Minnesota attorney general calls for delay in Sanford-Fairview merger timeline

Minnesota Attorney General Keith Ellison has asked Sanford Health and Fairview Health Services to slow down their proposed mega-merger, saying a scheduled closing for the transaction on March 31 is coming too soon to address questions about the deal.

Deputy Attorney General John Keller disclosed the request Wednesday night during a public meeting in Worthington, Minn.

Keller cited the University of Minnesota's concern that Sanford and Fairview have not adequately considered the merger's impact on the U's academic medical center.

Fairview owns the University of Minnesota Medical Center in Minneapolis, which is the university's primary teaching hospital. The health system and doctors at the U jointly provide hospital and clinic services through the brand M Health Fairview.

"It's more important to do this right than to do it fast, and that's why the parties' existing timeline concerns the Attorney General's Office," Keller said. "As a result, we formally asked the parties to delay the March 31st closing date, and we await their formal response."

Keller said the state Legislature is just beginning to gear up for hearings on the merger. He said meetings such as Wednesday's session in Worthington — the third of four this month — are providing valuable public input.

Ellison wants to make sure the U "has its fair say," along with the health systems and the public, Keller said. There also are questions, he said, about how the merger might affect employees, Minnesota health insurance premiums and "civil and human rights to get health care."

In a statement to the Star Tribune on Wednesday evening, Sanford Health and Fairview officials called March 31 a "target date" and said they are working to provide the attorney general "information needed to evaluate this merger."

In November, South Dakota-based Sanford proposed the merger with Minneapolis-based Fairview to create one of the largest health care providers in the Upper Midwest, with some 78,000 employees and more than 50 hospitals.

During comments at Wednesday's meeting, Sanford Chief Executive Bill Gassen did not directly respond to the attorney general's request for a delay. But he said any slowdown would delay the merger's benefits.

Gassen said the merger would not adversely affect the U's academic mission. He said that with a Fairview merger, Sanford has committed to meeting Fairview's obligations to the U through an existing affiliation agreement, which runs through the end of 2026.

"That leaves more than enough time for the combined system to work with the university on the terms of a repurchase of the medical center it sold to Fairview in 1997 and determine what a future clinical relationship could look like," Gassen said.

"University leaders have said publicly that this merger cannot move forward without the university. With all due respect, yes it can."

The U this month announced a plan to reacquire its teaching hospital and then build a medical center on campus.

At the Worthington meeting, Dr. Bevan Yueh, chief executive at University of Minnesota Physicians, reiterated the U's argument that the merger is moving too fast.

For weeks, the U has criticized the proposal as being focused on narrow business interests at the health systems, rather than the broader public question of what the merger would mean for teaching, research and patient care at the U.

"Pushing a quick approval of a merger is to squeeze out public interest," Yueh said.

He said the university might be willing to partner with the new health system, which Sanford would lead from its headquarters in Sioux Falls, S.D. But Yueh said addressing the public interest can't wait until after the deal closes.

"We are asking that Sanford and Fairview slow down, to commit to creating an academic health system that will serve Minnesotans over time, beyond 2026," he said. "Our vision for Fairview and Sanford to slow down and seize this opportunity to design a world-class academic health system with us is not a call to reject the notion that Sanford be able to combine with Fairview. It is a call to take the time to do it right."

Ellison's office is reviewing the merger to assess its impact on health care competition as well as its compliance with state law governing charitable assets. Keller said the attorney general has not decided if there will be cause for legal action.

Ellison's office, he said, is "waiting for substantial information from the parties that will help us analyze the situation."