The University of Minnesota Board of Regents last week gave university administrators authority to negotiate and implement the proposed merger of University Hospital with the private Fairview Health System in the Twin Cities.
A final contract is expected to be signed Sept. 30 and implemented Jan. 1.
Under the proposal, Fairview would pay $87.5 million for the university hospital, assume debts of $64.5 million and gain control of fund reserves totaling $150 million.
The university's hospital had a net operating loss of $2.6 million on revenues of $390 million last year, and losses were expected to balloon in 1999 to $41.5 million on revenues of $412.7 million.
The proposed merger has raised concerns about how Minnesotans can be assured University Hospital will remain a research and teaching facility when it is no longer owned by the state.
"There are no guarantees," said regent Jean Keffeler. "But there are no guarantees whether we're sailing these waters alone or within the Fairview system."
Eighteen medical and surgical departments at the university will have to be integrated into Fairview Riverside Medical Center. The new Riverside-University division of Fairview eventually will be one hospital with two locations.
Currently, the 554-bed university hospital usually averages about 320 patients. Fairview Riverside has 693 beds and averages 550 patients.
The proposed sale means the university is getting out of the business of running a hospital day-to-day, of handling things such as buying supplies, paying workers and negotiating contracts with managed-care organizations.