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State lawmakers seek more authority over potential Sanford-Fairview merger

(House Photography file photo)
(House Photography file photo)

Rep. Robert Bierman (DFL-Apple Valley) says Minnesotans are at a milestone moment in the intersection of public and private forces affecting the delivery of health care services across the state.

He is sponsoring HF402 in response to a potential merger between Minnesota-based Fairview Health Services and Sioux Falls-based Sanford Health.

The merger discussions, which only became public in November, have critics saying it would diminish health care in the state on several fronts, including reducing health care access by closing hospitals and laying off hospital workers, limiting reproductive health care services, and reducing decision-making authority of medical staff delivering patient care at the bedside.

The time is right for the Legislature to set guidelines in law to oversee not just this merger, but all future hospital mergers and sales that might affect health care in the state, Bierman told the House Commerce Finance and Policy Committee Wednesday.

Health Finance and Policy Committee considers HF402 2/1/23

“We need to obtain a clear vision of significant changes to our health care landscape brought by mergers. Mergers can affect price, accessibility, and quality care across the state.”

The bill was approved, as amended, and sent to the House Health Finance and Policy Committee.

What’s in the bill

“This bill is designed to do two things: protect public assets and promote better health,” Bierman said.

It would require the Department of Health, in consultation with the attorney general, to review a proposed sale or merger of two hospitals or health care systems to determine whether it would “benefit the public good or improve health outcomes for Minnesota residents.”

The review must consider how a proposed transaction would affect:

  • timely access by Minnesotans to health care provided at affected hospitals, including access by underserved populations and by populations disproportionately affected by health disparities;
  • the cost of health care provided for Minnesotans at affected hospitals;
  • communities where affected hospitals are located;
  • hospitals in the same region as affected hospitals; and
  • health outcomes for Minnesotans.

If the Health Department disapproves a transaction, it could not take place. If that happens, or a deal is approved with conditions, either partner could appeal the decision in district court.

Company officials have publicly stated that Fairview is struggling financially, and that it may need the financial help from a merger with Sanford to stay solvent.

Rep. Tim O'Driscoll (R-Sartell) said there is a danger that giving the state oversight and control over this and future health care system transactions could leave patients without any health care at all. “If Fairview fails, what’s the fallback plan?”

Monday’s public testimony

Public testimony on the bill was heard at a joint meeting of the commerce and health committees Monday. There the CEOs of Sanford and Fairview made their points in favor of the proposed merger and a half-dozen or so critics expressed opposition.

Gene Sparks, a member of the Service Employees International Union, said his union has a “deep mistrust” of Sanford due to its track record of closing or consolidating rural hospitals. And, he said, it has broken union agreements at Bemidji Main Clinic.

Sanford Health CEO Bill Gassen said the company has no plans to make any significant changes to facilities operated by Fairview and would honor union contracts.

Rep. Carlie Kotyza-Witthuhn (DFL-Eden Prairie), who sponsors the recently enacted law that codifies abortion in Minnesota, noted that Sanford does not provide a full range of reproductive care and won’t provide what it deems as “elective” abortion services.

Sanford seems to base its patient services on the reproductive health laws of its home base of South Dakota, she said, which would be a step backwards for Minnesotans seeking comprehensive abortion services.

Kara Pratt, a nurse at St. John's Hospital in Maplewood, is one of several critics worried the merger would shift control of the University of Minnesota Medical Center to Sioux Falls-based Sanford.

In her nursing career, she has witnessed the decline in patient care when distant, out-of-touch executives impose a “one-size-fits-all” strategy that ignores input from front-line health care workers.

“How does an executive in Sioux Falls know how to run an urban hospital?” she asked.

Other criticism came from Rep. Zack Stephenson (DFL-Coon Rapids), the commerce committee chair, who said a March 31 deadline Sanford and Fairview have set for themselves to complete their merger agreement was too soon for adequate public and legislative scrutiny.

Gassen and Fairview CEO James Hereford said they are not currently inclined to delay the date of the merger, save for a legitimate business reason that might arise.

Stephenson said that is “very disappointing” and reinforces in his mind the need for Bierman’s bill.


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