Merger talks have been halted between Fairview Health System and physicians at the University of Minnesota, upending a deal touted as promoting research and education at the U while building a more efficient network of hospitals and clinics.
The U's board of regents on Wednesday voted to terminate a letter of intent from October that would have combined Minneapolis-based Fairview with the University of Minnesota Physicians (UMP), the group that manages the private practice for U doctors.
For nearly 20 years, Fairview has owned the U's teaching hospital, and the health system already works closely with UMP through an affiliation agreement.
A merger would have created a tighter link, but Fairview's board last week voted to not accept the latest proposals outlining the deal.
"As the agreements are currently written, our board was not confident that the new organization would be able to realize the overall vision and original goals of the integration," Fairview said Wednesday in a statement.
U President Eric Kaler said he still believed the parties are close to a deal, but said after the vote that sticking points "involved elements of governance" and "reserving power to the board of regents." One example is that the U wanted to retain authority to approve or block any future change of control for the new health system, said Dr. Bobbi Daniels, the chief executive at UMP, which consists of about 750 doctors, including faculty for the U medical school.
Fairview did not grant an interview request. In its statement, the health system said it "continues to seek opportunities to discuss the agreements and find common ground."
But Richard Beeson, a member of the U's board of regents, said he was "angry with this sort of last-minute withdrawal by Fairview."