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The Fairview/U of M-Sanford merger: 3 good and bad questions to pose

Now that Attorney General Swanson has moved the Fairview-Sanford merger issue into the sunshine, what questions should Minnesotans be asking about it?

Sanford USD Medical Center in Sioux Falls

Minnesota Attorney General Lori Swanson is right to scrutinize the proposed merger of Fairview Health System and Sanford Health System.  It could have a big impact on Minnesota taxpayers, and it shouldn’t only be discussed by Sanford and Fairview C-suiters.  The discussion should be out in the open.

So now that Attorney General Swanson has moved the Fairview-Sanford merger issue into the sunshine, what questions should Minnesotans be asking about it? So far, some of the questions have been excellent, and some have been silly.

Bad questions

Minne-xenophobia.  “Should we allow marauding invaders from the west to rape and pillage our Minnesota health care motherland?”

  • Okay, so those aren’t the precise words that have been used, but there has been some of that tone coming from Minnesota elected officials looking to score political points.  There are plenty of relevant questions that Minnesotans should be posing about this merger, but this one is grounded more in delusional Minnesota Exceptionalism than good public policy.  There may be reasons why this dance partner turns out to be wrong for Minnesota patients and taxpayers, but state of origin is not one of them, at least not as a stand alone issue.  So Minnesota, let’s leave the xenophobia and ego trips out of this.

Loan Sharkism.  “Should we allow someone who made billions loan-sharking vulnerable consumers with 36% interest rate credit cards to control our medical bills?”

  • It’s true that South Dakota’s lack of usury laws did allow Sanford Health’s dominant benefactor T. Denny Sanford to make billions charging breathtakingly high interest rates and fees to the  nation’s most vulnerable consumers.  It’s true that South Dakota lawmakers should be ashamed about the damage they have allowed bankers to do to consumers.  Moreover, it appears Mr.  Sanford may be much more involved in Sanford Health’s strategic decision-making than Sanford Health has admitted.    But until someone can show that there is a tangible connection between Sanford’s loan-sharking and Sandford Health’s patient care, these two regulatory issues need to be considered separately.  The usury discussion isn’t relevant to the merger discussion.

Quid Pro Quo.  “Is the University secretly planning to trade away a $1.2 billion hospital and clinic system so that it can receive a few million dollars in donations for  Sanford-financed athletic practice facilities?”

  • If Mr. Sanford gave the University a few million for new basketball and football facilities right now, that would be an extremely destructive PR move.   Merger advocates understand this.  It would look very much like billionaire bribery, which is why the University was more than willing yesterday to pledge that no such donations would be accepted during the merger discussions.  That promise makes this a non-issue.

Good questions

Taxpayer Stewardship.  “Should health company executives who are not directly accountable to Minnesota taxpayers be given day-to-day control over a world class medical gem – the University of Minnesota Medical Center and related health sciences assets at the University – that was financed by Minnesota taxpayers?”

  • This is a very important question.  Much has been written about Mr. Sanford’s admirable $600 million in gifts to Sanford Health.  But Minnesota taxpayers have given even larger gifts to the University of Minnesota over many decades.  Given that, Minnesota taxpayers deserve to have ironclad guarantees that their interests – not Fairview’s or Sanford Health’s interests – will drive University-related decision making into the future.

Equal Regulatory Playing Field.  “Is Sanford as lean, transparent and efficient as the Minnesota Attorney General’s office has demanded other Minnesota health care non-profits to be?”

  • Former Attorney General Mike Hatch, with current Attorney General Lori Swanson heavily involved, famously audited Minnesota’s major health care companies – Allina, Fairview and HealthPartners.  Swanson and Hatch demanded, in a very public way, that these Minnesota-based non-profits be more lean and transparent.   Is Sanford Health going to be held to the same regulatory scrutiny and standards as Allina, HeathPartners and Fairview were?   I can promise you, Sanford was not subject to a Hatch-esque level of regulatory oversight in the conservative laissez-faire Dakotas. Therefore, will Attorney General Swanson audit Sanford Health’s salaries, perks and overhead, which would level the playing field between Sanford Health and its already audited and reformed Minnesota competitors?

Upside.  “What are the specific financial, research and patient care benefits associated with the Fairview-Sanford merger, as compared with the status quo or the University taking over Fairview?”

  • All mergers have both costs and benefits.  Minnesotans need to be sure they have a clear picture of what benefits Sanford Health would bring to the University.  So far, most of what we hear from Sanford Health CEO is that it is Sanford Health’s manifest destiny to be large and go east, young man.  For Minnesota taxpayers who have  invested heavily in the University of Minnesota over many decades, bigness for bigness’s sake is just not a good enough reason to merge.  Minnesota taxpayers need guarantees of specific benefits, or we shouldn’t risk a change.

It’s critically important for Minnesotans to debate the proposed Fairview-Sanford merger.  But it needs to be the right kind of debate.

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Note:  An earlier version of this post listed the cost of new basketball and football practice facilities at $25 million.  That was an error.  To the best of my knowledge, the cost of those potential new facilities is not yet known.

Disclosure:  In the past, I have worked for Allina and HealthPartners, but have not done so in many years.  I currently do work for the University of Minnesota, but on transportation-related issues, not health care issues.  I also have worked for the Minnesota Attorney General’s Office, but not during the Hatch- and Swanson-eras.

This post was written by Joe Loveland and originally published on Wry Wing Politics.

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