Merger would create one of Minnesota’s largest health systems
It’s the third major health care merger proposed in
The new nonprofit would take on HealthPartners’ name and headquarters in
The proposed deal would be the latest change in a tumultuous time for health care in
The combined entity would operate 22 hospitals and 135 clinics spanning
Health care providers in
Like other recent proposals, the HealthPartners-Essentia tie-up would involve nonprofits merging with no money changing hands and the larger health system gaining control.
North
In the long run, the larger organization should have financial resources to invest in specialty services, technology and digital tools that improve patient access to affordable care, Walsh said in an interview.
The new organization also would be positioned to address workforce challenges hitting hard in greater
It is, however, unique among Minnesota’s large health care providers because it also runs a large health insurance business. That strategy will continue, Walsh said, even as its hospital and clinic side will get much bigger with the merger.
Essentia’s largest hospital is St. Mary’s Medical Center in
Economists have long criticized consolidation in health care, saying deals drive up costs because larger organizations have more leverage to negotiate higher prices from health insurers.
Walsh stressed that extracting higher payment rates is not a goal with the combination.
She said
“We need to figure out a way to continue (providing) exceptional access to high quality care in more affordable ways,” Walsh said. “So a combination like ours will enable us to make some of those strategic long-term investments together, which we believe will be more efficient and effective.”
Health care providers are bracing for a surge in uninsured patients as more people lack coverage. That’s because Medicaid enrollment is expected to start declining soon under President Donald Trump’s One Big Beautiful Bill, passed by
Hospitals also argue Medicare reimbursements aren’t sufficient, including private Medicare Advantage insurers that can limit payments with prior authorization rules.
Herman, the
He will serve as president of the combined clinical care group’s operations, including 6,000 clinicians caring for 2 million patients.
“We felt that together we could better lead into this dynamic, if not chaotic, health care environment,” Herman said.
Herman was at the center of an ambitious, but unsuccessful, plan last year to merge Essentia and
That proposal fell apart after Fairview said it wasn’t interested in an outright merger. Doctors at the U questioned how Essentia could be a viable partner, given its lack of hospitals and clinics in
If Essentia merged with
The U of M and Fairview reached a new 10-year affiliation agreement earlier this year. The proposed merger of Essentia and
“I think as we work and bring [
Training the next generation of health care professionals is a key part of the merger, Herman said.
Essentia’s research and education programs provide more than 500,000 hours of training each year.
The deal is expected to take effect
Contracts with union workers at both health systems will be preserved, the CEOs said, and no layoffs are expected as part of the combination.
“We think, for what we see coming down the road at a federal and state level, that together we’ll be better able to assure strong and stable places for people to spend their careers,” Walsh said.
©2026 The Minnesota Star Tribune. Visit startribune.com. Distributed by Tribune Content Agency, LLC


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