SIOUX FALLS, S.D. (KELO) –The Minnesota Legislature’s Health and Human Services committee looks into the proposed merger between Sanford and Minneapolis-based Fairview Health. They invited the CEOs of both companies to speak and answer questions. They also heard from two former governors. Fairview’s ownership of the University of Minnesota Medical Center is a complication for the merger.

Sanford and Fairview set a deadline of May 31st to close the deal and begin the merger.
Lawmakers heard testimony that Fairview Health is in financial trouble and has lost hundreds of millions of dollars in recent years. Former Governor Mark Dayton told lawmakers that unless the U of M Medical Center is returned to the school, the merger should be rejected.

“The prospect of governance of the University of Minnesota Academic Health Center could shift to a South Dakota-based enterprise is alarming and should never be allowed to happen,” said Dayton.

Sporting maroon and gold, the U of M colors, fellow former Governor Tim Pawlenty added his testimony and alluded to the fact that Fairview Health owns the buildings used by the school.

“I will also tell you that Sanford and Fairview have recognized this in a letter to the University. You know, we kind of get it you want these assets back, buy them back, so if that is the spirit of discussion, then it really becomes just a valuation exercise,” said Pawlenty.

Pawlenty says the legislature can play a role in negotiating and funding a deal to buy the buildings. Fairview Health CEO James Hereford touched on some of the harsher criticism.

“Finally, I want to address those who have alluded to Sanford as an outsider and foreign entity from the Dakotas unfit to participate in Minnesota’s healthcare ecosystem. The reality is that for more than 25 years Sanford has served Minnesotans with more than 7,000 dedicated employees across 20 hospitals across 70 clinics in communities like Bemidji, Thief River Falls, Worthington, and Luverne,” said Hereford.

Sanford CEO Bill Gassen assured lawmakers the Medical Center could stay with the University of Minnesota.

“We are ready to work with the university on the valuation and the purchase of those assets. We have stated that we would also like to maintain a clinical partnership,” said Gassen.

Gassen told lawmakers Sanford will invest 500 million dollars into Minnesota hospitals and clinics. He says abortion services would remain available in Minnesota.

A number of groups, including several unions testified against the merger. But so far there isn’t any indication the merger could be held up legally.