IHC to merge with Midwest's Sanford Health

Salt Lake City-based Intermountain Healthcare has announced plans to merge with Sanford Health, one of the nation’s leading systems in rural healthcare delivery and clinical research, based in Sioux Falls, South Dakota.

“Intermountain and Sanford have a shared vision of the future of healthcare and have the aligned values needed to better serve more communities across the nation,” said Dr. Marc Harrison, president and CEO of Intermountain Healthcare, in a joint virtual news conference last week with Kelby Krabbenhoft, Sanford president and CEO. “This merger enables our organizations to move more quickly to further implement value-based strategies and realize economies of scale. Through coordinated care, increased use of telehealth and digital health services, we will make healthcare more affordable for our communities.” 

In the press event, both Harrison and Krabbenhoft expressed expectations that the new merger will reduce people’s healthcare costs and monthly insurance premiums and will be a healthcare “beacon and a model” for people in the regions the two systems serve. They said that the two organizations have “a cultural match that is really quite powerful.”

Harrison called the merger between the two systems “a match made in heaven.” Both were originally founded by religions. Intermountain was launched in 1974 by The Church of Jesus Christ of Latter-day Saints and Sanford was organized in the late 1800s by a group of Lutheran clergy and doctors.

“For more than two decades, we’ve been focused on good growth, with the goal of driving innovation and bringing more affordable and accessible healthcare to the communities we serve,” said Krabbenhoft. “Today, we’re marking another major milestone in our long history of working to change the course of healthcare across the globe. By coming together with Intermountain Healthcare, we will improve the health and well-being of the communities we serve and strengthen our impact in healthcare delivery and value.”

The two system leaders said that boards of both not-for-profit organizations unanimously approved a resolution to support moving forward by initiating the due diligence process. The organizations will enter this phase with a goal to sign a merger agreement that will bring both health systems together as a model for improving access to high-value healthcare across the U.S. The merger is expected to close in 2021, pending federal and state approvals.

The combined organization will employ more than 89,000 people and operate 70 hospitals, many in rural communities. It will operate 435 clinics across seven states, provide senior care in many locations in 24 states and insure 1.1 million people. Intermountain brings 24 hospitals, 225 clinics and about 41,000 employees in the Intermountain West to the new organization while Sanford contributes 46 hospitals and 48,000 employees in mostly midwestern states. Sanford also operates 366 Good Samaritan Society senior care and living centers.

Harrison will be president and CEO of the combined organization while Krabbenhoft will become president emeritus. Both organizations will continue to operate under their current names for the foreseeable future. Headquarters for the combined operation will be in Salt Lake City with a second corporate office in Sioux Falls.

Existing boards of trustees members from both systems will join to form a combined board. A new executive committee of the board will be created with equal representation from members of the Intermountain and Sanford Health boards. Gail Miller, chairwoman of the Larry H. Miller Group of Cos. in Salt Lake City and current chair of the Intermountain board, will serve as board chair for the merged organization.

When Harrison was asked if the merger would affect the Intermountain Healthcare workforce, he said that it would not. “There is no anticipation that it will affect the Intermountain workforce. With respect to the physicians fighting the pandemic, their day-to-day will not change at all. They will keep working as we do our work to get to the starting line of the merger,” he said.