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Sanford Health Inks Deal With Minnesota's NCHS

 |  By John Commins  
   February 28, 2011

North Country Health Services in Bemidji, MN, and Dakotas-based Sanford Health have signed an affiliation agreement that will create Sanford Health of Northern Minnesota on March 1. As part of the affiliation, Sanford will invest $70 million in resources over the next ten years and will immediately make a $5 million gift to the NCHS Foundation, the two healthcare systems said Friday in a joint announcement.

NCHS and Sanford Bemidji Clinic said the affiliation is the "first step" in the integration of the two Bemidji-based organizations to provide coordinated care for patients close to home. Plans are underway to expand service lines for heart, cancer, orthopedics & sports medicine, women's health, and research and education. The affiliation is also expected to help with clinician recruiting.  

In fact, 58% of recently polled rural health leaders named cardiology and oncology as their top targets for service line expansion.

 "A yearlong evaluation process revealed many ways for us to better serve the region together as an integrated provider," said Kelby Krabbenhoft, CEO of Sanford Health. "We will combine the resources of a strong regional healthcare institution and a multi-specialty physician clinic, together with the Sanford Health System, to offer more primary and specialty care services and new programs in research and education.  Our goals were the same -- to make Bemidji a regional referral center in northern Minnesota and this merger will enable us to do so."

Sanford Bemidji will consist of Sanford Bemidji Medical Center and Sanford Bemidji Clinic and will operate under the legal name of Sanford Health of Northern Minnesota, based in Bemidji. Sanford Bemidji will serve as the regional hub for Sanford Health in northern Minnesota.

The existing board at NCHS will comprise the new Sanford Bemidji Board of Directors, using the same corporate structure as other Sanford hospitals such as Sanford USD Medical Center, and Sanford Fargo Medical Center.

"Both NCHS and Sanford Bemidji Clinic have deep roots in this region as well as a legacy of community service," said Paul Hanson, president/CEO of NCHS.  "At a time of great change in healthcare, we see this affiliation as an opportunity to grow and provide quality healthcare to the people of this region now and for years to come."

NCHS has more than 900 employees with 25,000 emergency visits, 5,500 acute admissions and 1,000 births per year. NCHS opened in 1898 and is an acute care hospital serving a region of approximately 100,000 people in northern Minnesota. It has 80 acute hospital beds, 16 acute rehabilitation beds, 12 acute geriatric psychiatric beds and 78 skilled nursing home beds; 120 assisted living apartments including a distinct dementia unit; a durable medical equipment company; a Class A licensed homecare agency and Medicare certified hospice program.

Sanford Bemidji Clinic has 75 physicians, 15 mid-level providers and 550 employees. Sanford Health is an integrated health system headquartered in Fargo, ND and Sioux Falls, SD and consists of two long-standing organizations that merged in 2009. Sanford is now the largest, rural, not-for-profit healthcare system in the nation with a presence in 111 communities in eight states.

Sanford Health includes 31 hospitals, 111 clinic locations and more than 800 physicians in 70 specialty areas of medicine. With more than 19,000 employees, Sanford Health is the largest employer in North and South Dakota.

Both health organizations said the affiliation would create more healthcare-related jobs, rather than layoffs, as the full integration of the systems continues over many months.

Will Sanford Health Plan be offered in Bemidji?

The Sanford Health Plan is currently the second largest commercial health insurer in South Dakota, covering more than 65,000 lives. Recently it was introduced in North Dakota and it is currently available in southwest Minnesota. Work is being done so we can offer both group and individual policies in northern Minnesota in the future. This is subject to regulatory approvals. In the meantime, Sanford Health Plan is available to all Sanford Health employees.

How will Mr. Sanford's gift be used in this new health system?

Mr. Sanford's gift of $400 million is being used for clearly defined Sanford Health Initiatives: The Sanford Project – a quest to cure Type 1 diabetes, Sanford Children's Clinic development around the world and a multitude of other research development projects. His most recent gift of $100 million will be used for advancement of breast cancer research and treatment. These initiatives will be part of the new integrated health system (including NCHS).

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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