Minnesota Now with Nina Moini

Former governors Pawlenty and Dayton will testify against Sanford-Fairview health merger

University of Minnesota hosptical
The University of Minnesota's Board of Regents approved exploring the possibility of combining Fairview Health Services and University of Minnesota Physicians (UMP) into a a single academic health system called University of Minnesota Health. U of M hospitals seen here in 2015.
Mark Zdechlik | MPR News

State lawmakers spent Tuesday talking about the proposed Sanford-Fairview Health merger. In a rare joint appearance Tuesday evening, former governors Tim Pawlenty and Mark Dayton with testify in a Senate committee against the merger.

Fairview runs the University of Minnesota teaching hospitals and clinics, which is a snag in the merger deal. The University of Minnesota wants $300 million from the state to buy it’s hospital back from Fairview and another $650 million to run it. In a letter sent to the University on Monday, Fairview’s CEO said they’ll sell the hospitals back to the university if it helps clear the way to Fairview’s merger with Sanford Health of South Dakota.

DFL Sen. Melissa Wiklund is chair of the Senate Health and Human Services Committee who will hold the gavel in the Tuesday evening hearing. She joined MPR News host Cathy Wurzer to talk about the process.

Use the audio player above to listen to the full conversation. 

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Audio transcript

[MUSIC PLAYING] INTERVIEWER: State lawmakers started the day talking about the proposed Sanford-Fairview health merger and will end it talking about the same topic. Tonight, though, in a rare joint appearance, former Governors Tim Pawlenty, a Republican, and Mark Dayton, a Democrat, will testify in a Senate committee against the merger.

Fairview runs the University of Minnesota Teaching Hospitals and Clinics, which is a snag in the merger deal. The U wants $300 million from the state to buy back its hospital from Fairview and another $650 million to run it. In a letter sent to the U of M yesterday, Fairview CEO says they'll sell the hospitals back to the University if it helps clear the way to Fairview's merger with Sanford Health of South Dakota.

DFL State Senator Melissa Wiklund is chair of the Senate Health and Human Services Committee. She'll hold the gavel in tonight's hearing. And she's on the line. Senator, welcome.

MELISSA WIKLUND: Thank you. Thank you for having me.

INTERVIEWER: As I mentioned, Sanford Health is based in South Dakota. Governors Pawlenty and Dayton are against outstate ownership of a public entity like the U of M hospital. Should the deal go through? What's your view?

MELISSA WIKLUND: Well, I think that I believe Minnesotans really care a lot about access to health care and also being able to afford their health care. Looking at this merger, I think in the Senate, I think it's part of our job to ask questions about such a critical issue as the Fairview and Sanford merger proposal. It's a very large transaction.

And when we look at data, there's compelling data that when hospital systems do merge, there can be negative impacts on patient care quality. And sometimes there are changes in facilities that are open. Some of them close. And I think it's our responsibility to ask questions about it.

I don't at this point have a position to say this is-- it should or shouldn't go through. Part of the reason for the hearing tonight is to give my committee members a better view of all of the different points of view that relate to the merger. Since it involves the University of Minnesota, that also adds a factor that's of keen interest to legislators and Minnesotans in general. It's a state asset. And we care a lot about what might happen to it.

So the hearing tonight will give a chance for the attorney general to give us an update on his investigation and where he's at. As you mentioned, the former governors, Governor Pawlenty and Governor Dayton, will be able to provide us-- share their thoughts with us. And then we'll have an opportunity to hear from the Fairview CEO and the Sanford CEO.

Another important aspect is just that there are many groups who feel that this transaction would affect them. And so we're going to give time for people from labor, from the Nurses Association, et cetera, to provide their feedback on the merger.

INTERVIEWER: So the U of M, obviously, as I mentioned and you also touched on it, is a major entity in this equation. Do you also have concerns that an outstate entity could fully control one of the state's largest nonprofit health providers in the state if the deal is approved?

MELISSA WIKLUND: Yes. Yes, I do. I mean, I think that would be-- there would be a lot of ramifications that we'd like to make sure that we understand from a legal standpoint. How would that affect state resources that go to nonprofit hospitals that are in Minnesota and with the ownership being outside of Minnesota? So there's a lot of questions and a lot of complexity there.

INTERVIEWER: A letter from Fairview's CEO to the U of M indicated that Fairview was willing to sell the hospital back to the state, as I mentioned in my intro. If the U, according to reporting from The Star Tribune, if that clears the pass-- clears a path for the merger. Do you agree with that solution? Or is this, do you think, a bargaining chip?

MELISSA WIKLUND: I think it's something that we need to get to gather more information about. The university's proposal came forward about a week or so ago. So we've had a little bit of-- very short amount of time to take a look at that. And then there's the response that was provided today by Fairview and the implications. What does that mean that they're willing to go along with that?

But in addition, we haven't really settled this question about the transaction, the merger transaction itself and whether it's in the public interest for Minnesota. So a lot of questions. And I think the hearing tonight is a start for us hear more directly. And then there is legislation pending both in the House and I'm carrying a bill in the Senate along with others that would provide some structure to transaction reviews to make sure we get all the information we need to develop an opinion about is this in the public interest or not?

INTERVIEWER: By the way, do you support the kind of money the U of M says it needs to buy the hospital back and run it? Plus, they want to improve existing buildings. That's a huge sum of money.

MELISSA WIKLUND: It is. It's a very large sum. And I think that it will require pretty careful analysis. I mean, we have to be assessing whether the resources are necessary. But then how does that impact long term our spending on health care in Minnesota? And is it going to lead to the kind of health outcomes that we would want to see in our communities across the state?

INTERVIEWER: So the deadline for the merger has been moved now to May 31. Fairview and Sanford pushed it back after pressure. Do you think that's enough time? Or do you think it needs to be further delayed to give everyone a chance to weigh in and to really look at this?

MELISSA WIKLUND: Well, I think it's a very short amount of time. I think that clearly the first date of the end of March was absolutely too short amount of time. I think the end of May, it still is very challenging for us in the legislature because we have many other tasks that we are dealing with right now, trying to put together our potential budget that will have to be approved by my committee by the end of the month.

So there's a lot of competing really high-priority items that we have to review. So it will be challenging. I think we need to talk more about what the timeline should be and whether the end of May is really going to afford us enough time.

INTERVIEWER: Since you are going to be chairing the committee, you get to ask your own questions during the hearing tonight. What do you want to hear from both the CEOs of Fairview and Sanford that you've not heard yet?

MELISSA WIKLUND: I think I'd like to hear more about how they feel that this is really in the interests of serving Minnesotans well in terms of our ability to access high-quality health care across the state. And how are they going to ensure that this is not only a necessary step that they feel is positive for their entities, but then how is it a positive step that is going to benefit Minnesotans? Because we hear a lot about different specialty care that maybe has gone away in certain places in Minnesota and certain changes in facilities that are available to Minnesotans. And I think I'd really like to understand how do they see this transaction allowing us to continue having access that we need across the state to health care?

INTERVIEWER: All right. Well, Madam Chair, we'll be watching the committee. Thank you so much.

MELISSA WIKLUND: All right, thank you.

INTERVIEWER: We've been talking to DFL Senator Melissa Wiklund. She's the chair of the Senate Health and Human Services Committee.

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