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.
There’s even a T. Denny Sanford Pediatric Center at the Mayo Clinic in Rochester. Mayo CEO John Noseworthy should consider himself lucky that he hasn’t been called to St. Paul to defend a First Premier credit card as Mayo seeks public support for its expansion plans.
If there had to be a hearing anyway, a few topics would seem to have been well worth a discussion. Top of mind is the university’s goal of maintaining or even enhancing its academic medical center, as its principal teaching hospital has been part of Fairview’s system since 1997.
The competitive pressures in health care delivery are driving players in the market to merge with one another and to closely integrate as many of their services as they can. The long-term survivors will have big integrated systems that offer A to Z health care.
In that model, patients in a health care system who can’t get what they need near home will get sent to specialty care, with complex cases ending up being treated in places like the University of Minnesota Medical Center, Fairview.
Is that what was envisioned here, when Fairview and Sanford executives began talks? Would patients flow out of the Dakotas and into Minneapolis? How would such a combined organization be organized and managed? What would be done to keep the U’s mission of teaching and research from getting swallowed up in a $6 billion combined company?
Good questions. Had the attorney general just left Fairview and Sanford alone, they may even have come up with a convincing plan that addressed all of them.