The proposed merger of Sanford Health and Minneapolis-based Fairview Health Services has led to extensive investigations by the office of Minnesota Attorney General Keith Ellison, which regulates charities and considers antitrust concerns. evoked a reaction.
Combined, the two hospital networks make up one of the largest healthcare systems in the country. Based in Sioux Falls, South Dakota, Sanford is already the nation’s largest rural healthcare provider, and together, the healthcare giants are working to improve patient outcomes and improve patient outcomes while providing more affordable care. experience can be improved.
Critics are already worried about the Attorney General’s office. The proposed merger raises questions about not only moving Minnesota assets out of state, including the management of her two teaching hospitals in the state on the University of Minnesota campus, but also reducing choice and competition. increase.
Industry analysts say these concerns are not unfounded.
“It’s hard for a system without experience in a major teaching hospital to figure out how to manage it,” said Vivian Ho, a health economist at Rice University in Texas.
“We offer a completely different service,” says Ho. “You’re helping the sickest patients with the most complex care. There’s a whole different level of expertise and skill. Rural hospitals have no competition. They’re usually the only hospitals on the market.”
Teaching hospital, financial challenges
Officials at the University of Minnesota released an official statement in November, noting that the teaching hospital educates the majority of Minnesota doctors, and that the Fairview-Sanford merger will improve not only patient care but also the “faculty.” questioned whether Fairview would respect its “independence” and how it would address Fairview’s financial challenges. .
Fairview Health Services posted a net operating loss of $132 million last year, with the recent retirement of core services at St. Joseph’s Hospital and the former Bethesda Hospital in St. Paul, which accounted for most of the loss.
When merger talks surfaced between Sanford and Fairview in 2013, then-Governor Mark Dayton excluded the teaching hospital from negotiations and proposed returning it to the United States.
“The university’s healthcare system is probably one of Fairview’s most compelling attractions for Sanford,” said Alan Baumgarten, a healthcare market analyst based in St. Louis Park. “If Academic Health Center is separated from the contract, whether Fairview will be attractive to Sanford is an open question. I don’t think it’s better than it could be.”
And what if Sanford bought two teaching hospitals?
“I think Sanford is drawn to the prestige of a teaching hospital,” said Baumgarten. Reduce some of the key functions of the Academic Health Center. “
Diverse cultures, from abortion to urban care
Then there are questions about cultural differences and the potential impact on consumers on both price and service. For example, the Fairview system, which includes 11 hospitals and over 80 primary and specialty care clinics, is heavily unionized, but Sanford’s 47 medical centers are not.
The two health care networks both offer assisted living with aged care services, but their services diverge at different locations. As a matter of policy, Sanford does not offer abortions, which are prohibited by South Dakota state law except in limited circumstances.
Fairview does not openly promote abortion services other than “Plan B” emergency contraception, but patients do occasionally ask questions about abortion. A spokeswoman released a written statement Thursday supporting physician and patient autonomy and “all aspects of reproductive health care.”
Fairview spokesperson Amy Jordan said in a statement: “No changes are envisioned to Fairview’s care policies, including reproductive health and gender care, as a result of this merger.
Minnesota abortion rights this summer overturned a string of restrictions, including the state’s 24-hour mandatory waiting period and the requirement that minors notify their parents before having an abortion, a Ramsay County District Court judge said. expanded by
Some industry analysts believe that Sanford will be the new parent company, with about 45,000 employees compared to Fairview’s 31,000, and that Sanford chief executive Bill Gassen will join the combined company a year later. I’m beginning to refer to this merger as something of an acquisition given that I oversee the whole thing. The year he co-led with James Hereford, President and CEO of Fairview.
“Looking at who the CEO is and where they are headquartered, it looks like Sanford is taking over Fairview,” says Baumgarten. “I don’t know that Fairview has a lot to learn about rural health care from the merger he touted as one of the benefits.”
This is one of Sanford’s attempted mergers in the last decade. Fairview and Sanford merger talks were called off in 2013 after hearings led by then-Attorney General Lori Swanson.
Ellison’s office has created an online form for public feedback and has set up a telephone comment line at 651-296-3353 for subways and 800-657-3787 for out-of-state residents. A public hearing is scheduled at the State Capitol and details will be announced at a later date.
Below are excerpts from industry analysts’ views on the proposed merger.
Professor UMN
Bryan Dowd is Professor of Health Policy and Management at the University of Minnesota School of Public Health.
“The literature on hospital mergers is that the result is higher prices and the same quality. I don’t know. Hopefully Fairview and Sanford have some plans to improve efficiency as well as increase the pricing power of the market, but the literature suggests otherwise. increase.”
“Anything that reduces the number of independent choices available to consumers in a market area allows all suppliers of that product in the market to raise prices.”
health economist
Vivian Ho, a health economist at Rice University, who abandoned the acquisition of Baylor College of Medicine in 2010, is also on the faculty and holds a PhD in economics from Stanford University.
“Hospitals in the same market can be more expensive when they merge. You need a certain healthcare system to provide care, and when that healthcare system gets really big, you can do an “all or nothing” deal with the company’s insurer and say, “If you want to do business with us, we All hospitals in the hospital must be included in the contract, by the way, these are the prices you have to pay.”
“I can understand why faculty and staff are concerned. They have a mission to educate and educate. We want to teach you how to treat low-income people who may present with multiple chronic illnesses as well as mental health issues. think.”
Professor of Health Policy
Steven Davidson is Professor Emeritus at the Questrom School of Business, Boston University, where he has taught and written about health policy and management for most of his career in the Departments of Markets, Public Policy, and Law.
“Generally speaking, when the cultures of the two institutions are different, I don’t think the merger will always work, at least not for many years. …on the fate of teaching in a combined hospital I worry because it takes resources that insurers don’t want to cover.”
Healthcare Market Analyst
St. Louis Park-based healthcare market analyst Baumgarten is the author of the annual Minnesota Health Market Review, which summarizes the performance of health plans and hospitals.
“If[Sanford]said, ‘We’re going to cut some of the critical functions of the university’s medical center,’ I think there would be a rebellion and an exodus among key faculty and staff in an environment that no longer supports their research. No. It not only undermines prestige, but it actually undermines the three missions of an academic medical center: research, training and patient care.”
“There is this idea among hospital CEOs that they need to grow to $10 billion in annual revenue to be serious competitors. I believe we have already confirmed several potential partners have joined, including Essentia and Marshfield Clinic, Gundersen Health System and Bellin Health, so the list of possible partners has been shortened.”
“Sanford definitely wants to get bigger. No. Just before the first deal proposed by Fairview, Sanford sought a deal with Allina, which was not widely reported, but Allina’s doctor said, “No way.” . “
Co-author of “Big Med”
Lawton Robert Burns is Professor of Health Care Administration at the Wharton School of the University of Pennsylvania and co-author of Big Med: Mega-Providers and the High Cost of Health Care in America.
“This is one of the cross-market hospital mergers that The Economist is currently investigating. The more you do, the less likely you are to engage in anti-competitive behavior.”
“I think the question is, if they tried this 10 years ago, why are they trying again? Public grounds seldom become private grounds.”
“(Access to teaching hospitals in Minnesota) could allow Sanford to recruit more medical staff because it is affiliated with the University of Minnesota School of Medicine. That could be the rationale. There is — the workforce.Hospitals struggle to find nurses, so it could be a conduit for increasing your nursing supply.But how many nurses are there from Minneapolis-St. Paul wants to go to North Dakota?”
