Schafer: Sanford critics asked the wrong questions

  • Article by: LEE SCHAFER , Star Tribune
  • Updated: April 12, 2013 - 8:54 PM

The hearing into the potential merger of Sanford with Fairview Health Services was a skillfully prepared show designed to make Sanford appear threatening and vaguely disreputable.


Attorney general Lori Swanson asked questions during testimony from Sanford Health representatives on the proposed takeover of the University of Minnesota Medical Center and Fairview Health Systems by South Dakota's Sanford Health during a hearing at the Minnesota State Capitol on Sunday, April 7, 2013, in St. Paul, Minn.

Photo: Renee Jones, Star Tribune

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Maybe next time Sanford Health comes to Minnesota, its executives won’t be quite so naive.

When I caught up with them on the Capitol steps last Sunday afternoon, after a hearing called by Minnesota Attorney General Lori Swanson, some of their faces had the shocked look of people who had just seen a terrible accident.

But getting roughed up in that room was no accident. The hearing into the potential merger of Sanford with Fairview Health Services was a skillfully prepared show designed to make Sanford appear threatening and vaguely disreputable.

For those interested in policy issues, such as how the University of Minnesota’s Fairview-operated teaching hospital would fare in the merger, there wasn’t much to learn in that hearing.

As political theater, on the other hand, the attorney general’s show wasn’t to be missed.

It began with an appearance by two regular folks who had been through transplants at the U hospital and were grateful for their care, implying its role as a lifesaver would be at risk.

This segued into an attorney talking about the duties in nonprofit governance. Then on to David Feinwachs, a former general counsel for the Minnesota Hospital Association.

Swanson carefully set up an applause line for Feinwachs, and he delivered it with gusto. Merging Fairview with Sanford, he said, “would be like selling the public library to Wal-Mart.”

When Sanford executives Becky Nelson and Dave Link finally came to the witness table, within minutes they had been asked by Swanson about a credit card issued by First Premier Bank that Reader’s Digest had described as one of the worst cards in the market.

And so it went.

What First Premier and Sanford Health have in common, of course, is T. Denny Sanford, the former being one of the businesses that generated the wealth that has enabled the latter to give Sanford Health $600 million.

What’s most curious about concerns that Sanford Health would drain assets out of the Twin Cities is that this is where Sanford seems to want to be. Its view of the world is that there will be health care consolidation until there are just a few major health systems in an entire region.

Sanford maintains headquarters operations in Sioux Falls, S.D., and Fargo, N.D. Its core market is the Interstate 29 corridor that runs along the eastern side of South Dakota and North Dakota, and people in those areas lean toward the Twin Cities as the capital of the region. Simply put, they are Vikings fans.

But Sanford has put its plan on ice. Its executives have seen enough to know that there’s enough political opposition that pursuing the merger risked damage to its reputation.

It seems safe to assume, however, that Sanford will be back. Its leaders will be wiser, and should be a bit more wary.

As for Denny Sanford’s business, issuing costly credit cards to people on a financial ledge isn’t a business I would want to run. Sanford can argue, and he has, that issuing unsecured credit cards to people with poor credit scores helps those with good discipline get back into the financial mainstream.

The better question is what any of that has to do with Sanford’s decision to give his money away. His goal in funding Sanford was to turn it into a major medical system and improve the delivery of health services, particularly for kids, not generate the marketing buzz to sign up a few more credit card customers.

Moreover, many philanthropic organizations are fueled by the money made by hardheaded businesspeople like Sanford, although not many of those people are as extraordinarily generous as Sanford, in South Dakota or anywhere.

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