Fairview's Race to the Bottom Healthcare
Fairview proclaims dignity as one of its guiding values, “We say what we mean and do what we say. We communicate openly and honestly and behave ethically. We demand the best of ourselves and accept shared accountability for our actions.”[1] It can’t be denied: Fairview has pioneered new approaches to healthcare in our state for many decades. The question is: is this the kind of leadership we want?
[1] Fairview Website
The Race to the Bottom
1,100 former AFSCME members become non-contract when Fairview takes over the UMMC. Fairview institutes pay cuts to former University employees who earned more than Fairview employees. Some Fairview employees raised public concerns about Fairview’s “bad practices” being transferred to the University Medical Center. Pay cuts, health insurance increases, benefit cuts, fewer holidays. Fairview refuses to recognize union contracts negotiated with the University. (Pioneer Press, 7/12/1996, Star Tribune 11/16/1996)
- Feb 1997 - $175m in municipal bond funding is denied to Fairview by the Minneapolis City Council due to the council’s support of AFSCME’s union recognition battle. Fairview must seek taxable funding or other sources to complete the merger. Fairview refuses neutrality and AFSCME must hold an election (Star Tribune, 2/25/1997).
Fairview announces restructuring and the potential elimination of 250 to 300 jobs to achieve budget cuts. All this is done in the name of attaining a 1.5% profit margin for the year. (Star Tribune 2/5/1999).
· Fairview makes a contract dispute with Medica public in a newspaper ad (Medica is still owned by Allina at this point). CEO Page says “Fairview could survive the loss of Medica”. It is admitted to be a negotiating tactic to put public pressure on Medica. A deal is eventually reached but the tactic shocks many in the Twin Cities health care market (Star Tribune, 6/11/2000).
Fairview closes 6 clinics claiming the changes reflect market practices, not financial issues. (Star Tribune, 9/23/2000)
Fairview is only metro system that refuses to grant safe staffing language to nurses, forcing them on a 23 day strike (Star Tribune June 26, 2001)
Fairview needs more nurses
Fairview is named in a class action lawsuit along with Allina for overcharging uninsured patients. Fairview is accused of failing to provide charitable care (a requirement under their nonprofit status). Fairview is also charged with allowing patients who would qualify for charity care to be sent to collections. (Star Tribune, 6/17/2004 and Pioneer Press, 6/23/2004) (Lawsuit is settled March 2007 and impacted patients receive discounts based on what they were billed. (Star Tribune 3/17/2007))
Additional articles on Allina/Fairview’s low contribution in charity care relative to their size.
Health care industry debt collection practices are under review in Minnesota. Fairview garnished social security payments from seniors to pay for hospital bills. At this point it was legal in MN for debt collectors to gain access to bank accounts (garnishment) without getting approval from a judge. Attorney General Mike Hatch investigates (2-year investigation) Fairview’s collection practices and charges that the company had not been doing enough to ensure that patients get financial help and places too much focus on profits (executive bonuses based on profits). Page, the CEO, publicly admits Fairview lost sight of its charity care mission. (Star Tribune, 12/19/2004 and 2/1/2005)
Article published on dispute over the state’s site selection process for new hospital sites. Article indicates desire of large health systems to move into the suburbs (Maple Grove is being approved around this time frame). (Pioneer Press, 4/29/2006)
- Fairview execs are quoted in Star Tribune, lamenting the rise in uncollectable bills.
- “Fox said the total volume of bad debt in the Fairview system increased by 280 percent in the second half of 2005 compared to the first half of the year.” (Star Tribune 1/18/2007).
Fairview lays off 25 LPNs and they respond with an age discrimination suit. (Pioneer Press, 7/30/2008)
Fairview announces it will cut 150-200 filled positions and delay some capital projects, citing changes in medical plans and the failing economy. (Star Tribune, 10/7/2008)
Fairview announces pay freeze for non-contract employees. Also looking for pay freezes from union employees. (Star Tribune, 4/2/2009)
Fairview announces it will close a popular rehabilitation pool. (Pioneer Press, 2/11/10)
Fairview threatens to cut benefits from RNs, pushing MNA members to strike for one day over concerns about unsafe staffing and benefit cuts (MSP Business Journal, June 10 2010
Fairview cuts 240 jobs (through layoffs and attrition) (Pioneer Press, 5/25/2011)
AG Swanson files a civil suit against debt collector, Accretive Health Inc. which has contracts with Fairview and is alleged to have taken “control of many administrative functions at the systems and received fees and incentive payments to boost revenue and/or cut costs.” The initial suit focuses on the theft of a laptop with sensitive patient information. (Pioneer Press, 1/18/2012)
Department of Commerce temporarily suspends the license of Accretive Health (Pioneer Press, 2/2/2012)
- AG Swanson releases a report on aggressive tactics used by Accretive in addition to the privacy issues. (MSP Business Journal, 4/20/2012 and Pioneer Press, 4/24/2012)
- Accretive had embedded its own employees within Fairview hospitals in order to pressure patients or stall them from seeking care until they paid existing debts (story was also reported in NYT) (MSP Business Journal, 4/25/2012)
- End of April, CEO Eustis announces they are considering cutting ties with Accretive entirely. Both Eustis’ son and the son of Fairview Physician Associates' president are employed by Accretive Health. Eventually all ties are cut. (MSP Business Journal, 4/27/2012 and Star Tribune, 5/5/2012)
Federal investigators visit Fairview after Accretive Probe, to check for violations of EMTALA (Pioneer Press, 5/10/2012)
Accretive settles with the state of MN and pays $2.5m (distributed to patients). The settlement requires Accretive to cease all operations in MN by Nov. 1, 2012 and subjects the company to a 2-year ban on operations in the state. (Pioneer Press, 7/29/2012 and MSP Business Journal, 11/21/2012)
Rulon Stacey is appointed CEO, he comes to Fairview from University of Colorado Health. He is chosen for his experience leading a system with an academic medical center. (MSP Business Journal, 9/20/2013)
State audit questions whether officials wrongly granted the UMN Children’s Hospital an exemption from a state cost-cutting program in 2011, allowing the hospital to collect an extra $3m in reimbursements over 2 years. Exemption is eventually revoked by DHS. (Pioneer Press, 10/8/2013)
CEO Rulon Stacey tells Modern Healthcare that expansion is not a priority for Fairview. (MSP Business Journal, 3/4/2014)
Rulon Stacey leaves Fairview after 15 months, professional differences with the Board of Directors cited. (Star Tribune, 3/6/2015)
Fairview becomes majority owner of insurance company PreferredOne, fully acquired at the beginning of 2016 (Star Tribune, 4/22/2015)
A Federal audit shows that UMMC must refund $3.2m in overpayment from Medicare (Star Tribune, 2/3/2016)
Fairview signs letter of intent to buy insurance company UCare, merger falls through once James Hereford takes over as CEO. (MSP Business Journal, 4/5/2016 and Star Tribune, 8/17/2016)
James Hereford named CEO (MSP Business Journal, 10/27/2016)
Fairview announces merger with HealthEast. (MSP Business Journal, 3/8/2017 and Star Tribune, 5/9/2017)
St. Joe’s announces plan to close maternity ward. (Pioneer Press, 7/25/2017)
M Health Fairview announces cutting staff by 2% (equivalent of 500 positions) across the system. This is one of the first indications that there may be reductions/closures at St. Joseph’s and Bethesda hospitals. In this announcement, Hereford declined to confirm any plans related to the two former HealthEast hospitals but says we are in, “a healthcare affordability crisis”. (Star Tribune 11/23/2019)
Fairview announces it will cut beds at Bethesda hospital in half (down to 50) as the system drops 340 workers across the organization. Bethesda will also no longer accept patients from outside the Fairview system, seriously impacting the availability of long-term care beds. (Pioneer Press 12/6/2019 and Star Tribune 12/7/2019)
St. Paul City Council passes a resolution opposing any healthcare cuts and calling for transparency from Fairview. (Star Tribune, 2/11/2020)
Bethesda converted entirely away from Long Term Acute Care services into a COVID-19 treatment center (Star Tribune 3/18/2020)
Fairview preps for an expansion at Southdale in Edina to add more single-patient rooms (MSP Business Journal 6/8/2020)
Fairview announces sale of home health and hospice business to AccentCare, inc. a for-profit Texas based post-acute care company. This deal impacts nearly 1,000 employees (MSP Business Journal, 9/3/2020)
Fairview announces that it will eliminate 900 jobs system-wide and shutter Bethesda hospital and lease the property to Ramsey County for use as a homeless shelter for up to 18 months. It will shift COVID-19 services to St. Joseph’s and eventually cease acute care operations at the facility including, shutting the ER and shifting other specialty services to other Fairview locations (MSP Business Journal 10/5/2020)
Fairview plans to close the Emergency Department at St. Joseph’s by the end of the year. This plan is met by pushback from community members as well as rival hospitals that claim they cannot meet the increased patient needs. (Star Tribune 11/14/2020)
St. Joseph’s ER is permanently closed (MSP Business Journal 12/29/2020)
Fairview in the News
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