Kaler proposed U take over Fairview

South Dakota-based Sanford Health is also in talks to acquire Fairview Health Services. In an email to faculty and staff, Kaler said that raised ‘serious concerns for the University,’ and he outlined his own proposal.

by Branden Largent

President Eric Kaler has proposed that the University of Minnesota take control of Fairview Health Services, according to a January letter obtained by the Minnesota Daily.

Meanwhile, South Dakota-based hospital giant Sanford Health is in talks to take over Fairview itself.

In the letter to Fairview interim CEO Charles Mooty, Kaler writes that the union of the University and Fairview would be the “best choice for our patients and communities, our state, and our physicians, staff and students.”

Fairview has a net worth of approximately $1.2 billion. The Star Tribune first reported on the proposal Thursday.

Legislative leaders addressed the proposals at a press conference Friday.

Sen. Jeff Hayden, DFL-Minneapolis, said the Legislature is watching the developments, which he called a “fluid situation,” and he wants to make sure both Fairview’s quality of care and the quality of the University’s medical school are maintained.

House Majority Leader Rep. Erin Murphy said she’s asked to meet with the University to better understand both proposals.

In the Jan. 28 letter, Kaler wrote that he was prepared to appoint a “core transaction team” by around the end of April.

Kaler sent an email about the proposal to University faculty and staff Thursday evening. “We have been aware for some time of the Fairview-Sanford discussions,” he wrote.

Because of the University’s academic mission and its long-standing tie to Fairview, he said the idea of Sanford taking over Fairview, which includes the University Medical center, “raises serious concerns for the University.”

“Before any such merged entity could advance, the University must have its questions answered and perform extensive due diligence.

University Medical School Dean Aaron Friedman , who’s on Fairview’s board of directors, said he supports Kaler’s proposal.

“I believe that it is a win-win situation for both the University and for Fairview,” Friedman said. “I do think the University’s proposal is not only a legitimate one — it’s a strong one.” 

Since Fairview took over the University of Minnesota Medical Center  in 1997, the relationship has been working well, Friedman said, but he thinks the organizations still wrestle with having their missions align 100 percent of the time. The relationship makes it hard to ensure research and education is tended to the same way as if the University were the sole operator, he said.

Throughout the letter, Kaler emphasizes the benefit to the community if the two organizations were to join — especially in education, research and in combatting the “escalating cost of heath care.”

“We are now beginning the process of more deeply exploring both this option with Fairview, and the implications of a Fairview-Sanford combination,” he wrote in the email to faculty and staff. The Star Tribune reported Kaler is scheduled to meet next week with Fairview’s board of directors to discuss the proposal.

Friedman said Fairview’s board of directors briefly discussed Kaler’s proposal in February, and talks will continue after Kaler presents the proposal to the board later in the month. 

According to a statement released by Fairview last month, talks of Sanford’s acquisition are in “very early stages.”

Minnesota Attorney General Lori Swanson, on the other hand, told the Daily the talks are serious. She’s holding a hearing at the state Capitol on Sunday at 1:30 p.m. to discuss the implications of an out-of-state company controlling Fairview.