U of Minnesota seeks $950M to acquire 'flagship' hospitals before merger

The University of Minnesota plans to ask state lawmakers for $950 million to acquire and pay for initial operating costs of its on-campus hospitals in Minneapolis.

The university's preliminary request for the State of Minnesota to support its health system, UMN Health, aims to:

  • Acquire flagship healthcare facilities — the University Medical Center East and West Bank facilities, Masonic Children's Hospital and its clinics and surgery center. The investment would include the transfer of facilities and funding for workforce needs, union contracts and new leadership for a university-operated organization. The estimated preliminary request is $300 million.

  • Operate the flagship facilities. The investment includes an injection of 90 days of operating capital to cover payroll, supplies and professional services. The funding will also provide time to overturn operating losses and begin generating positive financial results. The estimated preliminary request is $650 million. 

The request is subject to formal board of regents action, expected on March 10, according to the university, which said initial estimates are subject to change, but are presented to advance the public health conversation about how best to address Minnesota's healthcare needs.

The move would significantly alter the university's relationship with Minneapolis-based Fairview Health Services amid its proposed merger with Sioux Falls, S.D.-based Sanford Health. 

University officials oppose the merger. Sanford and Fairview had hoped to complete the transaction in March, but announced plans to extend the completion date to May 31 amid the Minnesota Attorney General's review. If the transaction is completed, the combined system would have more than 50 hospitals and 78,000 employees.

"We must forge a new path: one that centers on the needs of Minnesotans' healthcare now and for decades to come, Myron Frans, senior vice president for finance and operations, said in a Feb. 24 news release. "One that recognizes the economic benefits of continuing our best-in-class healthcare sector, including the education and training of future healthcare professionals. And one that recognizes the treatments and cures U of M researchers will discover."

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars