Essentia Health announced plans to merge with another major Minnesota healthcare company, potentially creating one of the largest healthcare systems in the state.
Essentia leaders announced Tuesday, Sept. 29, that the Duluth-based company will merge with HealthPartners, which is headquartered in Bloomington.
Executives with the healthcare companies said the merger is meant to combat rising costs in the healthcare system. The move comes amid a statewide trend in healthcare consolidation, raising concerns from some healthcare workers about the merger's impact on workers and patients.
HealthPartners serves more than 1.4 million patients at facilities mostly located in the Twin Cities metro or western Wisconsin. Essentia Health is one of the primary healthcare providers in northeastern Minnesota, with over 100 facilities in Minnesota, Wisconsin and North Dakota.
Essentia Health becomes HealthPartners
At a press conference Tuesday, Essentia Health CEO David Herman said the merger was a proactive move to anticipate incoming problems in the healthcare industry, such as access and affordability.
"We know that while we're strong, our patients, our communities and our colleagues depend upon us," Herman said. "We're looking forward to partnering with our colleagues at HealthPartners in order to continue that reality for the people we are privileged to serve."
HealthPartners CEO Andrea Walsh named rising costs, rising healthcare premiums, workforce shortages, a lack of access and new technology investments as factors driving the decision.
According to a statement, the combined company would include 22 hospitals and over 135 clinics. About 45,000 total employees would work at the company, including 6,000 clinicians.
The company CEOs confirmed they have no plans to shutter or consolidate any facilities at this time.
Under the merger, Essentia Health would take on the HealthPartners name, though individual clinics would keep the Essentia name until "sometime in the future," according to Herman.
Walsh will serve as CEO, while Herman would shift to a new role as president of clinical care group operations.
Walsh said the decision comes at a "turning point" for the Minnesota healthcare industry.
"We can combine complementary strengths to improve health experience, affordability and quality," she said, "and to navigate some of the industry trends that are a challenge not just in Minnesota but across the nation."
The merger follows a trend of large-scale healthcare consolidation in Minnesota. Sanford Health acquired Robinsdale-based North Memorial Health last month, while Sutter Health announced an acquisition of Minneapolis-based Allina Health in March.
Essentia previously attempted to create a $1 billion "all-Minnesota" healthcare solution with the University of Minnesota and Fairview Health Services before bowing out in September 2025.
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The merger would also combine HealthPartners and Essentia's insurance businesses. HealthPartners currently insures about 1.6 million people. Essentia does not offer insurance plans, though it has a company-specific plan with Medica.
Herman said having both healthcare and coverage under one company "provides more surety" for patients.
"One of the things our patients complain about is the friction between the health plan and the care delivery services," he said. "To the extent that we can get under the hood on that and be able to get those together, we know they will benefit and likely reduce their cost of care."
Per Minnesota law, state attorney general Keith Ellison requested public comment on the Essentia-HealthPartners merger, which he will review in the next few months as part of a larger anti-trust investigation.
The attorney general does not directly approve or reject mergers, but Ellison can submit court actions to block mergers that are not in the public interest.
The public can submit to a community input form on the Minnesota attorney general website.
Nurses raises ‘serious concerns’
The Minnesota Nurses Association questioned the merger in a statement Tuesday, calling for "close scrutiny" about the merger's effects on healthcare workers and patients.
Chris Rubesch is the president of the MNA and works as a nurse for Essentia Health.
He argued that combining healthcare and insurance companies can create a monopoly.
"That total monopoly can be very risky for your access to care, for the costs you're going to pay," he said.
Rubesch also said rural communities may be particularly affected by the merger since they tend to be less profitable.
"As corporations get larger and larger, it gets easier and easier to cut services at facilities and close facilities entirely that appear to be not profitable," he said.
According to the nonpartisan Center for Rural Policy and Development, healthcare mergers do typically provide bigger patient pools and more access to capital to rural areas. However, research shows the mergers also tend to eliminate oversight, lower salaries and cause the relocation of services.
Nurses at Essentia and HealthPartners facilities learned about the merger through the public announcement, according to the union.
Mary Siedchlag is a nurse at HealthPartners and serves as the co-chair of the Methodist Hospital Bargaining Unit. She stated in the MNA release that the lack of communication was "deeply concerning" and "demonstrated disregard for frontline healthcare workers."
"If HealthPartners expects nurses to believe this acquisition will improve healthcare, it needs to start by giving the people who provide that care a meaningful voice in decisions that will affect our patients and our workplaces," Siedschlag stated.
In its statement, the union called for a "thorough and transparent review" of the merger and any potential effects on both healthcare workers and patients. The union also asked the companies to provide financial transparency and make legally binding commitments protecting union workers.
When asked about the union's statement, Walsh said her company understood the importance of hearing out union members and emphasized that HealthPartners has "strong union relations."
Herman added both companies have agreed to honor existing bargaining agreements and retain their relationships with the union.
"If they have specific questions about how things should work and how things should go forward," he said, "we look forward to sitting down and discussing those."
