ST. PAUL – The CEOs of Sanford Health and Fairview Health Services heard fresh calls to delay a proposed merger between the health systems during a meeting of the Minnesota Legislative Committee in St. Paul.
Minnesota Attorney General Keith Ellison heaped concerns on CEOs Monday, Jan. 30, along with members of the House of Representatives’ joint committees on Commerce and Health Finance and Policy.
Finally, DFL Rep. Robert Bierman announced the introduction of a bill that would prohibit healthcare systems from entering into certain transactions unless they are reviewed and approved by the Minnesota Department of Health.
The two healthcare systems have an expected closing date of March 31 for the merger, which would greatly expand Sanford’s Sioux Falls footprint in the Twin Cities.
Ellison called that date “too ambitious” and didn’t allow for the research that needs to be done to ensure the merger complies with charity and antitrust laws.
He said his office received more than 4,000 emails, messages and phone calls about the proposal.
“We think the investigation needs more time, the legislature needs more time, Minnesotans need more time,” Ellison said.
Rep. Zack Stephenson, a DFLer and committee chair, asked Fairview CEO James Hereford and Sanford CEO Bill Gassen if March 31 could be scrapped.
“Not at this point,” said Gassen, who said it was just a target date more than two months away.
Stephenson said he found Gassen’s response “extremely disappointing”.
“That seems like a reasonable request and I don’t think it doesn’t start off on the right foot in this relationship that you’re hoping to pursue with the institutions in this state,” Stephenson said.
Lawmakers raised concerns that comprehensive reproductive care and gender-affirming care could be reduced through a merger of the two systems, which would be called Sanford Health and led by Sanford’s CEO.
In South Dakota, where Sanford is based, abortion is illegal except to preserve the life of a pregnant woman.
In North Dakota, where Sanford also operates, a trigger law banning abortion went into effect when the US Supreme Court overturned Roe v. Wade last June, but abortion remains legal for now after a court blocked the law.
Both Hereford and Gassen said patient access to reproductive and gender-affirming care is determined by local medical personnel in accordance with state law.
“What is available to them today will not be reduced by this merger,” Gassen said.
Stephenson wanted assurances that Minnesotans would not lose access to health care in their communities and that costs would not be increased by the proposed merger.
“If you look at comparable transactions across the country and state in recent history, it’s not at all self-evident,” he said.
Gassen said there are no plans to close Minnesota facilities or reduce access to care as a result of this merger.
Hereford told the joint committee that the merger between Sanford and Fairview would allow the two to share the cost of innovative new technologies.
“It gives us the opportunity to lower our cost structures in areas like medical devices, pharmaceuticals and information technology, which account for about 1/3 of our total costs,” he said.
Gassen also assured those speaking on behalf of employees that Sanford Health has a long-standing unionized workforce in Minnesota and will continue to honor collective bargaining agreements.
Others raised concerns about the University of Minnesota and its two teaching hospitals, which are owned and operated by Fairview.
dr Jakub Tolar, dean of U of M Medical School, said the merger was a private deal unrelated to his school’s obligation to serve the state.
“As this was not reflected in the memorandum of understanding between Sanford and Fairview, we will oppose it at this time,” he told lawmakers.
Hereford said he wanted to provide reassurance to those who have characterized Sanford as “an outsider, a foreign entity from the Dakotas who is unable to participate in the Minnesota health care ecosystem.”
Sanford has provided quality care to Minnesotans for 25 years with more than 7,000 dedicated employees in locations including Bemidji, Thief River Falls, Worthington and Luverne, he said.
Ellison held three public meetings about the proposed healthcare merger this month in St. Paul, Bemidji and Worthington. A fourth meeting is scheduled for Tuesday, January 31 in Grand Rapids, Minnesota.
