For months, leaders of Fairview Health Services and the University of Minnesota medical school promoted the blockbuster merger they were negotiating.
The U would reclaim top-tier standing nationally as a research medical center. Fairview would become a cutting-edge academic health system, giving patients highly sophisticated medical care.
Instead, the deal abruptly fell apart last month after Fairview executives claimed the U wanted too much control. The collapse has the U looking for a new partner — and left a string of questions about the future of the medical school, one of Minnesota's flagship institutions, and its status as a leading research institution.
In the mid-1990s, the U ranked 15th in the nation for grants awarded by the National Institutes of Health, a widely watched measure of research prowess; by last year it had fallen to 32nd. Closer integration with Fairview would have given the U the steady flow of patients — and medical revenue — that can sustain clinical research.
"One of the university's goals in coming closer to Fairview was access to capital," said independent health care analyst Allan Baumgarten. "Because that has been a perennial challenge for the university."
With little chance of both sides returning to the negotiating table, the U says it wants make a deal with a different partner.
"University leadership feels very strongly that we need to build a very strong academic health system for the people of Minnesota," said Dr. Brooks Jackson, university vice president for health sciences and dean of the medical school.
Mistake to sell hospital?
On paper at least, Fairview was the most logical partner to extend the U's clinical reach beyond campus. The two have worked together for 20 years, ever since the U sold its hospital and clinics to Fairview.