Both Fairview merger proposals axed

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Amid controversy and concern from all sides, proposals from both Sanford Health and the University of Minnesota to merge with Fairview Health Services were nixed Wednesday.

The proposal from South Dakota-based Sanford Health, which came to light in late March, drew concerns from state officials and others about how the merger would affect the academic mission of the University’s Medical Center, which Fairview controls.

“Sanford Health has a philosophical policy of ‘only going where we are invited,’” Sanford CEO Kelby Krabbenhoft said in a statement Wednesday.

Sanford Health declined to comment further.

Fairview’s interim CEO, Chuck Mooty, said in a statement Wednesday that the news of Sanford’s withdrawal “comes as a disappointment.”

Mooty added that Fairview will not consider the University’s proposal at this time.

University President Eric Kaler had proposed in January that the University take control of Fairview, saying it would be in the best interest of the state and the school.

That Fairview won’t consider the University’s proposal “is disappointing, given my strong belief that the status quo is not sustainable,” Kaler said Wednesday in a letter to administrators and Academic Health Center faculty and staff.

Mooty added in his statement that while the board doesn’t feel that now is the time for the University to acquire Fairview, the two will work on strengthening their existing partnership. He also said Fairview would continue with its search for a new CEO.

Minnesota Attorney General Lori Swanson said in a statement Wednesday that she received Sanford’s statement but had not yet spoken to Fairview or the University, adding she appreciated the reinstated CEO search.

At a hearing she held this week, Swanson expressed concerns about the merger, including namesake T. Denny Sanford’s past donations to University athletics.

Leaders from both Sanford and Fairview said at the hearing that they’d stop merger discussions if the University objected.

On Monday, legislators introduced two bills that would have outlawed the acquisition.

Rep. Joe Atkins, DFL-Inver Grove Heights, who proposed the two bills with Rep. Dan Schoen, DFL-St. Paul Park, said in a statement that the bills still address a relevant problem.

“Another non-Minnesota-based entity could still try to acquire Fairview, and we would once again be in the same potential situation where the University of Minnesota Medical Center would be not under Minnesota control,” he said, adding that he would still hold hearings on his legislation and request that Fairview’s CEO attend.

Hailey Colwell and Katherine Lymn contributed to this report.