Becker's Hospital Review

11 CFO / FINANCE U of Minnesota seeks $950M to acquire 'flagship' hospitals before merger By Alan Condon T he University of Minnesota plans to ask state lawmakers for $950 million to acquire and pay for initial operating costs of its on-campus hospitals in Minneapolis. e university's preliminary request for the State of Minnesota to sup- port its health system, UMN Health, aims to: • Acquire flagship healthcare facilities — the University Med- ical Center East and West Bank facilities, Masonic Children's Hospital and its clinics and surgery center. e investment would include the transfer of facilities and funding for work- force needs, union contracts and new leadership for a univer- sity-operated organization. e estimated preliminary request is $300 million. • Operate the flagship facilities. e investment includes an in- jection of 90 days of operating capital to cover payroll, supplies and professional services. e funding will also provide time to overturn operating losses and begin generating positive finan- cial results. e estimated preliminary request is $650 million. e request is subject to formal board of regents action, expected on March 10, according to the university, which said initial estimates are subject to change, but are presented to advance the public health con- versation about how best to address Minnesota's healthcare needs. e move would significantly alter the university's relationship with Minneapolis-based Fairview Health Services amid its proposed merg- er with Sioux Falls, S.D.-based Sanford Health. University officials oppose the merger. Sanford and Fairview had hoped to complete the transaction in March, but announced plans to extend the completion date to May 31 amid the Minnesota Attorney General's review. If the transaction is completed, the combined sys- tem would have more than 50 hospitals and 78,000 employees. "We must forge a new path: one that centers on the needs of Minne- sotans' healthcare now and for decades to come, Myron Frans, senior vice president for finance and operations, said in a Feb. 24 news re- lease. "One that recognizes the economic benefits of continuing our best-in-class healthcare sector, including the education and training of future healthcare professionals. And one that recognizes the treat- ments and cures U of M researchers will discover." n Virginia health system eliminates COO positions By Alan Condon S ovah Health, part of Brentwood, Tenn.-based Lifepoint Health, has gotten rid of the COOs at its Danville and Mar- tinsville, Va., campuses and eliminated both positions, the Danville Register & Bee reported March 13. Sovah Health-Danville's COO was John Kent, who had been in the role since 2018, while the COO of Sovah's Martinsville hospital had only started in the role March 6, according to the report. The health system is spreading the responsibilities of both COO positions across members of its existing adminis- trative team. Employees were notified of the changes in a March 10 memo from Steve Heatherly, Sovah Health market president and CEO of the Martinsville hospital, and Spencer Thomas, CEO of So- vah's Danville hospital. "Like other hospitals and systems nationwide, we continue to be faced with inflationary pressures, workforce challenges and a significant shift in demand for healthcare services," Mr. Heatherly and Mr. Thomas wrote, according to the report. "In this challenging climate, every healthcare system must explore new, and sometimes difficult, ways to manage expenses in this challenging environment." n California hospital CFO resigns after 5 days By Andrew Cass M ariposa, Calif.-based John C. Fremont Hos- pital is again looking for a CFO after Mark Foote resigned after five days on the job, the Mariposa Gazette reported Feb. 23. "It is unfortunate for us and for him," the hospital's acting CEO, Lynn Buskill, said in a statement shared with Becker's on Feb. 27. "He was hired part time to mentor our current controller to take over the CFO position in a year, but after working in the role, he evaluated the role was full time. In addition, he was driving 1 1/2 hours one way, and he realized it was longer than he had originally thought to drive this length daily." Ms. Buskill said the hospital started its recruitment process immediately after Mr. Foote resigned. "In our accounting department, there is a big need for financial help," she said in the statement. "We are not waiting to hire a CFO, [and] we will recruit accountants to assist the team." n

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