The University of Minnesota got a response from Fairview and Sanford in regards to its announced intention to purchase the on-campus teaching hospitals before a possible merger.
In a letter dated Monday, the CEOs of Fairview and Sanford told the Board of Regents they support the U's plans and hope to enter into negotiations both on a possible timeline and a price for the transaction.
A spokesperson for the U tells WCCO Radio that no negotiations would change anything about the current relationship the organizations operate under.
Here is the full text of the letter, signed by Bill Gassen, President and CEO of Sanford Health, and James Hereford, President and CEO of Fairview Health:
We write in response to the University’s public proposal to reacquire East Bank and acquire West Bank (including Masonic Children’s Hospital) and Fairview’s interest in the Clinic and Surgery Center. This will confirm that we support and formally endorse the University’s five-point plan, as we currently understand it, to include the preliminary step of acquiring these assets. This is consistent with our longstanding position that Fairview and the combined system are indeed willing to sell these assets to the University to support its mission of research, education, and public health. We further understand from the University’s public proposal that it intends to operate the facilities in conjunction with partnerships with all health care providers in Minnesota, one of which may be our combined system. Consistent with our first meeting in August of 2022, Sanford and Fairview’s desire is to maintain a clinical partnership between our combined system, the University of Minnesota Medical School and its faculty practice. We look forward to continued discussion about the optimal partnership for all parties involved, following sale of the desired assets, that is consistent with the University’s public mission and its five-point vision. With this clarity on the path forward, we suggest immediately beginning the process for the University to purchase the assets. Given the University’s stated date of March 1, 2024 for a complete transfer of operations, we hope this work, together, can begin immediately. To facilitate this process, we propose Fairview and the University enter into a Memorandum of Understanding which defines the process and structure of the University’s acquisition of the assets, including identification of a mutually agreed upon process using third party financial advisors to determine the value of the assets. Now that the University has made public its request for specific funding levels relative to this proposal, a mutually agreeable valuation process should begin to determine the appropriate level of consideration for these assets. To continue forward progress, we recommend a series of standing meetings be established amongst the appropriate individuals to facilitate this work. We look forward to continuing our support of the University’s vision.
The return letter from Senior Vice President for Finance and Operations Myron Frans and Dean of the Medical School and Vice President of Clinical Affairs Jakub Tolar at University of Minnesota:
Dear James and Bill,
We write in response to your letter, received today, with your endorsement of the University’s five-point plan. It is clear that you have a deeper understanding now of why we are opposed to the merger as it is contemplated. Your support of the holistic vision is a good step forward.
Minnesota is presented with a historic opportunity to construct a health system centering on the teaching, research, and clinical care provided by the University and its Medical School faculty. Fundamental to the vision, as you note, is the University’s ownership and governance of the assets on the University’s flagship campus (point 2 - acquisition of academic health assets) and the University’s vibrant partnership
with affiliated health systems (point 3 - strategic partnerships). These components go together; facilities without strong partners committed to advancing the University’s mission of public healthcare do not
accomplish our public purpose.
We will continue to work with the legislature, and the Attorney General as well, on the transfer of the assets on the University’s flagship campus. That is a question of facilitating the ongoing charitable and
public purpose of the flagship campus facilities. It centers on public value rather than a commercial question of fair market value. At the same time, we will continue to work with Fairview and Sanford on a companion affiliation agreement that will similarly advance the University’s five-point vision. Your endorsement of the vision gives us hope for those interrelated efforts.
Advancing the work of the Joint Clinical Enterprise has been a priority for the University and UMP from the beginning of this discussion. The lack of clarity about the governance and operating model of the contemplated combined system remains a concern. It will be essential that these issues are resolved as a part of the next phase of this work. An MOU around the acquisition of assets is not sufficient. Alignment on all five components of the vision is required to assure the University, and thereby Minnesota, that the public’s interests will remain paramount in the years to come.
We appreciate your offer to engage in all steps necessary to achieve the vision, which includes the transfer of the assets on the University’s flagship campus as well as the development of a strategic partnership. Therefore, we assume that Fairview and Sanford agree to pause the proposed merger to
allow for the strategic planning that the University’s vision requires, and until an agreement can be reached with the University.