October 1, 2023

FARGO — South Dakota-based Sanford Health and Minnesota-based Fairview Health Services are discontinuing their efforts to merge, both health systems announced Thursday.

A spokesperson for Sanford Health told the Post Bulletin that the Sanford Board of Trustees initiated the process of ending the merger.

In a statement, Sanford Health president and CEO Bill Gassen said his health system determined “it is in the best interest of Sanford Health to discontinue the merger process,” as the transaction lacks support “from certain Minnesota stakeholders.”

“The significant benefits we identified for a combined system with Fairview Health Services compelled us to exhaust all potential pathways to completing our proposed merger,” Gassen said.

In a separate statement, Fairview confirmed that it is discontinuing the merger process with Sanford.

“Our aligned missions, our shared commitment to health and healing, and our deep roots in our communities positioned us well to transform the future of health care,” said James Hereford, Fairview president and CEO. “While we wish the outcome were different, we know that the best thing for our patients, our people and the communities we serve is to continue our focus on delivering world class care, now and into the future.”

The news, as first reported by the Star Tribune, follows

the May 2023 passage of a Minnesota law

that prohibits health care systems from transactions that would create a monopoly or “substantially lessen competition.” The law also gives the Minnesota Attorney General’s Office more oversight on those transactions.

The merger, announced in November 2022, would have created one health care system named Sanford Health, headquartered in Sioux Falls, South Dakota.

Public officials, including Attorney General Keith Ellison, have been critical of the merger, especially concerning the ownership of M Health Fairview University of Minnesota Medical Center.

Under the new Minnesota law,

a University of Minnesota health care facility “shall not be owned or controlled, directly or indirectly, in whole or in part, by a for-profit entity or an out-of-state entity, unless the attorney general determines that ownership … is in the public interest.”

In a statement late Thursday afternoon, Ellison said that Sanford and Fairview “have made the decision they have determined is right for them.”

“In my office’s ongoing investigation, we have done significant work to evaluate the proposed merger’s compliance with state and federal laws and whether it is in the public interest, including reviewing more than 300,000 pages of documents,” Ellison said. “We know the proposed merger has been of vital interest to Minnesotans as well: our investigation received more than 6,000 comments from Minnesotans about it, including at four well-attended public meetings across the state. While this merger will not be going forward, the health and future of Fairview, the University of Minnesota healthcare facilities, and all Minnesota health systems are of vital interest to all Minnesotans. Much work remains to be done.”

This is not the first time that Sanford and Fairview have attempted, and failed, to merge. In April 2013, Sanford withdrew from merger talks with Fairview.

Then-Attorney General Lori Swanson

stated her concern that the merger would “drain Minnesota assets to further the company’s own expansion in other states.”

The news follows Duluth-based

Essentia Health’s announcement

Thursday that itself and Wisconsin-based Marshfield Clinic Health System will merge later this year. Another Duluth health system, St. Luke’s,

announced two weeks ago

that it is planning to merge with Wisconsin-based Aspirus Health.

Dené K. Dryden is the Post Bulletin’s health reporter. She previously covered the Southeast Minnesota region for the Post Bulletin. Dené’s a Kansas expat who moved to Minnesota in 2020 and joined the Post Bulletin in 2022. Readers can reach Dené at 507-281-7488 and [email protected].

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