Minnesota attorney general seeks public input on proposed Sanford-Fairview merger

Minnesota Attorney General Keith Ellison plans to host three or four public hearings, likely beginning in January, to gather input on the proposed merger of Sanford Health and Fairview Health Services.

South Dakota-based Sanford and Minneapolis-based Fairview announced plans last week for a merger to create a sprawling nonprofit health system with about 78,000 employees and more than 50 hospitals across the Upper Midwest.

Shortly after the merger announcement, Ellison's office said it was launching an investigation into potential anti-competitive aspects of the deal and whether the tie-up would comply with Minnesota law on use of nonprofit and charitable assets.

Such investigations are standard with a merger of this size, the attorney general said Tuesday, adding he could not share details.

"We've heard that people are concerned about it," Ellison said during a news conference at the State Capitol. "I can tell you that every community meeting I've gone to over the course of the past week, people have mentioned it to me."

In a joint statement, Sanford and Fairview said that "public input is an important part of the review process by the attorney general's office."

The public hearing phase of Ellison's investigation apparently will unfold more slowly than when his predecessor scrutinized a proposed Sanford-Fairview merger in 2013.

Back then, it was former Attorney General Lori Swanson who publicly disclosed the two health systems were considering a merger. Swanson held a public hearing at the State Capitol where she grilled Sanford executives within just a few days. The merger idea was abandoned within a week or two.

"I think it's important to do our due diligence," Ellison said. "My style is to collect information and then review the law, get some responses from the document request we've already made, and then have an opinion.

"I just think that's the more prudent way to go and I think that's more in line with the public interest," he said. "But I want to say, I think there's more than one way to approach this — more than one right way to approach this."

The public hearings will take place before the end of the first quarter, Ellison said. One will be held at the State Capitol and two or three could be located in greater Minnesota — the attorney general said he was "99 percent sure" one would be scheduled for Bemidji, which is home to Sanford's largest hospital in Minnesota.

Sanford's operations in Minnesota include 19 hospitals, 70 clinics and more than 7,000 employees, many in the western part of the state. Fairview's 10 hospitals are concentrated around the Twin Cities metro and include two medical centers in northern Minnesota.

Fairview owns and operates the University of Minnesota Medical Center in Minneapolis, which is a key training site for many of the state's health care professionals. The hospital also is central to the U's mission for medical research and patient care.

Fairview and the U have an affiliation agreement where the health system directs tens of millions of dollars each year in financial support for the university. The current agreement runs through 2026 with an option that can be exercised in 2023 for a 10-year extension.

Asked whether he'd heard concerns about the deal from the University of Minnesota, Ellison said: "They'll be part of the conversation."

In 2013, merger opponents balked at the idea of an out-of-state organization running the taxpayer-supported teaching hospital at the U. State lawmakers introduced legislation to block the move at the time, and others proposed that the university take over Fairview instead.

"I've heard [concern] directly from doctors and nurses, from farmers and rural communities, from other workers who are worried about their jobs, and from people from all over who have raised concerns about Minnesota charitable assets going out of state and want to make sure those assets benefit the public," Ellison said in a statement.

With the merger, the combined nonprofit health system would be called Sanford Health and headquartered in Sioux Falls.

A Fairview spokeswoman said Tuesday that the health systems are in the process of making a filing about the merger with the Federal Trade Commission. When that happens, Ellison said, the Attorney General's Office works closely with FTC to review any effects on competition.

"We can't comment specifically on what we're looking at," said Elizabeth Odette, an assistant attorney general in the antitrust division.

Ellison said his office also plans to work with the Minnesota Department of Health, which monitors compliance with laws and rules on health care services. That includes a 2021 statute requiring notice and a public hearing if a hospital plans to cease, curtail or relocate any services.

Dates and times for the public hearings haven't been finalized. For now, the attorney general encouraged Minnesotans to use a dedicated web form to submit comments. Alternately, residents can contact his office directly at 651-296-3353 or 800-657-3787.

"There is much we don't know about the merger," Ellison said. "That's why we're doing the investigation. ... Before we come to a conclusion about whether this is in the public interest, we want to know a lot more. So this is a stage in that pursuit."