Marshfield Clinic plans to merge with Sanford Health. What you should know about the South Dakota-based health system.

Sanford Health announced Wednesday the potential of merging with a physician-led integrated health system serving rural Wisconsin and Michigan’s Upper Peninsula, Marshfield Clinic Health Systems.

This is Sioux Falls, South Dakota-based Sanford’s fifth attempt at merging with another health care system, four of which fell through, within the last seven years, another chapter in Sanford’s drive to expand. Sanford currently serves communities in South Dakota, North Dakota, Minnesota and Iowa.

This time is different, according to Sanford's Director of Media Relations Paul Heinert and Marshfield's Senior Media Relations Specialist Jeff Starck.

Heinert and Starck said both parties are “extremely optimistic” and “the time is right,” citing the two health systems’ shared values, culture and visions for the future.

“We are excited to combine our common purpose to lead the way for the future, drive innovation and solve the most pressing challenges facing rural health care,” said Bill Gassen, president and CEO of Sanford Health. “We are who we are today because of combinations with care delivery organizations in rural communities across America’s heartland. These opportunities have allowed us to follow through on our promise to deliver world-class health care to every patient we serve no matter their ZIP code, and we are eager to continue building on this track record with Marshfield Clinic Health System.”

Interim CEO of Marshfield Clinic Health System Brian Hoerneman, M.D., echoed this, stating the partnership “presents an incredible opportunity for our organizations to unify and establish the premier rural health system in the nation.”

More about the Marshfield Clinic merger: What we know and don't know about the proposed merger between Marshfield Clinic Health System and Sanford Health

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What will happen if the merger is successful?

Upon completion of the merger, Marshfield will become another region within Sanford Health’s footprint with Gassen serving as president and CEO of the combined system and headquarters remaining in Sioux Falls.

Marshfield’s medical campus will maintain its regional leadership and Hoerneman will fulfill the role of president and CEO of the Marshfield region.

Sanford Health and Marshfield Clinic Health System have announced a nonbinding Memorandum of Understanding to combine...

Posted by Sanford Health on Wednesday, July 10, 2024

The next phase, according to Heinert and Starck, is to begin working on a “definitive agreement” that will define how the two health systems will combine into one organization.

Sanford's press release on Wednesday disclosed “a nonbinding Memorandum of Understanding to combine their complementary assets and capabilities and create an integrated health system dedicated to advancing world-class care in the rural Midwest.”

Marshfield, an integrated health system that began in 1916, has more than 1,400 providers of 170 different specialties, a health plan and research and education programs. The health system cares for patients at more than 60 clinics and 11 hospitals, as well as the Marshfield Children’s Hospital, in a total of 45 communities. More than 12,000 employees are employed by Marshfield.

Combined, Sanford Health and Marshfield would have more than 56,000 employees, 56 hospitals, 4,300 providers, two integrated health plans, specialty pharmacies and nationally recognized research institutions.

The integration of the two health care systems is expected to close by the end of this year.

What happens until the merger is complete?

Heinert and Starck said that until the merger is final, Sanford Health and Marshfield will “remain separate organizations and will keep operating business as usual, with no plans for any changes.”

“Expanding their employee base” is their goal according to Heinert and Starck. In other words, no layoffs for now.

The merger, according to Sanford's press release on Wednesday, should improve patient outcomes, provide more advanced technology such as virtual care, AI and genomic medicine, expand research capabilities, which include access to nearly 1,000 active clinical trials and studies to develop new treatments and patient cures, invest more in clinical needs, enhance training and support for future physicians and caregivers and create new opportunities for research and collaboration, peer networks and professional development.

The two organization’s respective health plans, Sanford Health Plan and Security Health Plan, will allow the fully integrated system to serve more than 425,000 members, maximizing the benefits it can deliver to patients and members through shared governance, according to Sanford’s press release Wednesday.

Best (and worst) of times

As for Sanford's past merger history, here's a closer look at the health care nonprofit's previous attempts and successes:

In March 2017, the Good Samaritan Society National Campus in Sioux Falls laid off more than 100 positions . A little more than a year later in June 2018, Sanford announced the health care system would acquire the Society effective Jan. 1, 2019.

During this time, another Sanford merger was announced in October 2016 with Mid Dakota Clinic , which served the Bismarck-Mandan, North Dakota, area. However, in June 2019, the deal fell through after the Federal Trade Commission and the North Dakota Attorney General’s Office objected and the merger was blocked by a judge.

In the same month, Sanford was also pursuing another health care system, UnityPoint Health, one of Iowa’s largest health providers. By November 2019, UnityPoint Health “abandoned Sanford Health at the alter” due to contrasting structures and cultures.

A year later, Sanford Health began negotiations with Utah-based health care system Intermountain Healthcare in October 2020 . Not even two months later, this plan also fell through following longtime former CEO Kelby Krabbenhoft’s sudden resignation in November 2020.

The Sanford Health Board of Trustees appointed Gassen as the organization’s new president and CEO shortly after.

In October 2022, Sanford announced a number of nonclinical staff reductions to “streamline leadership structure and simplify operations in a few focused areas.”

The following month, Minneapolis-based nonprofit Fairview Health Services and Sanford announced plans to combine to “better serve the rural, urban and Indigenous populations across the Midwest.” This was Sanford’s second attempt to pursue Fairview Health, with the first being in 2013 .

Alas, Minnesota officials, attorneys and residents all protested the deal in 2013, forcing then-CEO Krabbenhoft to walk away. History repeated itself in July 2023 when current Sanford CEO Gassen stated in a press release it was in “the best interest of Sanford Health to discontinue the merger process.”

Marshfield Health is also just coming out of a rough patch with Duluth, Minnesota-based Essentia Health. In July 2023, the two health systems announced a proposed merger by signing an integration agreement. This January, the two called it quits citing Marshfield’s “financial challenges,” saying it just wasn’t the right time.

Looking ahead

With the newly proposed marriage of Sanford Health to Marshfield Clinic Health Systems, the two organizations seem to be moving on with hope.

On behalf of both Sanford and Marshfield, Heinert and Starck said as collaboration and partnerships become more common, the organizations are confident their aligned missions and commitment to rural health will “transform the future of health care and positively impact the well-being of the patients, residents, health plan members and communities we serve for decades to come.”

This article originally appeared on Sioux Falls Argus Leader: Marshfield Clinic plans to merge with Sanford Health. What you should know about the South Dakota-based health system.