Here's what we know about the potential Sanford, Fairview Health merger (2024)

Sanford Health announced Tuesday it plans to merge with Fairview Health Services, a Minneapolis-based health system.

This merger would affect thousands of patients across the Upper Midwest and across the country.

However, this is not the first time the two organizations have expressed an intent to combine, the other time occurring in 2013. But public opposition led the deal to fall through, and already, people have voiced concerns about a merger this time around.

Pending reviews, the two systems hope to reach an agreement and close the deal sometime in 2023.

Here’s what we know so far about the potential Sanford/Fairview merger and how it would affect employees and patients from both organizations.

Earlier:Sanford Health announces plans to merge with Minneapolis-based Fairview Health

How and where the new system will operate

The new health system will be headquartered in Sioux Falls, while maintaining a strong corporate presence in the Twin Cities area, and Sanford CEO Bill Gassen will serve as the system’s CEO and president.

Fairview CEO James Hereford will serve as Co-CEO the first year, post-closing.

At this time, it has not been determined who will make up the combined system’s Board of Trustees and how it will operate. But both Sanford and Fairview Health will remain nonprofit entities and retain their own regional presence, leadership and boards.

What is the service area and who will be affected?

Sanford Health is the country's largest rural healthcare system, serving more than one million patients worldwide. The provider covers an area of 250,000 square miles across 47 medical centers, 200 Good Samaritan Society senior care fasciitis and clinics in eight different countries.

A merger with Fairview would help the company break into its first metropolitan market in the United States.

Fairview Health Services is a nonprofit health system that was founded in 1906.

Earlier:Minnesota Attorney General opens investigation into Sanford, Fairview Health merger

It is part of the M Health Fairview system, which includes the University of Minnesota and the University of Minnesota Physicians. The system includes 31,00 employees across 11 hospitals, 80 clinics and 36 other medical facilities in the Twin Cities metro area.

The AP News reported the new combined system would include nearly 80,000 employees across over 50 hospitals and other medical facilities.

Virtual care, accessibility and what a merger means for patients

Until the transaction closes, Sanford Health and Fairview Health Services remain separate organizations and will continue to operate business as usual for the patients and communities they serve.

“We look forward to coming together as a combined system to expand access to advanced diagnostics and treatments, complex surgeries and nationally ranked subspecialties, including cancer care,” Gassen said.

Virtual health care and using new technology will also be a big part of the new system, he said.

“We are excited about what our landmark $350 million virtual care initiative will mean for the communities we have the privilege of serving,” Gassen said. “But we're even more excited to think about what we can do together with Fairview's expertise and access to specialists as we reimagine how we deliver care.”

He said the goal of the merger is to make care more convenient, affordable and consumer-centric in a way that will benefit patients in underserved areas of the community, and that can be done with wider access to virtual care.

“The future of health care is about making sure that we are bringing care to the patient as opposed to bringing the patient to us,” Hereford said.

Neither Sanford nor Fairview would disclose the financial terms, and it is unclear if the merger will increase patient costs.

Nurses, general public voice concerns over merger

One concern from the public is that the merger would result in staff layoffs, especially considering Sanford Health announced via an email in October that it would lay off an undisclosed number of non-clinical staff. However, in that same email, Gassen said the company had 6,000 open positions at the time.

In regard to the merger, Sanford and Fairview said that by coming together, there will be “broader career opportunities across areas” where the two systems operate, though no other details were determined at this time.

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But already, at least one group – the Minnesota Nurses Association – has publicly opposed such mergers this time around and asked for a “seat at the table” during negotiations.

The association released a statement, citing financial misgivings from both health systems and voicing concerns that corporate expansions and monopolies will become a priority above patient care.

Fairview Health Services said it will “continue to bargain in good faith until an agreement is reached.”

Why a previous merger attempt fell through

Similar merger talks between Sanford and Fairview occurred nearly a decade ago in 2013, according to AP New, but pushback and criticism from Minnesota’s former attorney general, legislators and others led former Sanford CEO Kelby Krabbenhoft to walk away from the deal.

Asked why a deal was attempted again now, Hereford said he thinks the change in conditions will lead to a different, better outcome than last time.

“A number of factors provide unique advantages compared to previous discussions, including new leadership of both organizations as well as different, complementary priorities and areas of strategic focus,” he said.

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As such, Minnesota’s current Attorney General’s Office released a statement last week saying it has opened an investigation into the merger to determine if it is a good idea.

While the attorney’s office did not confirm whether this is directly related to the opposition, Sanford and Fairview said the investigation is part of the standard review process in Minnesota.

“We’re prepared to work with the attorney general’s office to provide the necessary information and demonstrate the benefits of the combined system for the patients and communities we serve,” the two health systems said in a joint statement to the Argus Leader.

There is no indication that the investigation will stall the merger process any longer than intended.

Fairview and Sanford hope to close the deal some time in 2023, pending necessary reviews and closing conditions, but a detailed timeline of this has not yet been determined.