DULUTH — A newly proposed framework for nonprofit health care was announced Friday by Essentia Health and the University of Minnesota that aims to improve patient outcomes and expand access to care in underserved regions throughout the state.
The announcement said the new organization would invest “up to $1 billion over several years to realize this vision for Minnesota’s health care future,” but did not detail how the money would be spent.
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“This would be possible by leveraging the assets of the combined proposed system to unlock financing, and the vision for our shared future to inspire philanthropic support for this not-for-profit all-Minnesota solution,” the university said in its news release. “The newly formed, integrated health framework would reinvest in University of Minnesota on- and near-campus medical facilities, as well as in rural health care and increased access to elevated levels of specialized care.”
Solutions for statewide workforce shortages in the health care industry were a frequent topic of discussion during Essentia Health CEO Dr. David Herman's time serving on Gov. Tim Walz’s task force for academic health at the University of Minnesota last year.
“The challenges that Essentia have certainly are not unique to Essentia,” Herman said. “As health care demands have increased because of an aging population and a sicker population, and we're getting toward the end of the baby boom phase, there’s just fewer people available to provide health care.”
Herman noted that nearly 70% of all physicians in the state have been trained at the university.
“Continuing to deliver excellent patient outcomes while building a sustainable health care future rests on the foundation of a strong medical school,” Herman said. “We know that where people train is where they will practice.”
Expanding on the relationship already established between the university and the health care system, the proposed framework would enable each entity to further share its clinical activities and specialists, Herman said.
“It will help keep costs down for patients and really ensure that we have the health care education ability with our medical school to be able to continue to provide the next generation of health care workers that we know are needed all across the state,” said University of Minnesota President Dr. Rebecca Cunningham.
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Cunningham, who is a former emergency room physician, was brought on last year to lead the university system as it sought to buy its teaching hospitals back from Fairview Health Services.
The agreement between the university and Fairview expires in 2026.
“We are at an inflection point in our relationship with Fairview Health Services that requires an urgent and innovative solution,” Cunningham said in a statement. “We envision this model as a new path forward in our relationship, one that builds on the momentum all those at M Health Fairview have built and that continues to put patients first, consistent with our organizations’ shared priorities. We have begun conversations and invite further discussion with Fairview to bring this concept to life for Minnesota.”
In a statement, Fairview Health Services said it only became aware of discussions between the university and Essentia in the last 24 hours and “has not been provided with details on the concept.” It said any decisions about the future will come from its board of directors and leadership team.
“Over the last year, we have worked in good faith towards the University’s desire to purchase the academic assets,” Fairview said. “Today’s announcement by the University reflects a sudden change in their stated desire. As we look ahead to determine next steps, our unwavering focus remains on delivering exceptional care and ensuring the health and well-being of Minnesotans.”
The announcement also comes as the university seeks to build a new medical school campus in downtown Duluth that includes the College of Pharmacy.
The funds for the newly proposed framework would be separate from the medical school funding requests, according to Cunningham, and would expand training locations and opportunities for current and future providers across northern Minnesota.
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“This billion dollars is really about the development of this new health care system delivery, and those investments will be made in Greater Minnesota as well as metro Minnesota health care systems,” Herman added. “The healthy health care systems are able to be sustainable by the investments that they make in their facilities, and, of course, their people, and this will be mostly in the facilities, but those facilities support the people that provide that care and the patients who have to get their care in those spaces.”
In September, the university announced plans to expand the medical school program in Duluth from a two-year to a four-year program.
The medical school’s Duluth campus partners with Aspirus St. Luke’s and Essentia Health, and each of the local teaching hospitals has offered locations for the proposed new medical school campus.
Aspirus St. Luke’s is proposing the new medical school campus be built between the south side of First Street, between Eighth and Ninth avenues east. Essentia has offered to make the site of the former St. Mary’s Medical Center on the Fourth Street corridor available to the university at no cost.
“As this proposal moves forward and is successful, it better allows the University of Minnesota to move ahead with that commitment for the expanded health care building,” Cunningham said.
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