Merger reshapes healthcare in Dakotas
After four months of discussion, South Dakota-based Sanford Health and the North Dakota-based MeritCare Health System have announced plans to merge, creating one of the country's largest integrated healthcare systems.
After signing a Letter of Intent to merge, Sanford and MeritCare will now seek input from physicians, employees and people in the communities served by the two organizations.
Proponents of the merger argue that a unified system would expand services and access to care in the region. Both organizations plan to work into the fall to develop a final agreement and any necessary regulatory applications to create the new organization.
"With the current emphasis on healthcare reform calling for positive action, it is the perfect time to together pursue how we could grow and improve our services and expand our research and education capabilities as a shared mission," said Barb Stork, chairman of the Sanford Board of Trustees.
MeritCare is North Dakota's largest health system, with sites in North Dakota and northwest Minnesota. Sanford Health is comprised of Sanford USD Medical Center and a network of community hospitals and clinics in South Dakota, southwest Minnesota, northwest Iowa and northeast Nebraska.
"Becoming a larger system is simply building on the depth and range of two already large organizations," said Kelby Krabbenhoft, Sanford’s president and CEO. "Together, we would grow and improve the delivery of medicine, deliver on the promise of results in research and deliver on the promise of medical and health education."
MeritCare President and CEO Roger Gilbertson, MD, said the union of Sanford and MeritCare would significantly advance the service sophistication of the organizations as well as promote economic development in the communities served by the two systems.
If the merger were approved, Krabbenhoft would assume the role of CEO for the new health system. One of his early priorities would be to recommend, for board approval, a new president for the Fargo Sanford MeritCare operations, as Gilbertson plans to retire after more than 17 years as president and CEO of MeritCare.
Bruce Morgan, a principal with Deloitte Consulting, said affiliation would create growth opportunities that would facilitate the development of health services not currently offered by either organization.
Morgan said the size of a new organization would provide a stronger financial position to pursue strategic initiatives through economies of scale and enhanced access to capital.
"With a six-state presence and premier medical centers in adjacent but distinct geographic regions, the combination of MeritCare and Sanford Health would create a new health organization," he said. "It would have the ability to increase the level and efficiency of healthcare delivery for a very broad population in large contiguous service areas and expand research activities and education programs for further health improvements."
Morgan said a combined organization would accelerate the expansion of health plan products into a broader market area and help mitigate the out-migration of patients to other markets.
