy Olson • 612-673-7744