University of Minnesota heart specialists question proposed Essentia Health merger

Heart doctors at the University of Minnesota are expressing concern about the U’s proposal for a new academic health partnership with Duluth-based Essentia Health, fearing it could destabilize relations with existing partner Fairview Health Services.

Thirty physicians signed a letter sent in March to U leadership, a copy of which was recently obtained by the Minnesota Star Tribune, asking President Dr. Rebecca Cunningham and U regents to reassess their proposed partnership including a new statewide nonprofit that would merge Essentia Health and Minneapolis-based Fairview.

“Any disruption, whether through dissolution or restructuring, would destabilize patient referrals and introduce additional competition in a tight market,” the cardiologists’ March 18 letter says.

Records show the U has spent more than $4 million in the past 14 months on consulting services related to reacquiring its teaching hospital and studying the proposed tie-up with Essentia and Fairview.

However Fairview, which owns University of Minnesota Medical Center, is opposed to the merger idea. Cunningham announced it in January after providing only short notice to Fairview.

“Fairview is an essential component of our health care model and valued long-term partner,” the cardiologists’ letter states. “Given Fairview’s public opposition to this merger, it is imperative that the university reassesses its strategy to ensure long-term health care viability.”

Dr. Jakub Tolar, dean of the U Medical School, said in a statement that university leaders welcome perspectives from faculty and community physicians.

“We firmly believe the proposal to integrate care delivery for M Health Fairview, Essentia and University of Minnesota Physicians patients is the best solution,” Tolar said. “It addresses Minnesota’s most pressing health care challenges, while maintaining continuity of patient and provider relationships, the long-term viability of the University’s health care enterprise and its strong commitment to health and medical education.”

The back-and-forth amounts to the latest chapter in a long-running saga where the university, its physicians and Fairview have debated a variety of structural changes that might bolster financial support for the state’s only public medical school.

Back in February 2024, Tolar was advocating a plan for the U to reacquire University of Minnesota Medical Center (UMMC) from Fairview — an idea that’s clearly receded at the university without being completely abandoned.

At the time, the U started hiring expert consultants to advise on the UMMC deal, some of whom remain under contract to advise on the new vision with Essentia. Total spending on these consultants has reached about $3.2 million, according to information provided through a Minnesota Government Data Practices Act request from the Star Tribune.

The U also is being advised by the its former Senior Vice President Myron Frans, who focused on the issue before retiring last year. Since May 2024, the university has paid $961,700 for his consulting work.

Such investments in expertise are needed, the U says, given the complexity of the issue.

“This highly specialized input helps ensure responsible financial proposals are made with the public interest in mind, including patients and all of Minnesota,” the university said in a statement. “For context on the scope of this potential path forward, if realized the vision that’s been outlined could be an $11 billion/annual revenue organization.”

The heart specialists, however, worry a path forward with Essentia won’t include Fairview, a much larger health system that includes substantial operations in the Twin Cities. Their letter says they’re also concerned about how changes being proposed at University of Minnesota Physicians (UMP), the group practice for U doctors, might impact salaries, benefits and quality of care.

“We urge the university leadership to consider actively engaging faculty in shaping a sustainable future,” the heart doctors wrote. “The potential loss of our existing health system, uncertainty around the future of UMP and lack of representation in the process, is accelerating faculty attrition and recruitment by competing institutions in the metro area.”

In his statement, Tolar said the university fully intends to have a health system partner based in the metro and hopes Fairview will play that role. He also welcomed input in decisions from physicians as well as Minnesota Attorney General Keith Ellison, who earlier this month named former UnitedHealth Group executive Lois Quam as strategic facilitator to guide talks.

“Doctors come to the University of Minnesota to be part of our public mission to treat patients, train the next generation of health care professionals and research cures that save lives,” Tolar said. “While the governance structure of UMP would evolve, the physician practice would continue to exist as an essential component of our new health system.”

Fairview and the U jointly market hospital and clinic services under the brand M Health Fairview, but the long-term future of their affiliation is uncertain. Negotiations on a new arrangement kicked off after Fairview gave notice in November 2023 that it would not renew the current U of M affiliation, set to expire at the end of 2026.

It’s uncertain whether and how they’ll come to a new agreement since Fairview and the U haven’t come to terms on a deal for the university to reacquire its teaching hospital. There’s also been friction between the health system and UMP over the ownership structure for their joint venture within a large clinic and surgery center on the U’s East Bank campus.

Dr. David Herman, the CEO of Essentia Health, was part of a state task force that deliberated in 2023 and 2024 about the future of the U’s academic health program, which includes research, training health care professionals and care delivery, particularly from specialists.

Four months after Herman and Cunningham announced their proposal, details have yet to be finalized.

“While discussions around operational structure have been ongoing for several months, there are no binding commitments in place,” Essentia Health said Thursday in a statement. “Our leadership team is looking forward to discussions with the Attorney General’s Office, strategic facilitator and all parties moving forward.”