Gov. Walz signs bill giving attorney general more oversight of Sanford-Fairview merger
The new law, signed Friday, bars health care entities from entering into a merger that would create a monopoly.
ST. PAUL — Gov. Tim Walz signed nine bills into law Friday, including a measure that could complicate the planned merger between Sanford Health and Fairview Health Services.
The new law bars health care entities from engaging in transactions, such as mergers, that would create a monopoly or "substantially lessen competition." It also gives the Minnesota Attorney General's Office more power to block those transactions that would be "contrary to the public interest."
The bill was crafted in response to the proposed Sanford-Fairview merger, which the health systems announced in November 2022. Under the plan, the combined health system would be known as Sanford Health and would be headquartered in Sioux Falls, South Dakota.
The Minnesota Attorney General's Office is currently investigating the proposed merger, and the health systems have pushed back their deadline to after May 31 to give Attorney General Keith Ellison's team more time to review the plan. A new target closure date will be announced with at least 90 days' notice, the two health systems said in an April 3 update.
"Minnesotans understand why fair markets and competition matter. Many people also recognize the impacts of health care mergers on patients, prices, medical personnel, and communities are too often negative," Ellison said in a statement provided to the Post Bulletin. "This bill gives the attorney general tools to protect consumers, workers, and all Minnesotans facing health care mergers and to determine whether mergers are in the public interest. This is what Minnesotans are expecting us to do."
In response to the new law, Sanford Health released a statement saying that the health system remains confident in the "significant benefits" that the merger would have for patients.
"Together with Fairview, we will make historic investments to strengthen high-quality care delivery in Minnesota, address critical workforce challenges and expand access to care for the underserved in both rural and urban areas," said Sanford. "We have worked closely with the Office of the Attorney General on their review since last fall and will continue to do so in order to comply with the new requirements should this legislation be signed into law."
Fairview says in a prepared statement that the new law doesn't change the health system's desire to combine with Sanford.
"While it creates new regulatory processes, we strongly believe that the merger is in the public interest and that we can comply with the new requirements," the statement says. "As a combined organization, Fairview and Sanford can deliver our primary, specialty and sub-specialty care to a broader and more diverse population across Minnesota and throughout the Midwest."
In their statements, both Sanford and Fairview expressed interest in retaining a relationship with the University of Minnesota. A point of concern for the planned merger has been the ownership of M Health Fairview University of Minnesota Medical Center. In March, former governors Mark Dayton and Tim Pawlenty testified before the Senate Health and Human Services Committee expressing their thoughts that an out-of-state company should not control a Minnesota university's teaching hospital.
The new law states that an out-of-state or for-profit organization should not control the University of Minnesota's health care facilities unless the AG's office finds that it would be in the public interest.
"A combined organization gives the University of Minnesota Medical School access to a broader and more diverse patient population – especially in greater Minnesota – and would position them as a regional hub for medical research and education," Fairview's statement says. "That said, the University must decide its own future. While our preference is to continue a partnership, we remain willing to sell UMMC to the University in response to their public request, under appropriate terms, as one option for a path forward. We hope to resolve these discussions in short order, so that everyone can focus on planning for a successful future."
Walz has expressed interest in calling a special session of the Minnesota Legislature this summer to appoint a new University of Minnesota president.
"I think there's going to be, needs to be more talk around the University of Minnesota Medical School and what the long-term plan looks like," Walz said to reporters on Sunday, May 21. "I think it was hard to get some of that done when we did not have the interim president in place."