Minnesota lawmakers ask to delay merger between Sanford, Fairview

ST. PAUL — The CEOs of Sanford Health and Fairview Health Services heard new calls to delay a proposed merger between the health care systems during a Minnesota legislative committee meeting in St. Paul.

Minnesota Attorney General Keith Ellison, along with members of the joint House Commerce and Health Finance & Policy committees, peppered the CEOs with concerns on Monday, Jan. 30.

At the conclusion, DFL Rep. Robert Bierman announced the introduction of a bill that would prohibit health care systems from entering into certain transactions unless they were reviewed and approved by the Minnesota Commissioner of Health.

The two health systems have a projected closing date of March 31 for the merger, which would heavily expand Sanford’s Sioux Falls-based footprint into the Twin Cities.

Ellison called that date “too ambitious,” not allowing for the research that needs to be done to ensure the merger would follow charitable organization and antitrust laws.

He said his office has received more than 4,000 emails, messages and phone calls about the proposal.

“We think that 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 the March 31 date could be scrapped.

“Not yet, at this time,” said Gassen, who said it was a target date only, more than two months away.

Stephenson said he found Gassen’s answer “extremely disappointing.”

“That seems like a reasonable request and I don't think it's starting off on the right foot in this relationship that you hope to pursue with the institutions in this state,” Stephenson said.

Lawmakers expressed concerns that comprehensive reproductive care and gender affirming care might be diminished under a merger of the two systems, which would be called Sanford Health and run 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 abortions took effect when the U.S. 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 patients’ access to reproductive and gender affirming care would be determined by local medical staff, in compliance with state law.

“What they have access to today will not be decreased as a result of this merger,” Gassen said.

Stephenson wanted assurance that Minnesotans wouldn't lose access to health care in their communities and that costs are not driven up by the proposed merger.

“Looking at comparable transactions throughout the country and the state in recent history, that's not at all a given,” he said.

Gassen said there are no plans to close any 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 spread out costs of innovative new technologies.

“It gives us the ability to lower our cost structures in areas such as medical technology, pharmaceuticals and information technology, which are about 1/3 of our overall costs,” he said.

Gassen also assured those speaking on behalf of employees that Sanford Health has long had unionized workforces in Minnesota, and would continue to honor collective bargaining agreements.

Others raised concerns about the University of Minnesota and its two teaching hospitals owned and operated by Fairview.

Dr. Jakub Tolar, U of M Medical School dean said the merger is a private business deal, not focused on his school’s obligation to serve the state.

“Because this has not been considered in the letter of intent between Sanford and Fairview, we will oppose this at this time,” he told lawmakers.

Hereford said he wanted to provide assurance to those who’ve characterized Sanford as “an outsider, a foreign entity from the Dakotas, unfit to participate in Minnesota's health care ecosystem.”

Sanford has provided high 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 has held three public meetings about the proposed health care merger this month in St. Paul, Bemidji and Worthington. A fourth meeting is set for Tuesday, Jan 31 in Grand Rapids, Minnesota.