South Dakota

Seek a bolder vision for U’s medical center

Editor’s note: editorial represent the opinions of the Star Tribune Editorial Board, which operates independently of the newsroom.


A resurgent merger proposed by Sanford Health, based in Fairview and South Dakota, has provided a roadmap for the University of Minnesota Medical Center’s future: the integration of its hospitals and clinics into a regional health system headquartered in Sioux Falls.

However, given the fundamental importance of these facilities to the health and economic well-being of Minnesotans, it is imperative to develop alternatives to a future determined by out-of-state executives for these facilities, which the United States sold to Fairview in a controversial 1997 deal have sold.

What is needed ASAP is a competing U leadership plan that includes a bold Minnesota-led strategy to strengthen this academic health center and ensure state interests come first. Key Elements to Address: What would it take for the U to reacquire these flagship facilities and create a next-generation medical center that will be a state-of-the-art care destination for decades to come?

Lawmakers returning for the 2023 session this week should be calling for a detailed proposal like this as they review the proposed merger and hold high-profile hearings of expert testimony in the coming weeks. These hearings would supplement the public hearing sessions held by Attorney General Keith Ellison.

The state is fortunate to have two world-class medical campuses — the U and Mayo Clinic — that attract patients, top physicians, research funds, and entrepreneurs. Minnesotans have benefited for generations by having exceptional medical care close to home. Synergies between healthcare and business have turned the state into a mecca for medical devices.

It is troubling to leave the future of critical university facilities in the hands of an organization with insufficient experience running a premier league academic health center.

Of course, Sanford has an impressive track record of operating a large regional network. And in a recent interview with an editorial writer, the CEOs of Sanford and Fairview offered assurances about the merged system’s commitment to the US medical center and argued the benefits of being part of a larger, financially stronger organization.

But teaching hospitals like the one at U bring very different management and financial challenges. Conducting research and training the next generation of doctors is expensive. These activities also take time and distract physicians from revenue-generating patient care.

If the merger goes through, Sanford would have a learning curve, a reality bigger than it appears. Recruiting and retaining top physicians and researchers is daunting. Placing US institutions “under South Dakota administration” could result in a brain drain that will be difficult to reverse.

Feedback from doctors and staff about the potential Sanford merger has been “overwhelmingly negative,” Myron Frans, U.S. senior vice president of finance and operations, told an editorial writer last week.

When Sanford first attempted to merge with Fairview in 2013, the management of out-of-state U facilities was among the most serious concerns U hospitals had at out-of-state facilities.

The latest merger attempt opens up new possibilities for the future of underground facilities. The language in U-Fairview’s operating agreement appears to allow U to disband that alliance and bring back its flagship assets if Fairview seeks a merger with another organization.

Because of this, primary responsibility for providing an alternative plan for Sanford management rests with U leadership. They must deliver soon, particularly with details of costs. This would almost certainly require significant public investment.

Lawmakers should also be aware that there is a trend across the country for universities to end academic health center management agreements with outside firms, particularly those involving non-governmental organizations.

“Our research shows that such extra-governmental agreements have failed, leading to universities reopening their facilities and operations. Examples of where extrastate ties have been dissolved include Oklahoma University, Tulane, USC and St. Louis University. Indeed, some of the nation’s leading academic health centers find universities to own and operate their facilities: Michigan, Penn, UCLA, UCSF, Washington and Ohio State, among others,” the U said in a statement to an editorial writer.

There are plenty of other reasons to worry about a Fairview-Sanford merger, with studies suggesting that consolidation will result in higher healthcare prices. It’s one of the reasons the Star Tribune editors are skeptical that this deal would benefit consumers, even though it would help Fairview’s ailing finances.

But the future of the US medical hub must remain in sharp focus as the debate escalates. Lawmakers must understand that this vital institution is at a critical juncture, presenting a historic opportunity to undo a dubious 1997 deal, and boldly consider how it might best serve Minnesota in the years to come.

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