The University of Minnesota has objected to a new $1 billion partnership between Minneapolis-based Fairview Health Services and University of Minnesota Physicians, arguing the deal threatens the institution’s academic mission and was struck without its knowledge or consent.
Fairview and M Physicians — the clinical practice group for the university’s medical school faculty — have finalized a framework for a 10-year collaboration set to take effect Jan. 1, 2027. The agreement, which will replace the current M Health Fairview joint clinical enterprise, includes a $1 billion capital commitment to support Minnesota’s academic healthcare infrastructure and sustain hospital operations at key sites.
Under the partnership:
- Fairview will invest $1 billion in facilities including University of Minnesota Medical Center and Masonic Children’s Hospital.
- M Physicians will continue clinical practice and operational leadership at those facilities in coordination with Fairview.
- The two organizations plan to enhance physician training and research, expand patient access and address rural health challenges.
University leaders said the agreement amounts to a “hostile takeover” of its medical school, claiming the university was not consulted during negotiations. In a statement shared with Becker’s, the university said the deal “strongly oversteps Fairview and [M Physicians’] authority” and “handcuffs the university’s ability to provide medical education and conduct life-saving research.”
The university also criticized the closed-door nature of the talks, arguing that it erodes public trust and places a single health system’s interests above the broader needs of Minnesotans.
Fairview President and CEO James Hereford defended the agreement, stating in a Nov. 12 release, “This is about doing what’s right for our patients and for Minnesotans. Our shared success depends on putting patients first, supporting providers, and ensuring that Minnesota’s academic health system remains strong and sustainable.”
Greg Beilman, MD, interim CEO of M Physicians, said the new chapter “affirms what’s possible when we focus on what truly matters: patients, learners and the future of healthcare.”
The agreement maintains Fairview’s ownership of the University of Minnesota Medical Center and Masonic Children’s Hospital, with no anticipated changes in patient care.
The move comes after Duluth, Minn.-based Essentia Health exited merger talks with Fairview and the university in September. Essentia had been part of an earlier $1 billion proposal to sustain the university’s clinical enterprise. With its withdrawal, the Fairview–M Physicians agreement becomes the central pillar in the university’s evolving strategy, though without the institution’s endorsement.
The Minnesota Attorney General’s Office and strategic facilitator Lois Quam were involved in brokering the agreement and continue to work with the parties to address outstanding issues. While the deal does not resolve governance disputes between the university and Fairview, both sides said it sets the stage for long-term collaboration.
University officials urged all parties — including the attorney general — to involve the institution in making revisions to protect its academic mission and ensure the medical school continues to serve the state.
