What is next for Fairview and the U?

[audio href="http://www.publicradio.org/tools/media_player/get_player.php?audio=minnesota/general/features/2013/04/11/friedrichdbf_20130411_64&type=POPUP" title="Fairview and the U: What now?"]Alex Friedrich chats with Steven John on All Things Considered[/audio]

Here's a version of my chat (audio above) with MPR's Steven John today on All Things Considered:

SJ: A day after merger talks abruptly ended between Fairview Health Services and its suitors -- Sanford Health and the University of Minnesota -- Fairview and the U are left to figure out where to go from here with their relationship.

As we reported yesterday, South Dakota-based Sanford pulled out of discussions saying it felt unwelcome after its interest drew scrutiny from Minnesota officials.

Meanwhile, the university and Fairview have been discussing for months how to work more closely together. That's not necessarily an easy thing, since the organizations have somewhat different missions.

SJ: Why was the U even interested in Fairview? Didn't it sell its hospitals to Fairview in the late 1990s?

AF: It did. That was a time when a lot of universities were selling off their hospitals. Managed care was moving in. There were issues of reimbursement. There were financial pressures. Universities were concerned about the risks of running a hospital, and didn't think it was a good fit. They didn't feel equipped to deal with that.

Linda Cohen, chairwoman of the U's Board of Regents, told me that in the U's case there were financial pressures. Beds weren't being filled. But business is better now. U of M physicians have better relationships with outstate doctors and getting more referrals.

And the upcoming federal health care overhaul should bring insurance to more patients -- and lighten financial burden for hospitals.

With a changing market, the trend now is that universities are getting back into the business - or at least forging closer relationships. A Moody's analyst has mentioned USC, Stanford and New York University as examples. The financial outlook is improving.

And with a clinical hospital, university physicians have an expanded platform for research. Also, university officials tend to want more influence and control over such an important part of their program.

SJ: But the merger didn't happen. Why not?

AF: Simply put, university and Fairview have two different missions. Fairview is clinical practice. It treats patients.

University physicians treat patients there. They train there. But they also teach and do research. There is overlap in what they do -- but some areas may be incompatible.

Professor Dan Zismer, directer of U's healthcare administration program, put it like this: The U might eye a health system up in Duluth and say: Let's be partners.

But Fairview might not like that ,and say, "But they're our competitors."

SJ: So where does the U go from here?

It wants to continue its plans to develop a closer relationship. For a number of months, the U and Fairview have been working on agreement on how to integrate operations and management for facilities such as the University of Minnesota Medical Center, Amplatz Children's Hospital and the planned Ambulatory Care Clinic.

It's about efficiency and smoother operation for patient. I spoke with Bobbie Daniels, CEO of the University of Minnesota Physicians, and Aaron Friedman, dean of medical school and VP for health sciences.

For an example of what could be done, Daniels said, consider an area of medicine: transplants. The transplant program is essentially at the hospital, but transplant patients also deal with clinics as well as doctors and nurses from the different systems. The U handles certain parts of the process, and Fairview others.

To give the patient the best care, she said, we need to make sure it's well integrated so that the patient doesn't encounter any bumps in the process.

And Friedman said if the U can show students what really well-integrated care looks like, they can practice it in the future.

Prof. Zismer told me the U and Fairview could also save money through efficiency. And some of that increased profitibility could be plowed back into research, facilities and so forth.

University regents will review those plans at their May meeting.

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