U of M to Vote on Agreement to Strengthen Tie with Fairview

The agreement, which the University of Minnesota’s board of regents will vote on Friday, aims to enhance the relationship between Fairview Health Services, the U of M, and University of Minnesota Physicians, while also improving patient care, education, and research.

Almost a month after discussions regarding a takeover of Fairview Health Services came to an abrupt end, Fairview and two University of Minnesota groups that have been working together since 1997 have proposed an agreement that aims to enhance their relationship and improve patient care, education, and research.
According to a university-issued news release, the U of M’s board of regents will vote Friday on whether to approve the agreement, which applies to Fairview, the U of M, and University of Minnesota Physicians, which encompasses 18 separate practice groups of physicians at the university, and which owns and manages more than 50 specialty clinics and five family medicine clinics.
The U of M said the “integrated structure agreement is a significant step forward that enhances the business relationship” among the three groups. Through the structure, the organizations would operate under a “single strategic plan” and align to form a single management team—and the structure would integrate the operations and finances of the organizations without merging them. According to the university, the three would remain independent with separate financial balance sheets.
The U of M said that its board of regents in May 2012 approved letters of intent that outlined the goals of negotiations between the three organizations—and a university spokesman told Twin Cities Business on Tuesday that discussions around strengthening the organizations’ relationship have been going on for more than a year and were not prompted by Fairview takeover discussions having recently dissolved.
The recently forged agreement was approved by the University of Minnesota Physicians board of directors on April 17 and by the Fairview board of directors on April 18. The regents’ Friday vote marks the final step in the approval process.
In late March, news surfaced that Sioux Falls, South Dakota-based Sanford Health and Fairview were in discussions about a possible Sanford takeover of Fairview; Minnesota Attorney General Lori Swanson brought the discussions within public purview and outlined a number of concerns. Various roadblocks and many questions about the potential merger arose in the days that followed, and about a week later, it came to light that the U of M in late January had proposed its own takeover of Fairview.
But about a month ago, Sanford Health withdrew from talks with Fairview, and Fairview Chairman and Interim CEO Chuck Mooty said a U of M takeover was no longer on the table either. Mooty said at the time, however, that Fairview and the U of M would instead work to strengthen their existing relationship—and the agreement in the works appears to be a move in that direction.
In its announcement about the agreement, the university provided few details—and more specific information won’t be released until later this week (there is a media briefing mid-day Thursday, although information provided then is embargoed until Friday). None of the financial details surrounding the agreement have been revealed.
According to the U of M, the agreement would “create a more seamless experience for patients,” which the university says is “essential as health care reform is implemented across the country,” and result in more efficient operations and lower costs to patients.
The agreement would also provide an unspecified amount of additional funding for the U’s Academic Health Center, which comprises six schools and colleges that train health professionals and is home to various centers and institutes that focus on specific fields of study. The goal is to improve the national standing of the U of M Medical School and other health professional schools, and to increase on-site training and education for students, the U of M said.
The university said the agreement would also support health care research through increased focus on clinical trials and by streamlining the process for taking lab work to the bedside so that discoveries can benefit patients.
Additionally, the agreement would facilitate the development of a new ambulatory care center on the U’s Minneapolis campus that would open in 2016. The center would provide new space for clinics now in the Phillips Wangensteen Building, which the university called “outdated,” and provide “much-needed expansion space for a variety of clinics.”
If approved, the agreement would cover operations at the University of Minnesota Medical Center, the University of Minnesota Amplatz Children’s Hospital, University of Minnesota Physicians outpatient clinics on the east and west banks, University of Minnesota Physicians Heart at Fairview, University of Minnesota Physicians Cancer Care at Fairview, and University of Minnesota Physicians services at other Fairview sites, including Maple Grove.
Fairview owns seven hospitals and operates more than 40 primary care clinics. It has controlled the University of Minnesota Medical Center, a research and teaching hospital that trains about 70 percent of Minnesota doctors, since 1997.