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Two planned hospital mergers face review from Minnesota attorney general


Keith Ellison says he’s going to look at the deal involving Essentia Health and Marshfield Clinic Health System and the proposed merger of St. Luke’s Duluth and Aspirus Health.

Minnesota recently passed a state law calling for additional review of proposed hospital mergers, and the state’s top law enforcement official is going to utilize it.

Minnesota Attorney General Keith Ellison says he plans to review two planned hospital mergers. (Photo: Minnesota attorney general's office)

Minnesota Attorney General Keith Ellison says he plans to review two planned hospital mergers. (Photo: Minnesota attorney general's office)

Minnesota Attorney General Keith Ellison announced this week that he’s going to examine the planned merger of Essentia Health and Marshfield Clinic Health System. He says he’s also going to review the planned merger of St. Luke’s in Duluth, Minn. with Aspirus Health, a Wisconsin-based system.

Under Minnesota’s law, which was passed earlier this year, the attorney general can examine hospital mergers to ensure they don’t reduce competition or healthcare services. If the attorney general determines that a hospital deal isn’t in the public’s best interest, then he could seek court approval to block the deal.

"Every Minnesotan deserves high-quality healthcare that they can afford, access, and depend on, and every Minnesotan deserves the opportunity to provide input on healthcare transactions that affect them,” Ellison said in a statement. “As I review these mergers to ensure they comply with state and federal law, I want to hear from the public, because Minnesotans’ thoughts and concerns are an essential part of our review.”

The Minnesota attorney general’s office notes that he's the top civil regulator for nonprofit organizations and charities.

Ellison is soliciting public comment with a form on the office’s website. A public forum is also scheduled at the University of Minnesota Duluth’s campus on Oct. 25.

If Essentia and Marshfield Clinic complete their deal, they would create a system with 25 hospitals.

Essentia operates 14 hospitals and dozens of clinics in Minnesota and North Dakota, along with a few facilities in Wisconsin. Essentia employs more than 14,000 people. Marshfield Clinic manages 11 hospitals and other sites of care in Wisconsin and Michigan’s upper peninsula. The system employs more than 12,000 workers.

Essentia and Marshfield Clinic first disclosed their exploration of a merger in October 2022. The two systems announced in July that they had signed a letter of intent to come together.

“We are both physician-led organizations with an unwavering commitment to the health of rural communities,” Essentia Health CEO Dr. David Herman said in a statement in July.

Assuming the deal is completed, Herman will serve as chief executive officer of the new parent company.

In July, Aspirus signed a letter of intent to acquire St. Luke’s in Duluth, Minn., a system operating two hospitals and dozens of healthcare sites in northeastern Minnesota, northwestern Wisconsin, and Michigan’s upper peninsula.

Aspirus, based in Wausau, Wisc., operates 13 hospitals in Wisconsin and four hospitals in Michigan.

Matt Heywood, president and chief executive officer of Aspirus Health, told Chief Healthcare Executive® in a September interview that Aspirus and St. Luke’s are aligned in their views of delivering healthcare to rural communities.

“We both are very committed to rural healthcare,” Heywood said. “We're very committed to high quality, and we're very committed to making sure we bring services locally to the communities that are outside of Duluth, just as much as Duluth. And that's our model here. We don't want you to have to travel to Wausau for some basic services. We want to bring those services out into the community.”

Sanford Health and Fairview Health Services had explored a merger that would have created a system with more than 50 hospitals, but the systems dropped their plans in July. Bill Gassen, Sanford Health president and CEO, pointed to some opposition in Minnesota as a factor.

“The significant benefits we identified for a combined system with Fairview Health Services compelled us to exhaust all potential pathways to completing our proposed merger,” Gassen said in a July statement. “However, without support for this transaction from certain Minnesota stakeholders, we have determined it is in the best interest of Sanford Health to discontinue the merger process.”

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