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Midwest systems, Sanford and UnityPoint Health, announce merger

The combined company would have 76 hospitals in 26 states and nine countries.

Susan Morse, Senior Editor

UnityPoint Health and Sanford Health in the Midwest have signed a letter of intent to merge for a combined company of 76 hospitals worth more than $11 million in operating revenue.

The new company would rank among the top 15 largest nonprofit health systems in the country, the providers said. The deal is expected to be completed, pending regulatory review, by the end of 2019.

It would be led by Sanford CEO Kelby Krabbenhoft and Kevin Vermeer, president and CEO of UnityPoint. Krabbenhoft would serve as president and CEO, and Vermeer would serve as senior executive vice president.

Both organizations would continue to operate their respective medical groups and relationships with independent physicians, hospitals and other healthcare partners.

A new governing board would be established, made up of representatives from both legacy organizations, plus additional members who have relevant national industry experience and expertise. UnityPoint Health would recommend the inaugural board chair.

IMPACT

The horizontal merger creates an organization that employs more than 83,000 staff and 2,600 physicians and has operations in 26 states and nine countries. This includes hospitals, clinics, health plans and networks, post-acute care, research, innovation and other lines of business.

The two organizations would have combined strength in clinical care, research, innovation and education to deliver greater health outcomes and value in communities in the Midwest and around the world, they said.

TREND

Mergers have formed regional health systems where previous expansion may have been limited. Strong operational capabilities or innovative clinical care models can be exported to a new market. Larger systems also have better bargaining power and the strength to fend off market disruptions.

"Sanford and UnityPoint are two successful systems intent on controlling our own destiny," Krabbenhoft said. "We believe that in the very near future, fully integrated health systems will drive greater value through affordable options for high-quality health care to patients, governments and employers."

UnityPoint Health in Des Moines, Iowa, is an integrated health system made up of 32 hospitals, providing care in Iowa, western Illinois and southern Wisconsin.

Headquartered in Sioux Falls, South Dakota, Sanford Health is an integrated organization that includes 44 hospitals in 26 states and nine countries.

ON THE RECORD

"We will work tirelessly to find the next cures for diseases like Type 1 diabetes and breast cancer; train and grow our own physicians, nurses and other medical professionals who commit to providing care in rural America; and offer innovative health and wellness products and telemedicine services to help people live better, get care closer to home and stay healthier,"  Krabbenhoft said.

"As trusted healthcare brands with deep Midwestern roots, our organizations have worked hard to establish strong relationships in the communities we serve, whether that be a small rural town or a location across the globe,"  Vermeer said.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com