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U of Minnesota to buy 1,700-bed hospital campus from Fairview

The University of Minnesota and its affiliated physicians are moving to purchase facilities that it has shared for six years with Minneapolis-based Fairview Health Services. 

The University of Minnesota will purchase the four academic health facilities that make up M Health Fairview University of Minnesota Medical Center — the east and west bank campuses, M Health Fairview Masonic Children's Hospital, and the M Health Fairview Clinics and Surgery Center. The university aims to complete the purchase by the end of 2027.  

The parties announced the signing of their letter of intent for the "multi-year, multi-phased" sale on Feb. 9, according to a news release shared with Becker's. Specific terms and conditions of the deal are expected in definitive agreements, which the systems are working to have in place by October. 

The completed change of hands would mark the end of the affiliation shared between Fairview, the university and U-M affiliated physicians. The groups partnered in 2018 to form M Health Fairview, and that affiliation was set to automatically renew for another decade — starting in 2027 — unless either party objected to the renewal by the end of 2023. 

Fairview was the first party to object to another decade of affiliation, raising its hand in late 2023 to signal doubt with the partnership as it was designed. Fairview Health President and CEO James Hereford said the "current agreement cannot be what carries us into the future." The university also provided notice of nonrenewal.

Last summer, Fairview walked away from its proposed merger with Sioux Falls, S.D.-based Sanford Health after multiple delays. The deal would have created a 50-hospital health system with around 78,000 employees. The University of Minnesota opposed the merger due to the change in control it would bring to the state's public teaching hospital. 

M Health Fairview University of Minnesota Medical Center is made up of two hospitals and dozens of adult specialty clinics on both the east and west banks of the University of Minnesota campus in Minneapolis. The healthcare campus has 1,700 beds. 

Fairview has 11 hospitals and approximately 31,000 employees. University of Minnesota's medical school trains about 70% of the state's physician workforce, and its physician group counts toward the 3,300 providers that make up M Health Fairview. 

The organizations said there are no layoffs planned as a result of the LOI, and "active transitions will be planned in consultation with staff to minimize disruption," according to the news release.

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