When it comes to the future of health care in Minnesota, consumers recognize that health care leaders won’t easily reach agreements on the best courses of action.

But it was still disturbing last week to watch the University of Minnesota administration and Board of Regents spew exaggerated rhetoric to harshly criticize longtime partners because their health care vision hasn’t been fully embraced.

The U of M Board of Regents called a meeting Thursday, so President Rebecca Cunningham and the regents could express their outrage that Fairview Health Services and the University of Minnesota Physicians (UMP) would do a deal without them. The agreement, reached in conjunction with Attorney General Keith Ellison and strategic facilitator Lois Quam, lays out a framework for a 10-year operating pact in which U of M doctors practice in Fairview-owned facilities.

University administrators didn’t react well to this Fairview-UMP deal. In an official statement, the administration said: “This agreement strongly oversteps Fairview and the University of Minnesota Physicians’ authority—and represents a hostile takeover of the University of Minnesota Medical School.” The statement also said the deal “handcuffs the University’s ability to provide medical education and conduct life-saving research.”

In a letter to Ellison last week, U of M Regents chair Doug Huebsch, and Ruth Johnson and Penny Wheeler, regents’ vice chairs and physicians, said they were “frankly shocked” by “secret” negotiations, and they claimed the deal would make the university physicians “a captive entity of Fairview.” Meanwhile, they said the crucial talks between the two parties occurred while the University of Minnesota was left “on the sidelines and in the dark.”

In a three-page resolution approved Thursday by the regents, considerable criticism and ire was directed at the University of Minnesota Physicians.

President Cunningham recommended approval of the resolution that said the University of Minnesota Physicians had reached a deal with Fairview “in violation of its obligations to the University,” that it had “erroneously and unlawfully represented its ability to negotiate for the University’s missions with Fairview,” and that the deal would “improperly usurp the University’s authority” over research, education, and clinical priorities.

Talks on negotiating a new operating agreement between the U of M and Fairview have dragged on for years—and occurred during the administrations of President Joan Gabel, interim President Jeff Ettinger, and Cunningham, a physician who became U of M president on July 1, 2024.

Because of its unwillingness, or inability, to strike a deal with Fairview, should the U of M be allowed to indefinitely stall the talks? By his actions, attorney general Ellison’s answer to that question was “no.”

It’s the same assessment of some key business and community leaders who recognize the importance of the University of Minnesota’s role in educating tomorrow’s leaders and making a powerful contribution to the state’s economy. But they shared with TCB that they have been frustrated by how the University of Minnesota has handled the health care negotiations.

The fact that Fairview and the University of Minnesota Physicians group negotiated a deal—with the encouragement of Ellison—should serve as a pronounced wake-up call for U of M administrators and regents.

Of course, the University of Minnesota is a key actor in determining a detailed, final agreement that defines how Fairview and the physicians will operate and how the governance structure affects the University of Minnesota Medical School.

But the current operating agreement between the U of M and Fairview expires soon, on Dec. 31, 2026. Both parties gave notice at the end of 2023 that they wouldn’t renew the current agreement.

Yet nearly two years later, there isn’t a final resolution on a new contract. If the U of M had forged a deal with Fairview in a timely manner, the attorney general wouldn’t have entered the negotiating picture. He did so because time was running out to reach an agreement.

U of M leaders would benefit by analyzing their role in the years-long logjam. The odds of the U of M reaching a final deal with Fairview and the physicians’ group will increase, if the leaders spend more time trying to understand the other parties’ perspectives.

Avoid becoming isolated by recalibrating leverage in the negotiations.

Throughout the talks, the University of Minnesota appears to have underestimated the leverage that Fairview holds. The University of Minnesota antagonized Fairview and wasted time in achieving a U of M-Fairview deal when in January Cunningham unveiled a partnership with Duluth-based Essentia. Cunningham wanted to create a new not-for-profit entity, and she thought Fairview should merge its clinical enterprises into this new health system.

I spoke to a retired Twin Cities business executive who shook her head while recalling this chapter in the ongoing health care saga. She considers it a major blunder on Cunningham’s part to forge an alliance with Essentia and then treat Fairview as an afterthought and still expect it to fold its assets into a new system.

In September, it became public that Essentia was no longer a party to the talks that Quam was facilitating on behalf of the attorney general.

By coming across as the senior partner in talks and treating others like junior partners is how the University of Minnesota leaders found themselves stunned that an initial deal would be made without them.

Welcome expedited negotiations, instead of attempting to prolong talks.

How many more years does the University of Minnesota want to negotiate? “The University of Minnesota Regents failed to grasp their economic, political, and legal positions,” a veteran business executive told TCB. “The University of Minnesota should stop with all the hot breath rhetoric and get to the table,” the business leader said. “The resolutions and letters by the University of Minnesota are all puffery, with no real legal substance.”

When the regents’ chair and two vice chairs wrote to attorney general Ellison on Nov. 11, they said they want to move forward with “private mediation,” instead of working with strategic facilitator Quam. Despite the years that have elapsed since talks began, the U of M leaders don’t appear to want to make bargaining compromises at a quicker pace.

“The Board of Regents requests that all parties agree to a ‘standstill’ agreement to ensure that the time needed for further negotiations does not come with any party using ‘patient care’ as a bargaining chip or time pressure tactic,” the three regents’ leaders wrote to Ellison.

Make the best deal possible.

Labor leaders often face difficult challenges when their union membership is divided, and a large segment of members refuse to accept “the best deal possible” during tough economic times.

If University of Minnesota leaders are open to some compromises, they should be able to reach a health care agreement. But so far, they haven’t said yes to a deal.

Dr. Frank Cerra, former senior vice president for health sciences at the University of Minnesota, provided some sage advice for current negotiators.

“As someone who negotiated our relationship with Fairview and worked within it over its first 15 years, we always focused on the practical politics of the possible in place of any political navigation that would result in harm to the future of health care in Minnesota,” Cerra wrote in a Minnesota Star Tribune commentary. “Those negotiations were never simple, with each of us working to ensure fundamental needs were met.”

Cerra characterized the Fairview-U of M Physicians agreement as “an important first step.” He expressed concern over what he described as the “visceral reaction” to this initial deal by the current U of M administration.

“It’s clear this is a creative start to ensure a continued partnership allowing U physicians to continue seeing patients at the University of Minnesota Medical Center,” Cerra wrote. “This progress is long overdue. So why the university isn’t eagerly coming to the table to help finalize the agreements, as requested by the state’s attorney general, is puzzling to me.”

Acknowledge political and funding realities at the Legislature.

In 2026, during a short legislative session with state government facing budget challenges, it’s unlikely the University of Minnesota could secure substantial funding for a new health care vision that isn’t fully developed.

In addition, the Minnesota House has been divided 67-67 and Democrats have held a one-vote Minnesota Senate majority. Democratic Gov. Tim Walz is running for a third term, and Republican House Speaker Lisa Demuth is seeking her party’s nomination for governor. With this political dynamic, lawmakers probably would agree with Ellison that a new agreement needs to be reached between the U of M and Fairview.

“The University of Minnesota cannot afford to buy the hospitals [back from Fairview] with their budget problems and neither can the state,” the business leader told TCB. “So, that means there must be a deal with Fairview.” Fairview owns and operates the University of Minnesota Medical Center and Masonic Children’s Hospital.

Recognize the value of a stabilization agreement for health care consumers and doctors.

Uncertainty created by prolonged negotiations doesn’t serve patients, health care employees, or citizens of the state of Minnesota.

To some longtime political observers, attorney general Ellison was a surprising figure to step forward to bring some clarity and reassurance to health care patients and their physicians.

Ellison was a firebrand when he served in the U.S. Congress and a member of the left wing of the Democratic Party. Three years ago, he stood on the stage of Northrop Auditorium on the University of Minnesota campus next to U.S. Sen. Bernie Sanders, a longtime political ally. Sanders was in Minnesota to support Ellison’s reelection bid for attorney general, and he described Ellison as “one of the strongest progressive fighters in this country.”

Ellison is in the executive branch of government now. It’s his job to govern, and he has special oversight responsibility over health care systems.

Earlier this year, Ellison could have allowed the U of M and Fairview to simply continue their negotiations, which had not borne fruit. He chose not to sit on his hands, appointed Quam to serve as a strategic facilitator, and he remained engaged in trying to get a resolution in the talks between the U of M and Fairview.

Ellison said there was a “real and growing” possibility that the longstanding partnerships among the University of Minnesota, Fairview Health Services, and the University of Minnesota Physicians would come apart because of the inability to strike a new operating agreement.

He praised the work of Fairview and the physicians’ group. He labeled their deal “an important step toward a reimagined partnership” among the two parties and the University of Minnesota. “Fairview and the University [of Minnesota] will now embark on an agreement to address the remaining items before them, including provisions for graduate medical education and joint branding,” Ellison said in a written statement. “They have important work to accomplish for the entire state of Minnesota, and I look forward to supporting this process.”

It’s time for University of Minnesota leaders to cool their rhetoric, return to the bargaining table, and make a deal.

The University of Minnesota’s response:

As a land-grant institution, the University of Minnesota is a public asset with responsibility for world-class health sciences and medical education, research that leads to life-saving cures, and increased statewide access to high-quality patient care. These three dimensions of our health care mission are inextricably linked. The University’s Board of Regents and administration have a constitutional obligation to safeguard and advance this statewide mission and to protect public assets.

Despite that, the author and anonymous sources suggest the University should passively accept a deal that brings certainty to a private regional entity and physician group but reduces and destabilizes funding for facilities, teaching, research and community outreach. It also shifts authority to a private entity and removes the University from governance and management of a faculty practice that serves as both critical care providers and educators of the next generation of health professionals. Rural health, education and research that benefit all of Minnesota can’t take a back seat.

These are complex issues and there is hard work ahead. We must rebuild trust, take stock of shared successes, acknowledge differences with respect, and balance the needs of all parties with the best interests of all Minnesotans at the core. The University of Minnesota is eager to participate in negotiations with M Physicians and Fairview and a professional mediator experienced in complex health care and business matters to secure an agreement that addresses a looming health care crisis and serves the health care needs of Minnesota for decades to come.

Thank you for the opportunity to respond.

Gregg Goldman
Executive Vice President for Finance and Operations
University of Minnesota