U of M Objects to New Plan Between Fairview, M Physicians
Fairview Health Services and the University of Minnesota Physicians (M Physicians) this week announced a plan to continue a decades-long partnership. But the University of Minnesota, which has been the third in that partnership, is objecting to it.
Fairview and M Physicians, in a Wednesday press release, said the new partnership would begin Jan. 1, 2027. To last 10 years, with automatic renewals, the framework is intended to preserve the care for now delivered by M Health Fairview, the joint enterprise among the University of Minnesota, M Physicians, and Fairview. The three-way tie-up has lasted nearly three decades and is set to expire at the end of 2026. That end date has created an air of urgency around new agreements.
“The framework builds upon the strengths of both organizations while modernizing how they collaborate,” the release states. “Fairview will continue to own and operate the University of Minnesota Medical Center and Masonic Children’s Hospital, where M Physicians providers will continue practicing and leading operations with Fairview leadership. Patients will see no change to where or how they receive care.”
Along with continuity of care, Fairview and M Physicians described the plan as a move to continue academic partnership across Fairview hospitals and clinics, financially supporting faculty physicians, researchers, and trainees. It includes a commitment of $1 billion from Fairview to U of M hospitals and academic sites.
The two organizations “executed a binding agreement,” the release states, with a “definitive agreement” expected by year’s end. “Fairview remains open to conversations with the University regarding additional aspects of the relationship between both organizations,” the release notes.
The University of Minnesota has expressed shock at the proposed plan. In a statement provided to TCB, the U said it represents a “hostile takeover” of the university’s medical school. M Physicians is independent from the the university; it is the U of M Medical School faculty’s clinical practice.
In a letter, the U of M’s board of regents detailed its concerns to attorney general Keith Ellison, whose office in March assumed a more active role in negotiations given “the current status of the talks, the time pressure, and the importance of the public interest in getting this right,” Ellison said at the time, when his office was selecting a strategic facilitator for negotiations.
The board’s letter accused Fairview and M Physicians of deciding issues “critical to the future of the medical school” without university input. The board said it was working with information obtained from “limited oral summaries” of the proposed framework offered last Friday by Fairview and M Physicians.
It also described several problematic provisions: the removal of current university representation on the Fairview board; intentions “to set and redirect mission support” to M Physicians; a change in the reporting duties of a “key” medical executive appointed by the U of M; and a change in “effective operational control over critical functions” of M Physicians.
M Physicians refutes the latter claim, informing TCB it is and will remain “in charge of [its] own operations and administration,” under leadership of its faculty physician–led board of directors.
Ellison has facilitated the proposed plan. He released a statement Monday welcoming the agreements between Fairview and M Physicians, saying he invited the parties together to address the risk of discontinued care. He described “more than 1.2 million patients and 36,000 employees, including more than 10,000 union members,” reliant on the three-way partnership.
Ellison said his goal was to stop an unraveling of agreements.
“As Minnesota Attorney General, I have a variety of powers under state and federal law to review health care transactions,” he stated Monday. “I invited the parties into this strategic-facilitation process because the risk that this partnership could unwind before a new agreement, aspects of which are subject to review, could be submitted to my Office was too great. With today’s agreement, an unwind is now a far more distant possibility than it was before.”
He also cited the “deeply troubled” state of U.S. health care. The new framework, he said, “ensures that Fairview will continue to be one of largest funders of the University of Minnesota Medical School, if not the largest, as the federal government reduces its support for academic health care.”
In its letter, U of M board leadership referred to patient care as a “bargaining chip or time pressure tactic,” noting, “We’ve seen such tactics in the public dialogue between Fairview and United Health.”
Per its statement, the U of M wants involvement in changing the proposed plan and is accusing M Physicians of shirking its charter mission to serve the university. Its letter to Ellison requests private mediation for the remainder of the process.
In Fairview’s release announcing the partnership, Fairview president and CEO James Hereford stated, “This is about doing what’s right for our patients and for Minnesotans. Our shared success depends on putting patients first, supporting physicians and advanced practice providers, and ensuring that Minnesota’s academic health system remains strong and sustainable.”
