Fairview, UCare End Merger Talks
The proposed merger of Minneapolis-based Fairview Health Services and Minneapolis-based UCare has been called off.
A joint statement emailed to Twin Cities Business on Thursday confirmed the cancellation of the deal: “Fairview Health Services and UCare have ended merger discussions; the two organizations will not be combining.”
The groups had announced signing a letter of intent to merge nearly a year ago, in April 2016. Representatives of Fairview and UCare did not immediately respond to inquiries about precisely when and why the proposed merger had been nixed.
The proposed merger reflects a national trend of health care providers like Fairview combining or partnering with health plans like UCare. The original announcement indicated that Fairview and UCare expected to hammer out the details and secure regulatory approval by “mid-summer 2016.”
In August, the two nonprofit organizations acknowledged the delay of merger plans, but indicated that due diligence for the potential deal was ongoing. But in the six months since then, the groups offered no updates on the discussions.
Despite the collapse of the UCare merger, Fairview still has a presence in the Minnesota health plan market. Fairview became the sole owner of the PreferredOne health plan in January 2016. According to its web site, PreferredOne has 327,000 enrolled members and serves 4,800 employers.
The joint statement confirming that merger talks had ended also added: “This decision has no impact on the collaborative products and services Fairview and UCare offer together today to provide member- and patient-centric, community-based care. These include the Fairview UCare Choices products and the highly effective care management interventions for UCare for Seniors and Minnesota Senior Health Options.”
Fairview UCare Choices, for example, is a health plan that is available through MNsure, the state-operated health insurance exchange.
Fairview has new leadership since the proposed merger with UCare was first announced. James Hereford became the new president and CEO for Fairview in December; he previously served as chief operating officer for California-based Stanford Health Care.
Hereford replaced David Murphy who served as Fairview’s interim CEO for more than 18 months. Murphy’s background was not in health care: he had previously worked at Golden Valley-based General Mills Inc. for two decades and then Red Wing Shoe Co., where he was CEO until December 2015.