Sanford-Fairview merger could slash services and raise prices, Minnesota nurses claim

MOORHEAD — The Minnesota Nurses Association contends that the proposed merger between Sanford Health and Fairview Health Services could result in reduced services and higher prices.

The allegations in a report, “Healthcare at a Crossroads,” deliver the latest salvo by the nurses association, an outspoken opponent of the proposed $11.7 billion merger between the two health systems.

“Executives’ profit-first approach has slashed staffing levels, closed hospitals and clinics and put growth above all else,” the association’s report said.

Minnesota Attorney General Keith Ellison has held hearings around the state and has called for Sanford and Fairview to provide more information about the impacts of a merger. Other officials, including legislators, also have expressed concerns, such as the future of M Health Fairview University of Minnesota Medical Center.

“Fairview’s wealth was created in large part by taxpayers, charitable giving, and the close partnership with the University of Minnesota,” the nurses association report said.

Bill Gassen, president and CEO of Sanford, has suggested that the University of Minnesota could repurchase the medical center from the combined health system. The target date for completing the merger is May 31.

Much of the report sought to make the case that the merger would not be good for consumers, workers or communities.

“A merger between these two systems would create one of the largest healthcare providers in the Upper Midwest and could dramatically change the lives of patients, healthcare workers, and their communities,” the report said. “Mergers make our hospitals less accountable and less connected to communities, resulting in higher costs for patients, reductions in services, and increased burnout for healthcare workers.”

In a joint statement, Sanford and Fairview said a combined system will be “well positioned to reinvest in and strengthen local hospitals and the communities we serve across the state.”

Following the merger with North Country Health Services in Bemidji, Sanford Health invested more than $100 million to increase access to specialty care including mental health, cardiology, orthopedics and oncology, Fairview and Sanford said in the joint statement.

“And after merging with Meritcare in 2009, Sanford Health invested more than $1 billion of capital in the northwest part of the state,” the statement added, bringing a top-level trauma center to Fargo-Moorhead and a “state-of-the-art community hospital to Thief River Falls.”

As a combined system, Fairview and Sanford are committed to making significant investments to enhance health care in Minnesota, a point Sanford and Fairview said they have made in their letter of intent to merge.

“In keeping with our track record in other communities, the Letter of Intent includes a strategic capital investment of $500 million from the combined system into hospitals and facilities in Minnesota communities currently served by Fairview,” the joint statement said. “This investment reflects our foundational commitment to expanding services and increasing access to world-class health care for Minnesotans.”

The Minnesota Nurses Association report cites research showing that “cross-market” mergers — involving entities that don’t directly compete in the same local market — are increasingly common and often lead to increased prices.

Hospitals in cross-market mergers had relative price increases of 7% to 15% if the acquisition was in-state, according to research cited by the report.

Previous mergers and acquisitions by Sanford and Fairview often were followed by closures, including a pair of hospitals in the Twin Cities’ east metro area after being acquired by Fairview in 2017, according to the report.

“Fairview CEO James Hereford instituted major cuts at legacy HealthEast facilities almost immediately after acquiring them, ultimately closing Bethesda and St. Joseph hospitals during a global pandemic,” the report said.

Photo courtesy of Fairview Health Services

Both systems have exhibited a “pattern of reducing and outright eliminating mental health within systems” when needed most, the report said.

Nurses at Sanford surveyed by the nurses association described “reductions and eliminations to services” at facilities since Sanford became involved, including elimination of mental health services, home health services, cardiac care unit, intensive care unit, respiratory therapy services and outpatient services.

The report did not give the locations of the reduced or eliminated services or provide other specifics.

Decisions made far away can affect care in local facilities, the report said, citing as an example administrators in Fargo deciding when a facility could get surgical supplies.

Nurses at Fairview and Sanford surveyed by the nursing association identified cuts to mental health. Between 2016 and 2020, the report said, Fairview decreased mental health beds system-wide by almost 15%.

Nurses surveyed cited cuts to mental health services by Sanford, including one who described it as “the biggest negative impact I've seen with Sanford as a whole,” the report said. Sanford’s hospital in Worthington, Minnesota, closed its behavioral health unit, shifting care to an Avera center in Marshall, more than an hour away.