The deal for Fairview Red Wing Health Services would expand Rochester-based Mayo Clinic's territory closer to the Twin Cities.
Mayo Clinic announced Thursday that it has struck a tentative deal to acquire Fairview Red Wing Health Services.
The deal would end a 15-year affiliation between Minneapolis-based Fairview Health Services and the Red Wing health system, which includes its medical center, and health facilities in Zumbrota, Minn., and Ellsworth, Wis. The system has 800 employees.
It also expands Rochester-based Mayo's territory. Mayo expects to assume operations July 1. The facilities will carry Mayo's name.
Financial terms were not disclosed.
The agreement came after month of talks, although the two systems have collaborated for years, with doctors frequently moving back and forth, particularly between Red Wing and Mayo's facilities in Lake City and Cannon Falls, Minn.
Two years ago, the Fairview Red Wing board of directors began reviewing how to improve health care in the area, and reached out to Mayo last fall, spokeswoman Marcy Dowse said.
James Toscano, an adjunct professor at Hamline University in St. Paul and former president of the Minneapolis Heart Institute Foundation, said the acquisition brings Mayo's services to residents of Red Wing, Minn., and allows Mayo to expand its territory and consolidate services as they "inch toward Minneapolis."
"Systems need referrals," he said. "It's all about getting people referred into their specialties. That's where the money is."
Mayo has not announced plans to expand in the Twin Cities, though it has two outposts at the Mall of America offering health and wellness information. In an e-mail, Mayo spokesman Joseph O'Keefe said Mayo is exploring options for a permanent facility in the mall.
Because Mayo is a physician-led organization, Fairview Red Wing CEO Scott Wordelman, who is not a physician, will step down, Dowse said. He will remain as a consultant during the transition, she said.
Tom Witt, CEO of Mayo sites in Cannon Falls and Lake City, will serve as the CEO for Red Wing and its affiliates. They serve 60,000 people.
Walker Moskop • 612-673-4265