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The proposed merger that may end M Health may be the final consequence of the ill-fated agreement that created it ("AG seeking input on proposed Sanford-Fairview merger," Nov. 23).
The September 2018 agreement between Fairview and the University of Minnesota required Fairview to increase its annual sum certain payment to the university from $10 million to $50 million by 2021. It also requires Fairview to pay an annual variable amount based on its revenue. (See pp. 15-16 in the June 2018 report of the special meeting of the Board of Regents at tinyurl.com/regents-june18.)
In the high-stakes market of health system finances, the Fairview CEO was placing a bet on the drawing power of a new M Health brand name. The bet did not pay off.
By the pre-pandemic fall of 2019, Fairview was cutting staff in order to reduce its operating expenses ("M Health Fairview to cut staff, consider trims to hospitals," Nov. 23, 2019). Such staffing shortages, a significant factor in the nurses' strike this year, result in the deterioration of the quality of patient care ("Hospital crowding dehumanizing," Nov. 17).
And what will be the financial effect on patient care? As Elisabeth Rosenthal notes in "An American Sickness" (Penguin Press, 2017), the consolidation of health care systems increases the cost of health care even faster as competition is reduced.
In the end the Fairview CEO may depart with a million-dollar severance payment for his role in the demise of one of the oldest nonprofit organizations in our state. It would be far better to use such funds to pay the nurses and other front-line staff who actually care for the patients.