North Memorial and South Dakota-based Sanford Health merging

Three years after a deal with Fairview was called off, South Dakota-based Sanford Health is getting into the Twin Cities market with a new merger.

On Friday, the health system announced that it will combine with North Memorial Health.

Fairview, Sanford call off planned merger

Under the merger, Sanford says the organization will invest $600 million to strengthen the Robbinsdale hospital and double the Maple Grove hospital’s size.

Sanford is the largest rural nonprofit health system in the country, with 58 hospitals and roughly 56,000 employees across the Dakotas, Iowa, Wisconsin, Wyoming and the Upper Peninsula of Michigan. North Memorial operates two hospitals in Robbinsdale and Maple Grove, along with several other clinics, employing more than 6,500 people.

If completed, the health systems plan to keep some local leadership in place, including North Memorial CEO Trevor Sawallish, and two North Memorial board members will serve on the combined system’s board. However, the overall company will be led by Sanford CEO Bill Gassen.

The companies say they expect the merger to close later this year, as long as regulatory processes don’t cause delays.

Sanford’s previous attempt to merge with Fairview was called off in 2023, eight months after initially announcing the planned merger. Many Minnesotans raised concerns about that transaction, including Minnesota Attorney General Keith Ellison, although some of that was due to the University of Minnesota’s partnership with Fairview and the possibility of an out-of-state company running the state’s flagship medical school.

As with most mergers, concerns are still likely to arise about possible cutbacks and the impact on the state’s healthcare quality. However, the deal seems more likely to be completed than Sanford’s past attempts.

Reaction

SEIU Healthcare Minnesota & Iowa, who represents over 1,000 workers at North Memorial, called the news “worrisome.”

“At a time when healthcare costs are skyrocketing for Minnesota families and frontline healthcare workers are getting squeezed by short staffing levels, this latest attempt at consolidation brings many concerns. It is especially concerning because previous merger attempts by Sanford Health to come into Minnesota have failed due to their values and corporate behavior,” the union said.

SEIU also called on Ellison “to use all of his office’s powers within the law to provide oversight into this proposed merger and ensure the interests of Minnesota’s workers and patients are protected.”

Ellison’s office is asking the public to submit information through an online Community Input Form.

“As we have done and are currently doing with other healthcare transactions, we are conducting a thorough review of this potential acquisition to ensure it complies with the law and is in the public interest,” Ellison daid. “Proposed health care consolidation requires careful examination. As long as I am Attorney General, I will use the full range of regulatory tools to protect Minnesotans’ access to quality, affordable healthcare.”

The Minnesota Nurses Association released a statement saying it is “deeply concerned” by the merger announcement, warning it “could have far-reaching consequences for patients, healthcare workers, and the communities they serve.”

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