SALT LAKE CITY — Intermountain Healthcare announced Monday that it plans to merge with Midwest health care system Sanford Health in an effort to create a “model” for the country and improve health outcomes across the West.
“These are two great organizations with strong histories that are financially and clinically very strong. This is not something that should happen. This is not a reversal, this is something that needs to happen for the future of American healthcare,” said Dr. Marc Harrison, CEO and president of Intermountain Healthcare.
He called the merger between the two systems that were both originally founded by religious groups — Intermountain by the Church of Jesus Christ of Latter-day Saints and Sanford by the Lutherans — “a match made in heaven.”
The health care industry is “plagued” by issues such as waste, poor public health outcomes and expensive care that drive Americans to rations and medicine, according to Harrison.
“We believe the antidote to this is a system at scale in the inland western United States that is based on population health, value and affordability and the people we are privileged to serve,” Harrison said during a news conference. which announced the merger.
Sanford Health is headquartered in Sioux Falls, South Dakota. Intermountain Healthcare is headquartered in Salt Lake City and has hospitals around the Intermountain West.
Intermountain Healthcare employs more than 41,000 people and has 23 hospitals and one virtual hospital in Utah, Idaho and Nevada. Sanford Health has 46 hospitals in 24 states and employs 48,000 people.
Last week, the boards of both companies voted unanimously to join. A review of the regulatory process will now begin and the companies aim to merge in mid-2021.
Harrison and Kelby Krabenhoft, president and CEO of Sanford Health, were introduced in April by former Utah Gov. Mike Levitt, who said Krabenhoft is one of his advisers. He said they realized they shared a “common view of the future” within minutes of meeting.
“We have a mandate, Marc and I, and that is to streamline, to understand large areas of the country and large populations in terms of how we deliver health care because people are so mobile today and they expect to be able to move around with health insurance care and with the health care providers traveling with them,” said Krabbenhoft.
“Such large geographies are now just a very common sense, very rational way for healthcare organizations to talk to each other because we have to. This is what our populations demand,” he said.
Harrison said the planned merger will not affect Intermountain's existing workforce.
“Their daily life should not change at all. They will have to continue to work while we do our work around due diligence and negotiations to get to the starting point, but (Sanford Health) has the time and attention of their leadership and they have all the resources they need,” he said Harrison. explaining that neither system needs financial assistance from each other.
Krabbenhoft said he would imagine “growth and opportunity” would be more likely when the merger goes through, rather than possible layoffs.
The pandemic has brought to light the importance of collaboration between health care systems, Harrison noted, as Intermountain has partnered with University of Utah Health to combat COVID-19.
“And I look forward over the years to having the Sanford part of the system and the Intermountain part of the system … working together on any number of problems,” Harrison said.
Intermountain Healthcare will serve as the parent company of the two organizations, with headquarters remaining in Salt Lake City. Sanford Health will retain its name for its eastern hospitals.
The boards of both companies will merge “pretty much as they exist now,” Krabbenhoft said, with Gail Miller remaining as board chair.
“She's an incredible entrepreneur and accomplished matriarch of her family, and someone we're really excited about,” Krabbenhoft said. A Sanford board member will follow later as board chairman, he said.
Harrison will remain chairman and CEO, with Krabenhoft supporting him through the merger until his retirement in about two years, Krabenhoft said.
Intermountain Healthcare began in 1974, when the Church of Jesus Christ donated 15 hospitals to the community with the condition that a nonprofit organization be formed to operate them. Sanford Health's first hospital was founded by a board of Lutheran clergy and physicians in the late 1800s before receiving its current name in 2007.
