University of Minnesota announces plans to restructure M Health System under new leadership 

The University of Minnesota is taking steps to restructure the M Health system by integrating its physicians within the university under a new leader. The announcement came in a Wednesday memo to medical faculty and staff from the university’s president and the medical school’s dean. 

This week, the M Physicians Board of Directors passed a resolution to partner with the university to create the governance structure for all parts of the academic health system by next summer.

The U’s Board of Regents is expected to consider the restructuring proposal this week, along with budget issues. President Dr. Rebecca Cunningham said the changes will allow the school to continue “to both enhance the delivery of care we have while addressing our overhead costs.”

The U has long wanted to reacquire assets from Fairview Health Services, including the University of Minnesota Medical Center. Cunningham said the reorganization is “independent of our decisions and negotiations with Fairview.”

“We need to invest now in the future of our clinical enterprise and we're doing that by building on our strengths and partnerships across the state,” Cunningham said. “Our teams will continue to navigate that with Fairview.”

Another aspect of the proposed structure is hiring an interim executive vice president of health affairs for the university’s academic health system, who would also chair a UM Health board. The medical school dean and M Physicians CEO would report to the EVP.

Cunningham said they seek someone with experience “owning and operating a successful and financially feasible hospital system.”

The U does not expect to make any cuts during the reorganization and there are no plans to raise medical school tuition or fees, but other funding sources are being explored, said a U spokesperson who declined to be identified. This includes a $45 million budget request to the Minnesota Legislature.

The U says it wants to train more students in rural and tribal communities, increase the number of mobile and telehealth services statewide and expand connections with local care providers.

“The health care workforce shortage is really significant and that’s felt most deeply in our rural communities and our underserved communities and among our tribal nations,” Cunningham said.

The proposed restructuring will strengthen the U’s ability to compete for funding from a variety of sources, including the federal government, university leaders said. The U earns hundreds of millions of dollars in annual medical school funding from federal sources, according to the spokesperson.

In the joint internal announcement, the U president, Dr. Jakub Tolar, dean of the U’s medical school and Dr. Bevan Yueh, M Physicians CEO said that “downward revenue pressures, higher supply costs, and increased competition are resulting in historically low or negative margins.”

Cunningham said this has “real-world impacts for Minnesotans” because health services are being cut and are no longer accessible across the state. 

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