Fairview Health Services saw a fifth consecutive year of operating losses during 2023, but officials say profitable operations during the fourth quarter are the latest sign of fiscal recovery at the Minneapolis-based health system.
Fairview saw improvement toward the end of last year with labor costs as well as discharging patients to step-down facilities — two issues that hospitals generally have cited as significant financial problems in recent years. Fairview joins two other large health systems in the state — Minneapolis-based Allina Health and Rochester-based Mayo Clinic — in reporting improvements in these areas, along with better financial results.
With some 34,000 employees, Fairview is one of the largest health care providers in the Twin Cities, and owns the University of Minnesota Medical Center in Minneapolis. Fairview CEO James Hereford told the Star Tribune in an interview this week that negotiations continue on a deal for the U to acquire the teaching hospital from Fairview.
“We’re on track,” Hereford said, without offering details. “We’re where we believe we need to be, to progress this towards that September 30th deadline.”
Fairview is Minnesota’s fourth-largest nonprofit group. It operates nine hospitals, more than 80 primary and specialty care clinics and a number of senior living and long-term care facilities.
For 2023, Fairview posted an operating loss of $189 million on $7.3 billion of revenue, according to financial statements released this week. Between 2019 and 2022, the health system’s annual operating losses have ranged from $96.2 million to $315.4 million.
This run of red ink was preceded by two of Hereford’s signature strategic moves – merging Fairview with the financially weak HealthEast system in 2017 and launching a new affiliation agreement with the U, including the M Health Fairview brand, in late 2018.
Hereford said the HealthEast deal was good for Fairview because it extended its operations into the east metro, even if it brought short-term merger costs. The M Health Fairview partnership was starting to bring financial success in early 2020, he said, but the pandemic upended growth plans.