After months of negotiations and contentious public sparring, the University of Minnesota, Fairview Health Services and the University of Minnesota Physicians (M Physicians) have reached a 10-year agreement to invest in local care facilities and medical training while maintaining existing affiliations.
The three-party deal was struck after seven weeks of mediation and consulting brokered by Minnesota Attorney General Keith Ellison.
It comprises three distinct definitive agreements: an academic affiliation between the university and Fairview; a master agreement between M Physicians (medical school faculty and affiliated physicians) and the university; and an amendment to the agreement between Fairview and M Physicians that was struck last November.
Among the highlights are a $1 billion investment from Fairview into its owned medical facilities located on the university’s campus, which includes a potential capacity expansion at academic medical centers. Another funding commitment from Fairview for the medical school and clinical services “approaching $600 million, with additional funding based on achieving system-performance goals,” according to the announcement.
“This mediation process created the space for all parties to focus on what matters most: continuity of care, a strong academic partnership, and a sustainable future for healthcare in our state,” James Hereford, president and CEO of Fairview Health Services, said in a statement.
The accord will also reaffirm the university’s designation of M Physicians as its sole faculty practice group, establish new collaborative bodies between the three parties and explore new funding for programs supporting local physicians.
“This agreement establishes a clear and durable foundation for M Physicians and all parties to deliver world-class care and education for our patients, learners, and community,” Greg Beilman, M.D., interim CEO of M Physicians, said in a statement.
The groups will act on the binding agreement before the end of this month, with the 10-year agreement taking effect Jan. 1, 2027, with some areas implemented later this year.
“I’m gratified that after much hard work, the [parties] have reached an agreement that will ensure that 1.2 million Minnesotans a year will continue to receive world-class patient care in our state,” Ellison said in the announcement, adding “that Minnesota will remain a place where world-class physicians, specialists, and researchers seek to treat patients and build successful careers, and that secure, stable funding for the University of Minnesota Medical Center that trains 70% of Minnesota doctors will continue for the next generation.”
The deal comes as a 30-year agreement between the university and Fairview for the operation of a joint clinical enterprise, called M Health Fairview, was scheduled to expire at the end of 2026. That deal was struck when Fairview acquired the University of Minnesota Medical Center and Masonic Children’s Hospital in 1997.
Fairview currently employs more than 34,000 people across its 10 hospitals and medical centers.
A potential renewal of that deal hit rough waters during the past year or so, at one point involving negotiations for the two and Essentia Health to form a new “all-Minnesota health system solution.” The university cried foul in November over claims it was excluded from the proposed deal between Fairview and M Physicians (also helped along by Ellison’s office), describing it as a “hostile takeover” of its medical school.
“This agreement is an important milestone that brings clarity to the relationship between the University, M Physicians and Fairview Health Services for the next 10 years,” Rebecca Cunningham, M.D., president of the University of Minnesota, said of the new mediation agreement. “We are pleased to be able to continue this long-term partnership, which has played a vital role in caring for Minnesotans, training much of the state’s healthcare workforce and advancing lifesaving medical research. It represents meaningful progress toward our goal of building a world-class healthcare solution that serves all of Minnesota.