The University of Minnesota is strongly opposed to a deal announced last Wednesday between Minneapolis-based Fairview Health Services and University of Minnesota doctors.

In a Nov. 12 message from the Office of the President, administrators wrote, “This would essentially transfer the responsibility for an irreplaceable public asset—the University of Minnesota Medical School—to Fairview, a private organization.”

Fairview and University of Minnesota Physicians, a University physicians group, struck a deal to continue health services and medical training at the University of Minnesota Health Center, reported the Star Tribune. University Board of Regents members and administrators strongly condemned the deal, saying the University was blocked from participating in negotiations and alleging the deal would give Fairview more control and slash medical school funding.

The new 30-page deal has not been released to the public, according to the regents meeting. Representatives for Fairview and M Physicians did not provide a draft of the agreement to the Minnesota Daily, but the Star Tribune reported the deal will be complete by the end of 2025.

The deal, called the Strategic Partnership for Minnesota’s Healthcare Future, will begin Jan. 1, 2027, for an initial term of ten years, with a provision for subsequent renewal periods, according to a joint Fairview and M Physicians press release.

The University, M Physicians and Fairview have been negotiating for years to extend the existing partnership of the University’s medical center, dubbed M Health Fairview, with the partnership set to expire in 2026 if no deal is reached, according to the Star Tribune. 

University President Rebecca Cunningham said in the Thursday Board of Regents meeting that this agreement would radically shift University governance and management even further away than what was proposed in negotiations over the last year, and it occurred without any input from faculty or staff. 

“We cannot allow the interests of a single regional provider and the management of a single physician management group acting outside of our University values and shared governance to be put ahead of what’s best for all Minnesota,” Cunningham said.

A Fairview spokesperson said in an emailed statement to the Daily that the new agreement ensures stable financing, predictable support, and a clear framework for the next decade. They said the investment is consistent with historical support levels, provides predictability in recruiting, program planning and research development.

 “In other words: the academic mission remains strong, the dollars continue to flow, and the agreement creates a more reliable, transparent framework for how that support is delivered,” the spokesperson said in the email.

The birth of M Health Fairview

The University, UMP and Fairview have been negotiating for years to extend the existing M Health Fairview partnership, with the partnership set to expire in 2026 if no deal is reached, according to the Star Tribune. 

The University of Minnesota works with Fairview Health Services and the University of Minnesota Physicians group, the clinical practice of the University medical faculty, to provide education and health services. The University of Minnesota’s hospital, the University Medical Center, trains 70% of the state’s healthcare professionals and has served a million patients, according to the Nov. 6 meeting.

Since the University Medical Center was acquired in a financial bailout by Fairview in 1997, there have been significant tensions over leadership and financial management, according to the Star Tribune.

In the past two decades, negotiations have stalled and other partnerships have been considered. Fairview’s profits have declined for years due to increasing medical costs, yet Fairview provides the University with about $100 million annually under the expiring deal.

University negotiations unwinding

Minnesota Attorney General Keith Ellison said in a statement to the Minnesota Daily that the University informed him it no longer wished to negotiate with Fairview on Sept. 12, and wanted to explore other relationship options. He added he saw a risk of a highly damaging unwind of the 30-year relationships between the parties.

“I then took two steps: 1) I directed all three parties to submit to me their detailed plans for an unwind, including the harms an unwind would cause and the costs it would impose, and 2) at the same time, I directed Fairview and UMP, who remained willing negotiating partners, to ‘meet to discuss ways they can protect the continuity and stability of the integrated academic and community health systems for the sake of patients and physicians,’” Ellison wrote in the statement. “I reiterated these points in a subsequent letter to the University on September 17.”

Cunningham emphasized in the Nov. 6 meeting the University did not walk away from the negotiation table at any point. 

According to a Nov. 13 University news release, Cunningham and Regent Chair Douglas Huebsch sent a letter to Ellison Sept. 16 emphasizing their commitment to continued negotiations and objecting to the strategic facilitator’s declaration of an impasse.

Cunningham said in the Nov. 6 meeting despite allegations of walking away from the negotiation table, the University did not walk away at any point.

A representative for Ellison said in an emailed statement to the Daily the UMP has the legal authority to reach a deal without the University, because UMP and Fairview have had their own agreement for a decade already.

What the University is saying

In a Board of Regents letter to the Attorney General, the University urged Ellison to condemn the Fairview deal. 

“The Board of Regents, to forestall these imminent actions, calls upon UMP and urges Fairview and the attorney general to pause so that the full implications of its recent actions can be understood,” administrators wrote in the letter. “The public interest be more fully considered with the public interest be more fully considered with the public’s university at the table.”  

The University’s Executive Vice President for Finance and Operations, Gregg Goldman, said the Fairview deal does not invest in the University’s medical school. 

“This is especially concerning given Fairview has a track record of consistently and significantly investing in their own programs and their own facilities, while underinvesting in the University of Minnesota medical school and medical center and services to Minnesotans are desperately needed,” Goldman said. 

In the Nov. 6 meeting, Regent Ellen Luger said she understands the concerns surrounding Fairview doctors and UMP leadership. 

Regent Kodi Verhalen said in the meeting that the Fairview deal could affect Minnesota residents who receive Fairview care. 

“It appears that this agreement in these negotiations will impact the delivery of medicine to these people and clinical services across the state,” Verhalen said. “The other item that concerns me is the level of academic support that Fairview claims is guaranteed within the agreement.”

Board of Regents Vice Chair and former Allina Health CEO Penny Wheeler said that although the agreement focuses on clinical operations, it places the University’s education and research at risk by reducing protected faculty teaching time and weakening University clinical oversight.

“Allowing Fairview and the University of Minnesota Physicians to retain all clinical revenue funds that have been historically supported teaching and research it leaves the broader university underfunded,” Wheeler said.