South Dakota-based Sanford Health and Minnesota-based Fairview Health Services unveiled plans Tuesday to merge and create a 58-hospital stronghold that would serve rural and urban patients across the Midwest.
Non-profit organizations have signed a non-binding letter of intent as they proceed with due diligence and regulatory antitrust reviews; they said in a press release. Each would retain its own regional presence, leadership and regional boards, but operate as a single integrated system under the Sanford Health brand.
The organizations said they expect to close their deal sometime next year.
“Our organizations are united by a shared commitment to advancing the health and well-being of our communities,” Sanford Health President and CEO Bill Gassen said in the release.. “As a combined system, we can do more to expand access to complex and highly specialized care, use innovative technology and provide a wider range of virtual services, unlock greater research potential and transform the care delivery experience to ensure that every patient receives the best care no matter where they live.”
Gassen is set to serve as chairman and CEO of the new entity should the merger be completed, while Fairview CEO James Hereford will serve as co-CEO for a year after the deal closes.
Based in Sioux Falls, Sanford Health describes itself as the nation's largest rural health system with nearly 48,000 employees, 47 medical centers, 224 clinics and hundreds of other facilities. It serves more than 1 million patients and 220,000 health plan members, according to its website, and annually records 5.2 million outpatient or clinic visits, nearly 83,000 admissions, about 128,000 surgeries and procedures and about 195,000 emergency room visits.
Minneapolis-based Fairview Health Services employs 31,000 people at 11 hospitals as well as dozens of clinics, pharmacies and other facilities. It has a network of more than 5,000 doctors after merging a few years ago with fellow Twin Cities HealthEast system and thanks to partnerships with University of Minnesota health experts.
The two systems said their planned merger will improve quality of care, outcomes, patient experience and health equity in their patient populations. The new efficiencies will also help the systems deliver more affordable care, they noted, while their workforces will benefit from stronger recruitment and development opportunities.
“With Sanford Health, Fairview Health Services has found a partner who shares Midwestern values and our commitment to providing affordable, accessible and equitable care,” Hereford said in the release. “Our complementary capabilities mean that together, we are uniquely positioned to improve clinical outcomes, develop new models of care delivery, expand opportunities for employees and clinicians across our broader operational footprint, and use our combined resources to to positively impact the well-being of our patients and communities today and for decades to come.”
This isn't the first merger rodeo for the two systems. An earlier attempt was torpedoed by Minnesota's attorney general nearly a decade ago over concerns about the University of Minnesota's teaching hospital.
Sanford and Fairview's second push lands about six months after Advocate Aurora Health and Atrium Health announced their own nonprofit megamerger. That deal continues to go through necessary regulatory hurdles and, if it closes, would result in a 67-hospital with strong presences in the nearby Chicago and Milwaukee markets.
Additionally, in 2022 it closed the 33-hospital Intermountain Healthcare and SCL Health system in the Rocky Mountain region and the 22-hospital Beaumont Health and Spectrum Health system in Michigan.
