The University of Minnesota Board of Regents is set to vote Friday on a 10-year operating agreement with Fairview Health Services and M Physicians, which is a giant leap from the ruptured relationships on display in November when the U’s president and regents strongly objected to a deal between Fairview and M Physicians.

But the three parties needed each other and a three-person mediation team—led by Thomas Fraser, a retired Hennepin County District Court judge—prodded Fairview, the physicians, and the U of M to a deal that brings stability for health care consumers and providers and funding for the University of Minnesota Medical School.

“Despite differences they had, they shared the overriding goal of strengthening the health and prosperity of our entire state and its flagship university,” Minnesota Attorney General Keith Ellison, who appointed the mediation team, said in a Monday news release that announced the agreement.

Since 1997, Fairview has owned the University of Minnesota Medical Center, and it will continue its ownership position under the new agreement. In highlighting key aspects of the 10-year pact, the parties disclosed that Fairview will invest $1 billion in its medical facilities on the U of M campus.

Fairview has been providing $100 million annually in operational support to the University of Minnesota, but Fairview previously indicated that the $100 million level wasn’t sustainable. Under the new agreement that takes effect Jan. 1, Fairview will provide $50 million in annual financial support for the U of M Medical School. However, there’s the potential for increased funding based on the health system’s performance.

“Fairview also assumes additional financial responsibility for clinic services, bringing its 10-year commitment to the Medical School to approximately $600 million before additional performance-based funding,” according to the attorney general’s news release.

The agreement reaffirms the U of M’s designation of M Physicians, which is the group representing Medical School faculty and affiliated doctors. “M Physicians remains the sole faculty practice group, affirming its ability to continue their academic work as they practice in Fairview facilities and advance the University’s commitment to delivery of care, medical education and training, and important medical research,” the release said.

Throughout the many twists and turns of negotiations over multiple years, the University of Minnesota administration has repeatedly emphasized the U’s responsibility as a land-grant institution to serve all of Minnesota’s 87 counties.

In a nod to the U’s statewide priorities, the deal includes: “Exploration of an innovative new program to support local physicians in increasing the likelihood that patients in Greater Minnesota receive timely diagnosis, appropriate treatment, and necessary care for complex medical conditions, regardless of their geographic location or circumstance.” Fairview has made an initial allocation of $10 million toward this initiative.

In early 2025, Attorney General Ellison inserted himself into the negotiations process because the parties had failed to reach a deal and the operating agreement was set to expire at the end of 2026.

Ellison named Lois Quam, a former UnitedHealth Group executive, to serve as a strategic facilitator. In early December, after the U of M had objected to Fairview and M Physicians doing a bilateral deal, Ellison decided that the three parties were going to need even more help to make it over the goal line and reach an agreement.

So Ellison brought in Fraser to serve as the mediator, and he asked Quam and Dr. Bill McGuire, former UnitedHealth Group CEO, to serve as “coequal consultants” in the mediation process. The trio has had a busy schedule in the heart of Minnesota’s winter.

Ellison’s news release spotlighted the fact that an “agreement [was] reached after seven weeks of intensive mediation led by [an] experienced, mutually agreed-upon mediation team, meeting every day except Dec. 25.”

Rebecca Cunningham, University of Minnesota president, labeled the deal “an important milestone” that “brings clarity” to the relationship among the three parties. “We are pleased to be able to continue this long-term partnership, which has played a vital role in caring for Minnesotans, training much of the state’s health care workforce, and advancing lifesaving medical research,” Cunningham said.

“Health care delivery in Minnesota and across the country is in crisis, and meeting the needs of patients in this environment requires constant innovation, improvement, and a willingness to change how we provide care-delivery services to meet the needs of our patients,” James Hereford, president and CEO of Fairview Health Services, said in the news release.

“This mediation process created the space for all parties to focus on what matters most: continuity of care, a strong academic partnership, and a sustainable future for health care in our state,” Hereford said.

“This agreement establishes a clear and durable foundation for M Physicians and all parties to deliver world-class care and education for our patients, learners, and community,” Dr. Greg Beilman, interim CEO of M Physicians, said in the announcement release. “M Physicians is proud to reaffirm our status as the University’s singular, premier physician practice and further solidify the harmony and partnership in our clinical and academic missions.”

The new deal was announced just 11 days after Dr. Jakub Tolar, the University of Minnesota’s Medical School dean since 2017, said that he will be leaving the U of M. From a field of 179 applicants, Tolar was chosen to become president and CEO for the Baylor College of Medicine in Houston, Texas.