Fairview and Sanford’s healthcare systems plan to merge

Nearly a decade after an unsuccessful merger attempt, South Dakota’s Sanford Health and Minnesota’s Fairview Health Services announced Tuesday that they were in renewed talks to merge.

The two regional healthcare giants intend to finalize a merger next year. The new company would be called Sanford Health and would be led by Sanford’s current CEO. The deal would include the University of Minnesota hospitals, which Fairview bought in 1997.

Financial details and cost-cutting plans related to the proposed merger were not immediately disclosed.

In 2013, the two healthcare systems pursued a similar merger, however The talks collapsed amid an onslaught of public criticism. Some state legislatures pursued laws that would have prevented Sanford from controlling the University of Minnesota hospitals.

Then-Attorney General Lori Swanson expressed concerns about a merger due to the role that tax breaks and donations from Minnesota and Minnesotans played in Fairview’s development.

After the 2013 merger attempt failed, Swanson argued that nonprofits exist because of public support and that the public participates in their outcome.

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If approved this time, the agreement would create a massive healthcare system that stretches across the rural and urban upper Midwest.

Based in Sioux Falls, Sanford operates in six states including Minnesota and describes itself as the nation’s largest rural healthcare system, including 47 medical centers and approximately 45,000 employees.

Sanford Health is named for St. Paul native and University of Minnesota graduate T. Denny Sanford, a philanthropist who made his fortune in the high-yield subprime credit card business. The Sioux Valley Hospital and Health System was was renamed Sanford Health in 2007 after Sanford donated $400 million to the Sioux Falls-based care system.

Based in Minneapolis, Fairview has 11 hospitals, including the University of Minnesota Medical Center, and employs approximately 31,000 people.

Fairview has had financial problems for several years. It reported an operating loss of $132.6 million in 2021, up from a loss of $209 million in 2020. In financial statements, the system noted that the COVID-19 crisis was contributing to its financial woes and driving up operating costs while the number of non-elective procedures fell.

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