Sanford put in the hotseat over attempted Fairview/U of M takeover (Page 72)

Sanford Health has a lot of money and a lot of hospitals, but one more thing they’re bringing to Minnesota is scrutiny.  The nonprofit healthcare giant that runs facilities from Adrian to Wheaton now wants to add the Twin Cities to its corporate footprint, but Sanford executives got an earful of how their arrogance caused them to underestimate the height of the hurdles needed to takeover Fairview Health and the University of Minnesota Medical Center and research labs.

Minnesota Nurses have been talking about the short staffing situations in Bagley, Bemidji, Thief River Falls, and other facilities since Sanford took those over.  MNA President Linda Hamilton and Bemidji bargaining unit chair Peter Danielson were invited to give testimony.  Hamilton was asked to speak about the effects of the continued corporatization of healthcare through hospital takeovers.  She prepared a statement showing how local hospitals become funnels for corporate giants to send patients to their hospital headquarters out of state.  She also came ready to talk about the lack of investment in needed women’s care versus Sanford’s expansion into high-dollar facilities such as orthopaedics and cath centers.

Danielson was invited to speak as a nurse in a Sanford facility who has seen patient care decline due to cost-cutting.  He tells of how a nurse with a patient recovering from lung surgery, for example, should only receive one more patient assignment but at Sanford they can get five more.

The Attorney General’s inquiry into a possible Sanford takeover of Fairview reveals that the cruel cost-cutting nurses have experienced is only the proverbial tip of the iceberg.

Swanson started by indicating that her office had been investigating Sanford Health for months for, of all things, incomplete nonprofit paperwork.  Swanson said, when her office subpoenaed Sanford for 21 necessary inquiries to approve nonprofit status in Minnesota, Sanford failed to respond, and her office noted that Sanford only recently replied with one document of answers.

Before calling representatives of the three parties, Sanford, Fairview, and the U of M, Swanson established through healthcare and non-profit experts that a deal of this type would have to be extraordinarily analyzed to pass muster.

Brian Short, a consultant in non-profit governance, noted that non-profits do have shareholders because the taxpayer pays the taxes that non-profits don’t to help them with their mission.

David Feinwachs, former attorney for the Minnesota Hospital Association, agreed that not only would this deal be like selling the county library to Barnes & Noble, but Sanford getting the U of M Medical Center sounds more like the library going to Wal-Mart.

Sanford executives clearly looked uncomfortable in their seats when their speakers, COO and Senior Vice-President Becky Nelson, and Senior Executive Vice-President David Link got grilled by Swanson.  Nelson told the Attorney General and her staff that Sanford and Fairview should be allowed to pursue these preliminary talks but then revealed that months of regular meetings between the two companies had been going on, which produced 10-15 “synergy” documents and cost analysis.

Nelson and Link both shrank from questions about Sanford’s many donations to sports teams and stadiums by calling them investments into youth physical fitness.

Then Sanford execs sounded unclear on the relationships between the non-profit Sanford Health systems and Sanford’s other, for profit companies.  It was revealed that Sanford Health still uses the Sanford-owned Premier Bank to process payments.  The hospital chain uses a debt-collection company called Rushmore Service Center, also a Sanford company.  The A-G also pressed the two vice-presidents on a new company, Sanford Applied Bioscience, a medical research company.  When Swanson pressed for who sits on the board of the for-profit laboratory, neither could answer.  When she asked Link again, he suddenly remembered that he was.

Nurses and patients in the standing-room only hearing room heard some news that would indicate that a Sanford-Fairview takeover is far from a done deal.  Fairview acting-CEO Chuck Mooty said that if the University of Minnesota is opposed to this deal, it won’t go through.  When Swanson asked him to clarify who would make that decision, Mooty indicated that U of M President Eric Kaler has the veto vote.  U of M General Counsel Mark Rotenberg also said that any deal would have to address the U’s missions of educating healthcare professionals and medical research.  Rotenberg also told the Attorney General that the U of M would not accept any alumni contributions to any sports teams or facilities that could show a conflict of interest during this inquiry.  That may have been in response to a recent newspaper story that Kaler was spotted in Augusta, Georgia, with T. Denny Sanford at the Master’s Golf Tournament.

Due to the length of the cross-examination of witnesses, two invited MNA witnesses didn’t get a chance to speak.  Swanson said Hamilton, Danielson and other witnesses will take the stand at the second public hearing over Sanford and Fairview on April 21.