Minneapolis-based Fairview Health Services and University of Minnesota Physicians, or M Physicians, have finalized a framework for a new 10-year partnership that includes a $1 billion capital commitment to secure the future of Minnesota’s academic healthcare infrastructure.
The agreement will take effect Jan. 1, 2027, after the conclusion of the current M Health Fairview joint clinical enterprise agreements. It outlines a long-term plan to strengthen clinical care, research, education and physician workforce sustainability across the state.
Fairview and M Physicians — the clinical practice group for University of Minnesota Medical School faculty — will continue their decades-long collaboration through a restructured model focused on patient care continuity, academic excellence and statewide access. Both organizations signed a binding agreement and plan to finalize a definitive deal by the end of 2025.
Under the new partnership:
- Fairview will commit $1 billion in capital to support key academic sites, including the University of Minnesota Medical Center and Masonic Children’s Hospital.
- M Physicians will continue to practice and lead operations at those facilities alongside Fairview leadership.
- The partners will support physician training and research, expand patient access, and enhance collaboration between academic and community care teams.
- The organizations will also focus on rural health challenges and shared goals for growth and efficiency.
The University of Minnesota has criticized the partnership between Fairview and M Physicians, calling it a “hostile takeover” of its medical school. University leaders argue the deal was made without their knowledge or consent, sidelining the institution from decisions that directly affect its academic mission, medical education and research.
“This agreement strongly oversteps Fairview and [M Physicians] authority — and represents a hostile takeover of the University of Minnesota Medical School,” the university said in a statement provided to Becker’s. “It puts the interests of a single regional provider and physician group above Minnesotans, and handcuffs the university’s ability to provide medical education and conduct life-saving research.”
The university argues that the secretive nature of the deal — allegedly struck without engaging its administration or regents — erodes public trust and prioritizes the interests of a single health system over the broader needs of Minnesotans, according to the report.
“This is about doing what’s right for our patients and for Minnesotans,” Fairview President and CEO James Hereford said in a Nov. 12 news release. “Our shared success depends on putting patients first, supporting providers, and ensuring that Minnesota’s academic health system remains strong and sustainable.”
Greg Beilman, MD, interim CEO of M Physicians, added: “This next chapter builds on that shared history and affirms what’s possible when we focus on what truly matters: patients, learners and the future of healthcare.”
The deal ensures continuity in hospital ownership and operations: Fairview will retain ownership of the University of Minnesota Medical Center and Masonic Children’s Hospital, and patients are not expected to experience changes in how they receive care.
The move follows the collapse of earlier merger talks involving Duluth, Minn.-based Essentia Health, which exited negotiations in September. Essentia had been part of an earlier $1 billion health system proposal involving Fairview and the University of Minnesota. With Essentia stepping away, the partnership between Fairview and M Physicians now serves as the core of the university’s evolving strategy to sustain its medical school and clinical enterprise.
The Minnesota Attorney General’s Office and strategic facilitator Lois Quam were instrumental in the process and continue to work with Fairview and the university to address additional areas of mutual interest. While the agreement does not fully resolve broader governance discussions between the university and Fairview, it lays the groundwork for long-term collaboration, according to the organizations.
Both organizations emphasized that the door remains open for additional collaboration with M Physicians and other providers in Minnesota as they work to meet long-term health workforce and care delivery needs.
The University of Minnesota has called on on all parties — including the
Attorney General — to “involve the university in making changes in the proposed agreement necessary to protect the interests of the medical school that serves all of Minnesota.”
