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Midwest Health Systems Announce Merger Plans

Analysis  |  By Melanie Blackman  
   November 15, 2022

Sanford Health and Fairview Health Services have signed a letter of intent to combine into a single health system.

Midwest nonprofit health systems Sanford Health and Fairview Health Services announced today that they have signed a non-binding letter of intent to combine and create a new health system.

The merger will bring together the Sioux Falls, South Dakota-based health system and the Minneapolis, Minnesota-based systems to combine their experience serving rural and urban populations, and hope to provide accessible and equitable healthcare, accelerate population health and value-based care, and drive clinical innovation for rural, urban, and indigenous communities across the Midwest.

The organizations will sign a definitive agreement and following antitrust review, hope to close the deal in 2023. Following the close of the deal, the name of the parent company will be Sanford Health. The health systems will remain as nonprofit organizations, each with their own regional presence, and they will have their own leadership and regional boards within the markets they serve.

Bill Gassen, who currently serves as president and CEO of Sanford Health will serve as president and CEO of the combined system, while Fairview Health Services CEO, James Hereford, will serve as co-CEO for a year following the finalized transaction.

Sanford Health, which is the largest rural health system in the country, serves more than one million patients and 220,000 health plan members and has 47 medical centers across South Dakota, North Dakota, and Minnesota. Fairview Health Services, one of the most geographically accessible health systems in Minnesota, and has 11 hospitals, more than 80 primary and specialty care clinics, and numerous other facilities.

Together, the combined system will have 56 hospitals, 600 care sites, an established health plan, a specialty pharmacy and pharmacy benefit manager, and growing Medicare Advantage options.

"Our organizations are united by a shared commitment to advance the health and well-being of our communities," Gassen said in a statement. "As a combined system, we can do more to expand access to complex and highly specialized care, utilize innovative technology and provide a broader range of virtual services, unlock greater research capabilities and transform the care delivery experience to ensure every patient receives the best care no matter where they live."

"With Sanford Health, Fairview Health Services has found a partner that shares our Midwestern values and our commitment to affordable, accessible and equitable care delivery," Hereford said in a statement. "Our complementary capabilities mean that together, we are uniquely positioned to improve clinical outcomes, develop new care delivery models, expand opportunities for employees and clinicians across our broader operational footprint, and apply our combined resources to positively impact the well-being of our patients and communities today and for decades to come."

What are the benefits of this deal?

According to the FAQ page about the deal, the merger will have many benefits for both organizations, their patients, and their employees.

  • The combined system will create more patient access to care, including specialized medical care such as advanced diagnostics and treatments, complex surgeries, and nationally ranked subspecialties, and increase access to innovative behavioral health services
  • Patients will have an increase in access to virtual care capabilities, including the integration of novel technology and leading-edge innovation
  • Patients will also have more access to accelerated population health and value-based care
  • Clinicians will have more access to resources, collaboration opportunities, and a more robust peer network
  • Employees will have new opportunities for career growth and professional development, training, and geographic mobility

Melanie Blackman is a contributing editor for strategy, marketing, and human resources at HealthLeaders, an HCPro brand.

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