The proposed $1 billion partnership aims to address healthcare challenges in Minnesota, the organizations announced.
A new integrated care model could be on the way in Minnesota.
Essentia Health and the University of Minnesota announced that they're working to create a nonprofit "all-Minnesota health system solution" that would receive $1 billion over five years to improve rural healthcare, increase access to specialty care, and reinvest in the university's medical facilities.
The organizations, which have yet to sign a formal agreement, didn't reveal if the proposed partnership is a merger or includes integration.
What the framework will do, according to the announcement, is provide more career and education opportunities for healthcare professionals, decrease clinical costs, allow for more innovative models, and advance technology across a large health system.
"This is the beginning of an exciting, ambitious — and critically needed — conversation about the future of care in our state,” Essentia Health CEO David Herman said in a statement. “Essentia Health has a long and committed partnership with the University of Minnesota. With nearly 70 percent of all Minnesota physicians having been trained at the University, we know that continuing to deliver excellent patient outcomes while building a sustainable healthcare future rests on the foundation of a strong medical school. These are key reasons why Essentia leadership has begun exploring opportunities to build a new framework for healthcare in Minnesota.”
The proposed partnership could also affect the University of Minnesota's relationship with Fairview Health Services.
The two sides signed a letter of intent last February for the university to buy back the University of Minnesota Medical Center from Fairview, along with renegotiating their affiliation as M Health Fairview, which was formed in 2018 and set to expire at the end of 2026.
An agreement, however, was not reached by the September deadline, putting their connection up in the air.
"We are at an inflection point in our relationship with Fairview Health Services that requires an urgent and innovative solution," University of Minnesota president Rebecca Cunningham said in the announcement with Essentia. "We envision this model as a new path forward in our relationship, one that builds on the momentum all those at M Health Fairview have built and that continues to put patients first, consistent with our organizations’ shared priorities. We have begun conversations and invite further discussion with Fairview to bring this concept to life for Minnesota."
On its end, Fairview said it became aware of the university's plans with Essentia shortly before the announcement and didn't receive details on the partnership.
"Over the last year, we have worked in good faith towards the university’s desire to purchase the academic assets," a Fairview spokesperson said in a statement. "Today's announcement by the university reflects a sudden change in their stated desire."
Essentia Health, meanwhile, is a year removed from calling off its merger with Marshfield Clinical Health System after the organizations agreed to form a 25-hopsital system in July 2023.
Minnesota Attorney General Keith Ellison, who reviewed the deal for compliance with state and federal antitrust laws, would also investigate a union between Essentia and the University of Minnesota.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
The University of Minnesota and Essentia Health are in discussion to form a nonprofit entity that would expand care and strengthen workforce development.
Plans for a partnership may impact the university's efforts to renegotiate its affiliation with Fairview Health Services and its buy back of its teaching hospital.