Fairview, Sanford merger: Former governors testify against ‘out of state ownership’

(FOX 9) - Two former Minnesota governors on the seemingly opposite sides of the political spectrum found common ground Tuesday, testifying at an informal hearing against a proposed hospital merger that would make one of the state’s largest hospital systems owned by a South Dakota-based company.

On Nov. 16, 2022, Sanford Health and Fairview Health Services announced the two intended to merge in 2023. The new entity would be called "Sanford Health" and run by Sanford’s current CEO. 

"It says ‘M Health Fairview’ not ‘out-of-state health’. There is no precedent for an out-of-state entity owning or controlling the state’s flagship medical academic hospital," said Tim Pawlenty at the Minnesota Senate Fairview-Sanford merge informational hearing.

Sanford Health of Sioux Falls, South Dakota, has 47 medical centers with roughly 45,000 employees and locations in mostly rural Minnesota areas, including Bagley, Bemidji, Canby, Jackson, Luverne, Thief River Falls, Tracy, Westbrook, Wheaton and Worthington.

Based in the Twin Cities metro, Fairview Health Services has approximately 31,000 employees with 11 hospitals, including Masonic Children’s Hospital, Southdale in Edina, St. John’s in Maplewood, Bethesda in St. Paul, Ridges in Burnsville, Woodwinds in Woodbury, Northland in Princeton, Lakes in Wyoming, Grand Itasca in Grand Rapids, and the Range in Hibbing. Fairview also owns the University of Minnesota Medical Center, and has a partnership with the University of Minnesota Medical School and the University of Minnesota Physicians Group.

Backing Pawlenty's concerns about the merger, former gov. Mark Dayton also expressed concern about the state of the academic partnership should the merger come to fruition. The partnership between the U of M and Fairview currently ends in 2026, with an option for a 10-year extension in 2023.

"The prospect that the governance of the University of Minnesota’s academic health center could shift to a South Dakota-based enterprise is alarming and should never be allowed to happen," Dayton said at the hearing.

Minnesota Attorney General Keith Ellison previously announced his office would investigate the proposed transaction’s compliance with state and federal charities and antitrust laws. Ellison’s office has made requests for information from Sanford and Fairview to evaluate the transaction, according to an announcement. 

Under Minnesota law, the Attorney General is the chief civil regulator of charities and nonprofits in Minnesota and has authority to enforce state and federal antitrust laws.