South Dakota-based Sanford Health and Minneapolis-based Fairview Health Services are calling it quits on a merger that would have created a $14 billion, 50-hospital health system with 78,000 employees.
The proposed merger was announced in November and originally expected to be finalized in March. However, it was delayed multiple times amid scrutiny from the Minnesota attorney general over concerns it might affect access in the state.
Sanford CEO Bill Gassen said calling off the merger was “the right decision” in a Thursday statement.
Sanford and Fairview explored all options to keep the merger viable, but ultimately were forced to end the process due to a lack of support from “certain Minnesotan stakeholders,” Gassen said.
Sanford has been trying and failing to enter the Minnesota marketplace for at least a decade. The system first tried to merge with Fairview in 2013, but the idea was met with significant political opposition.
The systems rekindled the idea last year but met similar roadblocks, as the merger proved controversial among Minnesotans.
In January, UM medical school dean Jakub Tolar condemned the merger, saying the university had not been part of planning and could not assure the public of the merger’s purpose.
The Minnesota Nurses Association and International Association of Machinists and Aerospace Workers, which represents healthcare professionals in the state, both released statements opposing the merger.
"When we're talking about healthcare mergers, we have to first look at the research, and what the research from Kaiser Family Foundation tells us is that these types of corporate healthcare mergers frequently result in higher costs for patients, and what there isn't any indication of ... is any increase in the quality of the services," IAM healthcare director Shane Brinton told Minnesota news outlet KARE 11 in January.
Minnesota’s attorney general asked Sanford and Fairview to delay the merger in January to give regulators more time to review the deal and collect public comments.
In May, Governor Tim Waltz, a Democrat, added another speed bump to the merger when he signed a law requiring the state attorney general to sign off on any for-profit or out-of-state ownership of University of Minnesota healthcare facilities.