Sanford Health, Fairview Health Systems Plan to Form Integrated Health System

Sanford Health and Fairview Health Services have signed a letter of intent to form an integrated health system that aims to improve access to quality care for rural and urban populations.

“Our organizations are united by a shared commitment to advance the health and well-being of our communities,” Bill Gassen, president and chief executive officer (CEO) of Sanford Health, said in the press release.

“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.”

Sanford Health, headquartered in Sioux Falls, South Dakota, is the largest rural health system in the United States. The organization consists of 47 medical centers, 2,800 physicians and advanced practice providers, and 170 clinical investigators.

The health system provides care for more than one million patients and 220,000 health plan members across 250,000 square miles.

Minneapolis-based Fairview Health Services is a nonprofit health system providing care to Minnesotans, primarily in urban areas. The health system includes 31,000 employees across 11 hospitals, over 80 primary and specialty care clinics, 36 retail and specialty pharmacies, rehabilitation centers, and long-term care facilities.

The non-binding letter of intent signifies the organizations’ goal to merge and create a new health system, combining Sanford Health’s experience caring for rural populations and Fairview Health Services’ experience with urban communities.

According to the health systems, the new entity will provide rural, urban, and Indigenous communities across the Midwest with access to high-quality, equitable healthcare. In addition, the integrated health system will accelerate value-based care, improve population health, and drive clinical innovation, the organizations said.

“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,” James Hereford, president and CEO of Fairview Health Services, said.

“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.”

Additionally, the merged health system aims to improve the patient experience, support affordable care within its communities, advance employee growth, and boost staff recruitment and retention.

Sanford Health and Fairview Health Services will remain nonprofit entities and will each have their own regional presence, leadership, and regional boards in their markets.

After the transaction closes, the parent company will be named Sanford Health. Gassen will serve as the president and CEO of the merged entity, while Hereford will serve as co-CEO for one year post-closing.

The health systems’ governing boards have approved advancing to the next steps for the merger. The organizations plan to sign a definitive agreement and complete the transaction in 2023, pending antitrust and other regulatory reviews.

The deal follows several unsuccessful merger proposals for Sanford Health.

In November 2019, Sanford Health and UnityPoint Health called off their merger deal to create an $11 billion integrated system across 26 states and nine countries.

In addition, after announcing plans to merge with Intermountain Healthcare in October 2020, Sanford Health abandoned the deal just a month later in December. The decision came as the organization experienced a leadership change, with Gassen taking over the CEO position from Kelby Krabbenhoft.