University of Minnesota and Essentia announce new healthcare alliance

The University of Minnesota and Duluth-based Essentia Health are proposing a new academic medicine nonprofit. The organizations say they will spend $1 billion over five years to build an “all-Minnesota health system solution.”

U said much more work is needed to bring the proposal to fruition. Friday’s announcement said the new integrated health framework would reinvest in campus medical facilities, rural health care and increase access to elevated levels of specialized care.

Essentia Health employs approximately 15,000 people, including more than 2,200 physicians and advanced practitioners.

The university currently operates under a cooperative agreement with Fairview Health Services. That agreement expires next year. In December, U announced a restructuring plan.

Fairview says it learned within the last 24 hours about the university’s discussions with Essentia.

“Over the past year, we have worked in good faith against the university’s desire to purchase the academic assets,” Fairview noted in a statement. “Today’s announcement from the university reflects a sudden change in their stated desire.”

This is a development story. Check back for updates.