University of Minnesota says clock is ticking on solving Fairview 'partner problem'

A top University of Minnesota official said the next month or so will be critical as the U decides whether to revamp its partnership with Fairview Health Services for the long term or create a new agreement with Fairview's proposed merger partner, Sanford Health.

Myron Frans, the U's senior vice president for finance and operations, told the University's Board of Regents on Thursday that solving what he called the "partner problem" would help set the stage for any special session of the Legislature about the U's health care future.

Earlier this year, the U asked lawmakers for $950 million for a plan to regain ownership and operate its teaching hospital from Minneapolis-based Fairview, which currently owns the University of Minnesota Medical Center. The hospital is the flagship location of M Health Fairview, the brand partnership between Fairview, the University's medical school and University of Minnesota Physicians.

The Legislature didn't fund the request as the merger timeline slowed this spring, but lawmakers raised the possibility of convening a special session while also giving the state attorney general more authority for investigating the merger.

The University has opposed the proposed deal because it would shift control of the teaching hospital to Sanford Health, based in South Dakota.

"We are actively engaged in trying to come up with the right solution as soon as we can," Frans said during a board retreat in Victoria. "The clock is ticking. This has been going on for a year now. … We all need to resolve this and move on."

In a statement to the Star Tribune, Fairview said its merger talks with Sanford Health are continuing. The health system said it continues to believe a Sanford combination that includes the University as a partner would "benefit our patients and our community."

The current affiliation agreement between the U and Fairview runs through 2026. Either party must give notice by year's end if it doesn't want to renew the contract. Fairview said current agreements "are not financially sustainable and need to evolve."

While there's been talk of a special legislative session this September, Frans said in an interview he thought that timeline might be too short. He also suggested the University might not need the full $950 million funding request if there's a way for the U to negotiate governance of the hospital without outright ownership.

"If ... we reach some agreement where there's a transfer, and we negotiate what governance means and what control means, that may or may not mean that we need all of that money for operations," Frans said.

The University of Minnesota Medical Center includes a large hospital for adults and an outpatient clinic on the U's East Bank campus as well as a pediatric hospital and psychiatric inpatient hospital on the West Bank.

"We clearly want governance and control over some of them," Frans said. "We still haven't reached a decision on which ones they might be yet."