Merger failure post-mortem: What's next for Fairview and Sanford?

Ben H.

Ben H.

Sep 24, 20232 min read

0

Merger failure post-mortem: What's next for Fairview and Sanford?

The recent failed merger attempt between Fairview Health Services and Sanford Health has left both organizations in a state of uncertainty. With Fairview boasting 1.8K beds and a net income of 100M, compared to Sanford's 1.1K beds and 500M net income, the potential for a successful merger seemed promising. However, various concerns and obstacles have arisen, leaving experts to speculate on the next steps for these healthcare giants.

One of the primary concerns surrounding this merger was the control of healthcare facilities affiliated with the University of Minnesota. Fairview's University of Minnesota Medical Center, along with Minnesota lawmakers and Attorney General Keith Ellison, expressed worries about an out-of-state entity having control over these facilities. The exclusion of University of Minnesota executives from merger talks only heightened these concerns, as it raised the possibility of service cuts under Sanford's management.

In addition to these concerns, Fairview continues to report operating losses, further emphasizing the need for a stable financial situation. Industry observers predict that Fairview will be compelled to find another partner to address its financial struggles. However, new state legislation aimed at increasing merger oversight may create additional hurdles for Fairview in its search for a suitable partner.

So, what's next for Fairview and Sanford? The failed merger has made it clear that new avenues must be explored. Here are three actionable pieces of advice for both organizations moving forward:

  • 1. Reassess merger strategies: It's crucial for Fairview and Sanford to reevaluate their merger strategies. The concerns that arose during the failed merger attempt should be addressed and resolved in future negotiations. Both organizations must prioritize open communication and collaboration to ensure a successful merger.
  • 2. Seek local partnerships: Given the concerns surrounding an out-of-state entity controlling healthcare facilities affiliated with the University of Minnesota, Fairview should consider seeking local partnerships. By aligning with a local healthcare system, Fairview can alleviate worries about service cuts and maintain a strong relationship with the University.
  • 3. Focus on financial stability: Fairview's operating losses highlight the need for financial stability. Instead of solely relying on merger opportunities, Fairview should explore alternative strategies to improve its financial situation. This could include cost-cutting measures, revenue diversification, or seeking partnerships that prioritize financial sustainability.

In conclusion, the failed merger between Fairview and Sanford has left both organizations at a crossroads. While the path forward may be uncertain, there are actionable steps that can be taken to ensure future success. By reassessing merger strategies, seeking local partnerships, and focusing on financial stability, Fairview and Sanford can navigate the challenges ahead and find suitable paths for their organizations.

Resource:

  1. "Merger failure post-mortem: What's next for Fairview and Sanford?", https://www.modernhealthcare.com/mergers-acquisitions/sanford-fairview-merger-whats-next (Glasp)
  2. "Asset Strategy - Home", https://mckinsey.sharepoint.com/sites/spnec-4l746i5o (Glasp)

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