Fairview To Merge With HealthEast In Major Metro-Area Consolidation

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Memory Capacity
Apr 29, 2006
Could this have an impact on how some EMS units are dispatched?


Fairview Health Services has reached a deal to merge with HealthEast Care System, a move that will combine two of the metro area's largest health systems.

The deal marks the largest health care merger in the Twin Cities since Bloomington-based HealthPartners snapped up Park Nicollet Health Services in 2013.


Terms of the deal, expected to close this spring, weren't disclosed. James Hereford, who joined Fairview as CEO in December, would lead the combined organization. Three HealthEast board members will join Fairview's board.

Fairview would retain its ranking as the state's third-largest health care provider by revenue after the deal closes. However, its hospitals' market share would climb to 34 percent, exceeding fourth-ranked Allina Health System's 26 percent, according to research based on 2015 data by independent health care analyst Allan Baumgarten.

The deal would give Minneapolis-based Fairview a significant foothold in the east metro, where it doesn't have any hospitals but St. Paul-based HealthEast is a major player.

“I think Fairview is looking to expand its geographic reach to compete with Allina in those parts of the region where it doesn’t have a presence right now,” Baumgarten said, adding that HealthEast previously had little room to expand without bumping into formidable competitors.

HealthEast has struggled financially compared to other large systems in the Twin Cities, posting a loss of about $7 million for its most recent fiscal year. During its most recent quarter, ended Nov. 30, the company's loss from operations was about $5 million, slightly better than $5.1 million in the year-ago period.

In bond disclosures, the health system said its net revenue growth has suffered thanks partly to more of its payments coming from government programs rather than commercial insurers.

Fairview has been exploring merger options for years. Talks with University of Minnesota Physicians fell apart last year. In 2013, Fairview kicked off merger talks with South Dakota-based Sanford Health, but negotiations were suspended amid opposition from Minnesota state lawmakers.

Since those deals fell apart, Fairview has expanded deeper into the health insurance business through its acquisition of PreferredOne. It had a deal to merge with Minneapolis-based insurer UCare, but the organizations have since decided not to combine for reasons the systems declined to disclose.


Premium Subscriber
Aug 3, 2005
Minneapolis Area
Not really. Fairview has no ambulance service, only HealthEast. They already have a contract with each other for med trans.
The only potential change, and it is highly remote, is that Fairview owns the ambulance service area for North memorials Princeton and Forest Lake service areas. Perhaps they could kill those contacts and bring in HealthEast but highly unlikely.

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Premium Subscriber
Feb 6, 2004
Louisville, KY
There was a merging of hospitals here in Louisville a number of years ago. It didn't have much of an impact on EMS business, as a different model is used. Most emergent transports are done by Louisville Metro EMS. Private services may get involved if all Metro ambulances are busy - they are not hospital based.

What we are seeing as that at least one hospital wants to "un-merge" because things were not as rosy as they hoped.
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