MINNEAPOLIS — For nearly three decades, Fairview Health Services has operated the sprawling University of Minnesota Medical Center, which encompasses thousands of square feet and 1,700 patient beds across two sides of the Mississippi River. The complex consists of facilities on the East and West Bank, including Masonic Children's Hospital and the Clinics and Surgery Center.
In a state where health care drives a large sector of the economy, interim University of Minnesota President Jeff Ettinger describes the school's academic health facilities as the "hub of the hub."
"We think it's a really key component," Ettinger said, "to the thriving medical practice here in the state of Minnesota."
However, there are major changes on the horizon for the University of Minnesota Medical Center, with tens of millions of dollars potentially changing hands and huge implications for patients, health care workers, taxpayers, and other stakeholders.
The changes largely center around the university's plans to repurchase its academic health facilities from Fairview, which has controlled the medical center since 1997. Last month, the U of M's Board of Regents approved a nonbinding Letter of Intent with University of Minnesota Physicians and Fairview Health Services, signaling the university's desire to buy back the academic health facilities from Fairview as the two sides also continue to negotiate the long-term future of the "M Health Fairview" brand.
"The Letter of Intent with Fairview provides a road map for the future. It's a framework for an agreement," Ettinger said in an interview with KARE 11 at Northrop Auditorium earlier this month. "We have a common vision that the four on-campus facilities, ultimately in stages, would become operated by the university. That's what Fairview would like to see happen and that's what we would like to see happen as well."
The university initially transferred the medical center to Fairview in 1997 due to reeling finances and major upheaval in the health-care market. Some of the leaders involved in that initial transfer wrote in a recent Star Tribune editorial that conditions have changed, and that "it's time for the university to create a health delivery system to support the growth of its programs and meet the needs of the state."
Arne Carlson, who served as governor at the time of the transfer, told KARE 11 in a Zoom interview from Florida that the partnership "made good sense" in the late 1990s.
"It needed an injection, if you will, and they got it. It was a very welcome partnership. What impressed me most was the incredible capacity of all the people that were brought together to form that partnership," Carlson said. "It worked out well for a while, but I gather things have changed."
Fairview President and CEO James Hereford called last month's Letter of Intent a "critical first step towards a new and reimagined relationship" between Fairview and the university. If the agreement moves forward, the two sides would share ownership of the medical center for three years until the U of M could take full control at the end of 2027.
Yet, there are still major questions about the deal — namely, the overall cost.
"That's a really good question and we really don't know at the moment the full answer yet. That's part of reaching the LOI agreement, that then enables Fairview to now provide us with detailed financial information about the on-campus facilities," Ettinger said. "That will be a key question."
Ultimately, under a so-called "Five-Point Plan," the University of Minnesota envisions the construction of a new health facility after the school regains ownership of the medical center. Ettinger estimated that the price tag of a new facility could surpass at least $1 billion and would probably involve some state bonding support.
Those plans were first unveiled publicly last year as part of the "UMN Health" proposal. At the time, the U of M had expressed grave concerns about a potential merger between Fairview and South-Dakota based Sanford Health — which would have put the U's teaching hospital under control of an out-of-state entity — but that effort eventually failed.
"I think we realize that to have a complete academic health mission, where you have the research and the training and care for patients, that we would really like to have that hands-on involvement," Ettinger said. "We do recognize that it's been a number of years since we've had the principal responsibility for running it and that's part of why the LOI has a staged approach."
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