Bills Seek to Use Ultimatum, Bans to Prevent Sale of UMN Hospitals

Updated: 04/09/2013 6:40 AM KSTP.com By: Mark Albert

A trio of bills introduced Monday at the Legislature would seek to use bans or an ultimatum to prevent the sale of the University of Minnesota Hospitals and Clinics to an out-of-state company such as Sanford Health, the South Dakota-company that is trying to purchase Fairview Health Systems, which owns and operates the state's premier university hospital.

Two bills would ban the sale of the U of M's hospitals to a non-Minnesota based company - either during a two-year moratorium or permanently - and the third piece of legislation would make any sale potentially unpalatable by requiring Fairview to pay back the state's general fund for the value of the company's charitable assets, a financial penalty that could reach hundreds of millions of dollars.

"My bottom line is that the University of Minnesota Hospitals ought to be controlled by folks here in Minnesota," declared Rep. Joe Atkins (DFL-Inver Grove Heights), who has teamed up with colleague Rep. Dan Schoen (DFL-St. Paul Park) on the bills seeking to ban sales to out-of-state companies or non-profits.

Atkins has scheduled a hearing for April 17 and asked Sanford executives to appear.

"The University of Minnesota - that M stands or Minnesota," Rep. Schoen said, "...and we want to keep it that way. It's as emotional as mom and apple pie."

Fairview bought the U of M Hospitals and Clinics from the state in 1997. And while the affiliation between the two continues and the U of M does get state money, the proposed out-of-state ban could spark legal scrutiny, according to William Mitchell constitutional law professor Mehmet Konar-Steenberg.

"Anytime a state or local government tries to set up rules that say 'we're going to treat in state and out of state parties differently in some kind of commercial transaction,' it does raise warning flags for the courts," Prof. Konar-Steenberg explained during an interview Monday.

Minnesota Attorney General Lori Swanson is now investigating the potential sale, holding a packed hearing at the Capitol Sunday.

The University of Minnesota is now considering whether to try to buy the hospital back 16 years after it sold it to Fairview.

Another bill (HF1721) introduced Monday by Rep. Jim Abeler (R-Anoka) and Rep. Peter Fischer (DFL-Maplewood) would force Fairview to pay back the value of its charitable assets to the state general fund in the event of a merger or sale to an out-of-state company.

Contacted by 5 EYEWITNESS NEWS for its response to the proposals, Sanford Health said it considered itself a Minnesota company, since it has 45 clinics it owns or manages here, and 15 medical centers that it owns, leases, or manages.

Statewide, it employs 6,000 people, a spokesperson said.

In a statement Monday, Cindy Morrison, Sanford's Executive Vice President of Marketing, said "we expect that discussions over the next week will provide clarity in terms of next steps and our role in any future hearings."