Minnesota’s growing wave of hospital mergers could push up patient costs, a state health economist has warned, as three major healthcare combinations move through regulatory review.
Stefen Glidemeister, an economist at the Minnesota Department of Health, told a state Senate committee that prices had risen by as much as 20% in some cases after hospital mergers. He said research from different jurisdictions and on different types of consolidation had repeatedly raised similar concerns.
“We want competition because we think it makes healthcare delivery stronger,” Glidemeister told lawmakers. He added that there was “no clear evidence that consolidation improves quality”.
HealthPartners and Essentia merger
The warning comes days after HealthPartners and Essentia Health announced plans to combine, creating one of the largest non-profit healthcare systems in the upper Midwest.
The proposed organisation would include 22 hospitals, more than 135 clinics and about 6,000 clinicians across Minnesota, North Dakota and Wisconsin. The combined group would operate under the HealthPartners name, while Essentia facilities would retain their existing branding as the organisations are integrated. ([essentiahealth.org](https://www.essentiahealth.org/health-and-news/news/healthpartners-essentia-announce-combination-focused-on-improving-access-quality-and-affordability?utm_source=openai))
HealthPartners president and chief executive Andrea Walsh is due to lead the new organisation. Essentia chief executive David Herman would become president of its combined clinical care operations.
The companies said the deal was intended to improve access, expand specialist services and make healthcare more affordable. They said patients should not face changes to their care or insurance cover as a result of the combination.
Subject to regulatory clearance, the organisations expect to begin operating as one system on January 1, 2027. ([essentiahealth.org](https://www.essentiahealth.org/health-and-news/news/healthpartners-essentia-announce-combination-focused-on-improving-access-quality-and-affordability?utm_source=openai))
Ms Walsh said workforce shortages and uneven access to care were putting Minnesota’s health system at a turning point. Mr Herman said hospitals were also facing difficult reimbursement conditions, including pressure from Medicare and the prospect of more uninsured patients under new Medicaid requirements.
HealthPartners said integrating care, insurance, specialist expertise and rural health services could reduce complexity in ways that would be harder for the organisations to achieve separately.
Three major healthcare combinations
The HealthPartners-Essentia proposal is the latest of three large healthcare transactions announced in Minnesota over the past year.
Allina Health has agreed to join California-based Sutter Health, although the deal remains under review. Allina said it had lost $1 billion over the previous five years and described the proposed combination as necessary to strengthen its long-term financial position.
The organisation said the combined group planned to invest more than $2 billion in Minnesota and western Wisconsin, including spending on outpatient and specialist care, recruiting doctors, reducing waiting times and improving digital access.
The third transaction, involving North Memorial Health and South Dakota-based Sanford Health, has already gone ahead. The two organisations completed their partnership on September 1, creating an integrated system covering urban and rural parts of Minnesota. ([northmemorial.com](https://www.northmemorial.com/news/sanford-health-and-north-memorial-health-complete-partnership/?utm_source=openai))
Under a 10-year agreement with Minnesota Attorney General Keith Ellison’s office, Sanford committed to invest $600 million in North Memorial’s hospitals and maintain key services at Robbinsdale Hospital, including its Level I trauma centre. The agreement also includes commitments on staffing, emergency services, charity care and participation in Medicare and Medicaid. ([ag.state.mn.us](https://www.ag.state.mn.us/Office/Communications/2026/08/28_Sanford-NorthMemorial.asp?utm_source=openai))
Mr Ellison has said that hospital consolidation can result in higher costs, fewer jobs and reduced care, but argued that the agreement showed how state oversight could impose safeguards on major transactions.
Regulatory scrutiny
Minnesota’s attorney general reviews qualifying healthcare transactions under state law, in consultation with the Department of Health. The office examines their effect on patients, workers, access, affordability and competition.
The attorney general’s office has clarified that it does not formally approve or reject such transactions. Instead, it can seek legal action to block a deal if it concludes that the transaction breaches the law or is not in the public interest. ([ag.state.mn.us](https://www.ag.state.mn.us/Office/Communications/2026/06/16_Community-Meeting.asp?utm_source=openai))
Mr Ellison has asked the public to provide views on the proposed Allina-Sutter transaction. His office is also examining whether the HealthPartners-Essentia combination could contain anti-competitive elements.
Rural lawmakers have warned that consolidation may be necessary to keep struggling hospitals and clinics open. State Senator Paul Utke said some providers would have been lost without previous mergers.
Healthcare unions, meanwhile, have raised concerns about possible job and service cuts. The organisations involved in the latest deals say they do not currently plan to close clinics.
The effect of the proposed mergers on patient bills, competition and the quality of care remains uncertain. The Senate hearing is likely to intensify scrutiny of whether larger health systems can deliver the savings promised by their executives without leaving patients with higher costs.
