Fairview says merger with HealthEast moving forward

Fairview Health Services says a large merger with the St. Paul-based HealthEast system is moving forward, and they should be operating jointly by June 1.

Integration planning is underway, Fairview said, adding that capital needed to integrate HealthEast would be "generated by removing duplication and other synergies," according to slides for a Monday presentation to bondholders reviewed by the Star Tribune.

In March, Minneapolis-based Fairview announced a deal with HealthEast that would add three hospitals and 14 clinics to a network of providers that's already one of the state's largest.

"We continue to work with HealthEast to finalize the transaction," Fairview said in a statement Monday.

The company discussed the merger and 2016 financial results Monday during a conference call with bondholders.

With about 25,000 employees, Fairview last year provided more than 1.6 million clinic visits and nearly 59,000 hospital admissions across its network of six hospitals and roughly 100 primary and specialty care clinics.

The health system posted an operating profit last year of $130.6 million, down nearly 7 percent from 2015.

In a regulatory filing, Fairview attributed the decline in income to a number of factors including increased salaries and benefits, with more workers needed to support an increase in patient days.

Plus, Fairview saw greater expenses for supplies "associated with higher patient and pharmacy volumes in addition to unit cost increases outstripping reimbursement," the health system said in the filing.

Christopher Snowbeck • 612-673-4744