Walz signals openness to revived Sanford-Fairview merger

Gov. Tim Walz has been open about the proposed merger of Minneapolis-based Fairview Health Services with Sioux Falls-based Sanford Health, signaling friendlier political waters than the nonprofit healthcare giants they encountered when trying to merge a decade ago.

In an interview at the Capitol on Wednesday, Walz told the Star Tribune that the engagement between his government and Sanford, the country’s largest rural health care system, was transparent and open – even before a merger was discussed earlier this month.

“What I can tell you is Sanford’s new CEO, the communication and relationship with our office is 100% different than it used to be,” said Walz.

The two healthcare systems attempted to merge in 2013, but the deal fell through due to opposition from Minnesota political leaders. The debate focused on the University of Minnesota, as Fairview owns the US Teaching Hospital in Minneapolis.

When asked if the door was more open to a deal now than it was ten years ago, Walz said, “I think that’s right.” But the governor also said, “There’s still a lot to do.”

Walz, who represented southern Minnesota in Congress for over a decade, said a “harsh” rural health care environment has weighed on health systems’ ability to provide the care they need and remain financially sustainable. He also said that these economies have necessitated mergers.

However, Walz warned that the quality of care must not be neglected in such mergers. He cited the plight of Albert Lea residents after the Mayo Clinic reduced services at the city’s hospital a few years ago.

“Rural health care delivery will look different and there will be some realignment,” said Walz. “We just have to make sure the communities are heard and the service isn’t disrupted.”

State lawmakers don’t automatically have a say in whether the deal can go ahead, but the experience of the failed Sanford-Fairview merger in 2013 shows how they can complicate such combinations.

Former Minnesota Attorney General Lori Swanson led opposition to the plan by questioning the idea of ​​an extragovernmental organization operating the University of Minnesota Medical Center, the taxpayer-supported training facility for most of the state’s physicians. State lawmakers introduced legislation to block the move, and former Minnesota Gov. Mark Dayton backed a plan for the university to adopt Fairview instead.

Shortly after Swanson publicly announced talks with Fairview in 2013, Sanford scrapped the idea, saying it had a policy of “only going where we’re invited.”

Minnesota’s current attorney general, Keith Ellison, has signaled a different approach to evaluating the merger idea. While Swanson quickly held a high-profile public hearing at the Capitol, where she spied on Sanford executives, Ellison is planning three or four public hearings — including in the greater Minnesota area — likely to begin in January.

His office also encourages Minnesotans to use a special web form to submit comments.

“Rural health care is just one challenge,” Walz said, “so I think the AG at the listening session is right about that. The complexity of the teaching hospital and the University of Minnesota play a role.”

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